Portfolio Service


Investment strategies devised in line with your objectives and to maximise market opportunities.

Third Quarter 2017



All strategies saw solid performance over the quarter, with our modest preference for equities supporting performance as global stocks rose. Our tactical positions in Europe, global technology and emerging markets boosted performance as these areas continued to do well. But sterling strength saw UK equity returns more muted.

On the bond side, our preference for corporate and financial credit continued to contribute to strong performance in the low volatility, low default environment of global growth. Our preference for alternatives over gilts helped protect portfolios from the gilt sell-off in September.

Our disciplined investment process and core investment principles underpin our decision making:

  • Macro-informed allocation – we continue to see synchronised global growth supporting risk assets and maintain a preference for equities and credit over low yielding government bonds. We shortened the duration of our portfolios earlier in the year and this helped mitigate the effects of the gilt sell-off as the Bank of England considers hiking rates.
  • Quality – our UK equity holdings are focused on selected quality assets that have the potential to outperform the general market. Our UK equity holdings had returned 11.8% in the year to the end of September, compared to a 6.6% return for the FTSE 100. 
  • Diversification – the quarter has been characterised by solid performance across a number of sectors and regions. By making sure we have a diversified portfolio we’ve been able to tap into the different sources of return that drove markets in Q3.
Portfolio returns, after fees Defensive Balanced Growth
Last Quarter 0.7% 1.4% 1.7%
Rolling 12 Months:
End Sep 16 to end Sep 17
4.2% 8.5% 11.9%
End Sep 15 to end Sep 16 9.9% 13.5% 17.8%
End Sep 14 to end Sep 15 2.0% 0.9% -0.9%
End Sep 13 to end Sep 14 4.6% 5.4% 5.8%
End Sep 12 to end Sep 13 1.7% 6.6% 10.0%
Source: Coutts/Thomson Datastream

Past performance should not be taken as a guide to future performance.
The value of investments, and the income from them, can go down as well as up, and you may not recover the amount of your original investment.
Individual portfolio returns may vary.

Holdings and

Portfolio Update

This month we have maintained our allocations as we continue to have confidence in how our portfolios are positioned. Our modest preference for equities should continue to benefit from global growth while government bonds continue to look expensive, encouraging our low exposure to gilts in favour of corporate credit and alternative investments.

In July, we changed the way we get exposure to global equities by reducing our holding in our ‘Global 30’ basket of direct equities in favour of passive funds invested in global equity markets. This doesn’t reflect a fall in confidence in equities – our overall exposure to global equities as an asset class remains the same.

Nor have we lost any confidence in our Global 30 basket of shares – while the constituents change over time, the Global 30 exposure still represents one our highest conviction beliefs.

However, we believe this change in approach provides greater flexibility when executing asset allocation decisions. Reducing the weighting to these individual stocks means we can retain our high-conviction positions and trade efficiently with minimal cost when we need to.

(Please note: not all fund additions will be relevant for all funds)

For a full breakdown of all the underlying funds within the portfolios, please refer to our monthly factsheets, available on request.

The value of investments and any income from them can go down as well as up, and you may not recover the amount of your original investment. Where an investment involves exposure to a foreign currency, changes in rates of exchange may cause the value of the investment, and the income from it, to go up or down.

In the case of some investments, they may be illiquid and there may be no recognised market for them and it may therefore be difficult for you to deal in them or obtain reliable information about their value or the extent of the risks to which they are exposed.

Investments in emerging markets are subject to certain special risks, which include, for example, a certain degree of political instability, relatively unpredictable financial market trends and economic growth patterns, a financial market that is still in the development stage and a weak economy.

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