january 2013 platform factsheets & managers' comments

7/29/2019 January 2013 Platform Factsheets & Managers' Comments

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MANAGERS MONTHLY COMMENTARY JANUARY 2013

INVESTMENT MANAGERS:

Patrick Toes

Investment Director with over 20

years experience in fund

management. Previously a member

of Rensburg Sheppards Asset

Allocation and Fund Selection Committees

for over 9 years.

David Cowell

Chief Executive, possessing over 40

years experience in financial

services, with over 25 years being

The current rally was 76 days old as at the end of January with stock markets in full risk on mode. In fact this

month has been a tremendous month for equities. As we mentioned in our year end review and outlook, we

considered that the market was poised to move higher, not because the outlook for the global economy or

corporate earnings looked strong, rather that risk events investors have been grappling with had been kicked

further down the road. This would give investorsthe excuse to be more confident, if only in the shortterm.

Our investment approach is to look towards the medium term investment horizon (3-5 years) as we believe

many - or perhaps most - investors focus on short term performance and have the tendency to get too pre-

occupied by market noise. You may have read on our website about the need to be hyperopic as an investor and

not myopic (far-sighted, not short-sighted). The focus of many of these investments is on quality and strength in

76 DAYS AND COUNTING

.

SALES:

Julie Jones

Juliehas over 20 years experience ofworking in investment sales and

marketing, previously as Head of UK

Retail Sales for BNY Mellon (Newton

Investment Management).

For further information call :

0113 274 7700Email : [email protected]

Or visit us at :www.myddletoncroft.co.uk

. , -

markets which will exhibit low growth and a high degree of volatility. You will often hear us refer to quotes from

Warren Buffett. One which describes his approach to investing in equities is:

"In business, I look for economic castles protected by unbreachable 'moats'."

Our approach to investing is to use that castle and moat mentality to manage the whole of a clients portfolio,

both equities and non-equities. However, we have always been interested in looking to augment our medium

term views by identifying investments where the herd becomes too pessimistic and, for that matter, the

converse. We refer to this as our drawbridge. This allows us to add a tactical and opportunistic approach to

investing, employing a contrarian or mean reverting strategy, in effect, looking for out-of-favour laggards which

we believe could catch up with the herd. We utilised this part of our armoury to take a more positive stance

toward risk assets toward the end of 2012. This more positive stance has given us a strong start to the year

which you can see in our model factsheets (attached).

One opportunity which we noticed in late 2012 was in US small companies with a value bias. We saw four

positives: Firstly, the underperformance is particularly marked within small cap value stocks (Russell 2000 Value)

relative to the S&P 500 (see chart 1); secondly, from a valuation perspective small cap stocks with the highestreturn on invested capital were over 15% cheaper than S&P 500; thirdly, US companies in the S&P 500 have a

high risk of margin reduction which are currently at all time highs unlike small cap stocks wheremargins are well

below previous peak levels and finally, should there be a lasting improvement in sentiment we would expect to

see an improvement in M&A activity following a weak 2012 and we consider that is a likely positive for small-cap

stocks.We added a position to this area in November and have been well compensated for ourdecision.

The charts below show the relative performance of two indices, Russell 2000 Value vs S&P 500, which illustrate

the opportunity and how it has been a benefit to ourportfolio performance.

Myddleton Croft Investment Managers, 1 Woodside Mews, Clayton Wood Close, Leeds, LS16 6QE

T: 0113 274 7700 F: 0113 274 7711 E-mail: [email protected] Website: www.myddletoncroft.co.uk

Myddleton Croft Ltd is authorised and regulated by the Financial Services Authority. Registered in England & Wales number 05782909. VAT number UK 889 241088.

Registered office: 11 Clifford Avenue, Ilkley, LS29 0AS.

MPORTANT INFORMATION

This information has been approved for distribution

o professional investors only. The information inhis document is believed to be correct but cannot

be guaranteed. Past performance is not a guide touture performance and may not be repeated. The

value of investments and the income from them

may go down as well as up and investors may notget back the amounts originally invested. This

material is not intended as an offer or solicitation forhe purchase or sale of any security or any other

action, without first seeking advice as to theuitability of it for your needs.

Although not a drawbridge trade per se, we would bring your attention to another area where we are seeing a

change in the road ahead. I attended the M&G conference in January, where the focus of attention from their

bond team was on inflation and its inevitable corollary for higher gilt and western sovereign bond yields. The

new Governor of the Bank of England elect, Mark Carney, given his public questioning of the value of inflation

targets and his proposals for nominal GDP targeting, may unhinge UK inflation expectations at a risky time in

the investment cycle. The new leadership in Japan has targeted a much lower Yen and 2% inflation, when

deflation has been the status quo for a generation. Lastly, the long-term build up of liquidity from quantitative

easing programmes in the States and Europe over the last four and a half years warrants investors to considerinflation-proofing their portfolios. We have been doing so gradually by reducing duration and owning index-

l inked bonds within our fixed interest exposure. I would caution against an all-in bet tomorrow as central

banks/governments are on the other side of this trade. Whilst the timing of an upward rise in bond yields is

uncertain, we do expect that it is a when will this happen rather than if. Fingers on buzzers.


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Myddleton Croft Defensive Risk Model JANUARY 2013

PERFORMANCE SINCE LAUNCH

On PlatformOn PlatformOn PlatformOn Platform

NVESTMENT MANAGERS:

atrick Toes

Investment Director with over

20 years experience in fund

management. Previously a

member of Rensburg Sheppards

sset Allocation and Fund Selectionommittees for over 9 years.

avid CowellChief Executive, possessing over

40 years experience in financial

2013 PERFORMANCE

services, wit over 25 years

being investment managementocussed.

ALES:

ulie Jones

Julie has over 20 yearsexperience of working in

investment sales and marketing,

previously as Head of UK Retail

ales for BNY Mellon (Newton Investment

Management).

or further information call :

0113 274 7700mail : [email protected]

Or visit us at :

www.myddletoncroft.co.uk

atform model portfolios include the cost of

nderlying investments and Myddleton Crofts

nnual management fees but not the

espective platform charges.





ASSET ALLOCATION


This information has been approved for distribution

o retail and professional investors only. Thenformation in this document is believed to be

correct but cannot be guaranteed. Pastperformance is not a guide to future performance

a nd ma y not be r epe at ed. The va lue o f

nvestments and the income from them may godown as well as up and investors may not get back

he amounts originally invested. Beforecontemplating any transaction, you should consult

your financial adviser. This material is not intended

as an offer or solicitation for the purchase or sale ofany security or any other action, without first

eeking advice as to the suitability of it for yourneeds.

Platform performance / allocation may differ frommodel depending on platform availability of

underlying investments.


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Myddleton Croft Cautious Risk Model JANUARY 2013

PERFORMANCE SINCE LAUNCHVESTMENT MANAGERS

atrick Toes

Investment Director with over 20

years experience in fund

management. Previously a member

of Rensburg Sheppards Asset

ocation and Fund Selection Committees for

er 9 years.

avid Cowell

Chief Executive, possessing over 40


2013 PERFORMANCE

years exper ence n nanc a

services, with over 25 years beinginvestment management focussed.

ALES:

ulie Jones

liehas over 20 years experience of workingin investment sales and marketing,

previously as Head of UK Retail Sales

for BNY Mellon (Newton Investment

Management).

tform model portfolios include cost of underlying

estments and Myddleton Crofts annualnagement fees, but not the respective platform

arges.



r visit us at :ww.myddletoncroft.co.uk





ASSET ALLOCATION

PORTANT INFORMATION

is information has been approved for distribution

retail and professional investors only. Theormation in this document is believed to be correct

t cannot be guaranteed. Past performance is not ade to future performance and may not be

peated. The value of investments and the income

m them may go down as well as up and investorsay not get back the amounts originally invested.

fore contemplating any transaction, you shouldnsult your financial adviser. This material is not

ended as an offer or solicitation for the purchase

sale of any security or any other action, withoutst seeking advice as to the suitability of it for your

eds.

Platform performance / allocation may differ from

odel depending on platform availability ofderlying investments.


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IMPORTANT INFORMATION Myddleton Croft Moderate Risk Model JANUARY 2013



NVESTMENT MANAGERS:

atrick Toes



management. Previously amember of Rensburg Sheppards

Asset Allocation and Fund Selection

ommittees for over 9 years.

David Cowell

Chief Executive, possessing over


services, with over 25 years

2013 PERFORMANCE

being investment management

ocussed.

ALES:

ulie Jones

Julie has over 20 yearsexperience of working ininvestment sales and marketing,



Management).



Or visit us at :


latform model portfolios include the cost of








ASSET ALLOCATION


his information has been approved for distribution

o retail and professional investors only. Theformation in this document is believed to be

orrect but cannot be guaranteed. Pasterformance is not a guide to future performance

nd ma y not be re peat ed . T he v al ue of

vestments and the income from them may goown as well as up and investors may not get back

he amounts originally invested. Beforeontemplating any transaction, you should consult

our financial adviser. This material is not

tended as an offer or solicitation for the purchaser sale of any security or any other action, without

rst seeking advice as to the suitability of it for youreeds.

Platform performance / allocation may differ fromodel depending on platform availability of

nderlying investments.


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Myddleton Croft Progressive Risk Model JANUARY 2013



NOTE: THE ADVENTUROUS RISK MODEL HAS BEEN RENAMED THE PROGRESSIVE RISK MODEL

NVESTMENT MANAGERS:

Patrick Toes



management. Previously amember of Rensburg Sheppards

Asset Allocation and Fund Selection

Committees for over 9 years.

David Cowell

Chief Executive, possessing over


services, with over 25 years

2013 PERFORMANCE


ocussed.

SALES:

ulie Jones



Sales for BNY Mellon (Newton Investment

Management).

For further information call :

0113 274 7700Email : [email protected]

Or visit us at :


Platform model portfolios include the cost of

underlying investments and Myddleton Crofts







ASSET ALLOCATION



o retail and professional investors only. Thenformation in this document is believed to be


nd may not be repeated. The value of

nvestments and the income from them may goown as well as up and investors may not get

ack the amounts originally invested. Beforeontemplating any transaction, you should consult

our financial adviser. This material is not

ntended as an offer or solicitation for the purchaser sale of any security or any other action, without

rst seeking advice as to the suitability of it for youreeds.

Platform performance / allocation may differ frommodel depending on platform availability of



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Myddleton Croft Adventurous Risk Model JANUARY 2013



NOTE: THE HIGHLY ADVENTUROUS RISK MODEL HAS BEEN RENAMED THE ADVENTUROUS RISK MODEL

NVESTMENT MANAGERS:

atrick Toes


20 years experience in fundmanagement. Previously amember of Rensburg Sheppards

sset Allocation and Fund Selection




2013 PERFORMANCE

,


cussed.

ALES:

ulie Jones




anagement).



r visit us at :





spective platform charges.





ASSET ALLOCATION



retail and professional investors only. Theformation in this document is believed to be


nd ma y n ot be repe at ed. The v al ue of

vestments and the income from them may goown as well as up and investors may not get back

e amounts originally invested. Beforentemplating any transaction, you should consult

ur financial adviser. This material is not intended

an offer or solicitation for the purchase or sale ofny security or any other action, without first

eeking advice as to the suitability of it for youreeds.

Platform performance / allocation may differ fromodel depending on platform availability of



7/7

Myddleton Croft Speculative Risk Model JANUARY 2013



NVESTMENT MANAGERS:

atrick Toes


20 years experience in fundmanagement. Previously amember of Rensburg Sheppards

sset Allocation and Fund Selection




2013 PERFORMANCE

,


cussed.

ALES:

ulie Jones




anagement).



r visit us at :





spective platform charges.




ASSET ALLOCATION

PORTANT INFORMATION

is information has been approved for distribution

retail and professional investors only. Theormation in this document is believed to be

rrect but cannot be guaranteed. Pastrformance is not a guide to future performance

d may not be repeated. The value of investments

d the income from them may go down as well asand investors may not get back the amounts

ginally invested. Before contemplating anyansaction, you should consult your financial

viser. This material is not intended as an offer or

licitation for the purchase or sale of any securityany other action, without first seeking advice as

the suitability of it for your needs.

Platform performance / allocation may differ from

odel depending on platform availability ofderlying investments.

january 2013 platform factsheets & managers' comments

Documents