Since our September update, an awful lot has happened in financial markets, driven by both the macro and political arenas. Inflation kept rising, but maybe we have now seen the peak? In the same vein, interest rates have continued to rise, but the pace now certainly looks slower. In the UK we had the now world famous mini-budget, which kicked off an extraordinary chain of events that led to yet another Prime Minister in Number 10. COVID-19 still lurks in the background and all eyes are on the loosening of China’s ‘zero-COVID’ policy. In Europe, the one-year anniversary of the awful conflict in Ukraine fast approaches with no sign of cessations.
Our managers explain how they are navigating current challenges and opportunities, outlining fund performance, positioning and what they believe lies ahead.
We trust these insights will help you assess the role our funds can play in your investment propositions and client portfolios.
Taking stock of a crazy first year
Tom Carroll joined last year during a period of great market turbulence. Did he find the fund managers hiding under their desks as markets fell? It was an exceptionally difficult year for both equity and bond investors due to the speed with which the low-interest-rate era evaporated. But, as we approach peak rates, could the pain be almost over?
Rathbone Global Opportunities Fund
Manager James Thomson previews the race between falling inflation and faltering economic growth ahead of a likely recession. He has changed 20% of his global portfolio in the last year as he repositions for the strong getting stronger and returns that come when you least expect them.
Rathbone Income Fund
In 2022, the UK marched to a different beat: the FTSE All-Share handsomely outperforming its global peers. Co-managers Alan Dobbie and Carl Stick look ahead, arguing the case for both the UK and equity income. At a time when income is so valuable, the sector’s mojo is on the rise.
Rathbone UK Opportunities Fund
Manager Alexandra Jackson details why her fund’s performance improved dramatically in the final quarter of 2022. Her hunting ground of UK mid-caps recovered strongly as political stability returned and sterling strengthened. As 2023 beckons, she finds that this part of the market has gone through the hard yards. Expectations are low, forecasts have been downgraded already, and valuations are cheaper than ever. Whisper it…the UK might just have turned a corner.
Rathbone Greenbank Global Sustainability Fund
Manager David Harrison talks about recent performance and how his portfolio is positioned for a slowing global economy. He discusses why the energy transition is such a compelling investment opportunity and where he’s finding ideas to capture this. He also talks about where his team is seeing value in markets at the moment and why they have been adding exposure in Europe and the UK.
Rathbone Multi-Asset Funds
David Coombs and Will McIntosh-Whyte detail how their portfolios are positioned to balance participating in any rebound while protecting against an economic slowdown. Will explains how bonds can finally resume their traditional role in multi-asset funds and highlights other tools for protecting their funds in an uncertain environment. David outlines some of the exciting structural trends the team are targeting to help drive long-term returns.
Rathbone Ethical Bond Fund
Manager Bryn Jones believes bond markets are starting to show some interesting characteristics, and explains how fixed income is returning as an important hedge. In particular, how investment grade bonds are pricing in default rates that he believes are still too high, which shows that investment grade bonds are an interesting place to invest.
Rathbone HIGH QUALITY Bond Fund
Manager Noelle Cazalis explains how her fund has performed in a difficult year for bond markets. With yields now at multi-year highs, she explains why she is constructive on high-quality credit from here. She also highlights where she is currently finding value.
Rathbone STRATEGIC BOND Fund
Manager Bryn Jones explains how his fund has fared over the past year and argues that fixed income is now more interesting than ever, with higher yields and better ‘carry’ giving investors a level of protection they haven’t had for years. He also considers the impact of recent interest rate rises and what he expects for the year ahead.