Tactical opportunities, but caution is the watchword
2022 was the year the bond markets broke, forcing a fundamental rethink of defensive investment strategies. John Stopford believes a nimble approach to investing is essential.
29 Jan 2021
Capital markets were challenging to navigate in 2020, but it was possible to deliver a positive return primarily driven by resilient income; the Global Multi-Asset Income Fund (GMAI) did so for an seventh consecutive year, offering protection during weaker markets in addition to upside participation; this versatility is down to three core elements of its philosophy.
The Fund adopts a total return approach, using income as the engine of performance; our process is straightforward but effective, enabling us to protect against the downside; and finally, our process is aided by the ability to invest across a wide variety of asset classes with a flexible toolkit.
We believe GMAI’s track record of delivering defensive returns with relatively lower volatility1 makes it a reliable core holding in an investor’s portfolio, especially in the current climate, with markets increasingly volatile and risk assets expensive following their significant recovery last year.
GMAI has provided downside protection during market drawdowns, and swiftly recovered any weakness
Past performance is not a reliable indicator of future results, losses may be made.
Calendar year returns for the Fund (and competitor group); 2020: 5.0% (3.2%); 2019: 6.2% (13.5%); 2018: 0.5% (-4.9%); 2017: 6.0% (8.7%); 2016: 4.4% (6.7%); 2015: 0.9% (-2.4%); 2014: 3.7% (4.2%).
Source: Morningstar, 31 December 2020. Period shown is since 30 September 2013, from inception of the A Acc share class. Performance is net of fees (NAV based, including ongoing charges, excluding initial charges), gross income reinvested, USD. Chart shows peak to trough performance during drawdown episodes. The competitors shown for comparison purposes are the five largest Luxembourg/Dublin domiciled Multi-Asset income funds by AUM based on our Multi-Asset team’s analysis of the competitor landscape. The Fund is actively managed. Any index is shown for illustrative purposes only.
1 Defined as less than half that of global equities (MSCI ACWI).
The value of investments, and any income generated from them, can fall as well as rise. Where charges are taken from capital, this may constrain future growth. Past performance is not a reliable indicator of future results. If any currency differs from the investor's home currency, returns may increase or decrease as a result of currency fluctuations. Investment objectives and performance targets are subject to change and may not necessarily be achieved, losses may be made.
Currency exchange: Changes in the relative values of different currencies may adversely affect the value of investments and any related income. Default: There is a risk that the issuers of fixed income investments (e.g. bonds) may not be able to meet interest payments nor repay the money they have borrowed. The worse the credit quality of the issuer, the greater the risk of default and therefore investment loss. Derivatives: The use of derivatives may increase overall risk by magnifying the effect of both gains and losses leading to large changes in value and potentially large financial loss. A counterparty to a derivative transaction may fail to meet its obligations which may also lead to a financial loss. Interest rate: The value of fixed income investments (e.g. bonds) tends to decrease when interest rates rise. Equity investment: The value of equities (e.g. shares) and equity-related investments may vary according to company profits and future prospects as well as more general market factors. In the event of a company default (e.g. insolvency), the owners of their equity rank last in terms of any financial payment from that company. Government securities exposure: The Fund may invest more than 35% of its assets in securities issued or guaranteed by a permitted sovereign entity, as defined in the definitions section of the Fund’s prospectus. Emerging market (inc. China): These markets carry a higher risk of financial loss than more developed markets as they may have less developed legal, political, economic or other systems.