BY CRAIG RIPPE, HEAD OF MULTI-ASSET FUNDS
Trade war rhetoric dominated global headlines, but fortunately had little impact on UK equities. Instead, investors remained focused on company results. The market itself was broadly flat in aggregate, although we witnessed strong performances from a number of individual holdings that reported above-consensus numbers. This included high street success story JD Sports, which updated the markets on its successful acquisition of US-based Finish Line, an acquisition that management believes will be transformational.
Elsewhere, Hikma Pharmaceuticals also performed strongly on the back of positive newsflow, which included the announcement it had received the exclusive right to license and distribute more than 30 consumer healthcare products in all its core Middle East and North African markets. In terms of portfolio activity, it was very much a month of profit-taking, as we sought to add to areas we felt were more attractively valued. For example, we trimmed our position in Melrose, recycling the proceeds into upping our resource weighting. We also reduced the Fund’s cash balance down to c. 3%.
Looking forward, ten year bond yields remain range bound in 2018 so far and we have just witnessed a month in which defensives outperformed for the first time in a while. This points to the more uncertain outlook that surrounds UK equities, but we believe that the economy remains resilient and that the equity market is attractively valued. Therefore, despite global macro concerns, there a number of opportunities for active stockpickers in an income-friendly market.
Past performance is not a guide to future performance. The value of investments may fall as well as rise and investors may not get back the amount invested. Income from investments may fluctuate.
The information contained in this document is provided for use by investment professionals and is not for onward distribution to, or to be relied upon by, retail investors. No guarantee, warranty or representation (express or implied) is given as to the document’s accuracy or completeness. The views expressed in this document are those of the fund manager at the time of publication and should not be taken as advice, a forecast or a recommendation to buy or sell securities. These views are subject to change at any time without notice. This document is issued for information only by Canada Life Investments. This document does not constitute a direct offer to anyone, or a solicitation by anyone, to subscribe for shares or buy units in fund(s). Subscription for shares and buying units in the fund(s) must only be made on the basis of the latest Prospectus and the Key Investor Information Document (KIID) available at www.canadalifeinvestments.com.
Canada Life Investments is the brand for investment management activities undertaken by Canada Life Asset Management Limited, Canada Life Limited and Canada Life European Real Estate Limited. Canada Life Asset Management Limited (no. 03846821), Canada Life Limited (no.00973271) and Canada Life European Real Estate Limited (no. 03846823) are all registered in England and the registered office for all three entities is Canada Life Place, Potters Bar, Hertfordshire EN6 5BA. Canada Life Asset Management is authorised and regulated by the Financial Conduct Authority. Canada Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
CLI01273 Expiry 15 October 2018