July 2010
News
We have extended our offering and launched a private client division enabling us to offer a service for clients with assets in excess of £25,000. Private clients are now able to benefit from our institutional and disciplined investment approach coupled with our unique investment style that enables our clients to access the corporate deals of the major City institutions. .
Glenn Meyer has joined RCBIM as Head of Managed Funds. Glenn has more than 30 years experience in the investment industry. Prior to joining RCBIM, Glenn worked for Standard and Poor’s as a Director of Fund Research.
PERFORMANCE
The performance of our three largest clients is as follows. Our two largest ethically managed charities have outperformed their benchmarks during the total period of RCBIM’s management:
WM calculates Charity No 1 to the end of 2009 returned 258% against its benchmark of 177% since 1994.
WM calculates Charity No 2 to the end of 2009 returned 57% against its benchmark of 47% since 1999
The Marlborough UK Primary Opportunities Fund (formerly Marlborough Quantock UK Growth) remains one of the leading UK equity funds since its inception in 1996, returning 236.1% v 119.2% against its benchmark.
The Marlborough Ethical Fund has returned -1.22% year to date compared with -4.3% against its benchmark and has seen recent inflows.
IINVESTMENT OUTLOOK
The recovery from the collapse of the world banking system continues. Commodity prices, including oil, have recovered as emerging markets, particularly China, continue to expand. Developed economies have shown some recovery with modest GDP growth in the UK and consumer spending slowing. Businesses which were preparing for a depression at the end of 2008 and the beginning of 2009 initially made the recession worse. A reversal of this corporate purge should boost recovery growth.
A budget deficit of 11% of GDP needs to be addressed over the next few years by the coalition Government. The help given by the 19% fall in sterling against the dollar from $1.86 to $1.51 since the crisis of September 2008 should not be underestimated. The relative stability against the euro, €1.27 to €1.21 over the same period means the UK and European economies are benefiting from the devaluation effect. Strenuous efforts are being made to reduce deficits in Greece, Ireland, Spain etc.
Tightening in China, and other more robust economies, will continue. Eventually all economies will have to move interest rates to more sensible non crisis levels. The macro effects of this are difficult to gauge, although the effects on bond market yields and highly geared companies are more obvious. Steep bond curves will flatten.
The UK stock market should provide a good proxy for global economic recovery and progress. The UK economy accounts for 33%, emerging markets 22% and other developed economies, principally the US and Europe, 45%.
Following a decade when the UK equity market fell by 20% and provided desultory returns, we continue to expect reasonably good returns. Even after excluding BP’s cancelled dividend, equities yield more than ten year gilts. This should be seen as a buying signal.
* Source: Lipper to 30 June 2010. Benchmark: Morningstar UK All Companies. Ranked 8/109 since inception. YTD 0.84% v -4.3% (24/308)** Source: RCBIM to 30 June 2010. Benchmark: Morningstar UK All Companies. Ranked 48/308.
Past performance is not necessarily a guide to future performance. The value of investments and the income from them can go down as well as up and investors may not get back the amounts originally invested.
LATEST FUND REPORTS
Download the latest fund reports in pdf format:
