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For financial advisers only WEALTHSELECT MANAGED PORTFOLIO SERVICE Performance Summary – July 2020
For financial advisers only
WEALTHSELECT MANAGED PORTFOLIO SERVICEPerformance Summary – July 2020
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PORTFOLIO MANAGERCOMMENTARYJuly 2020
STUART CLARKWealthSelect Portfolio Manager
With the exception of Japan, major equity markets all made ground once more
in June
Asia, China, and emerging market equities significantly
outperformed developed markets
Our developed market, emerging market, and fixed
income holdings all outperformed
Performance reviewJune was another month of positive returns across all the WealthSelect portfolios thanks to the ongoing rally in risk assets of all kinds. With investors clearly in ‘risk-on’ mode once more, the higher-risk portfolios in the range naturally outperformed, with June returns rising from 1.6% for the lowest-risk portfolio to 4.1% for the highest-risk portfolio in the range.Pleasingly, the developed market equity portfolio outperformed and within this, our Asian equity holdings were the top performers thanks to the region gaining more than 8%. This made it the top performing regional market in June after being the biggest laggard in May. The standout performers were the Quilter Investors Asia Pacific (ex Japan) Large Cap Equity fund, run by William Lam at Invesco, and the Quilter Investors Asia Pacific fund, managed by Ian Heslop at Merian. Both funds were comfortably ahead of their benchmarks in June. In a reversal of the position in May, when Japan was the top performing regional market, Japanese equities were the worst performers in June, with the regional index actually delivering a small loss. The Quilter Investors Japanese Equity fund, managed by Masaki Taketsume at Schroders, underperformed this benchmark to deliver a loss of 1%, making it the worst performing equity holding in June.Elsewhere, the Quilter Investors US Equity Small/Mid Cap fund, run by Schroders’ Bob Kaynor, also underperformed its benchmark to deliver a small negative return due to poor stock selection in the healthcare sector. Although the Quilter Investors US Equity Income fund, run by John Bailer at BNY Mellon, succeeded in narrowly beating its benchmark, it too delivered a small loss over the period.Although absolute returns from our European equity portfolio were attractive, our underlying managers all underperformed their regional benchmark by various margins with the Quilter Investors Europe Small/Mid Cap Equity fund, managed by Merian, slightly more off the pace than its peers.With three of our five chosen UK equity managers underperforming their benchmark, the UK equity portfolio, in aggregate, slightly underperformed in June.
The Quilter Investors UK Equity Opportunities fund, managed by Derek Stuart and Andy Gray at Artemis, was the standout performer with a return of 2.3%. Like the Quilter Investors UK Equity Large Cap Income fund, it outperformed its benchmark thanks to strong stock selection among consumer staples stocks.
Our remaining UK holdings all delivered small positive returns in June, but failed to keep pace with the broader market index due chiefly to the underperformance of industrial stock picks, like National Express and others, that continued to struggle.
Performance was especially strong in the emerging markets part of the portfolios which, in aggregate, outperformed its benchmark by some margin in June.
The top performer was the Quilter Investors Emerging Markets Equity Growth fund, run by Leon Eidelman and Austin Forey at JP Morgan, which prospered due to its Singapore exposure and its overweight to financial sector stocks. The Quilter Investors China Equity fund, run by May Ling Wee at Janus Henderson, was another leading light, again thanks chiefly to its faith in financials. Both funds were comfortably ahead of their respective benchmarks in June with returns in excess of 10%.
The Quilter Investors Emerging Markets Equity Income fund, run by Alison Shimada and Elaine Tse at Wells Fargo, was the only holding to lag its benchmark thanks chiefly to some expensive Chinese technology holdings. Even so, it still delivered just north of 6% in June.
Our fixed income holdings returned more than twice their benchmark in June to deliver just over 1% in aggregate terms. The Quilter Investors Corporate Bond fund was the top performer in absolute terms followed by the Quilter Investors Diversified Bond fund.
The Quilter Investors Investment Grade Corporate Bond fund, run by Paul Causer and Michael Matthews at Invesco, was also noteworthy for delivering a return of 1.5% in a month when its benchmark index delivered a small loss.
Our alternatives allocation made steady progress although it was slightly adrift of its broad index benchmark. June was a better month for the Quilter Investors Global Equity Absolute Return fund, which mustered a small positive return. The strong performance of the PIMCO Dynamic Bond fund, which delivered 1.8% in June, and the Quilter Investors Absolute Return Bond Fund, managed by Janus Henderson, was only slightly dulled by the marginal loss suffered by the Janus Henderson UK Property fund.
OutlookBy booking profits and reducing risk in the portfolios back to where it was at the start of March, we’ve adopted a ‘holding pattern’; just like the position back then, we currently see too many potential downsides to justify committing ourselves to a ‘significant’ risk on portfolio.For now, we think most of the good news we’ve seen in economic data has been ‘priced in’ with markets increasingly reliant on investors’ fear of missing out (FOMO as it’s known) and further stimulus efforts from governments and central banks or the successful development of a vaccine to put the virus to bed in order to sustain the rally. Balanced against this is the growing realisation that we’re witnessing a new wave of (post-lockdown) covid-19 outbreaks in key locations like China, Japan, Germany, and South Korea, the unrestrained spread of the disease in emerging markets such as Brazil, Mexico, India, and Russia, and the ongoing failure of the US to deal with what’s clearly still the initial stage of an outbreak for which there still remains no vaccine. This is not to mention the risks around deal/no deal negotiations for Brexit and an ever closer US election that could further divide that nation.Consequently, this is no time to be taking significantly more or less risk than a neutral position For now, we remain well diversified and happy to sit slightly underweight the middle of our target volatility band for the remainder of the summer. Unless things change materially in the meantime, we’ll be saving any major changes to our risk exposure until our September rebalance.
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80
90
100
110
120
130
140
150
160
170
180
2015 2016 2017 2018 2019 2020
Retu
rn (%
)
80
90
100
110
120
130
140
150
160
170
180
2015 2016 2017 2018 2019 2020
Retu
rn (%
)
3
ACTIVE MANAGED PORTFOLIOS
CUMULATIVE PERFORMANCE (ACTIVE MANAGED PORTFOLIOS 3-6)
CUMULATIVE PERFORMANCE (ACTIVE MANAGED PORTFOLIOS 7-10)
Source: Quilter Investors. Total return over period 30/06/2015 to 30/06/2020.
Source: Quilter Investors. Total return over period 30/06/2015 to 30/06/2020.
––––– Active Managed 3
––––– Active Managed 4
––––– Active Managed 5
––––– Active Managed 6
––––– IA Mixed 0-30% Shares
––––– IA Mixed 20-60% Shares
––––– IA Mixed 40-85% Shares
––––– Active Managed 7
––––– Active Managed 8
––––– Active Managed 9
––––– Active Managed 10
––––– IA Mixed 40-85% Shares
––––– IA Flexible
––––– IA Global
Continued
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1 month (%)
3 month (%)
6 month (%)
1 year (%)
3 year (%)
5 year (%)
Since launch (%)
Active Managed Portfolio 3 1.62 8.34 1.19 3.62 10.65 21.43 32.06
IA Mixed 0-35% Shares 1.22 7.61 -1.09 1.27 6.02 18.86 25.34
Active Managed Portfolio 4 1.95 9.72 0.23 3.08 10.89 24.30 37.27
Active Managed Portfolio 5 2.27 11.12 -0.71 2.50 11.10 26.84 41.72
IA Mixed 20-60% Shares 1.41 10.12 -4.22 -0.73 4.82 19.96 27.83
Active Managed Portfolio 6 2.58 12.42 -1.74 1.83 10.81 28.94 44.65
Active Managed Portfolio 7 2.88 13.87 -2.83 1.10 10.77 31.43 48.20
IA Mixed 40-85% Shares 1.64 13.10 -4.13 0.10 9.00 29.74 39.74
Active Managed Portfolio 8 3.21 15.29 -3.75 0.66 11.33 34.40 51.83
Active Managed Portfolio 9 3.72 17.11 -3.27 1.30 13.03 44.26 61.76
IA Flexible 1.96 13.58 -3.96 0.38 8.66 30.14 41.11
Active Managed Portfolio 10 4.16 18.56 -3.02 1.94 14.46 53.40 75.40
IA Global 2.51 19.32 0.61 5.02 23.33 63.59 80.59
1 year to 30 June 2020
1 year to 30 June 2019
1 year to 30 June 2018
1 year to 30 June 2017
1 year to 30 June
2016
Active Managed Portfolio 3 3.62 3.99 2.68 7.38 2.18
IA Mixed 0-35% Shares 1.27 3.21 1.44 7.83 3.96
Active Managed Portfolio 4 3.08 4.17 3.27 9.50 2.33
Active Managed Portfolio 5 2.50 4.24 3.98 11.44 2.40
IA Mixed 20-60% Shares -0.73 3.02 2.49 11.91 2.26
Active Managed Portfolio 6 1.83 4.08 4.55 13.45 2.53
Active Managed Portfolio 7 1.10 4.20 5.14 15.62 2.58
IA Mixed 40-85% Shares 0.10 3.71 4.99 16.29 2.35
Active Managed Portfolio 8 0.66 4.49 5.85 17.60 2.62
Active Managed Portfolio 9 1.30 4.86 6.40 21.09 5.37
IA Flexible 0.38 2.93 5.16 17.79 1.68
Active Managed Portfolio 10 1.94 5.46 6.44 23.74 8.27
IA Global 5.01 7.35 9.39 23.47 7.43
CUMULATIVE PERFORMANCE (ACTIVE MANAGED PORTOFLIOS)
DISCRETE PERFORMANCE (ACTIVE MANAGED PORTFOLIOS)
Source: Quilter Investors. Total return over period 30/06/2015 to 30/06/2020. The WealthSelect Managed Portfolio Service launched on 24/02/2014.
Source: Quilter Investors. Total return over one year to dates shown.
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ANNUALISED RISK AND RETURN (ACTIVE MANAGED PORTFOLIOS)
Source: Quilter Investors. Total return and weekly volatility (annualised) over period 30/06/2015 to 30/06/2020.
Active 3Active 4
Active 5Active 6
Active 7Active 8
Active 9
Active 10
IA Mixed 0 -35%IA Mixed 20 -60%
IA Mixed 40 -85%
IA Flexible
IA Global
2.0
4.0
6.0
8.0
10.0
12.0
2.0 4.0 6.0 8.0 10.0 12.0 14.0
Perfo
rman
ce (%
)
Volatility
6
80
90
100
110
120
130
140
150
160
170
180
2015 2016 2017 2018 2019 2020
Retu
rn (%
)
80
90
100
110
120
130
140
150
160
170
180
2015 2016 2017 2018 2019 2020
Retu
rn (%
)
Source: Quilter Investors. Total return over period 30/06/2015 to 30/06/2020.
Source: Quilter Investors. Total return over period 30/06/2015 to 30/06/2020.
CUMULATIVE PERFORMANCE (BLEND MANAGED PORTFOLIOS 3-6)
CUMULATIVE PERFORMANCE (BLEND MANAGED PORTFOLIOS 7-10)
BLEND MANAGED PORTFOLIOS
––––– Blend Managed 3
––––– Blend Managed 4
––––– Blend Managed 5
––––– Blend Managed 6
––––– IA Mixed 0-30% Shares
––––– IA Mixed 20-60% Shares
––––– IA Mixed 40-85% Shares
––––– Blend Managed 7
––––– Blend Managed 8
––––– Blend Managed 9
––––– Blend Managed 10
––––– IA Mixed 40-85% Shares
––––– IA Flexible
––––– IA Global
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CUMULATIVE PERFORMANCE (BLEND MANAGED PORTFOLIOS)
DISCRETE PERFORMANCE (BLEND MANAGED PORTFOLIOS)
Source: Quilter Investors. Total return over period 30/06/2015 to 30/06/2020. The WealthSelect Managed Portfolio Service launched on 24/02/2014.
Source: Quilter Investors. Total return over one year to dates shown.
1 month (%)
3 month (%)
6 month (%)
1 year (%)
3 year (%)
5 year (%)
Since launch (%)
Blend Managed Portfolio 3 1.59 8.59 1.43 4.09 11.12 22.34 32.89
IA Mixed 0-35% Shares 1.22 7.61 -1.09 1.27 6.02 18.86 25.34
Blend Managed Portfolio 4 1.91 9.96 0.73 3.79 12.02 26.35 38.82
Blend Managed Portfolio 5 2.18 11.31 -0.05 3.37 12.71 29.94 44.65
IA Mixed 20-60% Shares 1.41 10.12 -4.22 -0.73 4.82 19.96 27.83
Blend Managed Portfolio 6 2.47 12.61 -0.94 2.82 12.75 32.76 48.06
Blend Managed Portfolio 7 2.74 14.02 -1.94 2.10 13.03 35.92 52.03
IA Mixed 40-85% Shares 1.64 13.10 -4.13 0.10 9.00 29.74 39.74
Blend Managed Portfolio 8 3.00 15.35 -2.72 1.73 13.94 39.84 56.44
Blend Managed Portfolio 9 3.59 17.28 -1.96 2.77 16.43 50.41 67.93
IA Flexible 1.96 13.58 -3.96 0.38 8.66 30.14 41.11
Blend Managed Portfolio 10 4.09 18.88 -1.52 3.59 17.75 59.81 81.61
IA Global 2.51 19.32 0.61 5.02 23.33 63.59 80.59
1 year to 30 June 2020
1 year to 30 June 2019
1 year to 30 June 2018
1 year to 30 June 2017
1 year to 30 June 2016
Blend Managed Portfolio 3 4.09 3.79 2.86 8.08 1.83
IA Mixed 0-35% Shares 1.27 3.21 1.44 7.83 3.96
Blend Managed Portfolio 4 3.79 4.26 3.53 10.43 2.09
Blend Managed Portfolio 5 3.37 4.64 4.20 12.73 2.22
IA Mixed 20-60% Shares -0.73 3.02 2.49 11.91 2.26
Blend Managed Portfolio 6 2.82 4.65 4.78 14.98 2.36
Blend Managed Portfolio 7 2.10 4.95 5.48 17.36 2.42
IA Mixed 40-85% Shares 0.10 3.71 4.99 16.29 2.35
Blend Managed Portfolio 8 1.73 5.51 6.16 19.63 2.56
Blend Managed Portfolio 9 2.77 6.10 6.77 23.24 4.82
IA Flexible 0.38 2.93 5.16 17.79 1.68
Blend Managed Portfolio 10 3.59 6.67 6.52 26.52 7.28
IA Global 5.01 7.35 9.39 23.47 7.43
Continued
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Further information on the WealthSelect Managed Portfolio Service can be found at www.oldmutualwealth.co.uk/wealthselect
Important informationPlease remember that past performance is not a guide to future performance. The value of investments and the income from them can go down as well as up and investors may not get back the amount originally invested.
www.oldmutualwealth.co.ukPlease be aware that calls and electronic communications may be recorded for monitoring, regulatory and training purposes and records are available for at least five years.
Old Mutual Wealth is the trading name of Old Mutual Wealth Limited which provides an Individual Savings Account (ISA) and Collective Investment Account (CIA) and Old Mutual Wealth Life & Pensions Limited which provides a Collective Retirement Account (CRA) and Collective Investment Bond (CIB).
The WealthSelect Managed Portfolio Service is provided by Old Mutual Wealth Limited and Old Mutual Wealth Life & Pensions Limited.
Old Mutual Wealth Limited and Old Mutual Wealth Life & Pensions Limited are registered in England and Wales under numbers 1680071 and 4163431 respectively. Registered Office at Old Mutual House, Portland Terrace, Southampton, SO14 7EJ, United Kingdom.
Old Mutual Wealth Limited is authorised and regulated by the Financial Conduct Authority. Old Mutual Wealth Life & Pensions Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Their Financial Services register numbers are 165359 and 207977 respectively. VAT number 386 1301 59.
Quilter Investors is a trading name of Quilter Investors Limited. Authorised and regulated by the Financial Conduct Authority with FCA register number 208543. Registered in England & Wales under number 4227837. Registered office: Millennium Bridge House, 2 Lambeth Hill, London, England, EC4V 4AJ.
SK11661/220-1110/July 2020
Source: Quilter Investors. Total return and weekly volatility (annualised) over period 30/06/2015 to 30/06/2020.
ANNUALISED RISK AND RETURN (BLEND MANAGED PORTFOLIOS)
Blend 3Blend 4
Blend 5Blend 6
Blend 7Blend 8
Blend 9
Blend 10
IA Mixed 0 -35%IA Mixed 20 -60%
IA Mixed 40 -85% IA Flexible
IA Global
2.0
4.0
6.0
8.0
10.0
12.0
2.0 4.0 6.0 8.0 10.0 12.0 14.0
Perfo
rman
ce (%
)
Volatility
