August 2016 Performance
The response to the Brexit vote by the UK bond and equity markets has been unequivocally positive. The rejuvenated Tory cabinet under the new leadership of Theresa May is now empowered to negotiate better terms of trade with Europe and develop stronger ties with the rest of the world. The Governor of the Bank of England has also played a key role in the change in investor sentiment. The BOE cut interest rates to the lowest level in its history and reduced the Bank Rate to 0.25%. It also announced a further £170 billion worth of quantitative easing measures, including gilt and corporate bond purchases aimed at lowering the cost of borrowing. The mid-cap FTSE 250 rallied 2.60% and the large-cap FTSE 100 climbed 0.85% after reaching a twelve month high of 6,941. Equity markets throughout Asia rose as the Hang Seng and Nikkei 225 gained 4.96% and 1.92% respectively. The S&P 500 was marginally lower and fell -0.12% following hawkish comments from the Chair of the US Federal Reserve citing a “positive outlook for economic activity and inflation”. The US Treasury market sold-off as a result, but government bond yields in the UK and Europe remain at near record lows. Volatility in the foreign exchange markets increased marginally and sterling appears to have found a near-term base. The pound fell -0.55% versus the Euro and -0.67% against the US dollar to close at 1.314. Commodity markets were mixed and the GSCI climbed 1.50%. The price of oil rose 7.45%, but precious metals fell across the board on profit-taking. The summer months have been very kind to bond and equity investors. The “mythical uncertainties” created by the UK’s decision to leave the European Union have yet to materialise and the further passage of time will likely bring clarity to a more balanced and robust economy.
ACUMEN Conservative Portfolio
The ACUMEN Conservative Portfolio returned 2.88% in August and outperformed the IA Mixed Investment 20-60% Shares sector, which rose 1.72%. The portfolio has returned 15.73% year to date and 20.52% since inception on 1st October 2014.
ACUMEN Income Portfolio
The ACUMEN Income Portfolio returned 1.77% in August and outperformed the IA Mixed Investment 20-60% Shares sector, which rose 1.72%. The portfolio has returned 15.87% since inception on 25th February 2016.
ACUMEN Progressive Portfolio
The ACUMEN Progressive Portfolio returned 1.86% in August and outperformed the IA Mixed Investment 40-85% Shares sector, which rose 1.81%. The portfolio has returned 9.79% year to date and 16.38% since inception on 9th October 2014.
ACUMEN Adventurous Portfolio
The ACUMEN Adventurous Portfolio returned 2.21% in August and outperformed the IA Flexible Investment sector, which rose 1.53%. The portfolio has returned 15.92% since inception on 25th February 2016.
The value of an investment in the ACUMEN Portfolios may fall as well as rise. Past performance should not be seen as an indication of future performance. Source of data: Tavistock Wealth Limited, Thomson Reuters and Lipper for Investment Management unless otherwise stated.