Client Portfolio Positioning

This has been an extraordinary year to date, and there are likely more short-term bumps as we near the close of 2020 with Covid, Brexit and the US elections. However, we remain optimistic over the medium to long term.

Whilst we have relayed our portfolio activities over the last six months or so, we thought it would be appropriate to expand on these, with a deeper analysis of how portfolios stand today and where we are heading.

During the darkest days of the markets in late March this year, we were adding new holdings to portfolios that focused on the world of tomorrow, including a technology giant, an online supermarket company and a global pharmaceutical company amongst others. These companies have since performed very well. 

Through to the end of June 2020 we let portfolio equity allocations ride up with the market recovery, taking some profits out of the strongest runners to ensure portfolios continued to be risk managed. During this period, we saw a recovery in most holdings; however, since June portfolios have continued to hold a number of core deep value names that have been negatively affected by Covid and the economic impacts. These exposures are focused in sectors that have lagged the more recent growth orientated rally, including UK listed energy, financials, telecommunications, and retail. 

Currently we are preparing to move towards a more global approach to portfolio management across the Bespoke business, ensuring all bespoke investors have exposure to some of the most exciting names in the world. Part of the transition will be to reduce our existing exposures to the deep value names in the sectors mentioned, in favour of Global companies that are better positioned to thrive in the world of tomorrow. 

This is a very exciting time for investors with Casterbridge; however, we strongly believe in a disciplined and orderly transition to the new approach. For this reason, we will not disadvantage clients by selling these deep value names at unreasonably depressed levels; instead, we will focus on exiting at the right price, that suitably reflects the intrinsic value of the company. We understand that over the short term, as we bump into Brexit, Covid and the US Election hurdles, these deep value exposures may well weigh on performance. However, we are confident that as the economic recovery gathers pace, these holdings will eventually rally and provide investors with solid performance at a time when growth companies will likely take a breather from their meteoric rise to date.

Important Information

This update is for information only and does not constitute advice or a recommendation and you should not make any investment decisions on the basis of it. The views and opinions within this document are those of Casterbridge Wealth at time of writing and may change without notice. They should not be viewed as indicating any guarantee of return from an investment managed by Casterbridge Wealth nor as advice of any nature. Past performance is not a guide to the future. The value of an investment and any income from it may go down as well as up and the investor may not get back the original amount invested.