MAB Quarterly Review Q1 2025 - Cautious - Flipbook - Page 9
These companies are often not the most exciting or
fast-growing, but they are deemed to be relatively
stable through all sorts of economic environments
and are typically characterised by a strong 昀椀nancial
position and low levels of debt so they can act from
a position of strength when others are suffering.
Although we are in a year where the market has
been ignoring these quality businesses and instead
bidding up defence businesses, companies linked to
AI spend or those linked to precious metals/gold, we
know from experience that this will not always be the
case and these “steady-Eddie” quality businesses can
be very helpful for your portfolios in less buoyant
market environments. This year we have brought
in two new managers investing in such a manner,
namely Evenlode UK Select Fund and GMO Quality
Investment Fund, and although their recent results
have lagged their respective market comparators,
we are very happy holders of these funds and are
con昀椀dent that their time will come.
Diversi昀椀ers
Within your Fund, we also balance our range of
regional equity exposures with other diversifying
exposures within Fixed Income (bonds), Absolute
Return strategies (designed to deliver positive returns
with little sensitivity to broader market movements)
and other independent return streams that can be
gained in asset classes like infrastructure (electricity
networks, toll-roads, mobile phone towers etc) and
commodities (oil, gold, agriculture etc). These asset
classes are set up to deliver returns that will likely
be below equities over the long term but will deliver
these returns in a very independent pattern to
equities, often helping out most when equities are in
the doldrums.
These diversifying strategies have been performing
very nicely this year, achieving their returns with
little correlation to equity markets, a pattern that
will become even more valuable should the current
buoyant equity markets take a pause for breath.
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