TAVISTOCK PB PROFILES
January 2018 Performance

Manager Commentary

Global equity markets charged ever higher in January. The MSCI World rose 5.22% driven by the US, where the S&P 500 enjoyed its strongest start to a year since 1987. Meanwhile, emerging markets returned 8.33% led by Brazil and Hong Kong, where the Hang Seng rose 9.92%.

Brushing aside US Government shut down fears, weaker than expected Q4 GDP growth and new trade tariffs on solar panels and washing machines, investors focused on the positives. S&P 500 corporate earnings are expected to increase 13.7% in Q4. Trump’s tax cuts and the weak US Dollar have benefited US equities and synchronised global growth continues to underpin risk assets throughout the world.

In fixed income, the 10-year US Treasury yield broke through an all-important resistance level, marking a symbolic end to the multi-decade downward trend in government bond yields. The 10-year US Treasury yield rose 31bp to 2.72%, its highest level since April 2014. In Germany, the 5-year Bund yield turned positive for the first time since late 2015. However, credit spreads remain tight and emerging markets continue to do well, with the iShares Emerging Market Local Currency ETF up 4.41% in USD.

The US Dollar Index continued its downward trend, falling -3.25%, as Steve Mnuchin (US Treasury Secretary) endorsed a weaker US Dollar whilst speaking at the World Economic Forum in Davos. Dollar weakness, and growing confidence in Brexit and the UK economy (Q4 GDP +0.5%), sent Sterling higher, up 5.02% against the US Dollar.

In commodity markets, Gold rallied 3.24% to $1,344.70 and WTI Oil climbed 7.13% to $64.73 a barrel. The S&P Goldman Sachs Commodity Index rose 3.42%.

The portfolios performed well this month. Yet there are clear signs of creeping investor euphoria, which may indicate we are approaching the twilight stage of this ageing equity bull market. If inflation continues to rise, pushing bond yields higher, then we will likely see a 5-10% correction later in 2018 or in early 2019. Having de-risked the portfolios in mid-October, we are well placed to benefit from a pick-up in volatility. However, the underlying economic backdrop remains positive and as such we do not envisage the next correction as marking the beginning of a structural downturn.

Tavistock PB PROFILE 3

Tavistock PB PROFILE 3 returned -0.16% in January. The Market Composite Benchmark and the IA Mixed Investment 0-35% Shares sector returned 0.50% and -0.29% respectively. The profile has a rolling 1-year return of 3.06%.

January 2018 Return

-0.16%

YTD

-0.16%

1 Year Rolling Return

3.06%

Tavistock PB PROFILE 4

Tavistock PB PROFILE 4 returned -0.01% in January. The Market Composite Benchmark and the IA Mixed Investment 20-60% Share sector returned 0.93% and -0.09% respectively. The profile has a rolling 1-year return of 4.10%.

January 2018 Return

-0.01%

YTD

-0.01%

1 Year Rolling Return

4.10%

Tavistock PB PROFILE 5

Tavistock PB PROFILE 5 returned 0.36% in January. The Market Composite Benchmark and the IA Mixed Investment 20-60% Share sector returned 1.57% and -0.09% respectively. The profile has a rolling 1-year return of 5.92%.

January 2018 Return

0.36%

YTD

0.36%

1 Year Rolling Return

5.92%

Tavistock PB PROFILE 6

Tavistock PB PROFILE 6 returned 0.81% in January. The Market Composite Benchmark and the IA Mixed Investment 40-85% Shares sector returned 1.79% and 0.11% respectively. The profile has a rolling 1-year return of 8.13%.

January 2018 Return

0.81%

YTD

0.81%

1 Year Rolling Return

8.13%

Tavistock PB PROFILE 7

Tavistock PB PROFILE 7 returned 1.32% in January. The Market Composite Benchmark and the IA Flexible Investment sector returned 2.21% and 0.58% respectively. The profile has a rolling 1-year return of 10.66%.

January 2018 Return

1.32%

YTD

1.32%

1 Year Rolling Return

10.66%

Tavistock PB PROFILE 8

Tavistock PB PROFILE 8 returned 1.57% in January. The Market Composite Benchmark and the IA Flexible Investment sector returned 3.07% and 0.58% respectively. The profile has a rolling 1-year return of 12.03%.

January 2018 Return

1.57%

YTD

1.57%

1 Year Rolling Return

12.03%

Tavistock PB Income

Tavistock PB Income returned 0.25% in January. The Market Composite Benchmark and the IA Mixed Investment 20-60% Share sector returned 1.57% and -0.09% respectively. The profile has a rolling 1-year return of 5.68%.

January 2018 Return

0.25%

YTD

0.25%

1 Year Rolling Return

5.68%

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: 31st January 2018 unless otherwise stated.