The fund is invested in the Aberdeen Standard Investments MyFolio Managed I Fund which aims to provide growth over the long term while being managed to a level of risk, rather than a level of return. It is part of the MyFolio Managed range, which consists of five funds with different expected combinations of investment risk and return levels.
The fund is risk level I, which aims to be the lowest risk fund in this range. This level will have the highest amount in traditionally lower risk assets such as money market instruments including cash and certain types of bonds.
The value of investments within the fund can fall as well as rise and is not guaranteed - you may get back less than you pay in. The fund may use derivatives for the purposes of efficient portfolio management, reduction of risk or to meet its investment objective if this is permitted and appropriate. The sterling value of overseas assets held in the fund may rise and fall as a result of exchange rate fluctuations.
Katie Trowsdale & Rob Bowie
Katie Trowsdale is a fund manager, having joined from Gartmore in 2011. She was previously at Kleinwort Benson Private Bank and Heartwood Wealth. Rob Bowie previously held roles Credit Suisse, Artemis, ABN Amro and Singer & Friedlander. Together they form part of the Multi-Manager Strategies team at Aberdeen Standard Investments.
*The Total Annual Fund Charge is the total of the Fund Management Charge (FMC) and additional expenses.
Click on the pie chart to see the full breakdown of growth and defensive assets.
Defensive - those assets which are expected to be lower risk and therefore generate lower returns (than growth assets) over the longer term. We consider defensive assets to be cash, gilts, corporate and global inflation linked bonds, and absolute return bonds (in certain fund ranges).
Growth - those assets which are expected to be higher risk and therefore generate higher returns (than defensive assets) over the long term. We consider growth assets to be equities, emerging market debt, global high yield bonds, property and absolute return growth funds (in certain fund ranges).
Click on the pie chart to see the full breakdown of growth and defensive assets.
Defensive - those assets which are expected to be lower risk and therefore generate lower returns (than growth assets) over the longer term. We consider defensive assets to be cash, gilts, corporate and global inflation linked bonds, and absolute return bonds (in certain fund ranges).
Growth - those assets which are expected to be higher risk and therefore generate higher returns (than defensive assets) over the long term. We consider growth assets to be equities, emerging market debt, global high yield bonds, property and absolute return growth funds (in certain fund ranges).
Tactical Tilt chart reflects the difference between the Strategic and Tactical allocations, i.e. the difference at asset class level between strategic and tactical which should show somewhere between -5% and +5%.
| Defensive assets | Asset class | £ | % |
|---|---|---|---|
| SLI Absolute Return Global Bond Strategies | Diversifying Defensive Assets | £14,030.00 | 14.03% |
| ASI Global Corporate Bond S Acc Hedged | Global Corporate Bonds | £11,760.00 | 11.76% |
| ASI Global Short Duration Corporate Bond | Short Dated Global Corporate Bonds | £8,080.00 | 8.08% |
| ASI Global Govt Bond Tracker Fund X Acc | Global Developed Government Bonds | £7,520.00 | 7.52% |
| ASI Short Duration Global Index Linked Bond | Short Dated Global Index Linked Bonds | £6,710.00 | 6.71% |
| ASI Global Inflation-Linked Bond | Global Index Linked Bonds | £4,310.00 | 4.31% |
| SLMT Sterling Intermediate Credit Fund | Short Dated Sterling Corporate Bonds | £3,930.00 | 3.93% |
| ASI Short Dated Corporate Bond | Short Dated Sterling Corporate Bonds | £2,340.00 | 2.34% |
| ASI Ethical Corporate Bond | Sterling Corporate Bonds | £1,640.00 | 1.64% |
| Vanguard UK Short-Term Investment Grade Bond | Short Dated Sterling Corporate Bonds | £1,560.00 | 1.56% |
| ASI (SLI) Corporate Bond | Sterling Corporate Bonds | £1,550.00 | 1.55% |
| ASI Investment Grade Corporate Bond | Sterling Corporate Bonds | £1,500.00 | 1.50% |
| Cash and Other | Money Market including Cash | £1,620.00 | 1.62% |
| Total | £66,550.00 | 66.55% |
| Growth assets | Asset class | £ | % |
|---|---|---|---|
| Vanguard US Equity Index | US Equities | £2,640.00 | 2.64% |
| ASI UK Income Unconstrained Equity | UK Equities | £2,360.00 | 2.36% |
| ASI Global High Yield Bond D Acc Hedged | Global High Yield Bonds | £2,340.00 | 2.34% |
| SLMT American Equity Unconstrained | US Equities | £2,300.00 | 2.30% |
| SLI UK Real Estate | Property | £2,270.00 | 2.27% |
| SLMT Global REIT Institutional S Acc | Property | £2,210.00 | 2.21% |
| ASI Emerging Markets Income Equity | Emerging Market Equities | £2,040.00 | 2.04% |
| SLI Emerging Market Local Currency D | Emerging Market Local Currency Bonds | £1,840.00 | 1.84% |
| ASI Europe ex UK Equity Fund I Acc | European Equities | £1,690.00 | 1.69% |
| ASI Europe ex UK Income Equity | European Equities | £1,640.00 | 1.64% |
| ASI UK Equity Fund I Acc | UK Equities | £1,530.00 | 1.53% |
| Neuberger Berman EM Debt Local Currency | Emerging Market Local Currency Bonds | £1,510.00 | 1.51% |
| SLI Enhanced Diversification Multi Asset Fund | Diversifying Growth Assets | £1,470.00 | 1.47% |
| ASI Asia Pacific Equity Fund K Acc | Asia Pacific Equities | £1,380.00 | 1.38% |
| ASI UK Smaller Companies | UK Equities | £1,060.00 | 1.06% |
| ASI UK High Income Equity | UK Equities | £1,020.00 | 1.02% |
| ASI American Income Equity | US Equities | £960.00 | 0.96% |
| Aberdeen UK Equity Enhanced Index | UK Equities | £900.00 | 0.90% |
| SLMT Standard Life Japan | Japanese Equities | £870.00 | 0.87% |
| Aberdeen Japan Eq Enh Idx Net B Acc | Japanese Equities | £790.00 | 0.79% |
| ASI North American Smaller Companies I Acc | US Equities | £630.00 | 0.63% |
| Total | £33,450.00 | 33.45% |
Global equity markets rose over the period, with the US, Europe and emerging markets the best-performing regions. Lockdown restrictions imposed by the onset of the Covid-19 outbreak dominated stock markets at the beginning of the period, with economic activity then grinding to a halt. However, massive fiscal and monetary stimulus pushed through earlier by governments and central banks supported sentiment. Markets began to recover into the summer months, as investors hoped that economies would return to some kind of normality.
Despite falling in September and October amid an uptick in Covid-19 cases, markets surged after Joe Biden won the US presidential election in November. The US stock market then surpassed all-time highs at the end of 2020, driven by the approval of the Covid-19 fiscal relief package. Positive results from several vaccine trials then led to the roll out of vaccination programmes. Latin American markets were particularly strong at the end of 2020, driven by vaccine optimism and a ‘risk-on’ environment. Accelerating vaccine rollouts and the easing of restrictions on social mobility helped boost hopes of a global economic rebound, with equities finishing the period positively. However, UK stocks lagged towards the end of the period as the Government extended lockdown restrictions by four weeks.
In fixed income, government bond prices fell over the 12 months. Early on, the pandemic and associated lockdown restrictions heightened fears of a deep recession. This ‘risk-off’ environment boosted government bond prices as investors fled to their perceived safety. As a result, major government bond yields fell to record-low levels by the middle of 2020. Rising optimism about vaccines and concerns that an economic recovery will fuel sharp rises in inflation led to a drop in government bond prices, although they started to rise at the end of the period. Corporate bonds performed well, as stimulus measures – including corporate bond purchases by central banks – and rising economic optimism helped bolster the market.
Total returns from UK commercial real estate were 6.8% over the 12 months to the end of May (the latest data available). Investment activity was low early on because of market uncertainty and buyers being physically unable to inspect properties. As restrictions eased, investment deals increased. Alongside continued growth in industrials, stabilisation in the retail warehouse sector boosted returns. However, the effect of remote working on offices continued to be felt, with capital values steadily declining.
Allocations to UK, US, European and emerging market equities, and property were the largest positive contributors to returns over the past 12 months. The actively managed tactical tilts placed over the year had a positive effect on overall Fund performance.
Over the 12 months to the end of June 2021, the main changes to the asset allocation were as follows:
Reduced exposure
Increased exposure
The global economy will likely experience a period of above-trend growth as it rebounds from the Covid-19 crisis. The current market backdrop is supportive for equities, with investor concern about long-term inflation abating and developed market monetary policy remaining accommodative. Moreover, better company fundamentals have also kept investors buoyant. However, it is still possible that inflationary concerns may re-emerge. Additionally, central banks have started to signal the need to reduce asset-repurchase programmes. Also, as the investment cycle matures, valuations rise and sentiment improves, prospective returns should steadily diminish.
Within fixed income, increasing vaccine dissemination and the progressive easing of Covid-19 mobility restrictions are supporting both economic activity and sentiment. The economic recovery in the US has been particularly strong, with an annualised real GDP growth rate of 6.4% in the first quarter. As a result, inflation has also been picking up strongly, and a key focus of investor attention is on whether this will be transitory or more long-lived. Evidence suggesting the latter would not be seen favourably.
In UK commercial real estate, industrials are likely to be the best-performing sector in 2021 for a fifth successive year. Meanwhile, there are increasing signs of bifurcation in the retail sector. Retail that is skewed towards grocery, value and core bulky goods has not just stabilised but started to see rising capital values. In contrast, discretionary and fashion-led retail is likely to see further loss, with shopping centre returns expected to be sharply negative in 2021.