protect and profit through vigilance - · pdf fileprotect and proﬁt through vigilance. our...

Q4 2017

PROTECT AND PROFIT THROUGH VIGILANCE

Behave with integrity. Protect and profit through vigilance.

OUR ETHOS:

That requires some

FOREWORD

From day 1, our aim has been to set industry leading standards for investment management.

We are dedicated to providing institutional quality investments to retail clients of any wealth.

Our investment team have access to portfolio management systems which, for far too long, have been available only to institutions, the big

hitters, the priviliged few. Our portfolios now deliver this advantage to you.

It’s time every investor had that same advantage; to receive transparent, tangible results - to demand vigilance when faced with market threats - to expect their interests to be at the heart of every investment decision - in a

relationship built on integrity.

Yes, that means you.

Your investment comes first, before we profit, that’s important to us.We provide the same benefits for a £1,000 investment as a £10,000,000 investment.

We also take care of risks your current investments may be exposed to...we protect you from movements in the foreign exchange markets.

See Page 6 to find out more about the impact of foreign exchange markets on your portfolio - a topic which few advisers warn you about. Page | 1

Our team of investment professionals monitor the financial markets 24/7, every trading day of the year, to be sure your

investments stay ahead of the curve.

VIGILANCE

The proof is always in the pudding:

Now your portfolio can be managed through the most sophisticated systems in our industry. Software trusted with $17trillion of client assets every single minute of every single day,

monitoring your portfolio in ways that are unparalleled in our industry. Through our strategic relationships Tavistock Wealth can provide this benefit to you.

Page | 2 Date of data : 30th September 2017

2014 2015 2016 2017

BENCHMARKIA Mixed Investment

20-60% Shares

ACUMENConservative

Portfolio

100

105

110

115

120

125

130

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Our flagship offering is the ACUMEN Portfolio range. ACUMEN protects you using industry-leading portfolio management tools, mitigating all types of unwanted risk within your investment.

Your money will be managed across multi-asset markets investing in a combination of assets classes, for example equities, bonds, commodities and property.

ACUMEN Portfolios form the core of our investment offering. We blend these together to create model portfolios for our clients.

Model portfolios are designed to cater for varying risk appetites of clients. Certain levels of risk are too high for some clients and too low for others.

There will be a match to your attitude to risk.

Our expertise is in portfolio construction and risk management.

Date of data : 30th September 2017

ACUMEN Conservative Portfolio

ACUMEN Bond Portfolio

Return over the last 12 months

ACUMEN Income Portfolio

ACUMEN Pr0gressive Portfolio

ACUMEN Adventurous Portfolio

ACUMEN Equity Portfolio

ACUMEN Strategic Portfolio

Launched June 20173.10%5.28%9.03%9.19%

Launched June 2017Launched June 2017

JUDGE OUR PERFORMANCE FOR YOURSELF

Page | 3

ACCESS TO MODEL PORTFOLIOS WITH A CONSISTENT 9-YEAR TRACK RECORD

“Greater than the tread of mighty armies is an idea whose time has come.”

Victor Hugo

Page | 4

A REVOLUTION in investment management

YOUR PORTFOLIO

ACUMENBond

Portfolio

ACUMENConservative

Portfolio

ACUMENIncome

Portfolio

ACUMENAdventurous

Portfolio

ACUMENEquity

Portfolio

ACUMENStrategic Portfolio

ACUMENProgressive

Portfolio

Page | 5

The ACUMEN Portfolios are the building blocks of your revolution.

MANAGER COMMENTARY

PORTFOLIO FACTSHEET

ASSET ALLOCATION

MONTHLY ATTRIBUTION

MONTHLY ATTRIBUTION

REGION ALLOCATION

North America

United Kingdom

Europe ex UK

Asia ex Japan

Japan

Rest of World

INVESTMENT POLICYThe investment policy of the ACUMEN Strategic Portfolio is to gain exposure through investment in a diversified portfolio comprised of index tracking regulated collective investment schemes (ETFs) and cash. There is no minimum exposure to fixed income and/or cash and the maximum permitted equity exposure is 100%.

Government Bonds

Corporate Bonds

Inflation-Linked Bonds

Emerging Market Bonds

Developed Market Equities

Emerging Market Equities

Commodity Equities

Property Equities

Cash

ACUMEN Strategic Portfolio returned 0.86% in September. The Market Composite Benchmark and the IA’s Global sector returned 1.99% and -2.19% respectively. The profile has a rolling 1-year return of n/a.September could mark a potential turning point for global financial markets. Synchronised growth and resurgent inflation led to a dramatic shift in communicated central bank policy towards balance sheet reduction and a historic end to crisis-era quantitative easing. On September 20th, the Fed took the landmark decision to start unwinding its $4.5 trillion balance sheet. Fed Chair, Janet Yellen, said the normalisation process would be very gradual, starting in October, and would trim just $10 billion per month (stepping up $10 billion per quarter to a total of $50 billion). The Fed also indicated a likely third rate hike this year, probably in December, as well as 3 increases in 2018. The announcement came on the back of communications from the European Central Bank, September 7th, and the Bank of England, September 14th, suggesting an October tapering in ECB asset purchases and likely UK rate rise in November. Towards the end of the month, the White House announced its long awaited proposal for cutting US taxes. Looser fiscal policy, to offset tightening monetary policy, would provide welcome stimulus and was interpreted positively by markets sending global equities and bond yields higher. In the UK, 10 year Gilt yields rose 33bps with US Treasury and German Bund equivalents climbing 20bps and 10bps respectively. Elevated yields contributed to Sterling strength, up 3.61% against the Dollar, 4.45% against the Euro and 5.99% against the Yen. The stronger pound led to a decline in the FTSE 100, down -0.78%, bucking an otherwise positive performance from equity markets which saw the MSCI World rise 2.08% and fresh highs for the S&P 500. In Commodity markets, WTI Oil rose 9.40% to $51.67 a barrel, on improving demand and a likely extension to OPEC supply cuts. Gold declined -3.22% to $1,279.10 per ounce. The portfolios performed extremely well versus the IA Sector benchmarks over the past month given our tactical positioning across asset classes and strategy to hedge overseas currency exposure. However, we believe the transition to a more normal policy framework will prove tricky with increased volatility and unintended consequences likely over the coming months. We continue to manage risk on a daily basis and have positioned the portfolios accordingly.

-0.50%

0.00%

0.50%

1.00%

1.50%

42.0%

26.0%

12.0%

4.0%12.5%

3.5%

-0.20%

0.00%

0.20%

0.40%

0.60%

2.0%

68.0%2.5%

10.0%

15.5%

2.0%

SEPTEMBER 2017 - For Use By Professional Intermediaries Only

TOP 5 ETF HOLDINGS

iShares Dow Jones Industrial Average UCITS ETFiShares MSCI Japan Small Cap UCITS ETFiShares MSCI UK Small Cap UCITS ETFiShares NASDAQ 100 UCITS ETFiShares US Property Yield UCITS ETF

The top 5 ETF holdings comprise 55.5% of the portfolio

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.

Rolling 1-Year Return

Year to Date

September 2017 Return

: N/A :

0.86%

MANAGER COMMENTARY

PORTFOLIO FACTSHEET

ASSET ALLOCATION

MONTHLY ATTRIBUTION

MONTHLY ATTRIBUTION

REGION ALLOCATION

North America

United Kingdom

Europe ex UK

Asia ex Japan

Japan

Rest of World

INVESTMENT POLICYThe investment policy of the ACUMEN Equity Portfolio is to gain exposure through investment in a diversified portfolio comprised of index tracking regulated collective investment schemes (ETFs) and cash. The portfolio aims to have a minimum equity exposure of 80%.

ACUMEN Equity Portfolio returned 1.30% in September. The Market Composite Benchmark and the IA’s Global sector returned 1.99% and -1.46% respectively.



Cash

September could mark a potential turning point for global financial markets. Synchronised growth and resurgent inflation led to a dramatic shift in communicated central bank policy towards balance sheet reduction and a historic end to crisis-era quantitative easing. On September 20th, the Fed took the landmark decision to start unwinding its $4.5 trillion balance sheet. Fed Chair, Janet Yellen, said the normalisation process would be very gradual, starting in October, and would trim just $10 billion per month (stepping up $10 billion per quarter to a total of $50 billion). The Fed also indicated a likely third rate hike this year, probably in December, as well as 3 increases in 2018. The announcement came on the back of communications from the European Central Bank, September 7th, and the Bank of England, September 14th, suggesting an October tapering in ECB asset purchases and likely UK rate rise in November. Towards the end of the month, the White House announced its long awaited proposal for cutting US taxes. Looser fiscal policy, to offset tightening monetary policy, would provide welcome stimulus and was interpreted positively by markets sending global equities and bond yields higher. In the UK, 10 year Gilt yields rose 33bps with US Treasury and German Bund equivalents climbing 20bps and 10bps respectively. Elevated yields contributed to Sterling strength, up 3.61% against the Dollar, 4.45% against the Euro and 5.99% against the Yen. The stronger pound led to a decline in the FTSE 100, down -0.78%, bucking an otherwise positive performance from equity markets which saw the MSCI World rise 2.08% and fresh highs for the S&P 500. In Commodity markets, WTI Oil rose 9.40% to $51.67 a barrel, on improving demand and a likely extension to OPEC supply cuts. Gold declined -3.22% to $1,279.10 per ounce. The portfolios performed extremely well versus the IA Sector benchmarks over the past month given our tactical positioning across asset classes and strategy to hedge overseas currency exposure. However, we believe the transition to a more normal policy framework will prove tricky with increased volatility and unintended consequences likely over the coming months. We continue to manage risk on a daily basis and have positioned the portfolios accordingly.

TOP 5 ETF HOLDINGS

iShares Core MSCI Japan IMI UCITS ETFiShares Edge MSCI World Minimum Volatility UCITS ETFiShares Edge MSCI World Multifactor UCITS ETFiShares Edge S&P 500 Minimum Volatility UCITS ETFiShares MSCI Europe ex-UK UCITS ETF (Dist)

The top 5 ETF holdings comprise of the portfolio65.0%

90.0%

8.0%

2.0%

-0.50%

0.00%

0.50%

1.00%

1.50%

2.00%

44.5%

13.0%

22.0%

6.5%

11.0%

3.0%

-0.50%

0.00%

0.50%

1.00%




Year to Date


: N/A: N/A

1.30%

MANAGER COMMENTARY

PORTFOLIO FACTSHEET

ASSET ALLOCATION

MONTHLY ATTRIBUTION

MONTHLY ATTRIBUTION

REGION ALLOCATION

North America

United Kingdom

Europe ex UK

Asia ex Japan

Japan

Rest of World

INVESTMENT POLICYThe investment policy of the ACUMEN Adventurous Portfolio is to gain exposure through investment in a diversified portfolio comprised of index tracking regulated collective investment schemes (ETFs) and cash. There is no minimum exposure to bonds and/or cash and the maximum equity exposure is 100%.

ACUMEN Adventurous Portfolio returned 0.74% in September. The Market Composite Benchmark and the IA Flexible Investment sector returned 1.48% and -1.10% respectively. The profile has a rolling 1-year return of 9.19%.

Government Bonds

Corporate Bonds





Commodity Equities

Property Equities

Cash


TOP 5 ETF HOLDINGS

iShares Core S&P 500 UCITS ETFiShares Edge S&P 500 Minimum Volatility UCITS ETFiShares Global Infrastructure UCITS ETFiShares MSCI Europe ex-UK UCITS ETF (Dist)iShares US Property Yield UCITS ETF


-0.50%

0.00%

0.50%

1.00%

49.5%

17.5%

15.0%

6.5%

7.5%

4.0%

-0.50%

0.00%

0.50%

1.00%

5.0%

3.0% 1.0%

1.0%

51.5%

5.0%

15.0%

16.5%

2.0%


Year to Date

Monthly Return :

::

:::

:::

N/AN/A

1.02% 0.38%

N/AN/A9.19%




Year to Date

0.74%6.49% 9.19%


MANAGER COMMENTARYACUMEN Progressive Portfolio returned 0.63% in September. The Market Composite Benchmark and the IA Mixed Investment 40-85% Shares sector returned 1.23% and -0.93% respectively. The profile has a rolling 1-year return of 9.03%.

PORTFOLIO FACTSHEET

ASSET ALLOCATION

MONTHLY ATTRIBUTION

MONTHLY ATTRIBUTION

REGION ALLOCATION

North America

United Kingdom

Europe ex UK

Asia ex Japan

Japan

Rest of World

INVESTMENT POLICYThe investment policy of the ACUMEN Progressive Portfolio is to gain exposure through investment in a diversified portfolio comprised of index tracking regulated collective investment schemes (ETFs) and cash. There is no minimum exposure to bonds and/or cash and the equity exposure ranges between 40-85%.

Government Bonds

Corporate Bonds





Commodity Equities

Property Equities

Cash


TOP 5 ETF HOLDINGS

iShares Edge S&P 500 Minimum Volatility UCITS ETFiShares FTSE 250 UCITS ETFiShares Global Infrastructure UCITS ETFiShares MSCI Europe ex-UK UCITS ETF (Dist)iShares UK Gilts 0-5yr UCITS ETF


-0.50%

0.00%

0.50%

1.00%

40.0%

26.5%

16.0%

6.0% 7.5%

4.0%

-0.20%

0.00%

0.20%

0.40%

0.60%

10.5% 6.0%

2.0%

1.5%

53.0%

5.0%

10.0%

10.0%

2.0%



Year to Date

Monthly Return :

::

:::

:::

N/AN/A

0.91% 0.29%

N/AN/A

0.63%

6.41% 9.03%


Year to Date


0.63%6.41% 9.03%


: :

: :

MANAGER COMMENTARYACUMEN Income Portfolio returned -0.10% in September. The Market Composite Benchmark and the IA Mixed Investment 20-60% Shares sector returned 0.72% and -0.83% respectively. The profile has a rolling 1-year return of 5.28%.

PORTFOLIO FACTSHEET

ASSET ALLOCATION

MONTHLY ATTRIBUTION

MONTHLY ATTRIBUTION

REGION ALLOCATION

North America

United Kingdom

Europe ex UK

Asia ex Japan

Japan

Rest of World

INVESTMENT POLICYThe investment policy of the ACUMEN Income Portfolio is to gain exposure through investment in a diversified portfolio comprised of index tracking regulated collective investment schemes (ETFs) and cash. The minimum bond and/or cash exposure is 30% and equity exposure ranges between 20-60%.

Income Target Income Paid*

3.50% - 4.00% 3.89%

Government Bonds

Corporate Bonds





Commodity Equities

Property Equities

Cash


TOP 5 ETF HOLDINGS

iShares £ Corp Bond 0-5yr UCITS ETFiShares Global Corp Bond UCITS ETFiShares Global High Yield Corp Bond UCITS ETFiShares $ High Yield Corp Bond UCITS ETFiShares J.P. Morgan $ Emer Mkts Bd UCITS ETF


-0.15%

-0.10%

-0.05%

0.00%

0.05%

0.10%

42.5%

17.0%

19.5%

6.0%

1.0% 14.0%

-0.10%

-0.05%

0.00%

0.05%

48.00%

16.50%

25.00%

3.00%

0.50% 5.00% 2.00%


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. *Rolling 1 year dividend yield as of 30/09/17 (applicable to income share class only). The rolling 1-year return is the return of the accumulation share class, where all income is automatically reinvested.


Year to Date

September 2017 Return -0.10%4.11% 5.28%

MANAGER COMMENTARYACUMEN Conservative Portfolio returned -0.27% in September. The Market Composite Benchmark and the IA Mixed Investment 20-60% Shares sector returned 0.47% and -0.83% respectively. The profile has a rolling 1-year return of 3.10%.

PORTFOLIO FACTSHEET

ASSET ALLOCATION

MONTHLY ATTRIBUTION

MONTHLY ATTRIBUTION

REGION ALLOCATION

North America

United Kingdom

Europe ex UK

Asia ex Japan

Japan

Rest of World

INVESTMENT POLICYThe investment policy of the ACUMEN Conservative Portfolio is to gain exposure through investment in a diversified portfolio comprised of index tracking regulated collective investment schemes (ETFs) and cash. The minimum bond and/or cash exposure is 30% and equity exposure ranges between 20-60%.

Government Bonds

Corporate Bonds





Commodity Equities

Property Equities

Cash


11.5%

25.5%

17.0%14.5%

18.0%

1.5%5.0%

5.0% 2.0%

-0.30%-0.20%-0.10%0.00%0.10%0.20%0.30%

43.0%

18.5%

17.5%

6.0%

4.0% 11.0%

-0.10%

-0.05%

0.00%

0.05%


TOP 5 ETF HOLDINGS

The top 5 ETF holdings comprise 51.5% of the portfolio

iShares Fallen Angels High Yield Corp Bond UCITS ETF iShares Global Corp Bond UCITS ETFiShares Global High Yield Corp Bond UCITS ETFiShares Global Inflation Linked Govt Bond UCITS ETFiShares J.P. Morgan $ Emer Mkts Bd UCITS ETF



Year to Date

September 2017 Return -0.27%: 3.04% : 3.10%

MANAGER COMMENTARY

PORTFOLIO FACTSHEET

ASSET ALLOCATION

MONTHLY ATTRIBUTION

MONTHLY ATTRIBUTION

REGION ALLOCATION

North America

United Kingdom

Europe ex UK

Asia ex Japan

Japan

Rest of World

INVESTMENT POLICYThe investment policy of the ACUMEN Bond Portfolio is to gain exposure through investment in a diversified portfolio comprised of index tracking regulated collective investment schemes (ETFs) and cash. The portfolio aims to have a minimum fixed income exposure of 80%.

ACUMEN Bond Portfolio returned -0.59% in September. The Market Composite Benchmark and the IA’s Global Bond sector returned -0.54% and -2.81% respectively.

Government Bonds

Corporate Bonds





Commodity Equities

Property Equities

Cash



-0.25%

-0.20%

-0.15%

-0.10%

-0.05%

0.00%

55.0%24.5%

12.5%

2.0%

1.0%5.0%

-0.25%

-0.20%

-0.15%

-0.10%

-0.05%

0.00%

54.5%31.0%

6.5%

6.0%2.0%


Year to Date

-0.59%Monthly Return :

::

:::

N/AN/A

N/AN/A

-0.29% -0.93%

N/AN/A

TOP 5 ETF HOLDINGS


iShares £ Corp Bond 0-5yr UCITS ETFiShares Fallen Angels High Yield Corp Bond UCITS ETFiShares UK Gilts 0-5yr UCITS ETFiShares US Aggregate Bond UCITS ETFiShares US Mortgage Backed Securities UCITS ETF



Year to Date : N/A : N/A

-0.59%September 2017 Return

An example of how an UNHEDGED investment could affect you:

WHY WORRY ABOUT THE FOREIGN EXCHANGE MARKETS?

If your portfolio invests across the globe you will be exposed to the currency markets. If this exposure is not properly managed (known as hedging), any

significant movement in other currencies could wipe out all gains in a heartbeat!

As an exampleSterling (GBP) fell 10% within a day of the Brexit announcement!

Are your investments ‘currency hedged’? - What happens if GBP bounces back? How much would you lose?

Say you hold an investment in an American stock market such as the S&P 500. The investment you make, as a UK investor, would be in GBP.

The underlying investments to which you have exposure are held in USD. Say over a 6 month period the S&P returns +5%. You therefore make a +5% gain in USD terms.

However, the return you actually receive is not only based on what the S&P 500 has done.

Crucially, it also depends on what the currency movement has been between GBP and USD over that same 6 month period. If GBP has appreciated by 10% versus the USD over that period...

(and in 2015 it appreciated by +8.5% between 10 April and 19 June), ...then even though the return of the S&P 500 was +5%,

you would suffer a loss of -4.55%.

Of course, if the S&P investment were to go down in value and the GBP appreciate, then your losses become magnified.

Unhedged investments expose people to significantly increased risk because they are affected by market moves that are not part of their intended strategy. The currency market is one of the most volatile of all financial markets and we believe care should be taken to minimise your exposure to this risk wherever possible.

We believe that hedging results in a portfolio that is significantly safer

because it is more likely to stay in line with your risk appetite.Page | 6

When your overseas exposure is

UNHEDGED:You could make MORE OR LESS than the American stock market

because

Your returns ARE being impacted by movements in the

foreign exchange markets

therefore

whatever your attitude to risk, youare exposed to the WRONG type

of risk within your portfolio

WE SHOULD ALL WORRY ABOUT THE FOREIGN EXCHANGE MARKETS!

When your overseas exposure is

HEDGED:You will make THE SAME

as the American stock market

because

Your returns ARE NOT being impacted by movements in the

foreign exchange markets

therefore

whatever your attitude to risk, you are exposed to the RIGHT type

of risk within your portfolio

UNHEDGED HEDGED

10/04/2015 to 31/12/2015

investment in GBP (unhedged)

American Stock Market

10/04/2015 to 31/12/2015

You are exposed to currency risk, causing your return to differ

from the market

You are protected from currency risk, meaning your return will

match the market

investment in GBP (hedged)

American Stock Market

Page | 7

INTEGRITY AND VIGILANCE.

PROTECT AND PROFIT

with

Page | 8

Page | 9

Thinking is the hardest work there is, which is probably the reason so few engage in it.

Henry Ford

“Every revolution was first a thought in one man’s mind.”

Victor Hugo

This document is for informational purposes only and does not constitute financial advice. If you require financial advice you should speak to a qualified financial adviser. The value of investments held in the ACUMEN Portfolios may

fall as well as rise. Past performance should not be seen as an indication of future performance.

Tavistock Wealth Limited is authorised and regulated by the Financial Conduct Authority.

Tavistock Wealth Limited is a wholly owned subsidiary of Tavistock Investments Plc.

Tavistock Wealth Limited, Unit 1, Bracknell Beeches, Bracknell, Berks, RG12 7BW +44 (0) 1753 867000 www.tavistockwealth.com

protect and profit through vigilance - · pdf fileprotect and proﬁt through vigilance. our...

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