Performance of the Old Mill Portfolios
Global economies are proving rather more resilient than most economists have expected in the face of rapidly increasing interest rates. While this is positive, in order to contain the risk of inflation central banks have had to increase interest rates further, and recent commentary from the US Federal Reserve, is that interest rates may have to stay higher for longer.
6th October 2023
-
Gavin Jones See profile
Investments on the M&G Wealth platform are being changed as per our previous correspondence.
The first stage involved making changes to the funds in portfolios held within non-taxable wrappers such as Individual Savings Accounts (ISAs) and pensions and this has now been completed. The team has processed over 36,000 trades.
We are now awaiting the second stage where accumulation units will be converted to income units in October. This change will be made with the fund management company without cost and your investments will not be ‘out of the market’ while this change takes place.
Performance since the last insight (from Friday 1 September 2023 to Friday 29 September 2023)
Higher inflation and interest rates have an impact on bonds – we know that expectations for higher interest rates means bond prices can fall although the yield that you receive rises. It also has an impact on share prices as equity valuations are affected by bond yields as rising yields can increase the cost of borrowing for companies and increase the relative attraction of bonds which can cause share prices to fall.
Performance to the middle of September was positive but both bonds and stocks fell to the end of the month.
Performance over the last year (up to Friday 29 September 2023)
Over the year portfolios are all positive as the main impact of rising interest rates and the Truss / Kwateng mini budget last year falls off the chart.
Longer term performance of standard portfolios (up to Friday 29 September 2023)
Investing is a longer-term pursuit and taking a look at the ten-year graph to the end of September, the portfolios are showing a more robust picture depending on the risk you have taken.
Sustainable portfolios performance since the last insight (from Friday 1 September 2023 to Friday 29 September 2023)
Sustainable portfolios performance was weaker than the standard portfolios over the period with rising oil prices and oil companies doing well, which the sustainable portfolios specifically exclude.
Performance over the last year (up to Friday 29 September 2023)
Performance over the last year for sustainable portfolios has been similar to the standard portfolios.
Longer term performance of sustainable portfolios (up to Friday 29 September 2023)
The sustainable portfolios have only been available to our investors for the last five years, but the graph below shows the longer time frame of ten years showing the potential upside over longer periods.
Below shows the performance of a number of asset classes for the last year and the annualised return over five years as at close of play on Friday 29 September.
Please speak to your financial planner if you want to discuss your portfolio.