Wrap update April 2010

In the budget, the Chancellor gave confident forecasts for GDP growth and the FTSE 100 passed its 5700 mark for the first time since June 2008.  This is excellent news for investors and compares to its low point of 3500 just over a year ago.
 
Cambrian Associates' Portfolios
The property funds in our model portfolios are performing fantastically, with the two non-UK property funds performing the best.  Schroder Global Property has achieved a 59.6% return over 1 year with SWIP European Real Estate producing 39.1%.  Ignis UK property has returned a more modest increase of 11.6% as the UK commercial property market gets slowly but surely back on its feet.
 
For those in our income portfolios, Blackrock UK Income, Schroder Income and Schroder Income Maximiser are all outperforming the FTSE 350.  In addition to providing growth in excess of 40% over the last twelve months, these three funds contribute to an overall distribution of 4.6% per annum for income clients.
To date we have operated six UK equity income funds in our income portfolio, but will reduce this to five for new business transacted on the platform, and for the time being, Threadneedle UK Equity Income will take a back seat.  The effect on our income portfolios will be fewer, six-monthly distributing funds, which means that overall, those taking natural income should see a benefit.
 
Some of our overseas fund choices are also showing outstanding performance, Blackrock European, Invesco Pacific and Aberdeen Emerging Markets are all providing excellent returns month on month.  Aberdeen Emerging Markets is leading the way with a 72.5% return over 1 year with Blackrock European and Invesco Pacific returning 57.3% and 51.2 % respectively over the same time period.
 
We operate our own “fund watch” which ensures that any funds falling below their index for two successive quarters, we would investigate their possible replacement.  An example of this would be Neptune US Opportunities where a moderate return of 22.7% over the past twelve months should be weighed against the excellent long term returns of this fund.  It is still top in its sector and carries the highest ratings from Morningstar and OBSR, so we would therefore keep this fund in our portfolios, despite the recent dip in comparison with the S&P 500.