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.

How did private client portfolios perform in 2013?

How did private client portfolios perform in 2013?

The ARC Sterling Private Client indices all ended 2013 in positive territory after rebounding strongly in the second half of the year.

The Equity Risk index was the standout performer, delivering 16.3% over the year after adding a further 4.4% in the fourth quarter. The Steady Growth index also delivered double digit gains, rising by 12.5% with the Balanced Asset and Cautious indices up 8.8% and 4.4%, respectively, comfortably ahead of inflation.

Graham Harrison, group managing director of ARC, said investment managers spent most of 2013 worrying about future events, such as the tapering of quantitative easing (QE) and rising interest rates with market sentiment generally neutral.

‘So during 2013 equity markets rose on the hope of future corporate profits growth at the same time that bond yields rose on the fear that eventually central bank money creation would fuel inflationary pressures,’ he said.

‘With cash returns close to zero and bond yields rising, the challenge in 2013 for multi-asset class managers was to keep the (actual and implied) volatility of portfolios within acceptable parameters. The consensus might have been that equities were the only asset class offering above inflation returns and a decent yield.

‘But, a portfolio invested 100% in equities requires a longer term investment horizon and a capacity to stay invested during dips that few private clients or charities possess. Little has changed for 2014, except that the entry level for equity investments is now around 25% higher than it was a year ago.’

He believes that all eyes will remain on the US and central bank policy in what sets look to be ‘another challenging year for multi-asset class strategies.’

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