Seven Investment Management published its investment update and outlook on the back of a summer of significant events in the UK. Political uncertainty, however, looks set to remain high on the agenda domestically, as well as across Europe and the US.
London, 13 October 2016 – Seven Investment Management (7IM) today published its Q4 2016 investment update and outlook on the back of a summer of significant events in the UK. Political uncertainty, however, looks set to remain high on the agenda domestically, as well as across Europe and the US.
This latest set of investment views has been issued on the back of the strong market rally that started in June and took many investors by surprise. Those that did benefit are now left in a difficult position as to what to do next. Equity markets are seen to be above the levels that the necessary macro and micro data supports. Bond markets, meanwhile, may see some relative value in some positions – such as US Treasuries that are yielding almost 1% more than UK Gilts – but any investments here face their own challenges given the heavy influence of Quantitative Easing across the world.
In response to these market pressures, 7IM has reserved relatively high levels of cash across their portfolios. By investing where the firm sees value emerge, taking profits where possible and holding a broad range of portfolio protection beyond the traditional safe havens, 7IM hopes to be able to meet any short term market stress and deliver the long term expected returns it promises its investors.
Justin Urquhart Stewart, co-founder of 7IM, stated: "Global growth remains steady, but the political backdrop is highly charged. The response by financial markets to the hyperbole of news’ headlines has been volatile. They seem to be disconnected to the fundamental economic story that should underpin investments.
"We combine a strategic view of assets using over 50 years of historical data with a tactical view on what may happen over the next 3 to 12 months. The decisions that result from this analysis provide a framework for our investment team to adjust portfolios that over a time period of five years or more deliver the expected returns that our clients value. However, now more than ever, our investment team are also having to judge how politics play into this planning."
Given the likely impact of the politics, the firm has decreased its positions in the three leading equity markets of the UK, US and Europe and taken some of the profits off the table from its Emerging Market Equity investments, although still remains overweight. The team has meanwhile increased exposure to Emerging Market Local Currency Bonds and US High Yield Bond positions given the returns that these are expected to yield over and above equity markets.
In addition the team is expanding its allocation to alternative strategies. Alternatives for 7IM cover two broad options: Alternative Strategies and Alternative Strategies – Market Neutral. The former provides an investment approach that exposes 7IM’s portfolios to interesting investment themes, but are strategies that are highly correlated to existing positions. The latter are largely commodity carries and are broadly uncorrelated to equity and bond markets, allowing the firm to de-risk portfolios in an increasingly politically charged world. This is particularly key given the risk that Trump may trump Clinton. This in turn may mean that the more traditional safe havens of the US Dollar and US Treasuries cannot provide the protection investors typically enjoy.
The outlook is available for download here: Q4 2016 Clients Investment Update
The 12 page document includes a lead story on the US election and the apparent increasing rejection of globalisation, the scenarios we have plotted for the coming 3 to 12 months and the probabilities that each will occur, a review of Q3 and the Q4 outlook and our proposed actions as event unfold.
NOTES TO EDITORS
About Seven Investment Management: 7IM provides investment services to professional wealth managers, planners and advisers. These include:
- Discretionary investment management with advice
- A range of multi-asset portfolios
- An investment and open architecture trading platform
- A developed range of banking services
- A fantastic app, 7IMagine, to bring the client portfolios to life.
- 7IM – a story of Continuous Innovation
Since 7IM launched back in early 2002, it has pioneered a continuous stream of developments regarding how investment services are provided and charged for. We could just provide a list of our awards, but actually think it is more useful to tell you what we have done and what we have provided for clients and their planners - and there is still more to come.
- January 2001 – First Sterling Online Wrap Account launched with ongoing Asset Allocation
- January 2003 – First White Label live
- January 2004 – 7IM OEIC live
- July 2005 – 7IM Platform live
- September 2005 – New 7IM Income Fund launched
- February 2007 – 7IM Sustainable Balance Fund launched
- December 2007 – 7IM gains its own FSA authorisation and new institutional investors
- January 2008 – 7IM joins the London Stock Exchange
- March 2008 – 7IM launches the AAP (Asset Allocated Passives) range of funds
- October 2009 – 7IM introduces 3rd party multi manager funds into the DFM service
- October 2009 – 7IM Personal Injury Fund launched
- April 2011 – 7IM launches enhanced, ‘on-demand’ client reporting
- January 2012 – 7IM Unconstrained Fund launched
- June 2012 – 7IM launches Fixed Term Deposits
- January 2013 – 7IM launches Asset Backed Lending
- March 2013 – ‘7IMagine’ launched
- June 2013 - Assets under Management pass £5bn
- October 2013 – 7IM launches preferred SIPPs with DP Pensions Ltd and Carey Pensions UK
- October 2014 – Assets Under Management pass £7bn
- January 2015 – Assets Under Management pass £8bn
- March 2015 – In partnership with AXA Wealth, 7IM announces preferred Offshore Bond offerin
- June 2015 – Assets Under Management pass £10bn
- February 2016 – 7IM launches My Future a new feature of the 7IMagine app which allows advisers and clients to enter the details of their existing savings and pension contributions, we well as spending expectations in retirement to identify when their cash will run out.
For more information, please contact: Justin Urquhart Stewart, 7IM
020 7760 8700 / 07866 427626 / firstname.lastname@example.org
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Seven Investment Management LLP is authorised and regulated by the Financial Conduct Authority. Member of the London Stock Exchange. Registered office: 55 Bishopsgate, London. EC2N 3AS. Registered in England and Wales No. OC378740.