TAVISTOCK PB PROFILES
February 2018 Performance

Manager Commentary

The long overdue correction in global risk assets finally materialised in February, as markets woke up to the threat of higher inflation. In the US, Treasury bond yields rose to a 4-year high and equity prices fell from near record levels. The S&P 500 declined -8.5% in 5 trading days, whilst the VIX, Wall Street’s so-called “fear index”, rose to a 2.5 year high.

Global equities were quick to recover, but remained in negative territory overall with the S&P 500 closing -4% lower. The publication of January’s Fed policy meeting minutes and new chairman, Jay Powell’s, bullish assessment of the US economy underlined the strong economic fundamentals underpinning the 9-year bull market. We see no signs of this abating and maintain our cautious preference for equities.

Mounting speculation that rates could rise further and faster than anticipated saw Fed fund futures price in an additional rate hike this year, bringing the total number to 4. Accordingly, the 10-year US treasury yield ended the month 15bp higher at 2.87%, down from an intra-month peak of 2.96%.

Higher rate expectations lifted the US dollar from its 3-year low set in mid-February from which the US dollar currency index rose 2.34%. The improved growth prospects outside of the US, notably in Europe, have been undermining the “Greenback” over the last year. However, disappointing Eurozone PMI’s and recent commentary from the ECB contributed to euro weakness, which fell -1.83% versus the US dollar. Sterling, which rallied at the start of the year on Brexit optimism and an increasingly hawkish stance from the BOE, closed lower following negative comments from EU chief negotiator Michel Barnier, at $1.38 and €1.13.

We de-risked the portfolios in mid-October, in anticipation of a market correction. This proved timely and the portfolios have performed well as a result. Following the recent sell-off, we took the opportunity to make additional changes, specifically increasing our exposure to Smart Beta trading strategies and reducing our exposure to global high yield bonds and emerging market hard currency debt.

Tavistock PB PROFILE 3

Tavistock PB PROFILE 3 returned -1.14% in February. The Market Composite Benchmark and the IA Mixed Investment 0-35% Shares sector returned -1.39% and -1.07% respectively. The profile has a rolling 1-year return of 0.51%.

February 2018 Return

-1.14%

YTD

-1.30%

1 Year Rolling Return

0.51%

Tavistock PB PROFILE 4

Tavistock PB PROFILE 4 returned -1.30% in February. The Market Composite Benchmark and the IA Mixed Investment 20-60% Share sector returned -1.74% and -1.38% respectively. The profile has a rolling 1-year return of 1.15%.

February 2018 Return

-1.30%

YTD

-1.31%

1 Year Rolling Return

1.15%

Tavistock PB PROFILE 5

Tavistock PB PROFILE 5 returned -1.61% in February. The Market Composite Benchmark and the IA Mixed Investment 20-60% Share sector returned -2.09% and -1.38% respectively. The profile has a rolling 1-year return of 2.29%.

February 2018 Return

-1.61%

YTD

-1.25%

1 Year Rolling Return

2.29%

Tavistock PB PROFILE 6

Tavistock PB PROFILE 6 returned -2.01% in February. The Market Composite Benchmark and the IA Mixed Investment 40-85% Shares sector returned -2.43% and -1.59% respectively. The profile has a rolling 1-year return of 3.75%.

February 2018 Return

-2.01%

YTD

-1.22%

1 Year Rolling Return

3.75%

Tavistock PB PROFILE 7

Tavistock PB PROFILE 7 returned -2.48% in February. The Market Composite Benchmark and the IA Flexible Investment sector returned -2.79% and -1.52% respectively. The profile has a rolling 1-year return of 5.43%.

February 2018 Return

-2.48%

YTD

-1.19%

1 Year Rolling Return

5.43%

Tavistock PB PROFILE 8

Tavistock PB PROFILE 8 returned -2.67% in February. The Market Composite Benchmark and the IA Flexible Investment sector returned -3.14% and -1.52% respectively. The profile has a rolling 1-year return of 6.38%.

February 2018 Return

-2.67%

YTD

-1.14%

1 Year Rolling Return

6.38%

Tavistock PB Income

Tavistock PB Income returned -1.54% in February. The Market Composite Benchmark and the IA Mixed Investment 20-60% Share sector returned -2.26% and -1.38% respectively. The profile has a rolling 1-year return of 1.99%.

February 2018 Return

-1.54%

YTD

-1.29%

1 Year Rolling Return

1.99%

The value of investments held in the Tavistock PB PROFILES may fall as well as rise. Past performance should not be seen as an indication of future performance. The rolling 1 year dividend yield is quoted as of 31st December 2017 (applicable to income share class only). The Tavistock PB PROFILES are a white-labelled offering based on the DFM Portfolio Management Service provided by PB Financial Planning. PB Financial Planning is a trading style of Tavistock Private Client Limited, which is authorised and regulated by the Financial Conduct Authority. The inception date of the PB Financial Planning DFM Portfolio Management Service is 18/02/08. All Tavistock PB PROFILE performance data up until 31/12/16 has been provided by PB Financial Planning Limited. As of 01/01/17, all Tavistock PB PROFILES invest in a blend of the ACUMEN Portfolio range. All performance data thereafter is provided by Tavistock Wealth Limited. Source of data: PB Financial Planning Limited, Tavistock Wealth Limited, Thomson Reuters and Lipper for Investment Management unless otherwise stated. Date of data: 28th February 2017 unless otherwise stated.