No SAA changes were recommended for the Governed Portfolios or GRIPs.
Last change made on 13th June 2019.
Global stock markets retrenched in May as President Trump reignited trade wars with China, imposing further tariffs on specific imports. With China retaliating, hopes of a US-China trade deal in the short-term was reduced. Economic data deteriorated slightly and antitrust scrutiny weighed on technology stocks. Trade tensions continued to concern Central banks who were closer to cutting interest rates in the hopes of boosting investor sentiment.
In light of this we moved overweight UK government bonds, given weaker inflation expectations and retain a moderate overweight in equities, given positive global growth persisting. This was funded through a reduction of cash exposure and commodities which are sensitive to slowing global trade.
9 RLAM funds on watch
3 Funds Under Review
14 Matrix funds on watch (due to underperformance)
The Artemis UK Special Situations pension fund has triggered red for thirteen consecutive quarters and is underperforming over 1, 3 and 5 years. Morningstar have downgraded their Analyst Rating from Bronze to Neutral for the fund as their level of conviction relative to other UK special situations funds is lower than it has been in the past. For these reasons, the committee gave their approval to replace this fund with Baillie Gifford UK Equity Alpha. Members, Advisers and Employers invested in this fund will be advised of the change shortly with the switch taking place in Q1 2020.
|Number of Governed Portfolios outperforming benchmark||1 year||6/9|
|Number of Governed Portfolios within target volatility ranges||9/9|
|Number of GRIPs outperforming benchmark||1 year||5/5|
|Number of GRIPs within target range – Income Risk Metric||5/5|
|Number of GRIPs within target range – Fund Risk Metric||5/5|
• All of the GRIPs were within tolerances for their income and fund value risk metrics
In June, a mix of trade tensions and deteriorating economic data nudged Central banks closer to cutting interest rates to boost investor sentiment. We moved overweight in UK government bonds, given weaker inflation expectations, and retain a moderate overweight in equities, given positive global growth persisting; while reducing exposure to cash and commodities which are sensitive to slowing global trade. The overall position as at end June, was overweight Equities, High Yield, Government and Corporate Bonds; underweight Absolute Return Strategies (inc. cash) and Commodities. Neutral positions were maintained across Property and Index Linked Bonds.
The following funds were subject to action at the latest IAC meeting: