COUTTS MULTI ASSET FUNDS UK
Coutts multi-asset funds are a range of UK-biased 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
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 (GBP Class A - distributing)||Defensive||Balanced||Growth||Equity Growth|
|Rolling 12 Months:|
|End Sep 15 to end Sep 16||10.13%||11.07%||12.28%||14.79%|
|End Sep 14 to end Sep 15||1.53%||-0.85%||-1.49%||-2.71%|
|End Sep 13 to end Sep 14||7.20%||7.04%||6.29%||5.26%|
|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|
This portfolio comprises the 30 global stocks where Coutts has the highest conviction, providing regional diversity that has been beneficial during the recent period of sterling weakness. Our team selects companies that best reflect the tactical and strategic opportunities they have identified, in line with our core investment principles of quality and value.
Starting with an investment universe of 1,200 stocks from the S&P 500, FTSE 350 and Europe’s Stoxx 600 indices, this list is then filtered down using a number of parameters including liquidity (how easily shares can be bought and sold), the outlook for profit growth and sustainability of cash flows).
We then conduct a qualitative ‘bottom-up’ analysis based on company fundamentals to identify a final short list before selecting the 30 we believe reflect the most promising companies in our favoured themes.
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.
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.
In August we reduced our allocation to the shares of global banks following a period of strong performance for the sector, boosted by sterling weakness. 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.
Summary of moves
- Reduced financial shares
- Increased financial bonds
27-Feb-2023As the new tax year approaches, you might want to know about possible changes to what you’ll pay in tax. In his Autumn Statement last November, Chancellor Jeremy Hunt announced a series of tax freezes and adjustments. While there are no personal tax rises, the fact that some rates have been frozen following a year of rising prices means we’re likely see more people fall into the higher rate category and find themselves paying more tax as wages increase.