TAVISTOCK PROFILES
May 2018 Performance

Manager Commentary

Rising political uncertainty in Italy and Spain hit European bourses this month and the FTSE MIB equity index fell -9.2%. The spread between the Italian and German government bond yield curves, a key measure of political tension in the Eurozone, widened sharply and the euro fell to 1.15, its lowest level against the US dollar for 10 months.

The heightened risk environment fuelled demand for safe haven assets, most notably the 10-year US treasury, which fell from an intra-month high of 3.13% to 2.82%, down -12bps on the month. Government bonds in the UK and Germany also rallied, with 10-year gilt and bund yields falling -19bps and -22bps respectively.

In the UK, the Bank of England postponed its May rate hike, citing weaker than expected economic growth in the first quarter. Despite Mark Carney’s reputation for backtracking on prior guidance, expectations had been running high. The declining probability of an August rate hike and subsequent fall in UK inflation from 2.5% to 2.4% in March, sent sterling to a 6-month low of 1.33 versus the US dollar, down from its near-term high of 1.43. Inflation may fall further over the coming months, but it will still be above the Central Bank’s target rate of 2.0%. Domestic price pressures continue to build, especially in the labour markets, which the BoE will find more difficult to ignore going forward.

The weakness in sterling was supportive for the FTSE 100, which closed up 2.3%. Elsewhere, the Euro Stoxx 600 fell -0.6% and MSCI World rose 0.3%. Emerging market equities fell -3.8%, largely in reaction to the stronger US dollar. In the US, the NASDAQ 100 climbed 5.5% and the smaller cap Russel 2000 rallied 6.0%.

The S&P Goldman Sachs Commodity Index rose 1.5% and is up almost 9% so far this year. Commodities typically provide diversification in a multi-asset portfolio and tend to outperform at this stage of the economic cycle. During the month, we reduced our exposure to commodity equities and increased our allocation to physical commodities via a swap-based ETF.

Tavistock PROFILE 3

Tavistock PROFILE 3 returned -0.08% in May. The Market Composite Benchmark and the IA Mixed Investment 0-35% Shares sector returned 0.43% and 0.67% respectively. The profile has a rolling 1-year return of -0.59%.

May 2018 Return

-0.08%

YTD

-1.49%

1 Year Rolling Return

-0.59%

Tavistock PROFILE 4

Tavistock PROFILE 4 returned -0.10% in May. The Market Composite Benchmark and the IA Mixed Investment 20-60% Share sector returned 0.49% and 0.91% respectively. The profile has a rolling 1-year return of -0.07%.

May 2018 Return

-0.10%

YTD

-1.39%

1 Year Rolling Return

-0.07%

Tavistock PROFILE 5

Tavistock PROFILE 5 returned 0.04% in May. The Market Composite Benchmark and the IA Mixed Investment 20-60% Share sector returned 0.56% and 0.91% respectively. The profile has a rolling 1-year return of 0.92%.

May 2018 Return

0.04%

YTD

-1.11%

1 Year Rolling Return

0.92%

Tavistock PROFILE 6

Tavistock PROFILE 6 returned 0.20% in May. The Market Composite Benchmark and the IA Mixed Investment 40-85% Shares sector returned 0.62% and 1.94% respectively. The profile has a rolling 1-year return of 2.05%.

May 2018 Return

0.20%

YTD

-0.87%

1 Year Rolling Return

2.05%

Tavistock PROFILE 7

Tavistock PROFILE 7 returned 0.50% in May. The Market Composite Benchmark and the IA Flexible Investment sector returned 0.69% and 1.67% respectively. The profile has a rolling 1-year return of 3.61%.

May 2018 Return

0.50%

YTD

-0.55%

1 Year Rolling Return

3.61%

Tavistock PROFILE 8

Tavistock PROFILE 8 returned 0.67% in May. The Market Composite Benchmark and the IA Flexible Investment sector returned 0.75% and 1.67% respectively. The profile has a rolling 1-year return of 4.41%.

May 2018 Return

0.67%

YTD

-0.32%

1 Year Rolling Return

4.41%

Tavistock Income

Tavistock Income returned -0.39% in May. The Market Composite Benchmark and the IA Mixed Investment 20-60% Share sector returned 0.59% and 0.91% respectively. The profile has a rolling 1-year return of -0.39%.

May 2018 Return

-0.39%

YTD

-1.42%

1 Year Rolling Return

-0.39%

The value of investments held in the Tavistock 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 30th April 2018 (applicable to income share class only). The Tavistock 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 PROFILE performance data up until 31/12/16 has been provided by PB Financial Planning Limited. As of 01/01/17, all Tavistock 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 May 2018 unless otherwise stated.