Investment
Market Updates

Investment Update, 16/04/2021

April 16, 2021 – Written by Nick Gait

Portfolio Monitoring

In addition to regular meetings with our fund managers, Tideway closely monitors your portfolios daily using both internal and risk analysis provided by third parties. Our internal system is built around portfolio holdings provided by each of our managers periodically which is then used to form an aggregate view of client portfolios. It allows a full analysis of our exposures including commonalty of holdings and net geographical and sector exposures amongst other things. This is a valuable tool both to manage risk as well as helping to inform decisions when we look to open a position with a new manager or reduce exposure at Investment Committee meetings. Ultimately it will be the underlying companies that drive performance and therefore we believe it is vital to understand our overall positioning in detail.

It should be noted however that we are limited in what we can publish due to the agreements with the fund managers and therefore will not disclose the names of the securities or the managers who hold these securities unless they have been made available publicly on manager literature, such as factsheets.

Top Bond Holdings (Stable Return Three Model):

Rabobank
Lloyds Bank
Enel
Commerzbank
EDF

Top Equity Holdings (Equity Blend / Stable Return Models):

Taiwan Semiconductor (TSMC)
IShares MSCI World
Microsoft
Tencent
AIA Group

From a geographical perspective we construct our portfolios with a core of global managers allowing them to cast the widest possible net from which to select the best possible opportunities for their mandate. This means our geographical allocation tends to move automatically based on manager preferences for certain areas of the market. We will then allocate to single country allocation managers should we have an underweight position that we would like to close. One example of this is our allocation to Artemis US Select as we are aware that it has historically been painful not to have a full allocation in this area. As you can see from the chart below, our equity blend portfolio currently has an allocation of c.34% to the US. Using the combination of global managers and our Macro research partner, TS Lombard, we will aim to allocate our clients to areas of the market with the best forward-looking returns.

As with commonalty of individual names between funds, review of overall sector positioning ensures the investment committee has the information to review whether portfolios are exposed to the right type of risks. Although we do not typically allocate to single sector strategies, with our managers having diversified portfolios, we nevertheless think it is important to have a good overall picture of where our risks lie. A recent example of this can be taken from TS Lombard analysis which indicated rising yields would see certain sectors such as Financials and Energy benefit in addition to more cyclical sectors which would benefit from easing of lockdown measures. In these scenarios it is valuable to be able to review current exposure to these sector allocations for future portfolio changes.

The content of this document is for information purposes only and should not be construed as financial advice.

Please be aware that the value of investments, and the income you may receive from them, cannot be guaranteed and may fall as well as rise.

We always recommend that you seek professional regulated financial advice before investing

Investment Update, 30/04/2021

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