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St. James's Place Wealth Management


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Immediate Income Portfolio Update - Autumn 2018

24 October 2018

Third quarter performance analysis for the St. James's Place Immediate Income Portfolio.

The Immediate Income Portfolio achieved a positive return over the period, buoyed by the performance of corporate bonds and, more significantly, global equities.

The Monetary Policy Committee (MPC) of the Bank of England felt sufficiently confident in the state of the economy to raise interest rates by 0.25% during the period, but not confident enough to yet begin tapering off its post-crisis programme of quantitative easing, as the Federal Reserve has begun to do.

Although some UK indicators remained relatively robust, growth was sluggish and business investment fell, while the odds rose on the UK departing the EU without a deal. Government bonds suffered through the period, not least in the UK. The Gilts fund, managed by Wellington, weighed slightly on Portfolio returns. Corporate bonds enjoyed a stronger quarter. The Corporate Bond fund, managed by Invesco Perpetual, performed well; the fund has exposure to Softbank, which in August announced second-quarter profits of 49%. The Diversified Bond fund, co-managed by Payden & Rygel, Brigade and TwentyFour, was another contributor to returns. It benefited from exposure to the industrial and telecoms sectors.

The Strategic Income fund, co-managed by Schroders, TwentyFour, MidOcean and Bluebay, also enjoyed a strong quarter, TwentyFour Asset Management benefited from its corporate bond exposure to the banking sector, and specifically to Deutsche Pfandbriefbank, a leading German bank focused on real estate and public investment.

Although stocks in some parts of the world struggled through the period, the US’s S&P 500 clocked yet another record high and extended its bull run to 9.5 years – by some counts, the longest in its history. Performance was boosted by strong corporate earnings, which some investors credited to Donald Trump’s package of corporate tax cuts.

The Global Equity Income and Worldwide Income funds both delivered strong returns over the period on the back of US stock market rises. The Global Equity Income fund, managed by Manulife, was aided by its allocation to healthcare but also by specific stock selection. Johnson & Johnson, the 132-year old US pharmaceutical company, posted record profits for the second quarter.

The Property fund, managed by Orchard Street, made a marginal contribution to Portfolio returns over the period. In August, the fund completed the purchase of a 30,000 square foot office-and-retail space in central London.

You may also like to access the full Immediate Income Portfolio Update.


The price of funds and the income from them may go down as well as up.  You may get back less than the amount invested.

Portfolio fund allocations are not rebalanced automatically. Thus Client Portfolios may not include all of the stocks mentioned in the commentary, as fund allocations may vary between clients, leading to different investment experiences.

The value of an investment with St. James's Place will be directly linked to the performance of the funds selected and the value may fall as well as rise. You may get back less than the amount invested.

© S&P Dow Jones LLC 2018; all rights reserved


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