John is Head of Multi-Asset Income at Ninety One. He is co-portfolio manager of the Multi-Asset Income strategies and has macro focussed research responsibilities.. During his time at the firm John has held senior positions as Co-Head of Fixed Income & Currency, having previously been responsible for the management of our South African fixed income assets from 1998 to 2004. John joined Guinness Flight in 1993, which was later acquired by our firm, and took responsibility for investments in emerging bond and currency markets. Prior to this, he worked in London and Tokyo as a specialist global bond and currency portfolio manager for Mitsui Trust Asset Management. John graduated from the University of Oxford with an honours degree in Chemistry in 1990 and he is a CFA Charterholder.
Jason is a portfolio manager in the Multi-Asset team at Ninety One. He is co-portfolio manager of the Multi-Asset Income strategies and his research responsibilities include equities. He joined the firm in 2015 to work on the income strategy as an analyst with responsibility for its equity exposure. Prior to this he worked for Pan Asset Capital Management as an assistant fund manager on multi-asset portfolios. Previously, Jason worked for BlackRock as an analyst. Jason studied Law at Oxford University. He holds an Investment Management Certificate and is a CFA charterholder.
Investec Global Opp Income comment - Jun 13
Market review Data generally surprised to the upside in the second quarter, especially in developed economies. This was sufficient to encourage a shift in rhetoric from the US Federal Reserve (Fed) towards a gradual removal in policy accommodation. This pushed bond yields generally higher and boosted the US dollar, especially against currencies of developing nations and major commodity producers, which were undermined by relatively weak data out of China.
Portfolio review The portfolio had a reasonable quarter, helped by interest rate and currency positioning. However, our emerging market debt and corporate bond exposure detracted from returns.
Portfolio activity During the review period, the portfolio reduced exposure further to emerging market debt and currencies, as well as to inflation-linked government bonds. The short duration position in Japan was reduced following a sharp rise in yields. In currency markets, the portfolio remained generally long US dollars against other currencies. Within corporate debt, the portfolio participated in a number of new deals such as Heinz (Warren Buffett's latest acquisition), Equiniti (a UK-based provider of share registrar and custodian services to large blue-chip corporations), Wepa (a German family-owned tissue manufacturer) and a shortdated HSBC deal. In secondary markets, exposure to more defensive sectors and names was increased. Profits were taken on cyclical names such as Anglo American (a diversified miner), Intercontinental Hotels (a global leisure organisation) and added to Verizon Wireless (US telecoms) and Medtronic (US healthcare). More thematically, exposure has been gradually reduced to both commodity and emerging market credit risk. The holding in New World Resources (Czech coal miner) was sold, and exposure to names such as Petrobras (Brazilian oils & gas), Reliance Industries (Indian chemical producer) and IPIC (Abu Dhabi-owned oil & gas vehicle) was reduced. Most recently market weakness was used to gain exposure to names that have disproportionately sold off such as Koc Industries (Turkish conglomerate) and Picard (French food retailer). Within emerging markets, the portfolio bought Israel and Singapore bonds on value grounds. In currency markets, we added exposure to the Colombian peso on supportive policy, the Brazilian real on value grounds, the Mexican peso on stronger US growth, the Peruvian sol after a significant sell-off, and the Korean won, given robust current account dynamics. We reduced positions in the Malaysian ringgit ahead of elections, the Chilean peso on more dovish central bank policy, and the Taiwanese dollar, which had performed well.
Portfolio positioning Leading indicators suggest that in the second half of 2013, developed market growth should accelerate to at or above trend rate, helped by lower inflation, less fiscal drag, stimulus in Japan and looser lending standards in the US. Emerging market growth appears to have stabilised, but is being held back by the weak performance of global trade. This is due, in part, to continued softness in Chinese data as it moves to a less export and investment driven growth model. We believe recent moves by China's new leadership to clamp down on excessive credit growth, risk extending weakness across the developing world and putting further downward pressure on commodity prices. Despite the mixed backdrop, US monetary policy has reached an inflection point. Although actual tightening is still perhaps two years away, quantitative easing is likely to be scaled back by the Fed and markets are beginning to re-price accordingly. In the short run, some bond markets also appear to have weakened too much and may reverse. Emerging market debt, in particular, appears cheap. Developed government bond yields might also dip back temporarily, as central bankers remind investors that interest rates are still likely to be on hold in the US for a long time, and that, elsewhere, policy may be eased further. However, we expect yields to move into a new higher range, with 10-year US Treasuries trading between 2% and 4%, as they did for the initial 18 months after the Fed funds rate was cut close to zero. Within the government bond markets, we remain positive about countries such as Australia, which are still expected to cut interest rates in response to weak growth and low inflation. We are somewhat less cautious towards corporate bonds now that valuations have improved. However, the rise in volatility may persist due to greater policy uncertainty, limiting scope for yield spreads to fall. We also remain concerned about the potential for investor rotation out of corporate bonds; the asset class has been a major beneficiary of the search for yield in recent years. In currency markets, a less dovish Fed should provide additional support for the dollar against most currencies. Our fair value for the euro has slipped lower as a consequence. We expect it to revisit this year's lows and, ultimately, fall further. Soft data in China leaves commodity-linked currencies, such as the Australian dollar, vulnerable to additional weakness. Emerging currencies could also fall further if downside risks to growth materialise, but entry levels for many currencies now look reasonably attractive.
The Ninety One Global Multi-Asset Income Feeder Fund aims to provide income with the opportunity for long term capital growth. The portfolio is a feeder fund which invests in the Ninety One Global Multi-Asset Income Fund under the Ninety One Global Strategy Fund umbrella scheme domiciled in Luxembourg.
The underlying fund will invest primarily in a diversified portfolio of fixed interest instruments, equities and portfolio of fixed instruments, equities and derivatives, the underlying assets of which are fixed interest instruments and equities.
The feeder fund consists solely of participatory interests in the underlying fund and other securities (including financial instruments and assets in liquid form) as allowed by the Act.