Liontrust Multi-Asset Quarter in Review - Flipbook - Page 22
MPS Income
Another difficult quarter for markets saw all our holdings in negative
territory, with concerns around potential recession in a rising
interest rate environment and ongoing war in Ukraine weighing
on sentiment.
Fixed income would usually be expected to provide defensive ballast
during equity sell-offs but bonds have not only become correlated
with shares in the short term, their performance has actually been
worse, particularly in the UK. A rising rate environment is clearly
difficult for this asset class, and our funds across the fixed income
spectrum struggled over the period.
As highlighted earlier, we retain a lower duration position in our
fixed income allocation as central banks prevaricate over the timing
and extent of rate rises and tapering, and AXA US Short Duration
High Yield was among our better-performers in Q2.
22 - Liontrust Multi-Asset Funds and Portfolios Quarterly Report: Q2 2022
With the value rotation continuing, our equity holdings skewed towards
that end of the market were the top performers over the period but even
these were unable to climb into positive territory amid widespread
volatility, including Redwheel Enhanced Income, Man GLG Japan
CoreAlpha, JPM US Equity Income and Schroder Asian Income.
While our long-term call to be overweight value is positive on a
relative basis, however, it has been more than offset by weaker
returns from our growth, quality and particularly small-cap positions,
with Artemis US Smaller Companies, Baring Europe Select and
Janus UK Smaller Companies among the worst performers over the
quarter. As ever, fears of imminent recession are having a greater
impact on domestically focused small caps.
We added the Liontrust Diversified Real Assets Fund to the portfolio in Q1
and it has continued to feature among the better performers, providing
the uncorrelated returns and inflation protection we were seeking.