MAB-Quarterly-Review-Q2-2025-Adventurous - Flipbook - Page 9
reign supreme. However, mid-way through 2025, the Dollar is one of the worst performing developed market
currencies globally. The US Dollar has depreciated against the Pound by nearly 10% this year. At YOU, we
approach currencies somewhat differently. All of the Funds’ equity exposures are “unhedged”, which means,
for example, that with our US equity exposure, we also get exposure to the US Dollar, our Japanese equity
exposure also brings exposure to the Japanese Yen and our European exposure provides some exposure to
the Euro and other European currencies. As a result, alongside equity market diversi昀椀cation we also achieve
multiple layers of diversi昀椀cation from global currencies. This does mean that when the US Dollar is weak, the
returns from our US equity exposure are depressed in Sterling terms. However, we also recognise that US
Dollar weakness is also typically good for Emerging Markets, which your Fund also has meaningful exposure
to. For example, in a period of US Dollar weakness, the MSCI Emerging Markets equity index was up +5.5%
in Sterling terms this quarter.
Conclusion
Predicting government policy or the outcome of major geopolitical events and their impact on markets is
not our primary focus. Instead, we focus on ensuring your Fund has exposure to a broad range of attractive
investment opportunities in different asset classes and different regions that will, over the long term, deliver
you an attractive level of return commensurate with your chosen risk pro昀椀le. Sticking to this disciplined strategy
is one that has served us well over the long term and saved us from making the mistake of succumbing to the
ever-present, troublesome newspaper headlines.
Instead, our focus is on tilting your portfolio towards the very best return opportunities we see globally, like
those we currently observe within Japanese equities, as well as ensuring you are in the hands of the very best
fund managers we can identify within each asset class. We will also tilt your portfolio away from strategies
where we believe risks may be elevated, like we currently observe in passive exposures in Emerging Markets.
We will always strive to deliver you a highly diversi昀椀ed return stream. Making bold calls in and out of markets
can sometimes be lucky enough to work over short periods, but this quarter provided a fantastic reminder of
its dangers and reinforces why we adhere strictly to the disciplines that have served us and our clients well
over the last 20 years.
Pg 8
