Coutts multi-asset funds are a range of global funds that aim to deliver attractive long-term returns by investing in a broad range of asset classes such as cash, bonds, equities, commodities and property.

Third Quarter 2016



Fund returns were positive across most asset classes over the third quarter, with a modest drag from UK commercial property, though the latter has now recovered much of its post-Brexit losses.

Both bond and equity markets generally had positive returns for the quarter as Brexit fears eased amid healthy UK business activity, consumer demand and job growth. Markets were also buoyed by central bank stimulus – with, for example, the Bank of England cutting interest rates to a new record low of 0.25% and renewing its bond-buying programme.

Both bond and equity markets generally had positive returns for the quarter as Brexit fears eased amid healthy UK business activity, consumer demand and job growth.

While we have further reduced our overweight position in equities during the review period, a continued modest pro-equity stance and international exposure helped fund returns as all major developed markets reached new highs for the year and some hit new record highs.

Continued positive performance from corporate bonds, which we prefer to expensive and low- yielding government bonds, also helped portfolio returns. The latter, where we have a relatively low weighting, suffered a modest setback over the third quarter.

While overall equity positioning was positive, an underweight stance in US equities held back fund returns slightly as US shares reached new record highs. Our overweight stances in Europe and Japan also caused some drag as these regions lagged other major markets over the quarter.

Fund returns, after fees (USD Class A - distributing) Defensive Balanced Growth
Last Quarter  4.13% 5.23% 5.73%
Rolling 12 Months:
End Sep 15 to end Sep 16 8.37% 6.53% 6.08%
End Sep 14 to end Sep 15 -1.53% -3.28% -4.70%
End Sep 13 to end Sep 14 5.63% 7.37% 8.69%
End Sep 12 to end Sep 13 - - -
End Sep 11 to end Sep 12 - - -
Blank cells represent periods prior to the Funds launch
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.

Spotlight on



  • Algebris Financial Credit

    Algebris is a boutique investment manager specialising in the financial sector. This fund invests across the capital structure of global financial credit, specialising in hybrid fixed-income securities, such as so-called contingent convertible bonds (which convert to equity when triggered by a specified event), of systematically important financial institutions.

    The investment team’s analysis across both credit and equity markets offers a comprehensive understanding of the factors governing hybrid securities. The fund has a successful track record and has outperformed its annual return target of 6% to 8% since inception.

  • PIMCO Global Investment Grade Credit Fund

    Throughout 2016 we have preferred corporate debt over government bonds. That is because we see little risk of any significant rise in corporate default rates and believe the additional yield over government bonds more than compensates investors for the added risk. We also see this asset class being supported by the ongoing hunt for attractive sources of income.

    We have expressed our view through the PIMCO Global Investment Grade Credit Fund. The managers invest at least two-thirds of their assets in high-quality global investment grade credit using a diversified, risk-controlled and value-based strategy. We believe this approach provides a diversification benefit, yield premium and greater total return potential compared with government debt.

  • Investec UK Alpha Fund

    We have maintained our exposure to UK equities through the build-up to the EU membership referendum and after the result because we believed the longer-term investment case would remain intact regardless of the outcome. Following a sharp sell-off during the days immediately after voting day, UK stock markets have rebounded strongly as fears of a sharp slowdown in the UK economy have faded.

    The Investec UK Alpha Fund invests in a concentrated portfolio of UK companies, diversified across sectors and company size. Manager Simon Brazier focuses on attractively valued, high-quality businesses with strong balance sheets. He is supported by an experienced and well-resourced investment team with a successful long-term track record.

Holdings and

Fund Update

In August we reduced our allocation to the shares of global banks following a period of strong performance for the sector. For Defensive portfolios, which do not hold the bank-equity theme, we reduced our allocation to local-currency denominated emerging-market debt.  Across all portfolios, we used the proceeds to increase exposure to bonds issued by financial institutions, which we see as having attractive yields that are backed up by robust capital structures.

We also took some profits in local-currency emerging market debt in growth portfolios, using the proceeds to increase exposure to investment-grade (higher quality) corporate bonds, slightly reducing overall risk in portfolios.


Summary of moves

  • Reduced financial shares
  • Increased financial bonds
  • Reduced emerging market debt (in local currencies)
  • Increased global investment grade bonds

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

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.

Important information

This webpage is a financial promotion for UK regulatory purposes. It provides general information only and is not intended as a personal recommendation, nor does it constitute an offer or solicitation to invest in the fund. Coutts multi-asset funds are sub-funds of Coutts Multi Asset Fund plc, an open ended investment company with variable capital incorporated in Ireland and authorised by the Central Bank of Ireland pursuant to the European Communities Undertakings for Collective Investment in Transferable Securities Regulations, 2011 as amended, supplemented and consolidated from time to time.

Investors should read the fund’s prospectus and Key Investor Information Document carefully before investing. Investors should consider the investment objective, risks and charges of the fund, which are contained in the prospectus and Key Investor Information Document. Any decision to invest must only be made on the basis of the prospectus and Key Investor Information Document. Copies of these are available from your Wealth Manager or online at www.coutts.com/cmaf.

The information contained in this summary is believed to be correct as at the date of publication, but cannot be guaranteed. Opinions and projections constitute our judgment as at the date of publication and are subject to change.

To the extent permitted by law and regulation neither Coutts & Co nor any connected company accepts responsibility for any direct or indirect or consequential loss suffered by you or any other person as a result of your acting, or deciding not to act, in reliance upon the above. Not all products and services offered by the individual Coutts companies are available in all jurisdictions and some products and services may be available only through particular Coutts companies. Certain aspects of the service may be performed through, or with the support of, different members of The Royal Bank of Scotland Group, of which Coutts & Co is a member.


Wealth division of Royal Bank of Scotland Group.

Coutts & Co. Registered in England No. 36695. Registered office 440 Strand, London WC2R 0QS.

Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

Calls may be recorded.

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