Lowes MPS - Quarterly Reports

Performance The portfolio underperformed the IA Global sector average during the period, returning -1.48% which compared to 2.19%, respectively. The strongest performer during the period was the Polar Capital Healthcare Blue Chip fund. Healthcare stocks proved popular with investors. Whilst the sector is at the forefront of new medicine and treatment it also benefits from the regular earnings generated from established drugs. Another strong performer was the Guinness Sustainable Energy fund. This fund provides a pure play on global renewable energy markets. It is not just focussed on energy generation however, but also invests in companies specialising in energy efficiency, such as equipment providers, battery resources and companies associated with electric vehicles. This industry as a whole continued to benefit from the support for low carbon producing technologies coupled with the continued energy supply issues brought about by the Russian conflict with Ukraine. Weaker performers were those funds with a heavy exposure to technology companies, such as the Polar Capital Global Technology fund. Technology stocks in general continued to see share price weakness. Higher interest rates and bond yields gave rise to a higher rate at which to discount these companies future earnings, causing a reassessment of their valuations. This same factor also had a negative impact on the performance of the Baillie Gifford Global Discovery fund which also invests in sectors and companies considered to be high growth names. 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’. Portfolio Activity and Positioning The portfolio remains focussed on funds which look to invest in the megatrends of tomorrow. This can lead to periods of volatility in performance given their high growth nature. We continue to monitor for new trends which could deserve a place within this portfolio and provide further diversification. There were no changes made to the portfolio during the quarter. The portfolio will be rebalanced in the first quarter of 2023, returning the underlying funds to their original allocations. 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). Source: FE Analytics, Bid-Bid, Total Return