January 2013 Factsheets & Manager's Comments

7/29/2019 January 2013 Factsheets & Manager's 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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MCIM Balanced Defensive Portfolio 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 Allocation and Fund

lection Committees for over 9 years.

avid CowellChief Executive, possessing over 40 years

experience in financial services, with over

25 years being investment management

focussed.

2013 PERFORMANCE

ALES:

ulie Jones

Julie has over 20 years experience ofworking in investment sales and

marketing, previously as Head of UK Retail

Sales for BNY Mellon (Newton Investment

anagement).

odel portfolios include cost of underlying

vestments and Myddleton Crofts annual

anagement fees, but not the charges for

stodian, dealing and settlement (equivalent to

atform charges)

or further information call :

113 274 7700mail : [email protected]

r visit us at :

ww.myddletoncroft.co.uk

PORTANT INFORMATION

s information has been approved for distribution to

ail and professional investors only. The i nformation ins document is believed to be correct but cannot bearanteed. Past performance is not a guide to future





ASSET ALLOCATION

rformance and may not be repeated. The value ofestments and the income from them may go downwell as up and investors may not get back the

mounts originally invested. Before contemplating any

nsaction, you should consult your financial adviser.s material is not i ntended as an offer or s olicitationthe purchase or sale of any security or any other

ion, without first seeking advice as to the suitabilityt for your needs.ients portfolios may differ from model portfoliospendent on their specific objectives.


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MCIM Balanced Cautious Portfolio JANUARY 2013

PERFORMANCE SINCE LAUNCHNVESTMENT MANAGERS

atrick Toes





election Committees for over 9 years.

avid CowellChief Executive, possessing over 40

years experience in financial services,

with over 25 years being investment

2013 PERFORMANCE

managemen ocusse .

ALES:

ulie Jones




vestment Management).




ustodian, dealing and settlement (equivalent to

atform charges)



r visit us at :

www.myddletoncroft.co.uk


is information has been approved for distribution





ASSET ALLOCATION

.

formation in this document is believed to be correct

ut cannot be guaranteed. Past performance is not auide to future performance and may not be

peated. The value of investments and the incomeom them may go down as well as up and investors

ay not get back the amounts originally invested.

fore contemplating any transaction, you should

nsult your financial adviser. This material is not

tended as an offer or solicitation for the purchase orle of any security or any other action, without first

eking advice as to the suitability of it for your needs.

lients portfolios may differ from model portfolios

ependent on their specific objectives.


4/9

MCIM Balanced Moderate Portfolio JANUARY 2013


atrick Toes









2013 PERFORMANCE

.

ALES:

ulie Jones








ustodian, dealing and settlement (equivalent

platform charges)



r visit us at :



is information has been approved for distribution

retail and rofessional investors onl . The





ASSET ALLOCATION

.

formation in this document is believed to be

rrect but cannot be guaranteed. Past performance

not a guide to future performance and may not be

peated. The value of investments and the income

om them may go down as well as up and investors

ay not get back the amounts originally invested.

fore contemplating any transaction, you should

nsult your financial adviser. This material is not

tended as an offer or solicitation for the purchase

sale of any security or any other action, without

st seeking advice as to the suitability of it for your

eeds.




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MCIM Balanced Progressive Portfolio JANUARY 2013PERFORMANCE SINCE LAUNCHNVESTMENT MANAGERS

atrick ToesInvestment Director with over 20 years

experience in fund management.Previously a member of Rensburg

Sheppards Asset Allocation and Fundelection Committees for over 9 years.

David CowellChief Executive, possessing over 40years experience in financial services,


***IMPORTANT NOTE : THE ADVENTUROUS PORTFOLIO HAS BEEN RENAMED THE PROGRESSIVE PORTFOLIO***

2013 PERFORMANCE

.

ALES:

ulie Jones


marketing, previously as Head of UKRetail Sales for BNY Mellon (Newton

nvestment Management).

Model portfolios include cost of underlyingnvestments and Myddleton Crofts annual

management fees, but not the charges for

ustodian, dealing and settlement (equivalent

o platform charges)



Or visit us at :



his information has been approved for distribution

o retail and professional investors only. The





nformation in this document is believed to be correct

ut cannot be guaranteed. Past performance is not a

uide to future performance and may not be

epeated. The value of investments and the income

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

efore contemplating any transaction, you should

onsult your financial adviser. This material is not

ntended as an offer or solicitation for the purchase or

ale of any security or any other action, without first

eeking advice as to the suitability of it for your needs.

Clients portfolios may differ from model portfolios


ASSET ALLOCATION


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MCIM Balanced Adventurous Portfolio JANUARY 2013


atrick Toes









***IMPORTANT NOTE: THE HIGHLY ADVENTUROUS PORTFOLIO HAS BEEN RENAMED THE ADVENTUROUS PORTFOLIO***

2013 PERFORMANCE

management ocusse .

ALES:

ulie Jones








ustodian, dealing and settlement (equivalent to

atform charges)



r visit us at :



is information has been approved for distribution to





ASSET ALLOCATION

.

this document is believed to be correct but cannot

e guaranteed. Past performance is not a guide to

ture performance and may not be repeated. The

lue of investments and the income from them mayo down as well as up and investors may not get back

e amounts originally invested. Before

ntemplating any transaction, you should consult

ur financial adviser. This material is not intended as

offer or solicitation for the purchase or sale of any

curity or any other action, without first seeking

vice as to the suitability of it for your needs.




7/9

MCIM Balanced Speculative Portfolio JANUARY 2013


atrick Toes









2013 PERFORMANCE

management ocusse .

ALES:

ulie Jones









atform charges)



r visit us at :


PORTANT INFORMATION






ASSET ALLOCATION

a an pro essona nves ors ony. e norma on


guaranteed. Past performance is not a guide to


ue of investments and the income from them maydown as well as up and investors may not get back

e amounts originally invested. Before

ntemplating any transaction, you should consult

ur financial adviser. This material is not intended as

offer or solicitation for the purchase or sale of any

curity or any other action, without first seeking

vice as to the suitability of it for your needs.


pendent on their specific objectives.


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INVESTMENT MANAGERS

Patrick Toes





Selection Committees for over 9 years and former

chairman of those committees at BWD Rensburg, he

holds a MSC in Investment Analysis and is an

Associate Member of the Society of Investment

Professionals (ASIP).

David Cowell

MCIM Enhanced Income Portfolio JANUARY 2013

PERFORMANCE SINCE JAN 2008*NVESTMENT MANAGERS

atrick Toes





avid CowellChief Executive, possessing over 40 years

experience in financial services, with over


Chief Executive, possessing over 40 years

experience in financial services, with over25 years being investment management

focussed. David formulates the macro

economic position and leads the investment process

across the portfolio range. He also has over 10 years

experience of business consultancy to small and

medium sized enterprises.

Model portfolios include cost of underlying

investments and Myddleton Crofts annual

management fees, but not the charges for custodian,

dealing and settlement (equivalent to platform

charges)


0113 274 7700Email : [email protected]

Or visit us at :


IMPORTANT INFORMATION

12 MONTH PERFORMANCE

ASSET ALLOCATION

The Enhanced Income Portfolio was launched at the beginning of 2011. It should be noted that the

performance before that date (presented above) is from the back-tested portfolio and is provided for

illustration purposes only.

ocusse .

ALES:

ulie Jones

Julie has over 20 years experience ofworking in investment sales andmarketing, previously as Head of UK

Retail Sales for BNY Mellon (Newtonvestment Management).

odel portfolios include cost of underlyingvestments and Myddleton Crofts annualanagement fees, but not the charges forstodian, dealing and settlement (equivalent toatform charges)



r visit us at :


PORTANT INFORMATION


ail and professional investors only. The information

*

s n orma on a s een appro ve or s r u on

to retail and professional investors only. The

information in this document is believed to be correct

but cannot be guaranteed. Past performance is not a

guide to future performance and may not berepeated. The value of investments and the income

from them may go down as well as up and investors

may not get back the amounts originally invested.

Before contemplating any transaction, you should

consult your financial adviser. This material is not

intended as an offer or solicitation for the purchase or

sale of any security or any other action, without first

seeking advice as to the suitability of it for your needs.

*Clients portfolios may differ from model portfolios

dependent on their specific objectives.

.








ue of investments and the income from them may

down as well as up and investors may not get backe amounts originally invested. Before contemplating

y transaction, you should consult your financial

viser. This material is not intended as an offer or

icitation for the purchase or sale of any security or

y other action, without first seeking advice as to the

itability of it for your needs.




9/9

MCIM Tactical Growth Portfolio JANUARY 2013

PERFORMANCE SINCE JAN 2011*VESTMENT MANAGERS

atrick Toes



Sheppards Asset Allocation and Fundection Committees for over 9 years.

avid CowellChief Executive, possessing over 40 yearsexperience in financial services, with over


2013 PERFORMANCE

.

ALES:

lie Jones


marketing, previously as Head of UK RetailSales for BNY Mellon (Newton Investment

anagement).


vestments and Myddleton Crofts annualanagement fees, but not the charges for


atform charges)



r visit us at :


PORTANT INFORMATION

s information has been approved for distribution to

ail and professional investors only. The information



M ddl t C ft Ltd i th i d d l t d b th Fi i l S i A th it R i t d i E l d & W l b 05782909 VAT b UK 889 241088

ASSET ALLOCATION

t s ocument s e eve to e correct ut cannot


ure performance and may not be repeated. The

ue of investments and the income from them may

down as well as up and investors may not get backe amounts originally invested. Before contemplating

y transaction, you should consult your financial

viser. This material is not intended as an offer or

icitation for the purchase or sale of any security or

y other action, without first seeking advice as to the

tability of it for your needs.

ients portfolios may differ from model portfolios


s as een run as a mo e por o o s nce anuary

Documents

January 2013 Factsheets & Manager's Comments