Please find below our Weekly Market Update for the week ending 27th September 2019.
Blue Sky Comment
The Blue Sky team caught up with a number of our investment partners this week, so what follows is a brief update on what we have been doing and their outlook.
LGT Vestra continue to actively manage our funds and the latest move has been to trim the holdings in the United States. The Morgan Stanley and T Rowe Price holdings we own have both had very strong runs, outperforming their benchmarks. This has allowed some nice profits to be banked and will help insulate us against any immediate sterling strength ( yes it can still happen!) against the US dollar. The proceeds are held as cash to be able to swiftly take advantage of fresh investment opportunities. We still like the US market and will be keeping sensible, albeit slightly reduced, holdings here.
At Legal and General, they have continued their strategy of reducing their holdings in European shares, where the economic outlook remains especially challenging. They have been slightly increasing holdings in large cap UK shares, which look attractive and provide a hedge against both a no deal scenario and also any deterioration in our economy, due to their overseas earnings. They have also added new small positions in commodities and frontier markets (deemed less developed then ‘emerging markets’). Finally, they see infrastructure as very attractive, which you will know chimes with us, as we have been very keen this last year in adding our Foresight Infrastructure fund to our portfolios.
We had a good update meeting with 7IM and met their Chief Strategist, as well as other key members of their team. We are reassured that the positive steps they are taking, will make a positive difference to our portfolios. For some time they have taken a more cautious approach with investments and this is part of the reason that they form an important part of an overall diversified approach. 7IM have started to increase their UK shareholdings, again citing attractive valuations on many long term historic measures, but are keeping a very careful eye on currency fluctuations. One of the stocks we talked about was Barclays, yielding around 5%, which with many of the issues which have so challenged bank stocks coming to an end, looks an interesting opportunity. Terence reiterated that the 7IM investment approach would remain, based around a simplified and disciplined long term strategy, using passive investments, but having an active approach to how these are deployed.
We expect to shortly make some changes to our Blue Sky Sapphire portfolio, which will be communicated by a notification from Transact.
For further information, please email or call on (01202) 756560.
