Trading Updates 11/09/2019
Trading Update - 11 September 2019
Further trades have taken place in the funds in September. Purchased: Allianz Strategic Bond Fund and Blackrock Emerging Markets Fund. Sold: Brown Advisory Latin American Fund and Vanguard Emerging Markets ETF and BT Group.
Purchased: Allianz Strategic Bond Fund
We have purchased the Allianz Strategic Bond Fund in a number of the Risk Managed Funds. The Allianz Strategic Bond Fund is a top-down, macro-driven strategy managed by Mike Riddell and Kacper Brzezniak. This fund seeks to generate returns from a broader range of views and positions than those typically expressed in more traditional credit-orientated or benchmark-constrained bond funds, and should act as a useful diversifier in the more challenging environment we see today. The fund has a flexible mandate and seeks to generate returns across interest rate, currency, inflation and credit markets within a sensibly controlled risk framework. We believe lead manager Mr Riddell is an experienced and insightful investor with proven expertise that can add real value over time.
Purchased: Blackrock Emerging Markets Fund
The Blackrock Emerging Markets Fund has been purchased across the Risk Managed fund range. The Fund is a core emerging markets equity strategy that combines high conviction, style-agnostic stock picking with a flexible and dynamic approach to managing currency and country risk. Performance has been strong since lead manager Gordon Fraser took over responsibility for the fund in March 2017. While his tenure on this fund is relatively short, Mr Fraser is an experienced investor that has built up an impressive long-term track record since joining Blackrock, originally as an analyst, in 2006. The manager is supported by substantial in-house research resource, with a large team of over 35 analysis located in 6 countries that are empowered to seek out and identify the best ideas available from across the emerging market universe.
SOLD: Brown Advisory Latin American Fund and Vanguard Emerging
The Brown Advisory Latin American Fund and Vanguard Emerging Markets ETF were both sold to finance the investment in the Blackrock Emerging Markets Fund.
SOLD: BT Group
We have sold our position in BT. The business remains a high yielding stock that trades on attractive near-term earnings multiples, however management are grappling with a number of challenges. The company is under pressure to accelerate investment in the Openreach fixed line network in order to deliver fibre connections to all homes across the UK despite the return on this investment remaining unclear. The pricing environment in their Consumer business has deteriorated as the mobile and broadband markets have matured, and although the business is well positioned to compete, pricing pressure could erode future profits. Finally, the industry is one of several facing increased scrutiny over charging structures for their back book of business compared to their new business. Hence, we are concerned that there may be a deteriorating profits outlook going forward, downgrades to which will likely drive the stock lower.
Cornelian Investment Team