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Sarasin IE Multi Asset Defensive Fund (GBP) - News
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Fund Name Changed
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Monday, 28 February 2022
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Official Announcement
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The Sarasin IE Multi Asset - Defensive (GBP) will change it's name to Sarasin IE Multi Asset Income Fund (GBP), effective from 28 February 2022
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Fund Name Changed
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Tuesday, 6 July 2021
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Official Announcement
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The Sarasin IE GlobalSar - Income (GBP) will change it's name to Sarasin IE Multi Asset - Defensive (GBP), effective from 06 July 2021
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Sarasin GlobalSar Income comment - Dec 15
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Friday, 11 March 2016
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Fund Manager Comment
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As widely expected, the US Federal Reserve raised interest rates in December, reflecting the first rate rise in 7 years. At the same time, Japan announced additional stimulus plans, which set alongside ECB sentiments further widens global divergence in monetary policy. Elsewhere, revised data indicated that the pace of the UK’s economic recovery had been slightly weaker than previously thought. The Reserve Bank of India cut interest rates by a larger amount than expected early in Q4, while Chinese Q3 growth data suggested that the pace of economic slowdown remains gradual.
While Chinese authorities have given publicity to promoting a more consumer driven economy, more recently they have favoured a weakening currency in order to protect Chinese manufacturing. This requires careful monitoring in respect of corporate bond credit spreads and our equity exposure, which is modestly overweight at 22% (including property).
Overall, the trend in UK gilt yields was upwards, following US Treasuries. The benchmark 10-year gilt rose by 20bp over the quarter, and the total return for all gilts was -1.2%, leaving the calendar year return a slim +0.6%. Against this backdrop, corporate bonds largely held their own over the quarter and credit spreads tended to tighten. As a result, their return was a modest positive and +0.7% for the year. However, problems in the US with specialist distressed debt funds, in essence at the extremes of high yield, resurrected fears of liquidity problems across the market. This was unhelpful. Despite uninspiring absolute performance for the year, the last quarter was relatively good for the fund. We continue to reduce exposure to less robust parts of the market, preferring to add, as before, in infrastructure, energy distribution and residential property.
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Sarasin GlobalSar Income comment - Sep 14
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Monday, 20 October 2014
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Fund Manager Comment
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The US remained an economic bright spot throughout much of the third quarter, though the Federal Reserve is still expected to start hiking interest rates only around mid-2015, and Chair Janet Yellen continues her labour market focus. In Europe, meanwhile, despite a disappointing take up of TLTROs (targeted longer-term refinancing operations), Mario Draghi claimed that the European Central Bank (ECB) remained ready to deploy more unconventional monetary policy in the face of weak data and entrenched deflation. Elsewhere, politics held centre stage through the Scottish independence referendum's 'No' vote in the UK, and anti-China protests in Hong Kong.
Perhaps of greatest significance has been the recent decline in long-term inflation expectations, and the fall in longer dated UK gilt yields, where we captured some of the price uplift by holding about 20% exposure. We also have a relatively large positon in a specialist fund, Twenty Four Income, investing in European Asset Backed Securities, which was up nearly 5% over the quarter.
With the end of QE in the US, and given the limitations for QE in Europe and the likelihood of greater market volatility, we have further trimmed risk in equities by selling TDC (the Danish Telecoms company held in Security of Supply) as well as GlaxoSmithKline, both of which performed poorly. Royal Dutch Shell was also somewhat disappointing, despite its strong performance over first half, which was driven by greater capital discipline under the helm of the new CEO.
Having also reduced risk in asset allocation by increasing liquidity, after a relatively weak period for corporate and emerging market bonds, towards the end of the quarter we deployed some of our cash. We reinvested in sterling bonds with higher coupons and a duration of about 7 years, issued by Mexico and the UK's Eastern Power Networks and carrying a credit rating of 'BBB' (from Standard & Poor's).
With the global economic outlook having weakened, and the collapse in long-term government bond yields surprising us, we go into the final quarter with a cautionary cash position of about 5%. All the same, given the lack of inflation there are grounds for optimism and we intend to pursue a similar investment style over the months ahead, with a bias towards higher yielding investment grade bonds and equities with solid and stable cash flows and strong thematic credentials.
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