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Performance of the Old Mill Portfolios

Investments have been taking their lead in the last few months from the likelihood, or not of the ‘Fed Pivot’ or the point at which the US Federal Reserve slow their increase in interest rate rises in response to inflation. Several times in the last month, there has been a hint of a reversal in policy only for hopes to be dashed and markets to fall back.

8th December 2022

As you know we do not try to second guess market movements. If we look back to this time last year markets had completely underestimated the inflationary pressures we would experience in 2022.

An article published by the Financial Times at the end of December asked a number of questions about 2022. Some of the big issues were identified: Inflation, Aggression by Russia and China as well as specific questions about how certain investments would perform. Some of the questions the writers got right. They thought inflation would not fall back to target, they correctly predicted the departure of Boris Johnson and they also predicted that the US stock market, the S&P500 would lose more than 10%. In fact, the S&P fell by 25% at one point before recovering.

Others they got wrong. In 2021, the world was still reeling from Covid and predictions included new more virulent strains would appear. They also thought Russia would not invade Ukraine – ’A large-scale invasion would risk heavy Russian casualties and would run counter to Vladimir Putin’s preference for subterfuge and plausible deniability’. While they thought that stock markets would fall, one writer (albeit tongue-in-cheek) predicted the already overpriced company Tesla, would continue to rise. Tesla has fallen by 55% to date this year.

If we asked investment professionals the same questions, we may have got some different answers but the reality is no one really knew what was going to happen in 2022. Asking broad questions with a yes or no answer is fun but life is more complicated. All the right questions were asked but the actual course of events where Russia invaded Ukraine and the subsequent impact this had on inflation and the falls we saw on bonds and growth shares seems obvious now with the benefit of hindsight.

Questions in the Financial Times article this year may include; will inflation stay high? will China invade Taiwan? or will stock markets rise or fall? You may read opinions in the media supported by carefully thought out arguments about why a particular event may happen. But it is only a guess. We continue to structure our portfolios to capture positive sentiment by participating in stock market growth but also to plan for the worst by including defensive assets to protect value if stock markets fall.

Performance of our standard portfolios

Performance since the last insight (from Friday 4 November 2022 t0 Friday 2 December 2022)


The change in tone from the Fed has had a positive impact on your investments in the short term. As expectations for interest rate rises subside, this has caused defensive assets to rise through November.

The magnitude and pace of US interest rate rises has caused the US dollar to soar this year. This has a number of effects and particularly on Emerging Markets where many commodities are priced in dollars.

Performance over the last year (up to Friday 2 December 2022)

You will be familiar with the decline over the year, although all portfolios have been more positive since October. Performance against inflation has been stark but forecasts from the Bank of England are expecting inflation to start falling next year.

Ten-year performance of standard portfolios (up to Friday 2 December 2022)

Investing remains a longer-term pursuit and taking a look at the ten-year graph to the beginning of December, the portfolios are showing a more positive picture.

Performance of our sustainable portfolios

Performance since the last insight (from Friday 4 November 2022 to Friday 2 December 2022)

Sustainable portfolios’ performance has been similar to standard portfolios.

Performance over the last year (up to Friday 2 December 2022)

Over the year, as sustainable portfolios have no exposure to the oil and gas sector, which has been one to the top performers, they have lagged against standard portfolios.

Five-year performance of Sustainable portfolios (up to Friday 2 December 2022)

As the sustainable portfolios have only been available for the last five years this is a shorter timeframe but still showing the potential upside over longer periods.

Portfolio Investments

Below shows the performance of a number of asset classes for the month of November and over the last year as at close of play on Tuesday 29 November.

Assets have largely performed better in November. The right-hand column shows the movement of assets over the year and while there have been many falling values there are a number of bright spots with undervalued companies and UK equities providing diversification for portfolios.