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The Global Equity fund also sustained
reasonable returns over the period.
Again, energy figured strongly in
returns. J OHambro, one of the
satellite managers for the fund,
benefited from its holding in Shell,
where second-quarter profits more
than tripled – the oil major also paid
out a large quarterly dividend.
The International Equity fund was the
worst-performing fund in the Portfolio.
Returns were constrained by Nestlé,
which slipped in value over the course
of the quarter.An announcement by the
company in July that 2017 sales growth
would be slower than expected added
to investor disappointment after a poor
first half of the year.
The Balanced Managed fund, managed
byAXA, achieved only muted returns
over the period.While the strong
showing for energy and commodities
boosted the share price of RioTinto, one
of the fund’s holdings, performance was
held in check by National Grid – the
THE PORTFOLIO REVIEW
32
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THE INVESTOR
Portfoliooverviews
THE INVESTOR CENTRE
Autumn 2017
T
he Managed Funds Portfolio
delivered a positive return
over the quarter. Returns
were delivered broadly
across the range of funds, although the
Strategic Income fund was an especially
strong performer, while equity fund
returns were more varied.
There were tailwinds for corporate
bonds, as global growth continued,
investors continued to take on risk,
and interest rates remained low.The
Strategic Income fund benefited from
these trends, but also from both regional
biases and individual credit selections.
Argentina entered the third consecutive
quarter of economic recovery under
its reformist president,Mauricio Macri
– Argentinian stocks have performed
very strongly over the past year.The
emerging market debt element of the
fund, managed by Bluebay, benefited
from its strong exposure to utilities and
sovereign debt inArgentina.
Energy and materials stocks
performed strongly over the period
as oil and metal prices rose, partly
on supply shortages but also on good
corporate results.The tailwinds for
energy and commodities buoyed the
Managed Growth fund, managed by
Schroders.AngloAmerican, the mining
multinational listed in London, was one
of the fund’s best-performing stocks.
MANAGED FUNDS
An underweight in the materials sector
detracted from performance.The fund’s
worst-performing stock was UPL, an
Indian chemicals company.
TheAsia Pacific fund, on the other
hand, continued to deliver positive
returns.AlistairThompson of First State
StewartAsia, who manages the fund,
benefited from his exposure to materials
companies like Newcrest, and a holding
in Koito, a Japanese manufacturer.
The Portfolio also has a weighting
towards commercial property, which
contributed to overall performance
during the period.The Property fund,
managed by Orchard Street, saw
income rise as capital growth slowed.
The Portfolio’s weighting to the UK
commercial property sector was a
positive contributor, despite continued
business uncertainty in the UK.
‘Markets are having to contend
with a constant stream of unsettling
messages around progress with Brexit
negotiations,’ says Philip Gadsden of
Orchard Street.‘Yet UK commercial
property values have risen over the
year to date and the independent IPF
consensus forecast for the 2017 full
year returns are more bullish than at the
start of the year.’
Energy and materials
stocks performed
strongly over the
period as oil and
metal prices rose