Lowes MPS - Quarterly Reports

Performance The portfolio strongly outperformed the IA Mixed Investment 40-85% Shares sector average during the quarter, with returns of 6.93% and 2.86% respectively. All funds in the portfolio posted a positive return over the period. In absolute terms there were stronger performances from UK equity income funds allocated to within the portfolio. There was a particularly strong performance from Unicorn UK Ethical Income. As well as its focus on income generation, which proved popular with investors, the fund also benefited from its smaller company focus. Smaller companies had underperformed during the third quarter on recession concerns. Such stocks are typically more sensitive to the domestic economic outlook given the proportion of their earnings which are generated here. Whilst concerns remain, there was something of a relief rally in the fourth quarter. The CT Responsible UK Income fund also performed well. Relative to their own sector average there were also strong performers from Rathbone Ethical Bond, Royal London Ethical Bond and abrdn Global Sustainable and Responsible Investment Equity. Source: FE Analytics, Bid-Bid, Total Return Portfolio Activity and Positioning There were no changes made to the portfolio during the period in terms of funds allocated to. We continue to review the funds allocated to within the portfolio, in particular the allocation between equity and fixed income. Whilst there has been a significant increase in the launch of sustainable funds, their positive screening rather than negative screening techniques means that they may not be suitable for an allocation within an ethical portfolio. We continue to review their eligibility. An allocation to a relatively new launched fund is being considered. As there were no changes made to the portfolio during the period the portfolio will be rebalanced in the first quarter of 2023, returning the underlying funds to their original allocations. Although further interest rate hikes are still forecast from year end levels in the UK, Europe and US, the market began to price in the possibility of interest rate cuts in the US for the second half of 2023. This was on the basis of inflation falling from its peak and also the threat of recession. This was somewhat at odds with the US Federal Reserve however, who believe that there is little likelihood that cuts will be seen in 2023. Whilst interest rates in the US therefore are likely to peak in the first half of 2023, it remains to be seen therefore whether we will see a full ‘Fed pivot’. Disclaimer The portfolio is managed on a discretionary basis therefore the investment manager may make changes to the investments held without notice. Investors are agreeing to the investment model as recommended by an Adviser and may not be investing into the specific assets included in this report. Past performance is not a guide to future performance. The value of investments and any income from them can fall as well as rise and are not guaranteed, so you may get back less than you invested. If you invest in currencies other than your own, fluctuations in currency value will mean that the value of your investment will move independently of the underlying asset. Consideration should be given to whether it is felt that the outcome of any risk assessment is accurate and advice should be sought for factors such as investment objectives, the investment term, attitude to risk, capacity for investment loss and the level of inflation. This illustrative document is intended for investors where advice has been given by Advisers. Models are prepared in accordance with the stated objective and not client circumstances. Information from given sources is taken to be reliable and accurate, which Lowes Investment Management Ltd cannot warrant for accuracy or completeness. Lowes Investment Management is authorised and regulated by the Financial Conduct Authority (192938).