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Balanced Portfolio Update - Summer 2018

20 July 2018

Second quarter performance analysis for the St. James's Place Balanced Portfolio.

The Balanced Portfolio performed well over the quarter.

Global equity markets were relatively strong across the period, boosted by strong US growth and corporate earnings figures, although different regions and sectors varied considerably. Indeed, emerging markets struggled through the period, and the MSCI Emerging Markets recorded a negative return, underperforming the MSCI World, despite its higher exposure to risk. In part, this reflected concerns over global trade, as Donald Trump followed through on threats to impose tariffs on China, but it also reflected the impact of a rising dollar, which makes dollar-denominated debts held by companies in emerging markets more expensive. The Shanghai Composite index entered an official bear market in the period.

In this light, it was notable that both the Asia Pacific and Emerging Markets Equity funds delivered highly positive returns over the period, outperforming the broader market. Among the examples of positive stock selection was Berger Paints India, which is held in the Emerging Markets Equity fund, managed by Wasatch Advisors. Berger Paints announced healthy 2017 profits – the second quarter also saw it complete one its more high-profile projects, the painting of three stadiums in Russia, ready for this year’s World Cup. Indeed, the fund benefited more broadly from its exposure to the materials sector, which enjoyed an especially strong quarter globally.

Uncertainty continued in the UK, as Brexit uncertainty persisted and headline growth remained sluggish, even after an upward revision to first quarter GDP growth. The negative outlook reduced market expectations for Bank of England rate rises, helping to hold down the value of sterling against a rising dollar. The decline in sterling acted as a sop to UK equities, and the FTSE 100 enjoyed its strongest quarterly performance in five years. However, the UK & General Progressive fund, co-managed by Majedie and Blackrock, outperformed the wider market, courtesy of positive stock selection. Centrica, owner of British Gas, was a particularly strong contributor to fund outperformance. The company reported in May that it was on track to meet 2018 targets, despite the ‘Beast from the East’ hitting profits in the first half of the year. Sentiment towards the stock improved as analysts increasingly expressed confidence in Centrica’s capacity – given rising profits – to maintain its dividend.

You may also like to access the full Balanced Portfolio Update.


The price of funds and the income from them may go down as well as up.  You may get back less than the amount invested.

Portfolio fund allocations are not rebalanced automatically. Thus Client Portfolios may not include all of the stocks mentioned in the commentary, as fund allocations may vary between clients, leading to different investment experiences.

The value of an investment with St. James's Place will be directly linked to the performance of the funds selected and the value may fall as well as rise. You may get back less than the amount invested.

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Some of the products and investment structures documented within this article will not be available to our clients in Asia. For information on the funds that are available please get in touch.


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