Latest Platform Factsheets & Managers' Comments

7/29/2019 Latest Platform Factsheets & Managers' Comments

1/8

NVESTMENT MANAGERS:

atrick Toes

Investment Director with over

20 years experience in fund

management. Previously a

member of Rensburg

heppards Asset Allocation and Fund

election Committees for over 9 years.

David Cowell

Chief Executive, possessing

over 40 years experience in

MONTHLY COMMENTARY DECEMBER 2012

On PlatformOn PlatformOn PlatformOn Platform

5 years of performance a marathon not a sprintAlthough we have been running client portfolios since 2006, our model portfolio records start at the end of 2007

which means we are now able to show a five year performance record. We strongly believe that managing

clients investments should be viewed as a marathon not a sprint and whilst 2012 has been a year where we

have lagged a little - mostly in the last quarter - I would draw your attention to our longer term performance

(marathon). This record is one where we have acted to protect capital given the difficult investment landscape

and we have been successful in that regard. Our balanced and flexible approach (we often refer to it as avoiding

the potholes or mitigating their effect with the shock absorbers in our portfolios) is in many ways the antithesis

of the benchmark-hugging and high equity content of many of our peers. In the volatile markets we have been

through and which we expect will remain for some years to come, we feel a more risk conscious and absolute

return mentality should be at the forefront. We are mindful that there have been four corrections of 15% in

equity markets over the last four years or so. In such circumstances outcomes for portfolios with structurally high

e uit content offer binar outcomes; it oes u a lot or down a lot, which is fine in ood ears but sava e to

For further information call :

0113 274 7700Email : [email protected]

Or visit us at :

,

years being investment

management focussed.

SALES:

ulie Jones

Julie has over 20 yearsexperience of working in

investment sales and

marketing, previously as Headf UK Retail Sales for BNY Mellon

Newton Investment Management).

investors capital, when not.

Myddleton Crofts Balanced Moderate risk model (platform clients) has risen by 19% which compares favourably

with a 12.56% return for the IMA 20-60% equity sector. Moreover, our Speculative risk model has grown by

16.42%, outpacing its benchmark IMA 40-85% which has risen by 10.07%.

2012 review

2012 was a year of moderate returns as you can see from

the table opposite, however, it wasnt always that way

throughout the year. Worries over Greece and the

periphery of Europe moved back into the headlines,

particularly through the second quarter of the year, to be

met with firm resolve by Mario Draghi to do whatever it

takes to protect the Euro. Just as that threat saw risk

assets rally in Europe, so too did Bernankes and other

central bank action.

2012 was not a year of strong profit growth; quite the opposite. Stockmarkets rallied significantly more than the

growth in corporate earnings in 2012 and a similar situation took place in bond markets where sovereign debt

rose very modestly but the lowest grade of debt (high yield) rallied strongly. Investors confidence to take on

more risk in both equity and bond markets was the key driver of returns in 2012. Sovereign bonds rose but far

more modestly than in 2011 and modestly too in respect of the expansion of central banks balance sheets. The

dire straits of 2011 were gone but their legacy remains money fornothin andyour debts forfree (excuse the pun).

To cap it all off, the worries over US tax rises coming

into force at the end of 2012, known as fiscal cliff, were

misplaced as eventually politicians fudged a solution.

The effect was that e uit markets moved stron l

IMPORTANT INFORMATION

This information has been approved fordistribution to professional investors. The

information in this document is believed to becorrect but cannot be guaranteed. Opinions and

forecasts constitute our judgment as at the date of

issue and are subject to change without notice.

Certain investments carry a higher degree of risk

than others and are, therefore, unsuitable for someinvestors. Past performance is not a guide to future

performance and may not be repeated. The valueof investments and the income from them may go

down as well as up and investors may not get back

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

your financial adviser. This material is not intendedas 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 yourneeds.

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

underlying investments.

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.

www.myddletoncroft.co.uk higher in the last week of the year and the beginning ofthe New Year. Clearly all our worries have gone away,

all our problems have been solved, the stalls have been

openedand its off to the races. Or not?

And so to our outlook for the year and further ahead.

We see two distinctly different scenarios which could

unfold in the year ahead. Confidence is the key as to

whether we see a replay of 2011 or 2012

markets. We expect growth in developed markets to be modest and slower than currently expected. This would

mean 2013 will look very similar to 2012. In 2012 low growth was ignored and more positive investor

psychology pushed valuations higher, this effect typically accounting for two thirds of the returns seen in

equities. A reprise of 2012s low earnings growth and improving sentiment is our positive scenario. Alternatively,

our negative scenario would see low growth allied to flat or worsening sentiment, more akin to 2011.

You will often hear that equities are cheap relative to history, particularly the period prior to 2008. We would

caution against wholly accepting such a premise,. The chart below compares a more normal level of GDP

growth in the States of 3% as opposed to the current slower growth environment. The valuation on the USmarket of 13x 2013 earnings seems cheap in the context of history but much less so in a slower growth

environment. We would extend this thesis broadly to other developed economies. We are not suggesting that

equity valuations cannot rise further towards the top end of the slower growth range at 17x but it is worth

noting we are trading above the average.


2/8

Myddleton Croft Investment Managers

Balanced Moderate Risk Model

Myddleton Croft Investment Managers

Balanced Moderate Risk Model

You could call it ironic that US stocks are at five year highs

despite the fact that the 3rd quarter earnings were very

disappointing. It seems likely that the 4th quarterreporting season (starting January 8th 2013) will also

disappoint. Make no mistake, when a public company

sets earnings guidance these numbers are very

conservative, and they expect to beat them comfortably

in a healthy business environment. The fact that

companies currently have to struggle to meet

expectations shows how difficult it is from a corporate

profit standpoint.

The global manufacturing PMI index has proved a good

indicator of equity markets over the last few years. The

chart below illustrates that there have been periods of

confidence (green lines) where equity prices diverged

NVESTMENT MANAGERS:

Patrick Toes




member of Rensburg

heppards Asset Allocation and Fund

election Committees for over 9 years.

David Cowell

Chief Executive, possessing

over 40 years experience in

financial services, with over 25

years being investment

Continued/DECEMBER 2012

.

Gilts and western sovereign bonds, which for recent years have been the default safe haven, have seen their

yields fall to very low levels, pushed by risk aversion and Bernanke et al continuing to use the printing press. We

see considerable risk to capital of investing both in this area and long duration (investment grade) credit over

the medium term. We expect there will be consequences to central banks efforts to avoid deflation which

include much higher inflation down the road. In effect it is a Scylla and Charybdis dilemma: in attempting to

avoid the first peril it almost assures capture by the second. Our solution is to position with short duration to avoid

from macro fundamentals. In these cases there were no

instances of a strong pick up in Global PMI andsubsequently the market corrected. We need to keep in

mind that there are some risks should growth remain

subdued that this confidence based rally may correct. We would also highlight that when comparing developed

markets to emerging markets manufacturing PMI, the latter has seen a pick up inferring that emerging markets

are not as stretched as developed markets in valuation terms.

We have been minded to agree that confidence is improving

even though growth continues to look anaemic and we have

increased equity exposure toward the end of the year. Small

companies valuations look attractive with drivers such as

M&A and cheap valuation looking likely to assist their

performance. This is an area we have added to recently. We

remain overweight in Asia & emerging markets whose

outlook seems to be improving and we will look to add to

that area should we see some weakness. However, we havemaintained exposure to defensive areas as we see those

areas less susceptible to disappoint, and should hold up

betterif we seesentiment wane.

management focussed.

SALES:

ulie Jones


investment sales and

marketing, previously as Head

f UK Retail Sales for BNY Mellon

Newton Investment Management).



Or visit us at :

www.myddletoncroft.co.uk





MPORTANT INFORMATION

This information has been approved for distribution to

professional investors. The information in thisdocument is believed to be correct but cannot be

guaranteed. Opinions and forecasts constitute ourudgment as at the date of issue and are subject to

hange without notice. Certain investments carry ahigher degree of risk than others and are, therefore,

unsuitable for some investors. Past performance is not

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

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

Before contemplating any transaction, you should

onsult your financial adviser. This material is notntended as an offer or solicitation for the purchase or

ale of any security or any other action, without first

eeking advice as to the suitabilityof it for your needs.

Platform performance / allocation may differ from

model dependingon platform availability of underlyingnvestments.

.

However this brings up a second issue: short duration often comes hand in hand with lower quality debt which

is highly correlated to equity returns. We note many of our peers have positioned in the riskiest end of fixedinterest. We are concerned that in such positioning little diversification is being exercised and, should equities

markets fall, so will the so-called safety element of a portfolio. In effect it is like playing roulette and betting on

black - the numbers bet on are irrelevant shouldit come up red.

Squaring this circle seems difficult but we have tried to find a balance. On the one hand by owning very little sovereign

debt and on the other, some of the more attractive areas in high yield and emerging market debt, whilst carrying a

high exposure to the US dollar as a safe haven which rallies in a time of stress, much like sovereign bonds but more

attractively priced. We consider the US dollar will provide a good hedge against tail risk and we have positioned

ourselves against the herd. We continue to hold gold which still remains under-owned and offers protection for both

left and right tail risk (deflationand inflation) scenarios.


3/8

Myddleton Croft Defensive Risk Model DECEMBER 2012

PERFORMANCE SINCE LAUNCH


NVESTMENT MANAGERS:

atrick Toes




member of Rensburg Sheppards

sset Allocation and Fund Selectionommittees for over 9 years.

avid CowellChief Executive, possessing over

40 years experience in financial

2012 PERFORMANCE

services, with over 25 years

being investment managementocussed.

ALES:

ulie Jones


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 :


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

and may not be repeated. The value of

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.


4/8

Myddleton Croft Cautious Risk Model DECEMBER 2012

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


2012 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, withoutt seeking advice as to the suitability of it for your

eds.


odel depending on platform availability ofderlying investments.


5/8

IMPORTANT INFORMATION Myddleton Croft Moderate Risk Model DECEMBER 2012



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



2012 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 may not be repeated. The value 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.


6/8

Myddleton Croft Progressive Risk Model DECEMBER 2012



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

NVESTMENT MANAGERS:

Patrick Toes





Asset Allocation and Fund Selection

Committees for over 9 years.

David Cowell




2012 PERFORMANCE


ocussed.

SALES:

ulie Jones




Sales for BNY Mellon (Newton Investment

Management).



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 i n this document is believed to be



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



7/8

Myddleton Croft Adventurous Risk Model DECEMBER 2012



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

NVESTMENT MANAGERS:

atrick Toes





sset Allocation and Fund Selection


avid Cowell



2012 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



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



8/8

Myddleton Croft Speculative Risk Model DECEMBER 2012



NVESTMENT MANAGERS:

atrick Toes





sset Allocation and Fund Selection


avid Cowell



2012 PERFORMANCE

,


cussed.

ALES:

ulie Jones





anagement).



r visit us at :





spective platform charges.



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

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 anynsaction, 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.


odel depending on platform availability ofderlying investments.

Documents

Latest Platform Factsheets & Managers' Comments