Wealth Manager - the site for professional investment managers

Register for full access to Citywire’s Fund Manager database, news and analysis. Registration is free and only takes a minute.

A spotlight on Cornelian's private client performance

A spotlight on Cornelian's private client performance

Cornelian director and head of private clients and charities Marcus Brooks explains why select UK equities have powered performance over the past year.


Brooks expects inflation to remain above 2% for the foreseeable future and to average out above 2% for the next decade. As such, he sees little value in fixed income broadly at the moment aside from holdings in a couple of top-performing corporate bond funds, which have attractive yields.

Instead, he has increased the equity weighting in his Medium Growth portfolio to 75%, adding to Europe on valuation grounds through a position in the long/short SWMC European fund.

‘The fact that the management team owns the business means their interests are aligned with ours,’ says Brooks, adding that he thinks manager Stuart Mitchell’s track record is impressive.

Brooks has also been tweaking his commodity exposure, selling his position in BHP Billiton and buying into Rio Tinto. ‘Commodities have fallen a long way, so there is value there,’ he says. He adds that he believes the consensus outlook for commodity demand understates the likely real demand.

However, he has sold out of gold mining fund CF Ruffer Baker Steel Gold and has also taken some profits on physical gold.


The portfolio returned 17% in the year to 5 October, outperforming the 16.7% return from the Apcims Balanced benchmark.

Positions in corporate bonds funds have contributed to the performance, most notably Eric Holt’s Royal London Sterling Extra Yield Bond fund, which is ranked first of 16 in the high-yield sector over the past three years.

‘Royal London is a holding we have had over a long period, largely because it is different. The manager looks for anomalies in the high-yield market and also buys unrated bonds, and he’s performed very well,’ Brooks explains.

He also holds the strongly performing JPM Sterling Corporate Bond fund and likes it for its flexibility. The fund is ranked second out of 17 in the Sterling Corporate sector and has returned 38.2% over the past three years, compared with a 26.2% rise in the Citigroup United Kingdom WGBI TB benchmark.

Performance was pulled down by a position in May Gurney Infrastructure Services, which made losses on some contracts with local councils, and Brooks exited the position entirely.


Global energy company BG Group is a holding that Brooks expects to deliver more positive news than of late as he feels the market is failing to recognise the value in its assets.

‘It has been a poor performer as the production cycle has been called into question, but over the longer term it has a fantastic portfolio of assets which will produce hydrocarbons and growing volumes over the next decade,’ he says. ‘That is not reflected in the share price.’

He also points to UK stocks with steady cashflow and strong balance sheets as those which will drive performance in future, and although a holding in B&Q parent group Kingfisher has not performed as well as expected, he anticipates better news.

‘If the UK housing market starts to improve, which there are signs of, that will increase profitability.’

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Investment Pulse: the highs and lows of 2014

Investment Pulse: the highs and lows of 2014

This week's Investment Pulse looks back at some of the biggest stories of the year as well as looking forward to 2015.

Play Inside ETFs: Why the US bull-run still has legs

Inside ETFs: Why the US bull-run still has legs

Global equities suffered a sharp sell-off in the third quarter but exchange traded fund investors are continuing to back the US to outperform in 2015

Play Paul Niven: I won't rip up the Foreign & Colonial Trust history book

Paul Niven: I won't rip up the Foreign & Colonial Trust history book

The newly appointed manager of the Foreign & Colonial trust talks about his plans for UK's oldest investment company.

Your Business: Cover Star Club

Manchester wealth firm hires Coutts director for London launch

Manchester wealth firm hires Coutts director for London launch

Former Coutts director Tony Robinson has joined Chartered Wealth Management to head the company’s newly opened London office.

Wealth Manager on Twitter