31 October 2020
The Fund returned -1.16% during the month, ahead of the IA Flexible Investment sector average return of -1.25%.
After a positive start to the month, equity performance waned as we approached month end. Markets in Europe and the UK responded negatively to the evidence of a further coronavirus wave taking hold and the increasing restrictions of movement which subsequently ensued. Nervousness also crept into markets as the US election drew nearer, with uncertainty as to what the best outcome for the markets would be. Asia and emerging markets stood up stronger thanks to what appears to be better control of the virus spreading. Within UK fixed income markets non-investment grade, or high yield bonds, were the strongest performers. Government bonds were mixed, recording a negative return for the period.
In line with index returns, the stronger performances were seen from the Fund’s holdings in the Emerging and Asia Pacific ex Japan markets. The return from Baillie Gifford Emerging Markets Growth was particularly strong. Elsewhere there was outperformance of the S&P 500 by Artemis US Smaller Companies whilst in the UK selection SVM UK Growth performed strongly relative to the FTSE All Share. Merian Gold & Silver meanwhile was a detractor after a sharp fall at the month end.
The Fund remains underweight its neutral allocation to equities, with none of the tail risks going away, although some were moving closer, such as the US election. As ever, with so many unknowns still out there, caution is justified. Central banks remain supportive which continues to bring stability to bond markets, including credit, where the fund maintains an overweight allocation. With uncertainties still with us, an overweight position in alternatives remains in place, which includes long/short equity funds who manage their net equity position carefully, along with the position in silver.
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.