PRIMA

PRIMA Fund July 2021

KLOFinancial |

Market Review in June

 

  • Best performing equity region/sector: Nasdaq Composite 8.37% in GBP
  • FTSE All-Share -0.66% & FTSE 100 -0.41%
  • FTSE Europe ex UK 0.55% in GBP
  • S&P 500 4.91% in GBP
  • MSCI EM Latin America Index, 3.12% in GBP
  • MSCI Asia ex Japan 1.42% in GBP
  • Japanese TOPIX 2.13% in GBP
  • MSCI World Small Companies 1.9% in GBP
  • MSCI World Value Index 0.74% in GBP
  • MSCI World Growth Index 6.74% in GBP
  • US 10-year Treasury yield down 17 basis points to 1.45% (price gone up)
  • UK 10-year Gilt yield down 11 basis points to 0.71%% (price gone up)

PRIMA Cautious

 

Performance* (Cumulative Total Return in GBP, net of fund’s OCF, daily data)
1 month 1 year Since Inception (17/02/2020)
PRIMA Cautious 0.40% 7.94% 4.06%
IA Mixed Investment 0-35% Shares sector 0.71% 6.86% 4.34%

 

  • Since inception the fund features lower standard deviation and average drawdown than the sector.
  • Long duration government and corporate bonds together with the property funds have been the main contributors to performance.
  • Exposure to minimum volatility stocks and some areas of Japanese equity were drags on performance as they lagged their respective sectors.
  • In order to hedge inflation and volatility risks in the fixed interest sector, the Artemis Target Return fund was added to the portfolio. Its purchase was financed by the proceeds raised from reducing exposure to the outperforming areas of the fixed assets allocations. 

 

Actions taken:

  • Sell 1% L&G Short Dated Sterling Corporate Bond Index 
  • Sell 1% Vanguard UK Short Term Investment Grade Bond Index 
  • Sell 2% Royal London Sterling Credit
  • Sell 1% Vanguard UK Government Bond Index
  • Buy 5% Artemis Target Return Bond 

PRIMA Balanced

 

Performance* (Cumulative Total Return in GBP, net of fund’s OCF, daily data)
1 month 1 year Since Inception (17/02/2020)
PRIMA Cautious 1.69% 14.81% 9.09%
IA Mixed Investment 40-85% Shares sector 1.63% 17.29% 10.37%

 

  • Since inception the fund features lower standard deviation and average drawdown than the sector. 
  • Attribution analysis shows the overweight allocation to the UK acting as the greatest contributor to performance and underweight allocation to the US as the greatest detractor.  
  • The Invesco China Equity fund’s performance continued to lag the sector over 4 weeks, but its short-term performance looked stronger and gaining momentum. 
  • All bond funds performed either in line with or ahead of their respective sectors over 4 weeks, with the Threadneedle Emerging Markets Bond fund emerging as the strongest performer during this period.
  • In order to hedge inflation and volatility risks in the fixed interest sector, the Artemis Target Return fund was added to the portfolio. Its purchase was financed by the proceeds raised from reducing exposure to the outperforming areas of the fixed assets allocations.

 

Actions taken:

  • Sell 2% Vanguard UK Government Bond Index 
  • Sell all (2%) Artemis Strategic Bond
  • Buy 4% Artemis Target Return Bond

PRIMA Adventurous

 

Performance* (Cumulative Total Return in GBP, net of fund’s OCF, daily data)
1 month 1 year Since Inception (17/02/2020)
PRIMA Adventurous 3.02% 23.38% 17.50%
IA Global sector 3.28% 25.92% 22.24%

 

  • Since inception, the fund had a lower standard deviation and shown less volatility than the sector.
  • Attribution analysis shows that allocation and selection in the UK equity space together with allocation and interaction effects in the Global equity sector were the main drivers of performance.
  • The main drag on performance was underweight to the US equity market, albeit this was tempered by allocation to the Global Technology tracker which features exposure to US companies.

Data source: FE Analytics as of 30th of June 2021

Disclaimer

Any research is for information only, it does not constitute financial advice. The value of investments and any income from them may go down as well as up, so you may get back less than you invested. Past performance cannot be relied upon as a guide to future performance. KLO Financial Services Ltd are registered in the UK, company number 08711328. We are authorised and regulated by the Financial Conduct Authority, reference 710272. For any information please visit our website www.klofinancialservices.com