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sell-off late in the quarter, following the
US Federal Reserve decision to raise
US interest rates, and an investor retreat
from risk assets in emerging markets
more broadly. Bluebay, which manages
the emerging market portion of the
Strategic Income fund, had enjoyed
strong performance but the trend was
quickly reversed.The Strategic Income
fund ended the quarter marginally up.
technology company, and a significant
holding in Edgepoint’s portfolio, rose
11%.The quarter also saw small caps
outperforming large caps, although
J OHambro, which manages another
portion of the Global Equity fund,
benefited from its holding in Capita,
a UK business outsourcing company
listed on the FTSE 250 Index – Capita
rose by more than 25%.
Emerging market equities enjoyed
a strong period, although the rise of
sterling pared back gains for non-UK
holdings. One particular outperformer
wasAlibaba, which is often described as
the Chinese equivalent to eBay –Alibaba
is one of Sands Capital Management’s
major holdings within the Global
Equity fund.The US-listed e-commerce
company rose by almost 30%.The
rise followed the announcement of
(yet more) strong quarterly results,
two major acquisitions, and a series
of major investments, not least in
supermarket chains and a payment
gateway, as it pursues an aggressive
expansion policy.
Value investing delivered a strong
return during the first quarter, but
growth investing came to the fore
again betweenApril and June.The
Managed Growth fund, which is run
by Schroders, continued to contribute
to returns, but its value investing style
meant returns were significantly down
from the previous quarter.
Emerging market credit suffered a mild
THE PORTFOLIO REVIEW
30
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THE INVESTOR
Portfoliooverviews
THE INVESTOR CENTRE
Summer 2017
T
he second quarter was
characterised by disparities
in performance across major
equity markets, disparities
that were driven by both political and
economic news.TheAdventurous
Portfolio delivered a positive return over
the period, but some of its geographical
weightings constrained returns.
The Emerging Markets Equity fund
Emerging market
equities enjoyed a
strong period, although
the rise of sterling
pared back gains for
non-UK holdings
aluminium, lead, zinc and tin all slipped
less dramatically – a barrel of Brent
Crude lost $5 over the quarter.Almost
a quarter of theAlternativeAssets fund
is invested in commodities.The fund was
a major detractor.
The International Equity fund
achieved a marginally positive return,
but gains were well down on the
previous period.The fund suffered as
a result of its high cash weighting and
its considerable US exposure – sterling
gained significantly against the dollar
over the period.
R
isk continued to be
rewarded during the
second quarter on global
markets, but on a more
selective basis than during the first.The
Managed Funds Portfolio advanced over
the period, and each fund contributed
positively to performance, but investor
sentiment globally was less bullish than
in the early months of the year.
Energy stocks suffered significantly
over the period as the oil price dipped.
EdgePointWealth Management’s strategy
within the Global Equity fund was
boosted by the manager choosing to go
underweight on energy names. Positive
sentiment towards industrials provided
a similar tailwind; Koninklijke Philips
Electronics, a Dutch electronics and
MANAGED FUNDS
ADVENTUROUS