Wrap
Several of our Funds have received improved ratings from the Rating Agencies. None of them have been downgraded. Our Portfolios have an element of UK Equities and the sector has been particularly buoyant. From the low point of 3,503 in early March, the FTSE now stands at over 5,500. Indeed, all world Equity markets have done well.
Commercial Property also seems to have turned the corner. It is early days but most UK Property Funds have risen in value over the last 6 months and the average European and Global Property Funds are showing a profit over 12 months.
For the low risk Bond sector, it is quite surprising that Government Bonds are up over the last 12 months (bearing in mind how much we are borrowing as a nation). Corporate Bonds have done really well for a low-risk investment with the Index being up 19.5% over the last 12 months.
Growth Portfolios
Old Mutual UK Select Smaller Companies should be switched to Investec UK Smaller Companies. This is an interesting case because, according to the January 2010 issue of Money Management, the Old Mutual Fund has shown a profit of 36% over the last 12 months. But the Index has risen by 57.1% and the Investec Fund by 64.7%. Indeed, it has outperformed the relevant Index over 1, 2, 3, 5 and 10 years. This is a good example of identifying a Fund whose short term performance has slipped.
The same applies to First State Asia Pacific Leaders and we suggest a switch to Invesco Perpetual Pacific.
First State Global Emerging Market Leaders has also been a splendid performer but has slipped below the Index over 12 months so we suggest that it is replaced with Aberdeen Emerging Markets.
Finally, the SWIP Property Trust has failed to outperform the average UK Commercial Property Fund over 12 months so we suggest that it is replaced with Ignis UK Property which has outperformed the average Fund over every period surveyed.
Income Portfolios
For those receiving natural income the average annual yield on our portfolio consistently ranges between 4.6% and 4.9%. Three of the income funds being replaced (Invesco Perpetual Higher Income, Invesco Perpetual Income and Artemis income) only distribute income twice a year. The income funds we are introducing will pay out distributions quarterly which will help reduce peaks and troughs of income flow for those receiving natural income. These three funds are also underperforming against the UK Equity Income sector, and will therefore be replaced by Aviva Investors UK Equity Income, Blackrock UK Income and Threadneedle UK Equity Income.
The highest yielding fund in our income portfolio is Newton Higher Income. However, despite producing an excellent yield, it too is underperforming and we felt that a change was necessary. We have selected Schroder Income Maximiser which yields 7%.
View our latest growth statistics for the latest recommendations, or contact us.