In summary
Global equities reported a buoyant start to the year as a number of significant geopolitical flashpoints failed to dull positive investor sentiment. In fixed income, government bonds were broadly flat over the month, with the notable exception of Japan where the announcement of snap elections drove a sharp sell-off in Japanese sovereign bonds. Supportive credit conditions and attractive all-in yields continued to attract investor demand for corporate credit, which made modest gains over the month. Trading highlights for January:
- US Equities: The BNY Mellon US Equity Income Fund was added during the month. This value-orientated strategy has an exceptional long term track record, underpinned by a disciplined investment process that has been consistently applied by its experienced management team for over 20 years ago. The new holding was financed by the sale of the Artemis US Select Fund.
- UK Equities: National Grid and Fevertree Drinks were purchased in January. National Grid owns essential electricity network infrastructure in the UK and US and is well placed to grow its asset base, earnings, and dividends in the coming years as energy networks are upgraded. Fevertree Drinks is the global market leader in the premium soft drinks market. We believe the business is poised for a period of accelerating growth after combining its US business with Molsen Coors, the no.2 drinks distributor in North America. With around £100m of net cash on its balance sheet, Fevertree should be able to grow cash returns to shareholders materially in the coming years through dividends and share buybacks. Rentokil Initial, BP and Smith & Nephew were sold during the month.
International Equities
International Equities made a strong start to the year, benefiting from regional and sector diversification as investor attention continued to broaden out from US mega-cap technology stocks. Emerging Markets (JPM Emerging Markets Income +7.8%), Asia Pacific (L&G Pacific Index Trust +10.8%), Japan (Amundi Prime Japan ETF +4.0%) and Europe (Waverton European Capital Growth +4.1%) all reported strong gains while US equities (SPDR S&P 500 ETF -0.6%), and specialist global technology (L&G Global Technology Index Trust -0.7%) the healthcare (L&G Global Healthcare & Pharmaceuticals Index Trust –1.7%) sector allocations lagged, with sterling returns pulled down by US dollar weakness.
UK Equities
The funds’ direct UK Equity holdings had a disappointing month as double-digit gains from Computacenter (+13.6%), Weir (+13.4%), Rio Tinto (12.4%) and Lloyds Banking Group (+10.9%) and a strong start from new holding National Grid (+5.8%) were insufficient to offset the continued de-rating of digital platform / data businesses (Experian -17.5%, RELX -14.6%, London Stock Exchange -9.3%, Autotrader -7.6%, Trainline -7.3% ) on AI-disruption fears, resulting in a modest negative return overall.
Fixed Interest
Fixed Interest delivered solid positive total returns, outperforming UK gilts and global bond markets. The Funds’ investments focus on generating attractive cash yields from short tenor lending to the investment grade corporate bond market, with limited sensitivity to changes in long term government bond yields. Returns were positive across credit, direct gilts and inflation-linked government bonds, with higher yielding specialist investment trusts Sequoia Economic Infrastructure Income (+2.9%) and TwentyFour Income (+1.2%) reporting the strongest returns.
Alternative Assets
‘Alternative’ assets enjoyed a strong month, led by listed infrastructure fund Foresight Environmental Infrastructure (+10.3%) and UK real estate investment trust holdings Tritax Big Box (+8.6%), Primary Health Properties (+7.7%), Target Healthcare REIT (+6.4%) and LondonMetric Property (+5.4%).
Contact us
0203 418 0257
info@onekc.co.uk
References
Source: https://www.brooksmacdonald.com/resources/insights/cornelian-risk-managed-funds-monthly-update
Cornelian Risk Managed Funds – Monthly update
In summary
Global equities reported a buoyant start to the year as a number of significant geopolitical flashpoints failed to dull positive investor sentiment. In fixed income, government bonds were broadly flat over the month, with the notable exception of Japan where the announcement of snap elections drove a sharp sell-off in Japanese sovereign bonds. Supportive credit conditions and attractive all-in yields continued to attract investor demand for corporate credit, which made modest gains over the month. Trading highlights for January:
International Equities
International Equities made a strong start to the year, benefiting from regional and sector diversification as investor attention continued to broaden out from US mega-cap technology stocks. Emerging Markets (JPM Emerging Markets Income +7.8%), Asia Pacific (L&G Pacific Index Trust +10.8%), Japan (Amundi Prime Japan ETF +4.0%) and Europe (Waverton European Capital Growth +4.1%) all reported strong gains while US equities (SPDR S&P 500 ETF -0.6%), and specialist global technology (L&G Global Technology Index Trust -0.7%) the healthcare (L&G Global Healthcare & Pharmaceuticals Index Trust –1.7%) sector allocations lagged, with sterling returns pulled down by US dollar weakness.
UK Equities
The funds’ direct UK Equity holdings had a disappointing month as double-digit gains from Computacenter (+13.6%), Weir (+13.4%), Rio Tinto (12.4%) and Lloyds Banking Group (+10.9%) and a strong start from new holding National Grid (+5.8%) were insufficient to offset the continued de-rating of digital platform / data businesses (Experian -17.5%, RELX -14.6%, London Stock Exchange -9.3%, Autotrader -7.6%, Trainline -7.3% ) on AI-disruption fears, resulting in a modest negative return overall.
Fixed Interest
Fixed Interest delivered solid positive total returns, outperforming UK gilts and global bond markets. The Funds’ investments focus on generating attractive cash yields from short tenor lending to the investment grade corporate bond market, with limited sensitivity to changes in long term government bond yields. Returns were positive across credit, direct gilts and inflation-linked government bonds, with higher yielding specialist investment trusts Sequoia Economic Infrastructure Income (+2.9%) and TwentyFour Income (+1.2%) reporting the strongest returns.
Alternative Assets
‘Alternative’ assets enjoyed a strong month, led by listed infrastructure fund Foresight Environmental Infrastructure (+10.3%) and UK real estate investment trust holdings Tritax Big Box (+8.6%), Primary Health Properties (+7.7%), Target Healthcare REIT (+6.4%) and LondonMetric Property (+5.4%).
Contact us
0203 418 0257
info@onekc.co.uk
References
Source: https://www.brooksmacdonald.com/resources/insights/cornelian-risk-managed-funds-monthly-update
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