Investment Performance – July 2019

Investment commentary

At our latest investment committee meeting, politics remained firmly on the agenda. Politics and economics are entwined, but lately the impact of one on the other is increasingly obvious.

For the most part politicians of whichever major party over the past 40 years have been focussed on providing a strong economy through which to provide support, growth and enrichment to the population at large. Clearly there is a change in politics, for all sorts of reasons, towards a more left leaning view of society. The two potential candidates for Conservative leadership are both espousing ideas to spend more money, whether in support of education, housing, public sector wages, the military and so forth.

On the other side, there is a real fear that a change in the Government could lead to a wholesale change to the approach and the form of capitalism that we have grown accustomed to.

With the future unknown we as a committee are content that our approach to the UK market and the diversification away from Sterling remains appropriate. 


It is worth revisiting our thought on debt as an investment. We have now reached the point where we have more negative yielding debt around the World than ever before. Remember negative yielding debt is loans investors make to banks, companies and Government in the knowledge that what they will get back will be worth less than the money they loaned. 

It does not seem to us to be a good investment at all.  Worse, if and when we see inflation or higher interest rates, then the value of that debt could be dramatically reduced and in the meantime you are not being reimbursed sufficiently or securely enough .

To us the rewards do not justify the risks, and we would rather have higher levels of cash waiting to be put to use when opportunities arise than to invest in something that we believe will lose you money.


Our wider view of the World remains relatively consistent for all of the headlines, and we continue to take action to address these to the best of our ability. At this stage we are looking at reducing commercial property in the UK, something that is likely to come under pressure through Brexit and beyond.

We are looking to consolidate some of the themes we have whilst keeping globally spread.  Cash remains available to take up opportunities as they arise over the months ahead.