Portfolio Service


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

FOURTH Quarter 2019



Most strategies delivered a positive return over the quarter, while more defensive portfolios were affected by falling UK government bonds as investors favoured risk assets. Generally markets benefitted from supportive central banks, trade talk progress between the US and China and a decisive UK election outcome.

In recent months, US employment and consumer confidence, and industrial production in countries within the Organisation for Economic Co-operation and Development (OECD), have been positive. This suggests that the global economy could be heading into an expansion phase. Risks remain as we enter 2020 – including the direction of central bank policy and the US political outlook – but we believe the world’s economic environment will remain supportive for investors.

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

  • Quality – We added to US equity earlier in 2019, bringing our allocation up to a neutral weight. US equities typically display higher quality characteristics and tend to be better placed to perform over different economic conditions.
  • Macro-driven – We have used some of our cash positions to buy more stocks, in the UK and Europe as well as the US. This reflects a business cycle that appears to be bottoming out, an improving economic outlook, central bank support and reduced trade tensions. Our analysis indicates there will be further recovery in global economic growth in the coming months.
  • Value and selectively contrarian – European companies derive a large share of their revenues from emerging markets and other sectors sensitive to global economic activity. And as the broader global economy improves, we’re seeing encouraging signs from those markets. This positive trend has not yet been widely recognised by investors, so European shares are currently good value in our view – a key reason why we bought more of them.

Portfolio returns, after fees Defensive Balanced Growth
Last Quarter -0.4% 0.8% 2.5%
Rolling 12 Months:
Dec 18 to dec 19 8.3% 12.4% 16.9%
dec 17 to dec 18 -3.7% -5.1% -6.5%
dec 16 to dec  17 5.8% 9.1% 12.1%
dec 15 to dec 16 8.4% 12.2% 16.2%
dec 14 to dec 15 0.8% 1.3% 1.4%
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.



In the days after the UK election, we used cash reserves to add to our holdings in UK equities. They look attractive based on our analysis, particularly on valuation measures. Greater clarity on Brexit, albeit with some potential uncertainty further down the line, could act as a trigger for gains.

We bought more European equities in October as the forward-looking data we analyse has shown some signs of stabilisation in the region’s economy after a period of negative signals. One positive factor, for example, is that leading indicators in China, the region’s biggest export market, suggest rising demand that should support European companies over the coming months.

We’ve reduced our exposure to commercial property. Although the investment case for commercial property remains credible, we have some concerns about how property funds manage redemptions. This has led to high levels of cash – which impacts returns – and some funds being periodically closed to redemptions, which can also be bad for investors. In the meantime, we’re considering other routes to the diversification benefits we see in property.

(Please note: not all positioning changes will be relevant for all portfolios)

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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