Page 26 - DIY Investor Magazine | Issue 32

FOUR FUNDS WE’VE BOUGHT & THREE WE’VE SOLD
Stock markets have had a difficult time. The FTSE 100 started the year well, but fell away at the end of January before rallying this week.
. FTSE 250 lost 8.8% in the last month, Paris CAC 40 has shed 5.3% and the Frankfurt DAX dropped by 6.7%. US indices have struggled as well - S&P 500 fell by 6.6% in a month and the Nasdaq Composite went down by 11.3%; Chinese and Japanese stock markets also report year-to-date losses.
As active investors, we believe in reacting to market conditions and we have been reducing our overall exposure to the markets for some time. In the Ocean Liner portfolio, our cash level went from 9% at the end of September to 37% at the end of December. It is now more than 60%.
Our Tugboat portfolio is slightly more cautious. Cash accounted for 20% of the portfolio at the end of September and by year-end it had risen to just over 40%. Since then, it has also gone above 60%.
In the last few weeks, we have sold, or significantly reduced,
a number of our long-term holdings including the Janus Henderson Global Responsible Managed fund. This is one of the funds, from the Mixed Investment 40-85% Shares sector, that we bought in February 2019 and held until the beginning of March 2020. We then reinvested in April 2020 and have held it ever since.
We have also sold the two funds from the Technology and Technology Innovations sector that have been in the portfolios since last June: L&G Global Technology Index and AXA Framlington Global Technology. Although most Investment Association (IA) sectors have struggled this year, when we did our analysis last week some funds appeared to be bucking the trend.
The Office for National Statistics (ONS) recently released its latest inflation data, showing the UK Consumer Price Index up 5.4% in the 12 months to December 2021, its highest level in almost 30 years. In the US, the comparable figure was 7%.
Much is being blamed on increasing fuel costs and commodity prices, and is reflected in the performance of some of the funds in the Natural Resources sector.
Last week, we invested in the JPM Natural Resources and TB Guinness Global Energy funds. They were at the top of our table of funds from the Specialist and Thematic sectors.
The two India funds also look promising.
Fund
JPM Natural Resources
TB Guinness Global Energy
BlackRock Natural Resources
Jupiter India
Liontrust India
Subzone
Nat res
Nat res
Nat res
India
India
4 week return
8.3%
11.1%
6.8%
6.4%
7.0%
12 week return
8.1%
6.9%
8.8%
5.3%
2.4%
26 week return
15.3%
30.2%
18.9%
15.0%
14.2%
Data source: Morningstar. Past performance is not a guide to future performance.
The only other sector that caught our eye was UK Equity
Income; the sector was up 3.6% over four weeks, 4.6% over 12 weeks and 7.1% over 26 weeks and some of the leading funds had done considerably better.
Fund
JOHCM UK Equity Income
Schroder Income Maximiser
Schroder Income
Jupiter Income Trust
L&G UK Equity Income
UBS UK Equity Income
4 week return
7%
6.9%
7.7%
5.8%
7.1%
8%
12 week return
6.1%
9.8%
11.4%
6.6%
6.4%
6.8%
26 week return
11.6%
16.8%
19.3%
6.9%
10.2%
14.9%
We also made a small investment into the JOHCM UK Equity Income and Schroder Income funds. If they get off to a reasonable start, we will consider adding to our holdings.
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DIY Investor Magazine · Feb 2022 26