MAB-Quarterly-Review-Q2-2025-Cautious - Flipbook - Page 7
Equities
Our Tactical Asset Allocation positioning in equities was marginally negative for the quarter, with the negative
impact from our underweight to the rallying European ex-UK equity market partially offset by the positive
impact from our overweight to the Japanese market and our modest overweight to the UK equity market.
Global equities were also up strongly over the quarter, and this was consistent across all of the global equity
markets in which you are invested. The Fund’s strategy of always maintaining broad diversi昀椀cation across
different regions and styles continued to prove helpful, given the outperformance of previously out-of-favour
markets such as Continental Europe and the Emerging Markets.
Among your underlying Fund Managers, the active Japanese Equity managers outperformed across the board.
This was led by the Neuberger Berman Japan Engagement Fund (+10.0%), the Goldman Sachs Japan Equity
Partners Fund (+8.5%) and the Nikko Japan Value Fund (+6.4%). Each of these managers were strongly ahead
of the Japanese equity market over the period, which returned +4.9%, while adding value in radically different
ways. Given the ongoing changes taking place in Japanese corporate culture, we feel these dynamics could
have a great deal of room to run.
Other strong performers over the quarter included the Polar Capital UK Value Opportunities Fund and the
Baillie Gifford Global Discovery Fund, which were up +12.8% and +11.8% respectively over the quarter.
Following a strong 昀椀rst quarter of the year, the Pzena Global Value Fund was the largest underperforming
equity manager over the second quarter as the market became increasingly wary of how their economically
sensitive holdings might fare under the new US administration’s trade policies.
Fixed Income
Your Fund’s Fixed Income managers had a successful second quarter, which was led by the Morgan Stanley
Emerging Market Local Income Fund, which returned +8.5% over the three months. This was primarily driven
by the sustained weakness we witnessed in the value of the US Dollar vs Emerging Market currencies, largely
a result of the uncertain trading environment caused by the Trump administration’s tariff policies. The Man
High Yield Opportunities Fund also had a good quarter, returning +3.0%. These returns were partially offset
by the underperformance of the long duration US Treasury ETF we hold in this Fund, which was down -2.3%
for the quarter due to volatility experienced in treasury markets in April.
Property, Real Assets & Absolute Return
The other diversifying strategies continued to deliver very strong returns, reinforcing the bene昀椀ts of these
lower correlation strategies in our Multi-Asset Blend portfolios.
This was led by the ClearBridge Global Infrastructure Income Fund, which sits in our Property & Real Assets
asset class, which returned +4.9% over the quarter. Our blend of Absolute Return managers continued to
deliver consistent returns with low volatility and zero sensitivity to the wider equity market. This was led over
the quarter by the Sanlam Multi Strategy Fund, which returned +4.1%, followed by the +2.5% return of the
Fulcrum Thematic Equity Market Neutral Fund and +2.0% from the Paci昀椀c G10 Rates Fund. These strong
returns were partially offset by underperformance from the AQR Managed Futures Fund, which returned
-2.2%. We would expect this strategy to struggle under conditions of sharp market volatility, where consistent
trends struggle to form, of which the second quarter was a prime example; however, AQR have done an
outstanding job over recent years vs other “trend following” Funds.
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