Tiller investor update: February 2019


Most stock market indices were up in February, driven by a combination of improvements in the US/China trade talks and the US Federal Reserve suggesting they would be more patient with interest rate increases.

The Chinese stock indices had a notably strong month. This was boosted by additional stimulus measures implemented in China and the news that the weighting of Chinese-listed shares would be increased in the widely followed MSCI Emerging Market index. This second measure should mean an increase in global investors allocating to Chinese shares.

On the downside – Japanese equities (once converted back to sterling) made a small loss. Our small position within portfolios meant this had a limited impact.

Within the UK bond market, the prices of government bonds fell as yields rose (yields move inversely to price). As a result, ETFs tracking the UK government bond index fell by roughly 1% in February.

This trend was in evidence globally as a lot of government bond markets saw yields rise. The Barclays Global Aggregate (a widely followed global bond index) was down 0.6% in the month. Lower risk portfolios that tend to hold more bonds than equities were most affected by this.

As the Tiller portfolios do not have a lot of government bond exposure, this did not have a big impact.

February was overall a good month for the active managers used within Tiller’s ‘Smart’ and ‘Select’ portfolios. The RWC Emerging Markets fund continued its strong relative performance in 2019. February saw it rise by 4.5%, when the passive equivalents were broadly flat.

Steady performance was also seen from the ‘Alternatives’ asset class. We see this asset class as a way of diversifying portfolios without adding more bond exposure. In February the majority made low single digit returns, while bonds fell.

In ‘Smart’ and ‘Select’ portfolios, the Merian UK Mid Cap fund and the Jupiter Absolute Return fund (which had been the standout performer in the down month that was December 2018) posted small losses.

March should bring more developments on the Brexit process. Our current portfolio positioning still ensures that should there be a sudden rally in the value of sterling, impact on portfolio performance would be limited.



The views contained herein are not to be taken as a recommendation or advice. Any forecasts, figures, opinions or investment techniques and strategies set out are for information purposes only, based on certain assumptions and current market conditions and are subject to change without prior notice. A mandatory sell of a theme may result in a taxable capital gain or loss. All information presented herein is considered to be accurate at the time of production, but no warranty of accuracy is given and no liability in respect of any error or omission is accepted. It is very important to do your own analysis before making any investment based on your own personal circumstances. You should take independent financial advice from a professional in connection with, or independently research and verify, any information that you find on Tiller’s website and wish to rely upon, whether for the purpose of making an investment decision or otherwise. It should be noted that investment involves risks, the value of investments may fluctuate in accordance with market conditions and investors may not get back the full amount invested.

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