Nutmeg investment strategy update – November 2015

Shaun Port


2 min read

This update was filmed on Wednesday 4th November and all data included is for the entire month of October unless otherwise stated.

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2015 has been an unusually volatile year for stock markets. In the three months up to the end of March, markets did extraordinarily well, clocking up some excellent performance.

However, at the start of April as the Greek bailout crisis grew ever more serious markets started to feel the brunt of economic uncertainty.

It seemed that one crisis subsided and gave way to another, with policymakers in China causing alarm to investors and a fall in markets during the height of the holiday season in August. For those investors who joined us in or around April this year, I’m happy to say we’re finally seeing some light at the end of the tunnel.

Fast forward to October and we’ve endured six long months of lacklustre market returns, but it seems that markets have turned a corner. This really shows the value of staying invested through volatile times – markets do generally re-gain what they’ve lost over time, and over a long-term period you’re more likely to see stronger growth.

The chart below demonstrates the performance of a range of different markets and asset classes from April to September – as you can see, it would have been very difficult to find strong performance whichever market you had invested in.

AA 6m

When compared to the performance in October we see a much-improving story:

AA Oct

The best defence in times like this when all markets are going down, is to have a portfolio which is globally diversified – minimising the impact wherever possible.

What’s behind the bounce in markets?

China made its position much clearer in terms of expected growth and monetary policy and markets have reacted positively to that news. This is coupled with strong results in European markets and excellent performance from Japan, another one of our favourite markets at the moment, which recouped 11% of its previous 14% decline during the month.

Our three year performance

Here at Nutmeg we’ve just released our three-year performance track record. We’re very pleased to say that we’ve consistently beat the average UK investment manager across our portfolios.

Our long-term strategy is clearly paying off for our customers and portfolios are really well positioned to take advantage of strong performance over the next few years.

What changes have we made to portfolios?

In early October we made some changes to our fixed income holdings. We sold some of our exposure to UK government bonds and bought some high-yield corporate bonds. This is the only change we’ve made to asset allocation recently – I’m very confident in our investment strategy for 2016 and beyond.

Risk warning: As with all investing, your capital is at risk. The value of your portfolio with Nutmeg can go down as well as up and you may get back less than you invest. Past performance is not a reliable indicator of future performance.

Sources

Macrobond 2015

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Shaun Port

Shaun Port

Shaun is the chief investment officer at Nutmeg. He has over 25 years’ experience developing and implementing investment strategies for clients ranging from central banks to pension schemes to charities and private individuals. Shaun holds a degree in Mathematical Economics from the University of Birmingham and is a Chartered Alternative Investment Analyst. He can be found tweeting @ShaunPort.


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