June 2016 Performance
The result of the EU Referendum came as a shock to financial markets around the world despite the tightness in the polls indicating an evenly balanced outcome. The vote to ‘Leave’ the European Union has plunged all wings of the UK’s political establishment into crisis mode amidst an economic outlook clouded with uncertainty. It will take many months for investors to accurately quantify the impact of the decision that reverses over forty years of membership. The exit route will take a minimum of two years to negotiate once Article 50 of the Lisbon Treaty to leave the EU has been formally enacted by the UK government. The Bank of England announced that it was prepared to inject an additional £250 billion of liquidity into the banking system to help ensure the near term stability of the City’s financial institutions. Volatility across all markets surged with short term, high frequency traders dictating price movements. The FTSE 100 traded in a 581 point range and closed up 4.39% at 6,504. The FTSE 250, which is comprised of small to mid-sized UK companies declined -5.32% on the basis that any reduction in access to the single market would negatively affect their future profitability. This sell-off is at odds with the benefits to UK exporters from the dramatic fall in sterling. The pound fell -8.09% versus the US dollar to reach a 31 year low of 1.32 and also lost -7.86% against the euro. The UK government bond market rallied on the expectation that short term interest rates would be cut as part of the central bank’s stability programme. Ten year gilt yields dropped 56 bps and closed at a record low level of 0.87%. Looking ahead, heightened volatility is here to stay at least until the election of a new Conservative Party Prime Minister in September and the subsequent Brexit negotiations in Brussels.
ACUMEN CONSERVATIVE PORTFOLIO
The ACUMEN CONSERVATIVE PORTFOLIO returned 4.19% in June and outperformed the IA Mixed Investment 20-60% Shares sector, which rose 1.38%. The portfolio has returned 8.46% year to date and 12.95% since inception on 1st October 2014.
ACUMEN INCOME PORTFOLIO
The ACUMEN INCOME PORTFOLIO returned 3.32% in June and outperformed the IA Mixed Investment 20-60% Shares sector, which rose 1.38%. The portfolio has returned 9.38% since inception on 25th February 2016.
ACUMEN PROGRESSIVE PORTFOLIO
The ACUMEN PROGRESSIVE PORTFOLIO returned 1.37% in June and the IA Mixed Investment 40-85% Shares sector rose 1.54%. The portfolio has returned 2.72% year to date and 8.88% since inception on 9th October 2014.
ACUMEN ADVENTUROUS PORTFOLIO
The ACUMEN ADVENTUROUS PORTFOLIO returned 0.49% in June and the IA Flexible Investment sector rose 2.37%. The portfolio has returned 7.65% since inception on 25th February 2016.
The value of an investment in the ACUMEN Portfolios may fall as well as rise. Past performance should not be seen as an indication of future performance. Source of data: Tavistock Wealth Limited, Thomson Reuters and Lipper for Investment Management unless otherwise stated.