31 January 2021
The Fund returned -0.24% during the month, only marginally behind the IA Flexible Investment sector average return of -0.11%.
January ended with many equity markets in negative territory. In what was lining up to be a positive month, sentiment was dented by the buying frenzy of retail investors in stocks being shorted by hedge funds. This was positive for the stocks involved as hedge funds were forced to buy to close out loss making positions. This also led however to the same hedge funds reducing equity exposure elsewhere. Far Eastern markets, such as the Hang Seng, ended in positive territory but off their month highs.
There were only small changes to asset allocation during January, predominantly driven by market movements. The allocation to cash drifted higher towards the end of the month due to positive cashflows into the Fund. These were not invested given the ongoing volatility and the allocation is now a little above the neutral allocation. The small reduction in allocation to equities was the result of weaker markets towards month end, with an underweight position relative to the neutral allocation maintained. The Fund remains overweight fixed income, allocating to strategic bond funds which have demonstrated their ability and willingness to use the flexibility in their mandates as market opportunities present themselves. The overweight position in alternatives was maintained, this allocation consisting mainly of long/short equity funds which have demonstrated their ability to provide downside protection.
This article is for information purposes only and should not be construed as advice. We strongly suggest you seek independent financial advice prior to taking any course of action.
The value of this investment can fall as well as rise and investors may get back less than they originally invested. Past performance is not necessarily a guide to future performance.
The Fund is suitable for investors who are seeking to achieve long term capital growth.
The tax treatment of investments depends on the individual circumstances of each client and may be subject to change in the future. The above is in relation to a UK domiciled investor only and would be different for those domiciled outside the UK. We strongly suggest you seek independent tax advice prior to taking any course of action.
Past performance is not a guide to future performance.