ACUMEN PORTFOLIOS
May 2018 Performance

Manager Commentary

Rising political uncertainty in Italy and Spain hit European bourses this month and the FTSE MIB equity index fell -9.2%. The spread between the Italian and German government bond yield curves, a key measure of political tension in the Eurozone, widened sharply and the euro fell to 1.15, its lowest level against the US dollar for 10 months.

The heightened risk environment fuelled demand for safe haven assets, most notably the 10-year US treasury, which fell from an intra-month high of 3.13% to 2.82%, down -12bps on the month. Government bonds in the UK and Germany also rallied, with 10-year gilt and bund yields falling -19bps and -22bps respectively.

In the UK, the Bank of England postponed its May rate hike, citing weaker than expected economic growth in the first quarter. Despite Mark Carney’s reputation for backtracking on prior guidance, expectations had been running high. The declining probability of an August rate hike and subsequent fall in UK inflation from 2.5% to 2.4% in March, sent sterling to a 6-month low of 1.33 versus the US dollar, down from its near-term high of 1.43. Inflation may fall further over the coming months, but it will still be above the Central Bank’s target rate of 2.0%. Domestic price pressures continue to build, especially in the labour markets, which the BoE will find more difficult to ignore going forward.

The weakness in sterling was supportive for the FTSE 100, which closed up 2.3%. Elsewhere, the Euro Stoxx 600 fell -0.6% and MSCI World rose 0.3%. Emerging market equities fell -3.8%, largely in reaction to the stronger US dollar. In the US, the NASDAQ 100 climbed 5.5% and the smaller cap Russel 2000 rallied 6.0%.

The S&P Goldman Sachs Commodity Index rose 1.5% and is up almost 9% so far this year. Commodities typically provide diversification in a multi-asset portfolio and tend to outperform at this stage of the economic cycle. During the month, we reduced our exposure to commodity equities and increased our allocation to physical commodities via a swap-based ETF.

ACUMEN Bond Portfolio

The ACUMEN Bond Portfolio (GBP) returned -0.21% in May. The Market Composite Benchmark and the IA Mixed Investment 0-35% Shares sector returned 0.23% and0.55% respectively.

May 2018 Return

-0.21%

YTD

-1.97%

Rolling 1-Year Return

N/A

ACUMEN Conservative Portfolio

The ACUMEN Conservative Portfolio (GBP) returned 0.07% in May. The Market Composite Benchmark and the IA Mixed Investment 20-60% Shares sector returned 0.49% and 0.91% respectively. The portfolio has a rolling 1-year return of 0.68%.

May 2018 Return

0.07%

YTD

-1.13%

Rolling 1-Year Return

0.68%

ACUMEN Income Portfolio

The ACUMEN Income Portfolio (GBP) returned -0.40% in May. The Market Composite Benchmark and the IA Mixed Investment 20-60% Shares sector returned 0.59% and 0.91% respectively. The portfolio has a rolling 1-year return of -0.41%.

May 2018 Return

-0.40%

YTD

-1.45%

Rolling 1-Year Return

-0.41%

ACUMEN Progressive Portfolio

The ACUMEN Progressive Portfolio (GBP) returned 0.57% in May. The Market Composite Benchmark and the IA Mixed Investment 20-60% Shares sector returned 0.69% and 1.94% respectively. The portfolio has a rolling 1-year return of 4.27%.

May 2018 Return

0.57%

YTD

-0.68%

Rolling 1-Year Return

4.27%

ACUMEN Adventurous Portfolio

The ACUMEN Adventurous Portfolio (GBP) returned 0.79% in May. The Market Composite Benchmark and the IA Flexible Investment sector returned 0.82% and 1.67% respectively. The portfolio has a rolling 1-year return of 4.21%.

May 2018 Return

0.79%

YTD

-0.68%

Rolling 1-Year Return

4.21%

ACUMEN Equity Portfolio

The ACUMEN Equity Portfolio (GBP) returned 0.80% in May. The Market Composite Benchmark and the IA Global sector returned 0.88% and 3.51% respectively.

May 2018 Return

0.80%

YTD

0.42%

Rolling 1-Year Return

N/A

ACUMEN Strategic Portfolio

The ACUMEN Strategic Portfolio (GBP) returned 1.18% in May. The Market Composite Benchmark and the IA Specialist sector returned 0.88% and 0.54% respectively.

May 2018 Return

1.18%

YTD

1.10%

Rolling 1-Year Return

N/A

The value of an investment in the Protection Portfolios, ACUMEN Portfolios or Tavistock PROFILES may fall as well as rise. Past performance should not be seen as an indication of future performance. Source of data: Tavistock Asset Management Limited, Thomson Reuters and Lipper for Investment Management unless otherwise stated.