Portfolio Updates - Ethical Offshore Investments

2022…. What Happened..??

Stephen Strowger — Thu, 05 Jan 2023 05:55:21 +0000

Let’s not mince words here…… 2022 was a shocker for financial markets.

While others may disagree, my personal opinion was that 2022 was a more stressful year for financial managers than what was encountered during the Global Financial Crisis of 2007 & 2008, the European Debt Crisis and the more recent turmoil caused by the Covid19.

When it came to market performance and investment returns in 2022 there was one clear, dominant force driving the markets: inflation.

Inflation’s surge to 40-year highs led the Fed to an unprecedented series of interest-rate increases, cratering the bond market and sending stocks into a bear market that continued into the end of the year.

As the dust settles on 2022, it’s been an all-around brutal year for mutual fund investors. The average U.S. stock fund finished the year down roughly 17%, with the average large-growth funds down an average of nearly 30%.

S&P 500 Index – down 19.4% Nasdaq – down 33.1%

For U.S. bond, mutual fund and exchange-traded fund performance, the story in many ways is much worse, where in many cases, losses were the biggest in history.

Other regions didn’t fair much better with the Hang Seng Index in Hong Kong falling 16% and the Shanghai Shenzhen CSI Index dropping by more than 20%.

Europe faired a little better (in local currency terms) with the Euro Stoxx 600 and the German DAX down 13% and the French CAC down over 9%. The UK FTSE 100 index actually bucked the trend with a positive 1% return for the year in local currency term, helped due to the high exposure to financial companies and global energy companies. However, the FTSE 250 index, which represents more companies of the local UK economy, suffered with a loss of nearly 20%.

How did the Sustainable Ethical Allocation Portfolios hold up in 2022…??

Unfortunately, our portfolios suffered negative returns for the year, with some of our high conviction equity funds suffering significant losses. We did make some allocation changes at the start of quarter 2, especially with our fixed interest and bond exposure (significantly reducing exposure due to forecast of higher interest rates & inflation) but it still didn’t stop the portfolio losses.

Both the Balanced Allocation and the Growth Allocation ended the year down 8% and the new Index ETF Allocation portfolio down just under 5% for the year.

Sustainable Ethical Growth Allocation
Sustainable Ethical Balanced Allocation
Sustainable ETF Index Allocation
IA Global Index

As mentioned above, some of our high conviction ESG / Sustainable type funds suffered in 2022, experiencing much higher levels of short term volatility. Our long term favourite Baillie Gifford Positive Change fund ended the year down 23% (was down near 35% during June) while the more diversified Royal London Sustainable World Trust ended the year down 17%.

Baillie Gifford Positive Change
Royal London Sustainable World Trust
Fundsmith Equity

However, as we continually state, these funds should be considered long term holdings and investors need to be aware, and accept that there will be periods of underperformance, which will include negative periods. Even with the disappointing performance of 2022, the above 3 funds have still generated above market returns over the past 5 years, with Baillie Gifford at 15.8%pa, Fundsmith Equity at 10.0%pa and Royal London Sustainable World Trust at 8.3%pa.

Baillie Gifford Positive Change
Royal London Sustainable World Trust
Fundsmith Equity

Looking Ahead…..

Our longer-term view has not changed, in that we continue to expect that high quality companies with strong balance sheets (low levels of debt), and that have a consistent, recurring and increasing revenue streams to provide the greater upside potential over the longer term. With rising interest rates, monitoring company debt levels will be important as higher interest costs, will have a negative impact on future company earnings and profits.

Higher inflation will also have a negative impact on earnings, so once again, it will be important that we are investing in high quality companies that have the pricing power to absorb the higher operating costs, or better still, be able to pass on these additional costs to the end consumer.

We did make some allocation changes to our Sustainable Allocation portfolios at the end of Quarter 1, increasing our exposure to value, income generating equities by reducing our exposure to high growth companies, which may struggle in the short term due to higher borrowing costs and inflation. We have maintained a bias towards companies involved in sustainable and renewable energy as well as healthcare and disruptive technology.

For the Balanced Allocation, we re-allocated our Bond and Fixed Interest exposure to funds that take a diversified approach to cautious assets, which includes inflation protected bonds, infrastructure as well as precious metals. With the current rising interest rate and inflationary environment, we will continue with this diversified approach.

Ethical Offshore Investments provides guidance on portfolios that have an ESG (Environmental & Social Governance) bias and an SRI (Socially Responsible Investing) focus. By avoiding high charging, commission paying funds, this results in lower portfolio costs, so more of the growth staying in the pockets of our clients.

If you would like to get more information on the Sustainable Ethical Allocation portfolios, or enquire on the vast array of Sustainable and Ethical style funds available, please click on More Information.

If you have an existing portfolio and would like to compare the holdings against the Sustainable Ethical portfolios, once again, please click the more information button at the bottom of this screen and we will provide a clear & easy to understand, comparison report.

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2021 – year in review for the Sustainable Ethical Allocation Portfolios

Stephen Strowger — Thu, 13 Jan 2022 09:02:32 +0000

2021 was another year impacted by Covid19…… we look back at how the Sustainable Ethical Allocation Portfolios performed during another 12 months of uncertainty.

We have made it through 2021, and with the hope that we had left the curse of Covid19 back in 2020, we were bitterly disappointed that this was not the case…..

In my opinion, 2021 was an even more volatile year of uncertainty for financial markets.

Of course, 2020 had the significant market falls in February & March but when you look back at it, the recovery from these lows, especially with the sustainable type entities that we have a bias towards to, was relatively linear.

Looking at the performance of the portfolios in 2021, we experienced much greater levels of volatility with the portfolios dipping into negative year to date performance 3 times by mid May. Performance picked up significantly in the third quarter…. only to once again experience more volatility through the fear of rising inflation and the forecast for rising interest rates.

Portfolios recovered again to hit their all time high levels at the start of November….. only to slightly pullback on once again the fear of rising interest rates, inflation and the risk of supply chain shortages.

While we are disappointed with the end of year performance, the portfolios still provided positive returns.

A – Sustainable Ethical GROWTH Allocation – 13.7%
B – Sustainable Ethical BALANCED Allocation – 12.2%
C – Sustainable Ethical CAUTIOUS Allocation – 8.6%

So how did the underlying funds perform….

Unlike 2020 where every fund held in the portfolios provided a positive return, this year we did have some funds that ended the year in negative territory.

Investments in Bonds and Fixed Interest assets were generally down across the board, as the increase in interest rates is actually a negative to existing bond assets. Our strategic ethical type bonds and fixed interest funds ended around 0.5% down for the 2021 year.

We had 2 equity funds, 1 being an Emerging Market equity fund (held in the Balanced and Growth portfolios) and the other a specialist, early stage global small company (held in the Growth portfolio) that suffered losses for the year, at -7.6% and -20.6% respectively. The remaining equity funds in the Sustainable Ethical Allocation Portfolios did end the year positively….. but there was a wide margin between the best performing equity fund (+32.7% – European allocation specialist fund held across all 3 portfolios) and the worst performing equity fund (+8.8% – UK equity allocation fund held in the Growth portfolio only).

With our portfolio updates, we regularly comment about the Baillie Gifford Positive Change fund and the Royal London Sustainable World Trust which are both held in all 3 portfolios. So how did they perform in 2021..??

A – Royal London Sustainable World Trust – 17.7%
B – Baillie Gifford Positive Change – 10.8%

The Baillie Gifford Positive Change, as can be seen on the above chart, has been quite volatile over the past 12 months. This should be expected due to the concentrated portfolio (25 – 50 stocks) with holdings towards Healthcare, Biotechnology and Technology companies…..

While it is disappointing to see the downward movement since September, the fund still ended the year + 10.8% and the fund has still provided an average annualised return of over 30%pa over the past 3 years.

The Royal London Sustainable World Trust has a much more diversified holding approach and a such, was a lot less volatile over the past 12 months.

Both funds are still very highly rated and while we expect that there will continue to be volatility and periods of negative returns, especially in the Baillie Gifford fund due to its investment style, we are continuing to maintain our holdings in these funds across all 3 of the Sustainable Ethical Allocation portfolios.

As part of our ongoing reviews and monitoring of the Sustainable Ethical Allocation Portfolios, we also keep an eye on other multi-manager, multi-asset funds to see how they are performing throughout the year, and will compare their month-to-month performance against that of our Sustainable portfolios.

Our goal is to be a consistent top quartile performer amongst our peers through the use of high-quality individual fund managers and investing in higher quality, sustainable business entities.

So how did we perform….??

Growth type strategies

A – Sustainable Ethical GROWTH Allocation
B – Tilney Growth
C – Canaccord (CGWM) Opportunity
D – Guinness Brewin Dolphin Growth
E – Momentum Harmony Growth
F – VAM Growth

Balanced type strategies

A – Sustainable Ethical BALANCED Allocation
B – Canaccord (CGWM) Diversity
C – Guinness Brewin Dolphin Balanced
D – Marlborough Balanced
E – Momentum Harmony Balanced
F – VAM Balanced

I am pleased to state that once again, the Sustainable Ethical Allocation Portfolios has held up very well compared to other multi-manager, multi-asset fund strategies. Even with the pullback in the sustainable areas that we have a bias towards to (Education, Healthcare, Technology, Sustainable & Renewable Energy) we just pipped the very highly rated Guinness Brewin Dolphin strategies for the year.

Strategy Going Forward

We continue to believe that investing in a diversified range of quality companies that exhibit strong internal management, successful (& sustainable) business models that are not only profitable, but are also contributing to the improvement of the environment and people’s well-being.

We will continue to do this by utilising highly rated Fund Management firms through a range of different managed funds and Investment Trusts, with the various Fund Managers using different investment strategies in achieving their long-term investment objectives.

By using a diversified portfolio with Fund Managers and their different investment styles, the different investment styles will compliment each other which has the potential to provide a more consistent overall portfolio return.

An additional point we would like to make is that of the portfolio charges. All managed funds will have a management fee, but at Ethical Offshore Investments, we will utilise the lowest cost version of the fund that is available on the various platforms / Life Companies. With the current fund allocations, the current combined fund manager Annual Management Charge (AMC) is:

0.62%p.a. Cautious Allocation
0.68%p.a. Balanced Allocation
0.74%p.a. Growth Allocation

If you are a client holding a portfolio that you would like to compare against the Sustainable Ethical Allocation model portfolios, please use the More Information button at the bottom of this page. We will provide a full comparison report which will include:

Performance comparison (short, medium & longer term)
Consistency of performance against peers
Fund manager ratings
Asset allocation comparison
Level of diversification
Ongoing charges

All of the funds that we propose for our clients must be strictly regulated, transparent with their investment holdings and/or investment strategy, liquid and preferably trade on a daily basis. As per above, we will utilise the lowest charging version of that fund that is available on the relevant platform / Life Company.

Whether it is investing via one the Sustainable Ethical Allocation portfolios or through a personalised bespoke portfolio, we will make sure that we only access regulated, and highly rated investment structures for our clients.

Sustainable Investing Strategies – Ethical Business Standards

If you would like to learn more about the portfolios or the underlying investments, please contact us using the more information button and we will respond to your queries.

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Sustainable Ethical Portfolios – 3 year anniversary

admin — Thu, 11 Nov 2021 15:19:56 +0000

Now that we have 3 full years of performance for the Sustainable Ethical Allocation Portfolios, it is time to compare how we have performed against other diversified, multi-asset multi-manager strategies over this period.

The start of November 2021 marked 3 years from when I constructed and starting monitoring the Sustainable Ethical Allocation Portfolios.

And while it is only 3 years, we have witnessed many significant events during this period which caused disruption to the financial markets, yet the Sustainable Ethical Allocation Portfolios and the underlying investments have continued to power on.

What are the ‘model’ Portfolios…??

As part of our Portfolio Management Service, we offer guidance on the management of 3 different risk controlled, diversified Sustainable model portfolios.

Growth Allocation – approx. 90% allocated to global equities and infrastructure, targeting an average annualised net return of 10% – 12%pa.

Balanced Allocation – approx. 65% allocated to global equities with the remaining allocated towards fixed interest, bonds and money market cash type assets. The objective of this portfolio is to achieve similar type returns associated with direct equity investing, while experiencing lower levels of short-term volatility, especially during negative market periods.

Cautious Allocation – approx. 35% allocated to global equities with a higher allocation towards fixed interest, bonds and money market cash type assets. The objective of this allocation is to achieve a net return of 5%-6%pabut with lower levels of short-term volatility

The portfolios are constructed using a range of different highly rated, managed funds from various regulated Wealth Management firms. We have taken a significant bias towards managed funds that take a quality, sustainable and ethical approach to their investment process. This results in a higher allocation towards companies associated with:

Healthcare and Biotechnology
Education
Technology and Cyber Security
Renewable & Clean / Alternative Energy

Our model portfolios are currently allocated to investment funds managed by the following Fund Management groups.

Examples of some of the highly rated Managed Funds held in the Sustainable Ethical Portfolios include:

Baillie Gifford Positive Change
Royal London Sustainable World Trust
Rathbones Greenbank Global Sustainability

For past regular portfolio updates, they can be accessed here.

So how have we performed over the past 3 years against benchmarks and peers..??

A – Sustainable Ethical GROWTH Allocation – 26.10%pa
B – Sustainable Ethical BALANCED Allocation – 20.76%pa
C – Sustainable Ethical CAUTIOUS Allocation – 16.67%pa
D – FTSE All World Index – 16.11%pa **

** as we take a global approach with our portfolio allocation, we feel that a global share index is an appropriate benchmark.

It is very pleasing to see that all 3 Sustainable Allocations have outperformed the FTSE All World Index, even more so when you consider that the Balanced and Cautious Allocations only have approx. 65% and 35% respectively allocated to the equity sector.

We have been able to provide outperformance over the period while also exhibiting lower levels of volatility. Plus, we have done so while adhering to our strict ethical business practices.

So how did we do against other Offshore discretionary management strategies..??

There are numerous wealth management firms that offer a multi-asset, multi-manager approach to offshore portfolio management. For the purpose of this exercise, I have used the more common and well-known firms in the Offshore market, being Canaccord Genuity, Tilney Group, VAM, Momentum Harmony and Marlborough, where I have used their ‘Growth Allocation Strategies to compare against the Sustainable Balanced and Sustainable Growth Allocation strategies that we have taken. (Guinness Brewin Dolphin which is also a well-known, reputable wealth management firm would have also been included but their offshore strategy has not been running for the full 3-year period).

A – Sustainable Ethical GROWTH Allocation – 26.10%pa
B – Sustainable Ethical BALANCED Allocation – 20.76%pa
C – CGWM Affinity – 10.60%pa
D – Marlborough Balanced – 8.21%pa
E – Momentum Harmony Growth – 5.25%pa
F – Tilney Growth – 6.91%pa
G – VAM Growth – 5.82%pa

The above performance figures are total returns (including dividends re-invested) in GB Pounds, and net of individual fund managers Annual Management Charge (AMC).

Once again, it is very pleasing to report that our strategy of a significant bias towards sustainable type entities at inception, has also resulted in our Model Portfolios outperforming similar multi-asset, multi-strategies in the offshore market.

With many of the above wealth management firms increasing their exposure to ESG and Sustainable type investments, the performance comparison for 2021 has been a lot closer.

A – Sustainable Ethical GROWTH Allocation – 15.1%
B – Sustainable Ethical BALANCED Allocation – 10.3%
C – CGWM Affinity – 8.8%
D – Marlborough Balanced – 9.9%
E – Momentum Harmony Growth – 10.1%
F – Tilney Growth – 7.5%pa
G – VAM Growth – 4.0%pa

I must at this point make the statement that “past performance is no guarantee of future returns”.

However, I do continue to believe that a bias towards high quality, sustainable investment strategies will result in superior returns over the medium to longer term.

And it does appear that more & more wealth management firms are coming around to this philosophy too when you start to look at the asset allocation changes being made…… but as with all investments, no matter how good the longer-term strategy is, there will be speed bumps in performance over the journey.

So why should you choose Ethical Offshore Investments..??

Over the past 3 years, we have proven that our preferred exposure to active, specialist managed funds with an ESG (Environmental, Socially & Governance) strategy has out-performed not only the benchmarks, but also that of our peers as well (once again, I must make the statement that past performance is no guarantee of future returns).

We strive to keep the ongoing charges as low as we can by utilising the lowest charging version of the funds that are available on the relevant platform. This ensure that more of the growth stays in the investor’s pockets. This has resulted in a combined total expense ratio (TER) for the underlying holdings of the Sustainable Portfolios of:

0.62%pa Cautious Allocation
0.68%pa Balanced Allocation
0.74%pa Growth Allocation

This is something that I am very passionate about and I do encourage clients, and prospective clients to ask the question about fees and charges. Unfortunately, there will always be charges when it comes to financial management, but clients need to know what they are paying and what services that they are getting to ensure that they are getting value for money.

Finally, it is the on-going service that our clients receive. Unlike many firms that target offshore investors, our focus is on the long-term professional relationship we have with our clients. We have regular contact with our clients to ensure that we continue to fully understand their personal financial needs and investment objectives. As the clients’ requirements change, we want to make sure that our service can be proactive in adapting to ongoing life changes experienced to ensure that their financial goals will continue to be met.

Sustainable Investing Strategies – Ethical Business Standards

If you would like to learn more about the portfolios or the underlying investments, please contact us using the more information button and we will respond to your queries.

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October 2021 Update – Sustainable Ethical Allocation Portfolios

Stephen Strowger — Mon, 08 Nov 2021 08:31:46 +0000

I get Knocked Down…… but I get Up Again

The Sustainable Ethical Allocation portfolios recover from the recent sell off

The end of October 2021 marked 3 years since from when I first constructed the Sustainable Ethical Allocation portfolios and we will be publishing a separate article on how we have performed over this quite unique time period.

3 Year performance Review

But for now, let us see what happened in the month of October……

Well, the negative momentum that we witnessed in the last few weeks of September continued into October, and it was once again the growth style ESG (Environmental Social Governance) type entities that we have a significant bias towards, that copped the brunt of the market sell off.

After dropping as much as 3% within the first week of October (Growth Allocation), the portfolios rallied well from these falls, with all portfolios ended the month above +1% for the month.

A – Sustainable Ethical GROWTH Allocation
B – Sustainable Ethical BALANCED Allocation
C – Sustainable Ethical CAUTIOUS Allocation

It was a really mixed basket of individual fund performance over the month, with our UK equity exposure being the hardest hit (down -2.6% to -3.3%) for the month. Yet our European exposure through the global equity funds was much more positive, with our specialist European fund providing a +4.1% for the month.

Fixed Interest / Bond assets once again struggled due to the fear of inflation and rising interest rates, resulting in our Fixed Income / Bond funds suffering small losses of -0.2% to -0.6% for the month.

For our diversified global equity funds, they all witnessed similar performance patterns, with losses at the start of the month before recovering well to finish the month well into positive territory.

A. Baillie Gifford Positive Change
B. Liontrust Sustainable Future Global Growth
C. Rathbone Greenbank Global Sustainability
D. Royal London Sustainable World Trust
E. Stewart Worldwide Sustainability

Changes to the Portfolios

We continue to review the underlying funds held in the various Sustainable Allocation portfolios, and as we are not affiliated with any of the fund management groups, we are free to make any allocation changes that we feel is necessary to improve performance.

At this stage, once again we are comfortable with the current range of funds held in the portfolios, so we will be maintaining the current fund allocation.

Portfolio Performance for 2021 Year to Date

A – Sustainable Ethical GROWTH Allocation
B – Sustainable Ethical BALANCED Allocation
C – Sustainable Ethical CAUTIOUS Allocation

We are very happy to announce that even with the pullback in September & early October, the recent recovery rally is helping push the gross performance back to near our all-time high levels. And to be completely honest, after the year we had for the covid19 affected 2020, we were not expecting to see such positive levels of growth for this year.

Going Forward…

I always seem to be concerned in the short term, as there always seems to be a current event(s) that could disrupt the markets…….. but realistically, that has been true for ever and a day. There is always the potential for a current event to cause chaos in one way or another.

However, as history has also shown us, investing in a diversified portfolio of quality real assets with an appropriate timeframe will also come out of any short-term turmoil generally in a better, stronger situation for investors.

So, while I am concerned in the short term (as I always am), I do still have a positive outlook for the types of investments we get exposure to over the medium to longer term……… BUT………. It is also very important that investors also maintain a cash reserve to cover any short-term income / capital expenditure requirements.

I admit that holding cash at present is a losing investment (if you do happen to get interest on cash, the effects of inflation soon take care of that), but it does provide a bit of insurance against having to draw out of an investment during a period of market weakness. You only need to look at February and March last year with the negative effects of Covid19 on the equity markets.

Structured Note Investments

Investors can also further diversify their portfolios through the use of Structured Notes. While Structured Notes are not our core investment offerings (we prefer the use of liquid, daily traded funds, ETF’s and direct shares), they can provide an opportunity to reduce short term volatility while receiving a pre-determined (conditional) investment return.

With interest rates at historical lows, downward pressure on dividends and equity market uncertainty ahead, investors are becoming increasingly attracted to the benefits of structured products.

But it must be stressed that Structured Notes are generally regarded as longer term investments so timeframe and whether access to capital is required needs to be seriously considered.

Some examples of the current notes available are:

Credit Agricole Technology Income Note 8.00%pa (underlying assets are Alphabet (Google), Amazon Inc, Apple Inc, Netflix Inc)

Barclays Climate Autocall 8.50%pa – (Solactive Climate Change Europe BTI PR Index)

Goldman Sachs Prime Markets 9.50%pa – (underlying assets FTSE MIB Index, Euro iStoxx 50 Futures Decrement 3% Index, FTSE 100 Custom Synthetic 3.5% Index)

Please click the below link to get information on the range of Structured Notes currently available via Ethical Offshore Investments.

Structured Notes currently available

If you would like to receive further information on the Sustainable Ethical Allocation Portfolios or on the underlying individual Managed Funds, please click REQUEST MORE INFORMATION.

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2021 Quarter 3 Update – Sustainable Ethical Allocation Portfolios

Stephen Strowger — Thu, 21 Oct 2021 05:49:38 +0000

The Investment Rollercoaster that is 2021 continued its theme again with the quarter 3 performance of the Sustainable Ethical Allocation portfolios.

There was good momentum going from early July right up to mid-September……. But the last week of the quarter was not a pretty one to watch for investors.

While saying that, all 3 portfolios did end the quarter in positive territory…… was just a little disappointing (& frustrating) with the market reactions in late September.

A – Sustainable Ethical GROWTH Allocation
B – Sustainable Ethical BALANCED Allocation
C – Sustainable Ethical CAUTIOUS Allocation

The Baillie Gifford Positive Change fund, which I seem to comment on a regular basis with my updates, was one of the better performers again for the quarter, up around 6.2% for the period……… and this is after being one of the hardest hit global funds in the last week of September.

The global growth funds hit hardest by the recent sell-off

The fund is still +17% year to date so while the end of the month performance is disappointing, the return year to date is still very impressive.

Royal London Sustainable World Trust, which is also held across all 3 portfolio allocations, returned a respectable 4.6% for the third quarter and has performed +11% year to date.

A – Baillie Gifford Positive Change
B – Royal London Sustainable World Trust

So what caused the issues late in the quarter..??

Continued concerns on the negative impact of inflation and rising interest rates did put a dampener on the future recovery sentiment for markets and economies. There was also rising oil & energy prices as well as supply chain disruptions, which some market analysts were predicting could derail the covid19 vaccine ‘inspired’ recovery.

There was also the US where urgent action was needed to increase their ‘debt ceiling’ to ensure that the Government would not default on its financial obligations.

And talking about defaults, there was the Chinese property developer, Evergrande, with its $300 billion in debt which they were struggling to service, leading to the default of some interest payments.

We can confirm that the underlying funds that we use for the Sustainable Ethical Allocation portfolios and the ones within the personal bespoke portfolios, do not have any direct exposure to Evergrande or any Chinese property developers.

While this may seem like a company specific problem, the risk is the contagion effect that a default or worse, a collapse will have on other companies globally (suppliers, contractors, banks, insurance companies)……… some media analysts have likened this situation to the Bear Stearns collapse that triggered the Global Financial Crisis in 2008. However, many other analysts have also come out to state that they believe that the Chinese Government, while reluctant, will not allow Evergrande to collapse as that would impact the wealth of millions & millions of Chinese nationals.

Our view is that there will be a Chinese government lead re-structure of the company’s debt to minimise the negative impact for local Chinese investors…… but it may not be such a good outcome for global investors in the company as there are reports that they may only get back 25 cents in the dollar.

While we have no direct exposure to Evergrande stock or debt and will therefore not feel the full brunt of any debt default, there will be some companies that our funds invest in that will be negatively affected. However, as long as this is controlled, we feel that our portfolios will be fairly well insulated from any fallout as this is a sector that generally doesn’t meet our ethical and sustainable investment objectives and as such, would only have nominal exposure to.

Portfolio Performance for 2021 Year to Date

A – Sustainable Ethical GROWTH Allocation
B – Sustainable Ethical BALANCED Allocation
C – Sustainable Ethical CAUTIOUS Allocation

As can be seen on the above graph, we have experienced 3 fairly significant pullbacks with performance this year (on 2 occasions actually putting performance negative YTD), but we are pleased that we are still in positive territory………. and above the performance objectives for the different fund risk strategies.

Going Forward…

However, our clients that were drawing an income or were due to take money out at that period, had holdings in cash, so they were drawing from an allocation that was NOT affected by the downturn. Over the following 12 months, the markets recovered (an even greater recovery within the sectors we have a bias towards) which allows some profits to be taken & allocated to cash to fund the next round of income / capital requirements.

This is why it is so important to have regular contact with your adviser so that planning strategies can be put in place, and more importantly, monitored, reviewed and adjusted accordingly.

While some regions have been disappointing of late (our Asian and Emerging market exposure), I am still very comfortable with the underlying funds included in the Sustainable Ethical Allocation portfolios in providing a solid core range of quality assets.

For clients that wish to have an increased exposure to specialist sectors, our bespoke portfolio management service can provide guidance on very high-quality managed funds and ETF’s for areas such as:

Alternative fuels
Solar Energy
Battery Technology
Artificial Intelligence & Robotics
Cyber Security
Blockchain Innovation

As with all funds / ETF’s that we propose for clients, we will only deal with Fund Managers that are regulated, fully transparent with their holdings and/or investment strategy and will avoid high charging versions of the fund.

If you would like to receive further information on the Sustainable Ethical Allocation Portfolios or on the underlying individual Managed Funds, please click REQUEST MORE INFORMATION.

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August 2021 Update – Sustainable Ethical Allocation Portfolios

Stephen Strowger — Wed, 01 Sep 2021 04:52:34 +0000

Positive momentum continues to power the Sustainable Ethical Allocation Portfolios

to an all time high…..

The Sustainable Ethical Allocation Portfolios experienced a strong positive performance for the month of August, reaching an All Time High at the end of the month.

The Cautious Allocation achieved a return of +3.0% for the month, Balanced Allocation +3.7% and the Growth Allocation +4.5%

A – Sustainable Ethical CAUTIOUS Allocation
B – Sustainable Ethical BALANCED Allocation
C – Sustainable Ethical GROWTH Allocation

August was one of those ‘dream months’ where all of the underlying assets held in the Sustainable Portfolios had positive performance.

As to be expected, the lower risk cautious style Fixed Interest / Bond funds performed at the lower end with returns ranging from 0.2% to 0.5% for the month with the diversified cautious allocation funds 1.5% to 2.4% for the period.

The Asian and Emerging Market exposure that detracted from the performance of the Balanced and Growth allocations last month, had an improvement of performance with returns of 2.1% to 2.7% for the month. However, this region is still experiencing a much higher level of short term volatility, which is predominantly coming from the Chinese ruling CCP instructing regulators to impose significant restrictions on companies involved in technology, food delivery and now on-line education. While our exposure to Asia does include some Chinese companies involved in the above industries, the funds are well diversified across other countries as well as business sectors.

So what drove the portfolios this month…

The answer to the above seems to be a recurring response…… it was once again our long term favourite, Baillie Gifford Positive Change with a return of 7.8% for the month. The diversified Royal London Sustainable World Trust, which like the Baillie Gifford fund is held across all 3 Sustainable portfolios, provided a 4.9% return for the month.

Other notable performers for the month of August were Stewart Investors Worldwide Sustainability with +7.1%, Liontrust Sustainable Future Global Growth +5.8% and Rathbone Greenbank Global Sustainability +5.4%

A – Baillie Gifford Positive Change
B – Stewart Worldwide Sustainability
C – Liontrust Sustainable Future Global Growth
D – Rathbone Greenbank Global Sustainability
E – Royal London Sustainable World Trust

Year to date performance…

After a bit of a rocky first half of the year, where we witnessed the ESG (Environmental & Social Governance) & SRI (Socially Responsible Investing) styles of investing struggling as many short term focused investors sold down their holdings in the anticipation of a recovery in the beaten down sectors of airlines, tourism, oil & gas, it is pleasing to see that maintaining the strategy of investing in good quality, well managed sustainable type businesses, has resulted once again in market beating performance.

A – Sustainable Ethical CAUTIOUS Allocation
B – Sustainable Ethical BALANCED Allocation
C – Sustainable Ethical GROWTH Allocation

Changes to the Portfolios

At this stage, once again we are comfortable with the current range of funds held in the portfolios, so we will be maintaining the current fund allocation.

REMINDER – ensure that you have a Cash Reserve

As part of our ongoing client management service, we stress the importance of ensuring that investors maintain sufficient cash (or very low risk, liquid assets) that can be called upon to cover their short-term income and/or capital purchase requirements.

While all of the underlying funds held in the Sustainable Ethical Allocation Portfolios do trade on a daily basis, we feel that it is very important to have access to some proceeds that is not subject to the daily movement (both up & down) that is applicable when investing in the financial markets.

This was highlighted back in February & March 2020 when the panic hit the markets thanks to Covid19 and even again (to a much lesser extent) at the start of this year, when the performance of the portfolios was not positive. If you are accessing your required proceeds from an area that is experience minimal to no negativity (i.e. Cash in bank), you are theoretically drawing from an asset that has not been effected by the current negative market conditions. It then provides time for the growth area of your portfolio to recover at which time, you draw some of the growth out & replenish your cash reserve.

Structured Note Investments

With interest rates at historical lows, downward pressure on dividends and equity market uncertainty ahead, investors are becoming increasingly attracted to the benefits of structured products.

But it must be stressed that Structured Notes are generally regarded as longer term investments so timeframe and whether access to capital is required needs to be seriously considered.

Some examples of the current notes available are:

Credit Agricole Technology Income Note – 8.00%pa (underlying assets are Alphabet (Google), Amazon Inc, Apple Inc, Microsoft Corp)

Morgan Stanley Prime Growth Note – 10.2%pa – (underlying assets FTSE100 Custom 3.5% Synthetic Index, Euro iStoxx 50 3% Synthetic Index)

BNP Paribas Developed Markets Autocall – 8.65%pa – (underlying assets S&P ASX 200 index, FTSE 100 index, TOPIX index, FTSE MIB index)

Please click the below link to get information on the range of Structured Notes currently available via Ethical Offshore Investments.

https://ethicaloffshoreinvestments.com/structured-notes

If you would like to receive further information on the Sustainable Ethical Allocation Portfolios or on the underlying individual Managed Funds, please click REQUEST MORE INFORMATION.

The post August 2021 Update – Sustainable Ethical Allocation Portfolios first appeared on Ethical Offshore Investments.

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July 2021 Update – Sustainable Ethical Allocation Portfolios

Stephen Strowger — Tue, 03 Aug 2021 09:02:31 +0000

The Sustainable Ethical Allocation Portfolios continue their positive momentum for the month of July.

An unusual month of performance for the Sustainable Ethical Allocation Portfolios where it was the Cautious Allocation (with only approx. 35% allocated to growth type assets) ended the month as the better performing portfolio.

The Cautious Allocation achieved a return of +1.9% for the month, Balanced Allocation +0.9% and the Growth Allocation +0.7%

A – Sustainable Ethical CAUTIOUS Allocation
B – Sustainable Ethical BALANCED Allocation
C – Sustainable Ethical GROWTH Allocation

The fixed interest / bond exposure of the portfolio was positive for the month with returns in the range of 1% – 2%, outperforming some of the growth & equity funds.

The Cautious Allocation Portfolio also benefitted from its minimal exposure to Chinese and Asian markets in general, which was the subject of a significant market sell off late in the month.

The Balanced Allocation Portfolio does have exposure to the Asian and Emerging Market region with the Growth Allocation Portfolio having an increased exposure. The sell-off in the Chinese market had a negative impact on the portfolios Asian and Emerging Market holdings. This cost the portfolios 0.9% (Balanced) and 1.29% (Growth) of performance for the month.

What this does also show is the importance of ensuring that your portfolio is well diversified of not only asset type, but also industry sector and geographical region. While the Asian region showed significant losses for the month (Hong Kong was down circa 15%), the Balanced & Growth portfolios still ended the month on a positive note.

So what drove the portfolios this month…

It was once again our long term favourite Baillie Gifford Positive Change, along with the Rathbone Global Sustainability and Royal London Sustainable World Trust that were the main drivers of the monthly performance with a monthly return of all around 3%.

A – Baillie Gifford Positive Change
B – Rathbone Global Sustainability
C – Royal London Sustainable World Trust

Year to date performance…

It has been a rollercoaster ride for investors in the various Sustainable Ethical Allocation Portfolios, with the ESG (Environmental & Social Governance) & SRI (Socially Responsible Investing) styles of investing seeing both positive & negative momentum sentiment so far this year.

However, we are pleased to declare that all 3 portfolios are well in positive territory so far for 2021.

A – Sustainable Ethical CAUTIOUS Allocation
B – Sustainable Ethical BALANCED Allocation
C – Sustainable Ethical GROWTH Allocation

Changes to the Portfolios

At this stage, we are comfortable with the current range of funds held in the portfolios, so we will be maintaining the current fund allocation.

Structured Note Investments

With interest rates at historical lows, downward pressure on dividends and equity market uncertainty ahead, investors are becoming increasingly attracted to the benefits of structured products.

But it must be stressed that Structured Notes are generally regarded as longer term investments so timeframe and whether access to capital is required needs to be seriously considered.

Please click the below link to get information on the range of Structured Notes currently available via Ethical Offshore Investments.

https://ethicaloffshoreinvestments.com/structured-notes

If you would like to receive further information on the Sustainable Ethical Allocation Portfolios or on the underlying individual Managed Funds, please click REQUEST MORE INFORMATION.

The post July 2021 Update – Sustainable Ethical Allocation Portfolios first appeared on Ethical Offshore Investments.

The post July 2021 Update – Sustainable Ethical Allocation Portfolios appeared first on Ethical Offshore Investments.

2021 Half Yearly Update – Sustainable Ethical Allocation Portfolios

Stephen Strowger — Tue, 06 Jul 2021 10:39:02 +0000

The Sustainable Ethical Portfolios continue to power ahead…….

It has been a roller-coaster ride for clients invested in the various Sustainable Ethical Allocation Portfolios, with the recent quarter closely mirroring that of the first quarter.

We are happy to report that all 3-risk managed Sustainable Allocations performed strongly over the last 3 months with Cautious Allocation +6.8%, Balanced Allocation +8.4% and Growth Allocation +10.9%

Sustainable Ethical CAUTIOUS Allocation
Sustainable Ethical BALANCED Allocation
Sustainable Ethical GROWTH Allocation

All 3 portfolios benefitted once again from a long-term favourite, Baillie Gifford Positive Change which had a positive quarter with a return of 13.6% This fund has been held across all 3 of the Sustainable Ethical Allocation Portfolios since November 2018, and is up 140% since then (probably one of the reasons why it is a long-term favourite of mine….)

The diversified Royal London Sustainable World Trust, which is also held across all 3 portfolios, performed strongly and recovered some of its earlier losses with a quarterly return of 9.5%

Actually, all of the underlying funds in the portfolios had positive performance last quarter but as expected, the lower risk/volatile Bond & Fixed Interest type funds were the laggards with returns ranging from 1.8% to 2.4% for that period.

So as we are half way through the year, how have the Sustainable Ethical Allocation Portfolio performed…??

Sustainable Ethical CAUTIOUS Allocation +5.0%
Sustainable Ethical BALANCED Allocation + 6.9%
Sustainable Ethical GROWTH Allocation +9.9%

While it has been a more volatile ride than we are accustomed to for the Sustainable portfolios, the good news for investors is that all 3 are firmly in positive territory and well ahead of the individual portfolios’ objectives.

For more information on the performance of the portfolios against their benchmarks, please click here

As per previous updates, the ESG (Environmental & Social Governance) and SRI (Socially Responsible Investing) sector, which we obviously have a significant bias towards with our portfolios, has struggled performance wise against areas of the market that have rebounded from the significant negative impact caused by the effects of covid19 in 2020.

Sectors such as Oil & Gas, Banks, Insurance, Travel Related companies have been the outperformers so far this year, with speculators betting that the vaccine rollouts around the world will result in some areas around the world coming back to some form of normal day to day life. This would potentially provide a recovery scenario for these types of businesses and a subsequent share price increase (coming from a very depressed, low level).

For investors (traders) to get proceeds to re-invest in those depressed areas, many looked at selling down their ‘winning assets’ of 2020 which predominately would have been companies involved in Sustainable business activities (technology, healthcare, education, renewable energy) and rotate their proceeds into these other, sold down assets.

The obvious question is “why don’t we get active & involved in the same..?”

A lot of the companies that were sold off in 2020 and (& have been the ones speculators have been buying this year) didn’t fit with our medium to longer term strategy which is investing in quality companies with stable management, low levels of debt, sustainable business model (i.e. will perform & be profitable in most economic climates), that have a significant advantage over their competitors and operate using ethical business methods.

It is a combination of the above that helped our clients reduce the negative impact of covid19 early in 2020 and provide the significant out-performance by the years end. It is also a strategy that we firmly believe will also provide outperformance over the medium to long term, way after the effects of covid19 have become a (bad) memory.

For a recap on how the Sustainable Portfolios performed in 2020, please click here

Because of the different, quality style approach that we take with our allocations, there will be periods of underperformance which will includes negative returns. This is going to be unavoidable. However, we are taking a medium to longer term outlook and we continue to believe that investing in a diversified portfolio of good quality, well managed assets, using their pricing power to generate sustainable revenue and profits, and continuing to evolve their business practices, will result in investors reaping the benefits.

The above is well & good for the medium to longer term…… but as has been openly stated, there will be periods of high volatility, which will include times when there will be negative returns.

It is therefore very important to ensure that any proceeds that is required in the short term (within 12 months), whether that is income and/or capital, is maintained in a very low risk environment (i.e. cash management style investment) that will not be subject to any short term fluctuations.

This will ensure that when it comes time for you to draw down those proceeds, there is no need to be trying to ‘time’ the payment. If the markets are struggling at the time, then you have peace of mind knowing that you are drawing out your required money without it being negatively affected by the general market conditions. It also ensures that the growth part of the portfolio has time to recover before the next amount is required.

Investors can also further diversify their portfolios through the use of Structured Notes. While Structured Notes are not our core investment offerings (we prefer the use of liquid, daily traded funds, ETF’s and direct shares), they can provide an opportunity to reduce short term volatility while receiving a pre-determined (conditional) investment return. But it must be stressed that Structured Notes are generally regarded as longer term investments so timeframe and whether access to capital is required needs to be seriously considered.

Please click the below link to get information on the range of Structured Notes currently available via Ethical Offshore Investments.

https://ethicaloffshoreinvestments.com/structured-notes/

If you would like to receive further information on the Sustainable Ethical Allocation Portfolios or on the underlying individual Managed Funds, please click REQUEST MORE INFORMATION.

The post 2021 Half Yearly Update – Sustainable Ethical Allocation Portfolios first appeared on Ethical Offshore Investments.

The post 2021 Half Yearly Update – Sustainable Ethical Allocation Portfolios appeared first on Ethical Offshore Investments.

April 2021 Update – Sustainable Ethical Allocation Portfolios

Stephen Strowger — Mon, 03 May 2021 09:13:07 +0000

A positive month all round for the Sustainable Ethical Allocation Portfolios.

As stated in our recent end of quarterly update, portfolios that hold a bias towards Sustainable growth and Environmental improving type companies have struggled so far this year, especially after last year’s significant outperformance.

And the question was asked, “is it now time to abandon our strategy of investing in quality E.S.G. (Environmentally & Social Governance) and S.R.I. (Socially Responsible Investing) entities…??

Well 1 month on from this, it was good to see that every underlying fund held in the various Sustainable Ethical Allocation Portfolios had a positive month, which resulted in the portfolios showing growth of 3.3% (Cautious), 4.4% (Balanced) & 6.4% (Growth) for the month of April.

A – Sustainable Ethical CAUTIOUS Allocation
B – Sustainable Ethical BALANCED Allocation
C – Sustainable Ethical GROWTH Allocation

As with every month, there was some volatility and the sell-off in global stocks in the last 2 trading days did dampen the monthly performance…….. with all 3 portfolios beating their respective benchmarks (all be it by a slim 0.1% for the Balanced Allocation).

The main contributor for the monthly performance was the exposure to our long-term favourite Baillie Gifford Positive Change that was +7.8% for April which is held across all 3 of the Sustainable Portfolios. I have provided some further performance information on this fund later in this report.

The Royal London Sustainable World Trust, which is also held across all 3 portfolios was up +5.2% for the Month.

The equity sectors that did struggle this month compared to other areas was that of our Asian and Emerging Market equities, which were +1.3% to +1.8% respectively.

So what has happened so far in 2021……….

A – Sustainable Ethical CAUTIOUS Allocation
B – Sustainable Ethical BALANCED Allocation
C – Sustainable Ethical GROWTH Allocation

All of the underlying Growth style funds are now back in positive territory for 2021 (2 of them only just) with most +4% to +6% Year to Date.

However, it is a different story with the cautious style funds that historically allocate predominately to Bonds, Fixed Interest and Money Market style assets with a low allocation to shares. While we did have a positive month for April, all of the bond type funds are still negative for the year (-0.86% to -2.4%).

Looking at the Bond / Fixed Interest sector in general, the Year to Date negative returns are across the board with only the High Yield Bond sector being in positive territory. UK Gilts (which we have minimal if any exposure to) are down over 7% for 2021.

A – IA UK Gilts
B – IA Sterling Strategic Bond
C – IA Sterling High Yield Bond
D – IA Sterling Corporate Bond
E – IA Global Mixed Bond
F – IA Global Government Bond

As interest rates are so low globally, there is really only 1 way that interest rates can go and that is up. With the vaccine rollout and the possibility that we may get back to some form of normal day to day living sometime this year, there has been comments from certain Central Banks that this may result in a spike in inflation. So what is the common course of action to curb this..?? They raise interest rates which in theory reduces disposable income & subsequently discretionary spending. Less demand then forces prices down (or reduce the upwards trend).

This can have a negative affect on Interest Rate sensitive assets such as Bonds. In general terms, if interest rates rise, the price (or value) of current bonds will reduce as the ‘interest rate premium’ that they had over new bonds being issued with the current interest rates, has now reduced. They are therefore not as attractive to hold.

What to do…..?? This is not the first time that bond markets have faced such an issue and one thing that I can guarantee is that it will not be the last. The advantage that we have is that all of the cautious type funds held in the portfolios are being managed by very experienced asset managers, who have experienced such issues many times in the past. Bond and fixed interest assets are liquid type assets that can be bought / sold fairly easily on market. The high quality, very experienced Fund Managers that we are using for our cautious allocations (Royal London, Rathbones, Aegon, Liontrust) will be using this as opportunity to re-balance and restructure their underlying Bond portfolio allocations in-line with their current and future interest rate forecasts and projections.

Baillie Gifford Positive Change Fund

I will be preparing a more in-depth look at this fund as a separate article, but I just wanted to highlight the performance of this fund, as it is held across all of the Sustainable Ethical Allocation Portfolios and has been the stand out performer since inception of the Sustainable Portfolios.

The Fund invests in an actively managed portfolio of 25-50 global high quality growth companies which can deliver positive change in one of four current themes:

Social Inclusion and Education, Environment and Resource Needs, Healthcare and Quality of Life and addressing the needs of the world’s poorest populations.

The reason why I am bringing focus onto this fund is due to recent performance and to once again stress the importance of having a suitable investment timeframe.

https://ethicaloffshoreinvestments.com/features/the-importance-of-investment-timeframe-april2021/

The performance of this fund since inception of the Sustainable Portfolios in November 2018 has been incredible, up by +128% (it is over +260% since the fund launched in January 2017). But as the graph below indicates, it has not just been a 1 way street upwards….. there have been some speedbumps along the way.

A – Baillie Gifford Positive Change
B – IA Global Index

Because of the style of investment that the manager (Baillie Gifford) takes plus the type of companies that they will invest in, the fund will experience a higher level of short-term volatility. And this has been evident this year with the fund being one of the bottom performers compared to other Global Equity strategies, especially those that have a ‘value’ bias strategy that have benefited recently with the market rally in the sectors that got hammered last year during the covid19 induced economic closures…….. areas that the Positive Change has minimal, if any exposure to.

Baillie Gifford Positive Change performance 2021 YTD

A – Baillie Gifford Positive Change
B – IA Global Index

As I have stated in previous updates, I don’t like it when there is a drop in performance, especially when it results in a period of negative returns……. But unfortunately, it is a situation that investors do need to be aware of and accept if they are to achieve the superior, longer term rewards of investing in such funds.

While this fund is a personal favourite of mine (I personally hold it my own offshore portfolio), I am mindful of ensuring that clients portfolios are well diversified and the overall performance is not reliant on just 1 or 2 funds. For the Cautious Portfolio, this fund makes up 5% of the portfolio allocation, with the Balanced and Growth Portfolios being 8% and 10% of the portfolio allocation respectively (please note that the portfolios do also hold other Baillie Gifford sustainable strategies).

Please click the following link for more information on the Sustainable Ethical Allocation portfolios https://ethicaloffshoreinvestments.com/services/#portfolio-management

Investors can also further diversify their portfolios through the use of Structured Notes. While Structured Notes are not our core investment offerings (we prefer the use of liquid, daily traded funds, ETF’s and direct shares), they can provide an opportunity to reduce short term volatility while receiving a pre-determined (conditional) investment return. But it must be stressed that Structured Notes are generally regarded as longer term investments so timeframe and whether access to capital is required needs to be seriously considered.

Please click the below link to get information on the range of Structured Notes currently available via Ethical Offshore Investments.

https://ethicaloffshoreinvestments.com/structured-notes/

If you would like to receive further information on the Sustainable Ethical Allocation Portfolios or on the underlying individual Managed Funds, please click REQUEST MORE INFORMATION.

The post April 2021 Update – Sustainable Ethical Allocation Portfolios first appeared on Ethical Offshore Investments.

The post April 2021 Update – Sustainable Ethical Allocation Portfolios appeared first on Ethical Offshore Investments.

Sustainable Ethical Allocation Portfolios – Quarter 1, 2021 Update

Stephen Strowger — Sun, 11 Apr 2021 14:39:27 +0000

The Sustainable Ethical portfolios have struggled so far this year….. is it time to abandon the quality E.S.G. & Socially Responsible Investing approach that we promote..??

Not going to mince my words here…. I have been disappointed in the recent performance (or more to the point, lack of positive performance) so far this year for the Sustainable Ethical Allocation Portfolios. After a very positive start to the year, we saw a reversal of fortunes in February as the areas that the portfolios have a significant bias towards, such as sustainable & renewable energy, technology and healthcare, experienced a sell off as short-term investors ‘rotated’ towards the areas of the market that were hardest hit during the covid19 pandemic (oil & gas, tourism, airlines).

The 3 Sustainable portfolios unfortunately were all negatively affected and have ended the quarter all suffering losses circa 2%.

Sustainable Ethical CAUTIOUS Allocation
Sustainable Ethical BALANCED Allocation
Sustainable Ethical GROWTH Allocation

While it is disappointing to experience a portfolio loss over this first quarter of 2021, if we look at the actual performance over the past 12 months, the strategy still has generated solid positive returns for investors.

Sustainable Ethical CAUTIOUS Allocation
Sustainable Ethical BALANCED Allocation
Sustainable Ethical GROWTH Allocation

What caused the pullback with our Sustainable portfolios..??

With the covid19 vaccine rollout, there was some positive sentiment towards the areas of the economy that were hardest hit by the covid19 lockdown, with the prospect that we may get back to some form of normal day to day life. Sectors such as airlines, tourism, oil & gas and discretionary spending saw quite a bit of investor inflow and to do that, investors/traders had to get the proceeds from somewhere with many using the opportunity to sell down some of their winning holdings of 2020. The funds held in the Sustainable portfolios would have had very little if any exposure to those sectors hard hit in 2020……… so while it is part of the reason for the recent underperformance, it is also a significant reason for the longer term outperformance.

Another negative sentiment towards the sectors the portfolios have a bias towards was the forecast that the re-opening of the world’s economies could result in an increase in inflation to above the level that the various Central Banks are comfortable with. To curb inflation, Central Banks will generally increase official interest rates, which in theory would be a negative to companies that have debt, as the cost of servicing that debt would rise, therefore eating into profit.

The above fear of rising interest rates did actually result in price movement in the bond market, with bond yields rising. What needs to be remembered here is that when interest rates rise, this becomes a negative for existing bond holdings as the value (or premium) of the Bond entity will fall. This is also why our fixed interest / bond assets also struggled this quarter (this was across the board, and not just with Ethical or Sustainable type issuers).

So, is it now time to abandon our strategy of investing in E.S.G. (Environmentally & Social Governance) and S.R.I. (Socially Responsible Investing) entities…??

My honest answer to that is a resounding no…..

While we are disappointed with the recent quarterly performance, it must be remembered that all portfolio strategies will experience some periods of underperformance which will include negative returns.

The underlying Fund Managers and the funds that make up the Sustainable Ethical Allocation Portfolios have consistently outperformed their benchmarks and their peers over the medium to longer term……. so this would include periods prior to the Covid19 pandemic and the subsequent recent focus on ESG and Sustainable investing strategies.

The Fund Managers perform in-depth research on their investment holdings, with an emphasis on investing in quality companies that exhibit a business model that will be sustainable (& profitable) over many years and through different market cycles. Unfortunately, like what we witnessed last quarter, is that there will be times when we will see a short-term rotation out of these quality stocks from traders which can put some pressure on the share price of such companies.

Assuming that the medium to longer term outlook of the companies has not changed, this pullback in their share prices can actually provide an opportunity for our Fund Managers as they can top up some of their share holdings at discounted levels. And this seems to have been the case with the Fund Managers held.

An example of this is some recent comments from the lead manager of the SDL UK Buffettology Fund which is held in the Sustainable Growth Allocation:

“The current so-called rotation to value reads like a Who’s Who of everything we don’t invest in, so is giving us a buying opportunity to add businesses to the portfolio which we have had on the watch list, including Quartix and Team17,” said the manager.

“There are also excesses in the US market which might yet create some favourable opportunities if there were to be a meaningful pull back.”

We are only 9 days into April, but the 3 portfolios have benefited considerably so far with the recovery in the sectors that our portfolios have a bias towards. Hopefully this is a sign of performance to come………

Sustainable Ethical CAUTIOUS Allocation
Sustainable Ethical BALANCED Allocation
Sustainable Ethical GROWTH Allocation

Are we making any changes to the underlying funds…??

We are continually monitoring the funds and the Fund Managers in how they are performing in relation to their investment objectives, benchmarks as well as against their peers. As I have stated above (& on many previous occasions), there will be periods where the underlying funds underperform which may include negative returns. This is not the first time and this will no doubt not be the last time.

However, while we will not panic & sell out of a fund just because of short term performance issues, we will monitor the fund to determine if it is in fact just a short performance blip, or if it is something more substantial. We are NOT associated with any of the Fund Managers that form the Sustainable Portfolios and do NOT receive any financial incentive from them…….. therefore any changes that we make would be done so without any bias.

At present, we are maintaining the current holdings for now. If there is a significant change in an investment style or management of one of the underlying funds, being daily traded and liquid, we can easily sell out of the affected funds and re-allocate to a new fund holding(s).

Please click the following link for more information on the Sustainable Ethical Allocation portfolios https://ethicaloffshoreinvestments.com/services/#portfolio-management

As part of our ongoing client management, we stress the importance of ensuring that investors maintain sufficient cash (or very low risk, liquid assets) that can be called upon to cover their short-term income and / or capital purchase requirements. I strongly believe that this is even more imperative now due to the extremely uncertain and unprecedented economic and market conditions we are experiencing.

https://ethicaloffshoreinvestments.com/news/the-importance-of-investment-timeframe/

The other area that we encourage investors to look at is that of diversification…….. the Sustainable Allocation Portfolios are well diversified with not only asset type (equities, bonds, cash) but ensuring that there is also diversification of geographical region.

The underlying Fund Managers (Baillie Gifford, Royal London, Rathbones, Vanguard for example) will also take a different approach and style to their investment strategies and by blending these different managers and investments styles & strategies, potentially will result in lower volatility and more consistent overall portfolio returns.

Please click the below link to get information on the range of Structured Notes currently available via Ethical Offshore Investments.

https://ethicaloffshoreinvestments.com/structured-notes/

If you would like to receive further information on the Sustainable Ethical Allocation Portfolios or on the underlying individual Managed Funds, please click REQUEST MORE INFORMATION.

The post Sustainable Ethical Allocation Portfolios – Quarter 1, 2021 Update first appeared on Ethical Offshore Investments.

The post Sustainable Ethical Allocation Portfolios – Quarter 1, 2021 Update appeared first on Ethical Offshore Investments.

Sustainable Ethical Allocation Portfolios – January 2021 Update

Stephen Strowger — Tue, 02 Feb 2021 16:15:49 +0000

One month into the new year……… and it still feels like 2020.

The first 3 weeks of the month of January, we were very pleased with the general market performance and the portfolios mirrored this by continuing their positive momentum from last year.

Then we hear all about some Reddit online forum talking about a battle between an army of amateur investors and multi-billion-dollar hedge fund that has ignited a trading frenzy, sending the share prices of some previously unfancied companies in the US surging while delivering a kicking to the short-selling Hedge Funds who bet against them.

The company that gained most of the media attention was GameStop, a struggling video games retailer that has been hit very hard by the covid19 pandemic.

Institutional investors, including the $13bn hedge fund Melvin Capital have seen this as an opportunity to make a profit from betting against the GameStop share price, commonly known as short selling.

All of this was unremarkable until users on a Reddit forum called ” WallStreetBets” decided to buy into GameStop shares (or options to buy them), initially because they thought it was undervalued, then to send a message to the short-sellers. Acting in unison they pushed up the share price to astronomical levels causing massive losses for short-sellers. The battleground had already shifted to other shares that have been bet against by hedge funds including BlackBerry, cinema chain AMC and American Airlines.

The media frenzy surrounding all of this resulted in headlines that the investment world that we were all familiar with, was about to be completely disrupted by a group of young, on-line trading activists, with their disruptive strategy against the hedge funds and the so called big boys of Wall Street.

What is Short-Selling..?

It’s a way of profiting when the price of an asset – such as gold, oil or a company’s shares – falls. It’s perfectly legal and many experts argue it is an important way to allow markets to determine the “true” price of any asset. It’s also a method of speculation that can increase volatility and reduce stability.

A short seller pays a fee to borrow shares from someone else. Usually this is an institutional investor such as another Investment Fund Manager or a Pension Fund. The short seller then sells the shares at the market rate.

Later on, they will buy the shares back again and return them to their previous owner. If the price has fallen the short-seller pockets the difference between the price they sold the shares at and the price they bought them back at. If the share price is higher, well they then lose money.

One thing with Short Selling is that there is no limit to how much someone can lose. Example, if you buy $5,000 worth of GameStop shares, the most you can lose is $ 5,000 (i.e. the share price goes to zero). But if you decide to short-sell the shares (borrow the shares from someone else and then sell them) and the share price goes the other way and continues to rise, theoretically the potential losses are infinite. Because you still owe that other person the shares and as you have sold them, you will need to buy them back at the current market price.

Me personally, I am not a fan of short selling strategies on individual companies as I don’t agree with benefiting from the pain & suffering of loss from others…… but I do agree with short-selling strategies when it involves broad market indices / indexes as this can be a very successful tool when managing portfolio risk and market volatility. Anyway….. that is my personal ‘ethical’ observation of the subject.

While the above may have resulted in some of the volatility and late month market sell off, there was also updated news on the success (or lack of in some cases) of the covid19 vaccines and future projected affects that this may have with company earnings and economic growth. The media does seem to like to sensationalise situations and the Reddit WallStreetBets was an opportunity to do so…… got to sell that advertising space somehow.

So back to the Sustainable Ethical Allocation portfolios…..

Following the market sentiments early in the month, all 3 Allocation portfolios rose to their all-time highest levels on the 25^th (26^th for Cautious Allocation) of January, but as stated above, the portfolios were not immune from the significant sell off seen late in the month.

However, even with the market sell off, I am still happy to report that all portfolios ended the month in positive territory.

+ 0.2% – Sustainable Ethical CAUTIOUS Allocation
+ 1.3% – Sustainable Ethical BALANCED Allocation
+ 2.2% – Sustainable Ethical GROWTH Allocation

While I never like to see periods where investment values fall (even though we all know that it is a part of longer-term investing), what was good to observe was that once again, the Sustainable Ethical Portfolios were LESS volatile during these times and as such, did not suffer as bad as their benchmarks.

The main contributor for the monthly performance was once again our exposure to Baillie Gifford Positive Change (which is held across all of our Sustainable portfolios) which was up 7.6% for the month as well as our exposure to Asian & Emerging Market Equities which was +4%. It was a very mixed result for the rest of the underlying funds held as they were all negatively affected in that last week of January.

So are we making any changes….?

At the moment, no. We are continuously monitoring and reviewing all of the funds held in our Sustainable Ethical Allocation portfolios. As has been stated before, we only want to invest in a range of funds that have good stable, high quality management, transparent with their holdings and investment strategy, and have a significant bias towards investing in quality companies that will benefit from a sustainable business model (i.e. consistently profitable during the different market cycles, political changes and what ever pandemics are thrown into the mix).

I am happy with the current allocations for all 3 portfolios as they all meet the above criteria. If there is a significant change in their investment style or management, being daily traded and liquid, we can easily sell out of the effected funds and re-allocate to a new fund…… we do NOT get paid commission from any of the funds held in the Sustainable Ethical Allocation portfolios, so this ensures that we are proposing funds based on merit and future opportunity….. and not financial incentive from the Fund Manager. This is part of the Ethical Business Practices that we preach.

Please click the following link for more information on the Sustainable Ethical Allocation portfolios https://ethicaloffshoreinvestments.com/services/#portfolio-management

https://ethicaloffshoreinvestments.com/news/the-importance-of-investment-timeframe/

Please click the below link to get information on the range of Structured Notes currently available via Ethical Offshore Investments.

https://ethicaloffshoreinvestments.com/structured-notes/

If you would like to receive further information on the Sustainable Ethical Allocation Portfolios or on the underlying individual Managed Funds, please click REQUEST MORE INFORMATION.

The post Sustainable Ethical Allocation Portfolios – January 2021 Update first appeared on Ethical Offshore Investments.

The post Sustainable Ethical Allocation Portfolios – January 2021 Update appeared first on Ethical Offshore Investments.

2020 – A year to forget….. or a year to remember..?

Stephen Strowger — Thu, 14 Jan 2021 06:00:58 +0000

Now that 2020 is behind us, it is time to review how the Sustainable Ethical Allocation portfolios performed during one of the most volatile 12 month periods that investors have ever experienced.

Each and every year, there will always be events that occur that market participants were not prepared for. And 2020 was no different there…..

Obviously, the big event this year was the covid19 virus and how this virus spread the planet so quickly, which had a significant negative impact on global economies, shutting down local businesses and causing all sorts of chaos with travel arrangements. We also had a phenomenon where Oil Future Contracts went into negative territory, so in other words, investors/traders were paying people to take their contracts for oil delivery. US politics and probably the most controversial president the US has ever voted in was also making consistent headlines, and this also had (both positive and negative) impacts on the global financial markets. Plus, we had that on-going saga called BREXIT.

I am not going to make comment on the above issues, as there are plenty of other news & current affairs sources available to get your fix of global information and news.

So, with so many unprecedented events for 2020, how did the Sustainable Ethical Allocation Portfolios perform.

The good news for our investors is that all 3 allocation portfolios performed positively, considerably outperforming their benchmarks.

21.4% – Cautious Allocation
31.1% – Balanced Allocation
39.6% – Growth Allocation

Our goal is to be a consistent top quartile performer amongst our peers through the use of high-quality individual fund managers and investing in higher quality, sustainable business entities.

So how did we perform….??

Sustainable Ethical BALANCED Allocation – GBP
Canaccord (CGWM) Diversity – GBP
Marlborough Balanced – GBP
Guinness Multi-Asset Balanced – GBP
Tilney Balanced Portfolio RETAIL – GBP
Harmony Momentum Sterling Balanced – GBP

I am very pleased to state that even with all of the turmoil that hit the investment world in February & March, which our portfolios were not immune from, not only have we been able to provide a positive return of over 30% for the year for our very diversified Balanced allocation, this has been substantially greater than what has been achieved by other diversified balanced portfolio managers. The above funds that we have compared the performance to are all diversified with a similar balanced risk style of asset allocation.

Looking at the performance on a month-by-month basis, the Sustainable Ethical Balanced Allocation portfolio had the best monthly performance in 7 of the 12 months and was the second-best performance for the other 5 months (the next best was Canaccord (CGWM Diversity) with top monthly performance 3 times).

So why has the Sustainable Ethical Allocation portfolios been able to significantly outperform our peers..??

I would like to think that it was the fund research that we took back in 2018 before constructing the portfolio allocations. While the general philosophy was to have a significant bias towards investing in sustainable entities with ethical business practices, we have been able to do this while also utilising fund managers that take a different approach and investment style in achieving their objectives.

All of the underlying funds held through the 3 Allocation Portfolios achieved a positive return for 2020…… and this includes the allocation towards direct UK equities which saw their FTSE All Share index benchmark drop around 10% for the year.

The portfolios were definitely helped by our holdings in various Baillie Gifford Funds, with the Positive Change Fund providing a return of 80.1% for the year (there is an allocation towards this fund across all 3 portfolios). While they may have slightly underperformed in the last quarter, our exposure to the various Royal London Sustainable funds also resulted in the year portfolio outperformance, with the diversified Sustainable World Trust up just over 20% for the year. Once again, this fund is allocated across all 3 portfolios.

What was also very pleasing to see this year was the defensive, more cautious type funds that actually helped with reducing the short-term volatility. The Royal London Sustainable Managed Growth Trust and Rathbone Ethical Bond funds, both of which are allocated across the Cautious and the Balanced allocations, provided returns of 10.6% and 8.9% for 2020 respectively and were also part of the reason why the portfolios avoided the worst of the market activity in February and through early March.

0.61%p.a. Cautious Allocation
0.64%p.a. Balanced Allocation
0.76%p.a. Growth Allocation

There will be a separate report posted in the next few days about the various funds being used with our Sustainable model portfolios, but a preview of this is that of the 23 different funds being used across the 3 Sustainable model portfolios, 19 recorded top quartile performance against their peers with the other 4 funds recording 2^nd quartile performance.

As readers can probably tell, we are very pleased with the performance of all 3 of our Sustainable model portfolios in not only being able to outperform their benchmarks, but also a significant outperformance against their peers while also exhibiting a lower level of short term volatility.

However, we are not resting on our laurels but instead, once again reviewing the current fund holdings as well as the opportunity to get exposure to other managed funds and trusts that meet our strict investment and ethical business practices and objectives. Our objective with the Sustainable Allocation Portfolios is to provide investors a range of ‘core holdings’ to consistently meet or exceed the relevant benchmarks, while doing so with a lower level of short term volatility and maintaining full liquidity and flexibility.

Performance comparison (short, medium & longer term)
Consistency of performance against peers
Fund manager ratings
Asset allocation comparison
Level of diversification
Ongoing charges

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Sustainable Ethical Allocation Portfolios – December Update

Stephen Strowger — Tue, 12 Jan 2021 11:45:15 +0000

We finished 2020 on a high…!!!

Well, we nearly did…… the last 2 trading days of the year were negative for the majority of equity markets and as a result, all 3 Sustainable Ethical Allocation portfolios did slip a little to end the year just off their all-time highest levels.

However, the positive momentum from last month did continue for most of December, even though trading volume was low due to the Christmas & New Year holiday period.

The 3 Sustainable Ethical Allocation portfolios once again delivered a positive monthly result with the Growth Allocation +3.7%, Balanced Allocation +2.9% and the Cautious +2.1% for the month of December.

A. Cautious Allocation – 2.1%

B. Balanced Allocation – 2.9%

C. Growth Allocation – 3.7%

This monthly performance was in-line to slightly above that of their relevant benchmarks. The FTSE All Share index, which has been one of the worst performing share indexes for 2020 was also positive for the second month in a row, up 3.7% for December.

All of the underlying funds held in the portfolios had a positive monthly performance to round out the year. The main contributors for the month was the exposure to Emerging Markets (+ 5.6%) as well as a +5% return for the Rathbone Global Sustainability, with 1 of our UK equity funds benefiting from the strong finish of the year in the UK, being up +6.6% for December.

2020 Performance

After such a dismal year in regards to economic lockdowns, travel restrictions, mass unemployment and most of all, illness due to the covid19 outbreak, I am actually very pleased to state that the Sustainable Ethical Allocation portfolios all performed positively, significantly outperforming their benchmarks for 2020.

We will be posting a separate article in the coming days, detailing the annual performance of the Sustainable portfolios and how they have compared to their benchmarks, as well as other diversified strategy funds. But a quick preview, each & every fund that was included in the Sustainable portfolios, recorded a positive return for 2020…… and that includes the funds directly exposed to the UK.

2020 Year to date performance v’s FTSE All Share

A. Cautious Allocation

B. Balanced Allocation

C. Growth Allocation

D. FTSE All Share

Strategy Going Forward

This may seem like I am repeating myself, and I make no apologies for doing so. As I continue to believe that this is a good medium to longer term strategy.

We are still going to maintain our diversified approach with our portfolios, once again with a strong focus on businesses that have a strong, sustainable business models. The obvious question is why not chase the recovery in the other sectors which potentially could provide greater, short term returns…… while that may be the case, the fundamentals for maintaining a longer term focus utilising a diversified portfolio of quality businesses, is as strong as ever…… if not even greater now at these unprecedented times.

NEED TO REMEMBER that this same strategy not only was beneficial during the darkest days of the covid19 crisis, but was also beneficial PRIOR to the covid19 outbreak…….. once again, quality of assets and fund management are very important.

So we are maintaining our current fund manager allocation for the Sustainable Ethical portfolios.

The Importance of Investment Timeframe

Please click here to get information on the range of Structured Notes currently available via Ethical Offshore Investments.

If you would like to receive further information on the Sustainable Ethical Allocation Portfolios or on the underlying individual Managed Funds, please click REQUEST MORE INFORMATION.

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Sustainable Ethical Allocation Portfolios – November Update

admin — Tue, 01 Dec 2020 16:27:56 +0000

Vaccine driven economic recovery & the financial markets cheered…!!!

After all of the chaos of last month, with most markets experiencing their worst performance since the covid19 induced panic of March, the month of November saw a complete reversal of this negativity with many equity markets posting their best monthly gains in many years.

And this positive momentum was also experienced by all 3 of the Sustainable Ethical Allocation Portfolios, with the Growth Allocation +8.0%, Balanced Allocation +6.5% and the Cautious Allocation +4.8% for the month.

A. Cautious Allocation – 4.8%

B. Balanced Allocation – 6.5%

C. Growth Allocation – 8.0%

While we are always happy to make a profit, and this recent month has pushed the performance to all time highs for the Sustainable Allocation Portfolios, but I must actually point out that this recent month’s performance was actually below that of our portfolio benchmarks.

For example, the FTSE All Share that we have used as a reference this year had an extraordinary monthly performance and was up 12.43% for November.

So why did the Sustainable Allocation Portfolios underperform..??

With the announcement from Pfizer that their covid19 vaccine had a very high success rate in testing, this provided a positive outlook that we may get back to a pre-covid type world sooner than expected. This was obviously a very good situation for the sectors that have been the worst hit by the covid19 economic lockdowns, specifically airlines, tourism sector (cruise lines, hotels) and with all of this potential increase in travel, the energy sector also saw significant gains in November.

Our Sustainable Allocation Portfolios have minimal exposure to those sectors and as such, did not get the same level of performance last month…….. but…… this is also the reason why the year to date performance is significantly greater than that of our benchmarks.

So for this month, the higher quality assets the portfolio holds actually detracted from the performance potential….. but I think I would rather maintain the quality for the medium to longer term potential benefits.

2020 Year to date performance v’s FTSE All Share

A. Cautious Allocation

B. Balanced Allocation

C. Growth Allocation

D. FTSE All Share

So how did the underlying Managed Funds perform….??

November did provide a rare opportunity where every one of our underlying funds held in the 3 Sustainable Allocation Portfolios, all produce a positive return for the month.

The Baillie Gifford Positive Change fund, which is held in all 3 portfolios, was the best performer (again) with a monthly return of 12.7%

The very highly rated diversified Royal London Sustainable World Trust, which is also held across all 3 portfolios, returned 3.8% for the month. But as has been stated previously, the allocation to quality, sustainable companies actually detracted from performance this month.

Our exposure to the more cautious fixed interest, ethical bond funds returned 1.4% – 2.5% for the month.

Strategy going forward….

While we would not be surprised to see a further rally in the same sectors as what outperformed in November, we are still going to maintain our diversified approach with our portfolios, once again with a strong focus on businesses that have a strong, sustainable business models. The obvious question is why not chase the recovery in the other sectors which potentially could provide greater, short term returns…… while that may be the case, the fundamentals for maintaining a longer term focus utilising a diversified portfolio of quality businesses, is as strong as ever…… if not even greater now at these unprecedented times.

Need to remember that this same strategy not only was beneficial during the darkest days of the covid19 crisis, but was also beneficial PRIOR to the covid19 outbreak…….. once again, quality of assets and fund management are very important.

So we are maintaining our current fund manager allocation for the Sustainable Ethical portfolios.

https://ethicaloffshoreinvestments.com/news/the-importance-of-investment-timeframe/

Please click the below link to get information on the range of Structured Notes currently available via Ethical Offshore Investments.

https://ethicaloffshoreinvestments.com/structured-notes/

If you would like to receive further information on the Sustainable Ethical Allocation Portfolios or on the underlying individual Managed Funds, please click REQUEST MORE INFORMATION.

The post Sustainable Ethical Allocation Portfolios – November Update first appeared on Ethical Offshore Investments.

The post Sustainable Ethical Allocation Portfolios – November Update appeared first on Ethical Offshore Investments.

Sustainable Ethical Allocation Portfolios – October Update

Stephen Strowger — Sun, 01 Nov 2020 08:17:35 +0000

Sustainable Ethical Allocation Portfolios – October Update

Keeping your investment head……. while others around are losing theirs

The majority of the financial markets experienced their worst month for performance since March earlier this year, triggered by a significant increase in active covid19 cases in Europe and the US. With the real possibility of further full lockdowns in the region, there is the fear that this will further delay any economic recovery from the previous covid19 lockdowns and put additional pressure on Government assistance.

Just to add further uncertainty to the investment mix, we also have the upcoming US elections which (unfortunately) seem to be dividing America even more.

The Dow Jones Industrial Index (DJIA) and the S&P 500 Index finished the month down by 4.3% and 2.3% respectively. European markets were even harder hit with the UK FTSE All Share down 4.5%, French CAC down 4.8% and the German DAX down 8.9% for the month. There was some positive performance for the month from Asia with Japan’s Nikkei up 1.1% and the HSCEI in Hong Kong up 3.8% for the month of October.

The month of October started well enough, with the Sustainable Ethical Allocation portfolios continuing their positive performance to new all-time high levels. Unfortunately, the portfolios were not immune from the significant equity market falls in the last 2 weeks of October and did end up having a negative performance of just under 1% for the month………… however these losses were significantly less than that experienced by the general markets (& is the first negative month for the portfolios since March).

Performance for October 2020

A. – 0.9% – Cautious Allocation
B. – 0.8% – Balanced Allocation
C. – 0.9% – Growth Allocation

As expected, our exposure to global equities, especially to European and US companies were generally negatively affected, with the Royal London Sustainable World Trust (held across all 3 Sustainable Allocation Portfolios) suffering a loss of 2.9% for the month. However, our exposure to Asian & Emerging Markets was positive with a +4.5% return over the same period.

By employing a diversified strategy which included an allocation towards the more cautious fixed interest and bond type funds did help in minimising the portfolio losses for the month. While we obviously never like to see a situation where a portfolio performs in a negative way, it must be remembered that there will always be some levels of volatility when investing, which in turn will result in periods of negative returns……… it is therefore very important that investors do have an appropriate investment timeframe and ensure that any short term funding requirements are maintained in cash or very low risk, cash like investments.

We believe that the Sustainable Ethical Allocation Portfolios will continue to offer investors the potential for market leading returns over the medium to longer term through exposure to high quality fund managers, investing in high quality (& sustainable) companies………… and because of this diversification and quality, doing so with lower levels of risk and volatility.

2020 and the Performance So Far….

Even with the set back of a slightly negative return for October (plus the significant market falls in March), the Sustainable Ethical Allocation portfolios have still provided investors market beating returns so far for 2020, even exceeding our own forecasts and objectives.

For comparison, the FTSE All Share Index is still struggling to recover from the market turmoil of covid19 through February & March with negative performance of 23% year to date.

This emphasises the importance of diversification and investing into quality assets.

23% – Growth Allocation, 18% – Balanced Allocation and 12% – Cautious Allocation. This compares to the FTSE All Share Index which is still struggling this year, down over 23% over this same period.

A. Cautious Allocation
B. Balanced Allocation
C. Growth Allocation
D. FTSE All Share Index

Strategy Going Forward….

As with most of the world, we will be watching the US election closely. While the 2 political parties seem to have different agendas for the future of the US economy, where there will be no doubt some significant business winners as well as losers, we still feel that the quality and the blended investment style of the Fund Managers currently being used plus the strategy of investing in quality businesses with a long term sustainable business model, there will be no need to make any significant allocation adjustments to our Sustainable Allocations, irrespective on who ends up being the winner.

We are happy with the current diversified asset allocations as well as the underlying Fund Managers. While saying that, we will continue to monitor and review the funds being used to ensure that we only have access to high quality, top quartile Fund Managers.

While we are enjoying good solid positive returns with many of our equity funds, we are very mindful that our portfolios need to remain well diversified and that they do not get significantly ‘overweight’ to a specific asset class or sector.

https://ethicaloffshoreinvestments.com/news/the-importance-of-investment-timeframe/

Please click the below link to get information on the range of Structured Notes currently available via Ethical Offshore Investments. https://ethicaloffshoreinvestments.com/structured-notes/

If you would like to receive further information on the Sustainable Ethical Allocation Portfolios or on the underlying individual Managed Funds, please click REQUEST MORE INFORMATION.

Sustainable Ethical Allocation Portfolios

The Sustainable Allocation portfolios are currently invested in 10 – 12 different managed funds, utlising the expertise of the following Fund Managers.

Cautious Allocation

The SUSTAINABLE ETHICAL CAUTIOUS ALLOCATION PORTFOLIO will generally have approx. 65% of the assets invested in various bond, fixed interest and cash type assets that are regarded as lower risk. The remaining will be allocated with a growth style of equities and infrastructure type assets.

The objective of this allocation is to achieve a net return of 5%-6%PA but with lower levels of short term volatility.

A. Sustainable Ethical Cautious Allocation
B. IA Mixed Investment 20-60% Share Index

Balanced Allocation

The SUSTAINABLE ETHICAL BALANCED ALLOCATION PORTFOLIO will have approx. 65% of the allocation invested in growth type assets such as equities and infrastructure with the remaining allocated to more cautious type assets such bonds, fixed interest and cash type assets.

The objective of this portfolio is to achieve similar type returns associated with direct equity investing, while experiencing lower levels of short term volatility, especially during negative market periods.

A. Sustainable Ethical Balanced Allocation
B. IA Global Index

Growth Allocation

The SUSTAINABLE ETHICAL GROWTH ALLOCATION PORTFOLIO will invest in a range of equity and growth style funds and is designed for the longer term investor that can accept higher levels of short term volatility.

The objective of this allocation is to achieve a net annual return of 10% – 12%pa but investors need to be aware and accept the higher levels of short term volatility, which will include periods of negative returns.

A. Sustainable Ethical Growth Allocation
B. IA Global Index

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Sustainable Ethical Allocation Portfolios – September Update

Stephen Strowger — Sat, 03 Oct 2020 17:06:05 +0000

Sustainable Ethical Allocation Portfolios

The Importance of Quality – The quality of the underlying assets and the Fund Managers has once again resulted in superior portfolio performance this month…….. this Quarter…….. this Year

The month of September did see a significant return of volatility in equity markets, especially with the top performing Technology sector in the US. The fear of a slower recovery out of this current covid19 situation resulted in substantial falls across equity markets around the world…… and the Sustainable Ethical Allocation Portfolios were not immune from this.

However, due to the quality of the underlying Fund Managers and the diversified nature of the portfolios, we were able to reduce the short term volatility and limit the downside, and yet still achieved positive returns for the month.

Performance for September 2020

A. 1.10% – Cautious Allocation
B. 1.30% – Balanced Allocation
C. 1.90% – Growth Allocation

Our exposure to the Baillie Gifford funds within the Sustainable Ethical Portfolios were the main drivers for the positive performance once again this month. As announced in our last update, we have included Liontrust Fund Partners across the Sustainable Portfolios which not only assisted with the upside performance, but also with the short term volatility.

Not all of the funds were positive for the month, with our exposure to Emerging Markets being slightly lower (-0.4%) for the month and our exposure to the UK market funds being flat to slightly lower (0% to -1%).

The cautious fixed interest type funds recovered from last months slight pull back with all of the holdings performing positively for September.

2020 and the Performance So Far….

As was commented in previous months portfolio updates, the Sustainable Ethical Allocation Portfolios have been very successful in minimising the volatility and market falls we experienced back in February & March.

However, investors have been rewarded with positive returns year to date:

25% – Growth Allocation, 19% – Balanced Allocation and 14% – Cautious Allocation. This compares to the FTSE All Share Index which is still struggling this year, down 20% over the same period.

A. Cautious Allocation
B. Balanced Allocation
C. Growth Allocation
D. FTSE All Share Index

Strategy Going Forward….

As discussed last month, we added a new allocation to Liontrust Fund Partners across all 3 Sustainable model portfolios, which further diversified the various investment styles of our quality Fund Managers. This will potentially result in clients not only continuing to achieve market leading performance, but reducing the short term volatility.

We are happy with the current diversified asset allocations as well as the underlying Fund Managers and as such, we will not be making any changes to the portfolios.

As mentioned earlier in this report, we have experienced an increase in short term volatility this month (which we did forecast in the previous months update). With the ongoing uncertainty surrounding covid19 and how will the global economy rebound, plus the upcoming US Presidential elections as well as the ongoing saga that is Brexit, we would expect that this higher level of volatility to continue for the rest of this year

However, I still hold a very positive medium to longer term view on the funds held in the portfolios and while we should expect to experience short term volatility (which will include periods of negative returns), I do believe that the funds held will result in superior medium to longer term positive returns.

https://ethicaloffshoreinvestments.com/news/the-importance-of-investment-timeframe/

Please click the below link to get information on the range of Structured Notes currently available via Ethical Offshore Investments. https://ethicaloffshoreinvestments.com/structured-notes/

If you would like to receive further information on the Sustainable Ethical Allocation Portfolios or on the underlying individual Managed Funds, please click REQUEST MORE INFORMATION.

Sustainable Ethical Allocation Portfolios

The Sustainable Allocation portfolios are currently invested in 10 – 12 different managed funds, utlising the expertise of the following Fund Managers.

Cautious Allocation

The SUSTAINABLE ETHICAL CAUTIOUS ALLOCATION PORTFOLIO will generally have approx. 65% of the assets invested in various bond, fixed interest and cash type assets that are regarded as lower risk type assets. The remaining will be allocated in growth style of equities and infrastructure type assets.

The objective of this allocation is to achieve a net return of 5%-6%PA but with lower levels of short term volatility.

A. Sustainable Ethical Cautious Allocation
B. IA Mixed Investment 20-60% Share Index

Balanced Allocation

A. Sustainable Ethical Balanced Allocation
B. IA Global Index

Growth Allocation

The objective of this allocation is to achieve a net annual return of 10% – 12%pa but clients need to be aware and accept that there will be higher levels of short term volatility and periods of negative returns.

A. Sustainable Ethical Growth Allocation
B. IA Global Index

The post Sustainable Ethical Allocation Portfolios – September Update first appeared on Ethical Offshore Investments.

The post Sustainable Ethical Allocation Portfolios – September Update appeared first on Ethical Offshore Investments.

Sustainable Allocation Portfolios August Update

Stephen Strowger — Wed, 02 Sep 2020 06:16:27 +0000

Portfolio Update for August 2020

Positive momentum continues to power the performance growth of the Sustainable Ethical Allocation Portfolios

Our Sustainable Ethical Allocation Portfolios maintained their positive momentum, resulting in net gains of 3.8% (Growth Allocation), 2.7% (Balanced Allocation) and 1.5% (Cautious Allocation) for the month of August.

Performance August 2020

A. Cautious Allocation
B. Balanced Allocation
C. Growth Allocation

The equity fund holdings within the Portfolios were predominately higher in August, with our allocation to the Baillie Gifford Positive Change providing a return of 5.6% and the diversified Royal London Sustainable World Trust returning 2.8% for the month (both funds held across all 3 portfolio allocations).

The Rathbones Global Sustainable fund (held in the Balanced and Growth allocation portfolios) also provided a solid 5.6% return for the month of August.

The cautious bond assets in the portfolios were generally flat or slightly negative over this recent period.

2020 Performance So Far….

While we did see high levels of volatility and significant losses with markets in March, all 3 of the Sustainable Ethical Allocation Portfolios have recovered very well and investors have experienced positive returns for 2020 Year to Date.

21% – Growth Allocation, 16% – Balanced Allocation and 13% – Cautious Allocation. This compares to the FTSE All Share index that is still struggling with a loss of 19% so far in 2020.

A. Cautious Allocation
B. Balanced Allocation
C. Growth Allocation
D. FTSE All Share Index

Strategy Going Forward….

I still hold a very positive medium to longer term view on the funds held in the portfolios and while we should expect to see some short term volatility (which will include periods of negative returns), I do believe that the funds held will result in superior medium to longer term positive returns.

With our rebalancing of the portfolios, we will be adding a new fund manager, Liontrust Fund Partners, to the model portfolios going forward. We feel that the sustainable investment objectives and management style of Liontrust will complement that of the other fund managers held in the Sustainable Ethical Allocation portfolios, potentially providing further upside potential while providing additional diversification.

https://ethicaloffshoreinvestments.com/news/the-importance-of-investment-timeframe/

Please click the below link to get information on the range of Structured Notes currently available via Ethical Offshore Investments. https://ethicaloffshoreinvestments.com/structured-notes/

If you would like to receive further information on the Sustainable Ethical Allocation Portfolios or on the underlying individual Managed Funds, please click REQUEST INFORMATION.

So how have the Sustainable Model Portfolios held up in 2020…..

Sustainable Ethical Allocation Portfolios

The Sustainable Allocation portfolios are currently invested in 10 – 12 different managed funds, utlising the expertise of the following Fund Managers.

Cautious Allocation

The SUSTAINABLE ETHICAL CAUTIOUS ALLOCATION PORTFOLIO will generally have approx. 65% of the assets invested in various bond, fixed interest and cash type assets that are regarded as lower risk type assets. The remaining will be allocated in growth style of equities and infrastructure type assets.

The objective of this allocation is to achieve a net return of 5%-6%PA but with lower levels of short term volatility.

A. Sustainable Ethical Cautious Allocation
B. IA Mixed Investment 20-60% Share Index

Balanced Allocation

A. Sustainable Ethical Balanced Allocation
B. IA Global Index

Growth Allocation

A. Sustainable Ethical Growth Allocation
B. IA Global Index

The post Sustainable Allocation Portfolios August Update first appeared on Ethical Offshore Investments.

The post Sustainable Allocation Portfolios August Update appeared first on Ethical Offshore Investments.

Sustainable Allocation Portfolios July Update

Stephen Strowger — Tue, 04 Aug 2020 07:26:41 +0000

Portfolio Update for July

Quality continues to shine…. another positive month for the Portfolios

The month of July started really well for the Sustainable Ethical Allocation portfolios, but the fears of a second wave of COVID19 impacting the economic recovery with the very real possibility of further lockdown restriction, plus further tensions with the US China relationship, the equity markets did see a considerable pullback in the last week.

Even with the end of month pullback, the Sustainable Ethical Allocation Portfolios still recorded a positive performance month with all 3 allocations outperforming their objective benchmarks.

Performance July 2020

A. Cautious Allocation
B. Balanced Allocation
C. Growth Allocation

This now results in the Portfolios returning +9% (Cautious Allocation), +13% (Balanced Allocation) and +17% (Growth Allocation) for this year to date. This compares to the FTSE All Share which is still down over 20% for 2020.

A. Cautious Allocation
B. Balanced Allocation
C. Growth Allocation
D. FTSE All Share Index

With the underlying funds held in the Sustainable Portfolios, it was only the UK Sustainable Equity fund held across all 3 allocations that was negative for the month…… and while we don’t like experiencing losses of any kind, this fund was down 1.5% for the month compared to the 3.5% loss experienced by the broader FTSE All Share Index.

However, this was countered by the outperformance of our holdings in the Baillie Gifford Positive Change fund that had another outperforming month with an 8.5% return. This fund is also held across all 3 of the Sustainable Allocation Portfolios.

Strategy Going Forward….

As part of our client management, we always encourage investors to maintain sufficient proceeds in cash (or very low risk, liquid assets) that can be called upon to cover their short-term income and / or capital purchase requirements. I strongly believe that this is even more imperative now due to the extremely uncertain and unprecedented economic and market conditions we are experiencing.

While the Sustainable Ethical Allocation Portfolios have provided very solid positive returns so far this year, we only need to look back to February and especially March to see how quickly markets can turn and have a negative impact on an investor’s wealth.

What we want to try and avoid is the situation where investors are forced to draw out their required investment income at a time when markets are volatile and are falling in value……

By maintaining a reserve of 6 – 12 months of investment income requirements in cash, it ensures that you have the option of then drawing your current income requirements from a source that is not being affected by the short-term market conditions…………. If the markets are experiencing a March 2020 type pullback, drawing from the unaffected cash reserve then gives the main portfolio the opportunity to recover.

https://ethicaloffshoreinvestments.com/news/the-importance-of-investment-timeframe/

Please click the below link to get information on the range of Structured Notes currently available via Ethical Offshore Investments. https://ethicaloffshoreinvestments.com/structured-notes/

If you would like to receive further information on the Sustainable Ethical Allocation Portfolios or on the underlying individual Managed Funds, please click REQUEST INFORMATION.

So how have the Sustainable Model Portfolios held up in 2020…..

Sustainable Ethical Allocation Portfolios

The Sustainable Allocation portfolios are currently invested in 10 – 12 different managed funds, utlising the expertise of the following Fund Managers.

Cautious Allocation

The SUSTAINABLE ETHICAL CAUTIOUS ALLOCATION PORTFOLIO will generally have approx. 65% of the assets invested in various bond, fixed interest and cash type assets that are regarded as lower risk type assets. The remaining will be allocated in growth style of equities and infrastructure type assets.

The objective of this allocation is to achieve a net return of 5%-6%PA but with lower levels of short term volatility.

A. Sustainable Ethical Cautious Allocation
B. IA Mixed Investment 20-60% Share Index

Balanced Allocation

A. Sustainable Ethical Balanced Allocation
B. IA Global Index

Growth Allocation

The SUSTAINABLE ETHICAL GROWTH ALLOCATION PORTFOLIO will invest in a range of equity funds and is designed for the longer term investor that can accept higher levels of short term volatility.

A. Sustainable Ethical Growth Allocation
B. IA Global Index

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Sustainable Allocation Portfolios continue their positive moves higher (Mid Year Update)

Stephen Strowger — Tue, 14 Jul 2020 08:28:44 +0000

Mid Year Portfolio Update

2020 – A Year to forget….. or is it..??

The word Unprecedented seems to be the buzz word when it comes to describing the financial markets for 2020

And yes, I too have been regularly using that word to describe how I have viewed what has occurred so far in 2020.

There is no point me going into detail as to what has been the catalyst for this years ‘unprecedented’ market activity, because unless you have been lucky enough to live with absolutely no media access this year, you are all well aware that it is the economic effects being caused by the covid19 Corona Virus. I don’t think that there are many people on this planet that have not been somehow negatively affected by covid19.

As has been reported in our previous client updates, the sectors that have been hit the hardest this year have been Airlines, Cruise Companies, Travel & Tourism Operators. Plus we had the unprecedented (…there is that word again…) price action of Crude Oil when it went into a negative price situation…… that is correct…. traders were actually paying for others to take delivery of their oil contracts that they had previously purchased. So as expected, oil exploration and producers have also been hit very hard this year.

With the first 3 months of the year, we saw significant falls in equity markets and volatility not seen since the darkest days of the Global Financial Crisis, but markets in the second quarter staged a very strong rebound. Helped by the easing of Covid19 lockdowns and early signs of an economic recovery, saw risk appetite return in Q2, supporting equity and credit markets.

So how have the Sustainable Model Portfolios held up in 2020…..

Sustainable Ethical Allocation Portfolios

We have been very pleased with the performance of the model portfolios so far this year, considering the significant (unprecedented..??) market conditions experienced in 2020.

A. Sustainable Ethical Cautious Allocation +7.1% YTD
B. Sustainable Ethical Balanced Allocation +10.7% YTD
C. Sustainable Ethical Growth Allocation +14.3% YTD

The investment style of the portfolios resulted in a lower level of volatility in the first quarter, especially during the extreme negative market conditions in March. This helped to reduce the negative impact compared to that of the general market.

While the portfolios, like most assets struggled in the first quarter of 2020, the allocation to what we regard as very highly reputable fund managers investing in quality, sustainable type businesses, resulted in a very strong rebound for the second quarter. The quarterly performance for the portfolios was 28.4% Growth Allocation, 20.7% Balanced Allocation and 14.4% Cautious Allocation.

Performance 2020 year to date is:

+ 7.1% Cautious Allocation
+10.8% Balanced Allocation
+14.3% Growth Allocation

This compares to the FTSE 100 in the UK which is down 18.2% year to date. The Eurostoxx50 is down 13.65% in 2020 (after +16.15% this last quarter) and even the Dow Jones Index and S&P500 in the US are down 9.5% and 4% respectively this year. The only bright light has been the technology biased NASDAQ in the US that is actually +12.1% so far in 2020.

So what has been driving the performance of the Sustainable Ethical Allocation Portfolios……

Since the inception of the Sustainable Allocation Portfolios back in November 2018, we have maintained a bias towards fund managers that we think will offer superior risk adjusted performance through their investment into good quality companies with strong balance sheets, low levels of debt, a long term sustainable business/revenue model, while operating with an ethical business practice.

While we were expecting the portfolios to outperform over the medium to longer term, we are very pleasantly surprised at how well they have rebounded and their level of out-performance so far this year.

Our exposure to Baillie Gifford Global Discovery and their Positive Change fund has no doubt been the standout performers. I did post an article on 6^th April https://ethicaloffshoreinvestments.com/news/within-this-turmoil-is-there-opportunity/

at the time when the fund had just dropped 30% from its February 2020 levels and questioned whether this was actually a time for opportunity with this fund. I then posted a follow up article on the 25^th June

https://ethicaloffshoreinvestments.com/top-features/turmoil-and-opportunity/

A. Baillie Gifford Positive Change
B. Baillie Gifford Global Discovery

All 3 of the Sustainable Allocation Portfolios have some exposure to the Baillie Gifford Positive Change fund, with the Balanced Allocation and Growth Allocation also having some exposure to the Baillie Gifford Global Discovery. If you would like further information on the Baillie Gifford funds, please contact me and I will provide the latest Fund Manager update.

The portfolios exposure to the technology, biotechnology sector as well as healthcare were the main benefactors for their performance so far in 2020, plus a geographical bias towards the US. The portfolios had no direct investments in the airlines, cruise ships and the Crude Oil sector, so was able to avoid the significant falls those sectors experienced.

What helped the Cautious and Balanced Allocations during the highly volatile, negative period during March and early April was our exposure to the very diversified Vanguard LifeStrategy fund. While the fund could not avoid losses during this period, the fact that this fund is so well diversified and the asset allocation is re-balanced daily, resulted in much lower levels of volatility and reduced the negative impact on the portfolios.

Vanguard LifeStrategy 20% Equity – 2020 Performance YTD v’s IA Mixed Investment 0%-35% shares

A. Vanguard LifeStrategy 20% Equity
B. IA Mixed Investment 0-35% Shares

The Sustainable Ethical Allocation Portfolios continue to be well diversified in not only asset type (shares, infrastructure, bonds, fixed interest) but of business sector and geographical location. We continue to utlilise a range of different quality fund managers which include Baillie Gifford, Royal London and Vanguard that also provides diversification of investment style. The different investment approach and styles will complement each other with the potential to provide a more consistent overall portfolio return with lower levels of volatility.

We will continue to have bias towards investments into higher quality assets, with good management, strong balance sheets and a sustainable business model.

Strategy Going Forward…..

I think what is important now more than ever is that of liquidity and ensuring that you have sufficient assets in ultra low risk (i.e. cash) assets to cover any short term income and or capital requirements.

What happened in March & April is a prime example of why I continue to harp on about having the next 6 – 12 months worth of income sitting in cash. No one likes to see their portfolio going down in value, but if you are relying on it for your income or a lump sum payment in the short term, it can result in even greater short term pain. As you are then drawing out of an asset during a falling market.

Investors that maintained their short term income requirements in the cash accounts of their portfolios ensured that those particular assets were protected from the negative markets…… therefore not affecting their upcoming income payments. The rest of the proceeds continue to be invested in the growth component of the portfolios, but by ensuring that short term needs are taken care of with the cash account, when we do see a negative situation with the markets like we did in March & April, it gives the quality assets time to recover before they will be needed.

In regards to portfolios themselves, we are happy with the underlying managed funds that are held in the Sustainable Ethical Allocation Portfolios as they have consistently provided top quartile performance against their peers. We will continue to re-balance the portfolios back to around their default asset levels to ensure that the portfolios maintain their very diversified nature.

We are concerned in the short term with so much uncertainty surrounding covid19 and what the actual true negative impact has been on economies and what is a realistic timeframe for getting back to some form of normal…… obviously a covid19 vaccine would provide a boost to economic confidence going forward.

However, while we are concerned in the short term, we do hold a lot of confidence with the sustainable strategy and that of the quality fund managers that make up the Portfolio Allocations.

As we have stated in the past, all of the managed funds held are strictly regulated, transparent with their holdings and/or their strategy but most importantly, their assets are liquid and can be traded on a daily basis. So if there is a significant change with the financial markets, we can relatively easily switch in or out of investment or move to a holding in cash.

Summary

We are obviously very happy with the performance of the 3 Sustainable Allocation Portfolios to not only limit the negativity downside in the first quarter, but to also show substantial recovery in the second quarter which has resulted in strong positive returns year to date.

If you have any queries with your portfolio or would like to get additional information on the underlying investments, please click on the Request Information.

Sustainable Ethical Allocation Portfolios

The Sustainable Allocation portfolios are currently invested in 10 – 12 different managed funds, utlising the expertise of the following Fund Managers.

Cautious Allocation

The SUSTAINABLE ETHICAL CAUTIOUS ALLOCATION PORTFOLIO will generally have approx. 65% of the assets invested in various bond, fixed interest and cash type assets that are regarded as lower risk type assets. The remaining will be allocated in growth style of equities and infrastructure type assets.

The objective of this allocation is to achieve a net return of 5%-6%PA but with lower levels of short term volatility.

A. Sustainable Ethical Cautious Allocation
B. IA Mixed Investment 20-60% Share Index

Balanced Allocation

A. Sustainable Ethical Balanced Allocation
B. IA Global Index

Growth Allocation

The SUSTAINABLE ETHICAL GROWTH ALLOCATION PORTFOLIO will invest in a range of equity funds and is designed for the longer term investor that can accept higher levels of short term volatility.

A. Sustainable Ethical Growth Allocation
B. IA Global Index

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Sustainable Portfolios continue their Positive Performance (May 2020 Update)

admin — Tue, 02 Jun 2020 07:43:51 +0000

Positive Performance for May 2020…

After a shaky and volatile start to the month of May, and a significant pullback in Europe on the last trading day, the majority of equity markets posted gains for the month……… and so did the Sustainable Ethical Allocation Portfolios.

A. +7.2% Growth Allocation
B. +5.2% Balanced Allocation
C. +3.3% Cautious Allocation

2020 so far…

That has powered the Portfolios well into positive performance for year 2020……. Even after all of the turmoil that was experienced during the panic of late February and through the month of March.

A. Growth Allocation
B. Balanced Allocation
C. Cautious Allocation
D. FTSE All Share

As can be seen in the graph above, all of the Sustainable Ethical Allocation portfolios have provided investors positive performance against a backdrop of negativity across the global markets. The FTSE All Share Index had a positive month (+3.1%) but is still down 19.85% year to date.

So what has driven the Portfolio performance…

Once again, I refer back to previous reports and my comments on the focus of Diversification and Quality. The underlying Fund Managers and their respective funds held in the portfolios have been included because of their individual focus on investing in higher quality, sustainable businesses that should not only come through this current covid19 crisis, but because of their strength of business practices, will come out an even stronger company.

Like all investors, they will not get everyone of their investments perfect and each manager does have their own specific style of investing. This is where the benefit of diversification comes into play by not only ensuring that the portfolio is invested across a range of asset types (equities, infrastructure, fixed interest / bonds, commodities) but across a range of geographical regions, industries as well as individual Fund Manager investment style……….. By blending the different investment styles of the different Fund Managers will potentially provide a more consistent overall portfolio return.

And this has been the case since when I first constructed the portfolio allocations on 1^st November 2018.

If you would like to receive further information on the Sustainable Ethical Allocation Portfolios or on the underlying individual Managed Funds, please click REQUEST INFORMATION.

Request more information on the Sustainable Ethical Allocations

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Positive Performance for 2020 – Sustainable Ethical Allocation Portfolios in the green (April 2020 Update)

admin — Fri, 01 May 2020 12:05:33 +0000

What a difference a month can make…

Unprecedented…… that seems to be the new ‘buzz’ word when trying to describe the financial markets of 2020. In my performance update at the end of March I made the blindingly obvious statement that the first quarter of 2020 was a challenging one for investors… but I also praised the quality of the underlying Fund Managers held in the portfolios where their performance did soften the negative impact being seen across the markets.

So what happened in April……… the word Unprecedented makes another appearance.

We saw a strong rebound in many of the financial markets and this has filtered through to the Sustainable Ethical Allocation portfolios, where we saw positive performance and returns of 14.6% for the Growth Allocation, 10.8% for Balanced Allocation and 7.2% for the Cautious Allocation.

C. Sustainable Ethical GROWTH Allocation
B. Sustainable Ethical BALANCED Allocation
A. Sustainable Ethical CAUTIOUS Allocation

Positive Performance: This has resulted in all 3 Allocation Portfolios to now be in positive territory for 2020.

This compares to the FTSE All Share Index in the UK that is still struggling with a loss of 22% YTD and even the S&P 500 in the US is still down 9.8% YTD.

A. Sustainable Ethical GROWTH Allocation
B. Sustainable Ethical BALANCED Allocation
C. Sustainable Ethical CAUTIOUS Allocation
D. FTSE All Share Index

Once again, while we can not forecast when we can expect to see normality returning to the markets, we still do hold high confidence in the underlying Fund Managers and their ethical & sustainable investment strategies which in turn should result in consistent outperformance, with lower levels of volatility, over the longer term.

All of the managed funds held within our Sustainable Ethical Allocations are strictly regulated, liquid and trade on a daily basis.

Request more information on the Sustainable Ethical Allocations

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Sustainable Ethical Allocation Portfolios – How have they held up in 2020? (March 2020 Update)

admin — Mon, 06 Apr 2020 06:15:36 +0000

To say that the first quarter of 2020 was a challenging one for investors would be an understatement. Not only have we had to deal with the financial and economic impact of the Corona COVID19, but at the start of March, markets were also hit with a significant fall in the price of oil.

With the restrictions on travel and the slump in the oil price, it was no surprise that it has been the oil related and the travel related companies (cruise lines, airlines, travel agents) that have been the hardest hit with the market sell off.

The positive news is that our Sustainable Allocation Portfolios had no exposure to the Oil & Gas sector and had only minimal exposure to the travel industry. As a result, all 3 of Model Portfolios (Cautious, Balanced & Growth) did perform better than the general market. While we were unable to avoid losses during this period, the quality of the underlying assets and Fund Managers did help in reducing losses with lower levels of volatility.

_{A. Sustainable Ethical CAUTIOUS Allocation

B. Sustainable Ethical BALANCED Allocation}
_{C. Sustainable Ethical GROWTH Allocation}
_{D. FTSE All Share Index}

The Sustainable Ethical Allocations suffered losses of -5.4% (Cautious), -8.2% (Balanced) & -10.7% (Growth) for the 3 month period to 31st March 2020. This compares to the FTSE All Share which suffered a loss of 25.1% over the same time period.

Just for comparison, the S&P500 in the US had its worse ever first quarter with a loss of 20% and Europe fared even worse with the German DAX down 24.5% and the current covid19 hotspot (Italy) down 28.5%

Obviously we don’t like seeing any situation where we see a loss in value for our portfolios. But this does go to show that by investing in a portfolio of good quality Fund Managers, which in turn invest in good quality companies with a sustainable ethical outlook, this can soften the blow of negative markets during extreme periods of volatility.

While we can not forecast when we can expect to see normality returning to the markets, we still do hold high confidence in the underlying Fund Managers and their ethical & sustainable investment strategies which in turn should result in consistent outperformance, with lower levels of volatility, over the longer term.

All of the managed funds held within our Sustainable Ethical Allocations are strictly regulated, liquid and trade on a daily basis.

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