Trading Updates 31/05/2019
Sale: Legal and General
Legal and General, the life insurance company, has been sold from the funds.
The shares were held at a half weight in the UK equity portfolio. The reason for the sale is tactical. We wish to reduce the funds’ exposure to the insurance sector, which tends to have a relatively high correlation with general market risk appetite. The major reason for this is that a significant proportion of the insurance sector’s capital is held in assets (such as credit) which are sensitive to market levels. In addition, several companies in the sector have large asset management arms, the value of which are reduced when markets fall.
Our appetite for risk has fallen somewhat as President Trump announces another front on the tariff war (this time with Mexico), German Bund yields fall further into negative territory and the oil price weakens despite tensions in the Gulf.
The proceeds of the sale will be held in cash temporarily
31 May 2019
Cornelian Investment Team