MAB Quarterly Review Q1 2026 - Cautious - Flipbook - Page 6
Equities
Fixed Income
Our Tactical Asset Allocation positioning in equities
was positive for the quarter. In particular, strong
performance of Japanese Equities relative to
Continental European equities over the period
was helpful.
Your Fund’s blend of Fixed Income managers
outperformed in aggregate over the course of what
was a volatile quarter. This was led by three highly
unique funds with little or no exposure to interest
rate movements, the Ellington Structured Credit
Fund, the Man High Yield Opportunities Fund and
the Coolabah Credit Alpha Fund. This was partially
offset by holdings which have explicit exposure to
interest rates in different forms such as the iShares
Long Duration US Treasury Bond ETF and the
Morgan Stanley Local Emerging Market Debt Fund.
The latter Fund has had an exceptionally strong
run in recent years but gave up some gains in the
geopolitical volatility in March, leading to slight
underperformance for the quarter.
Stock markets had a mixed quarter, with strong
gains early on followed by a broad decline in March.
Different types of companies behaved quite
differently. Shares in more “value” focused
companies, often those in sectors like banks, energy
and industrials, performed well. These businesses
tend to bene昀椀t when the economic outlook is stable
and when their starting valuations are relatively low.
This was captured by managers in your Fund such as
the Neuberger Berman US Small Cap Intrinsic Value
Fund, the North of South Emerging Market All Cap
Fund and the Amova Japan Value Fund.
At the same time, some “growth” and “quality”
companies, particularly in areas like software,
started to struggle. These companies are often
valued based on pro昀椀ts expected many years into
the future, and when interest rates are expected
to stay higher, those future pro昀椀ts become less
valuable today. There are also questions around
whether these companies will truly be as valuable
in the future given the competing capabilities of
Arti昀椀cial Intelligence. This led to underperformance
in strategies such as the Evenlode UK Select Fund
and the GSAM Japan Equity Partners Fund.
Overall, the quarter is a good reminder that different
parts of the market will perform differently at
different times. This is exactly why we invest across
a range of regions and styles. While not everything
will perform well at once, this approach helps to
smooth returns over time.
5
Property, Real Assets & Absolute Return
Your Real Assets and Absolute Return asset classes
were the stars of the show this quarter, and were
responsible for your Fund generating a positive
return over the period despite both Equity and
Fixed Income markets being down. The Real
Assets manager blend is designed to perform in
an in昀氀ationary shock and it did so with aplomb
this quarter by returning +9%. This was led by the
UBS Bloomberg Commodity ETF, the ClearBridge
Global Infrastructure Income Fund and the AQR
Managed Futures Fund. As we would expect, not all
components of the diversi昀椀ed blend outperformed
at the same time, and the strong performance
from these three names was modestly offset by
the underperformance of our European Carbon
Allowance exposure.
The Absolute Return asset class is designed to
provide steady returns no matter the market
environment, and it was broadly unaffected by the
volatility in March to return a decent return ahead of
UK Cash rates for the quarter. This was driven by the
Fulcrum Thematic Equity Market Neutral Fund and
the Man Credit Opportunities Alternative Fund.
