Friends First Stewardship Fund – 2019 gross performance 36.3% – No.1 Fund in Global Ethical Equity Sector
Whilst broad equity markets saw strong returns through calendar year 2019 as trade war concerns eased and a more dovish Federal Reserve was also supportive, the FF Stewardship Fund strongly outperformed broader equity markets on both stock selection and asset allocation between sectors. The fund’s overweight exposure to Information Technology and underweight to Energy (the fund remains fossil fuel reserve free) contributed strongly to relative performance. Equally important was strong stock selection, particularly within Information Technology and Healthcare, where our continued focus on quality businesses addressing long term sustainability challenges continues to contribute positively to relative performance.
Aviva High Yield Equity Fund – 2019 gross performance 24.9% – No. 1 Fund in Global Equity Income Sector
The Fund’s emphasis on income growth has been key driver of performance. Notably unlike other income peers the fund has significant exposure in the technology sector, which was a standout performer in 2019. The fund has holdings in names such as Microsoft (who have seen strong growth in their Azure cloud computing platform), Texas Instruments (semiconductor manufacturer selling chips that help with industrial automation and also electric vehicle technology). Free cash flow generation has been key driver of double-digit annual income growth for both these companies. Also seen strong growth in some of our industrial companies – we have a positive view on aerospace and defence, particularly demand for next-generation narrowbody aircraft which helped drive performance in holdings such as Airbus and United Technologies. Elsewhere, we have seen big structural themes such as the demand for renewable energy help our investment in NextEra Energy, which is one of the largest generators of wind energy globally.
Friends First Concept K – 2019 gross performance 13.5% – No. 1 Fund in Alternative Multi-Asset Fund Sector
All asset classes generated positive returns in 2019. Of this equities were a major contributor to returns. The fund’s gold and currency positions also contributed positively to returns. The latter benefiting from the strengthening of the US dollar, sterling and the Russian ruble. In fixed income, the fund benefited from an increase in its exposure to corporate bonds and the fund made profits in government bonds in the US, Russia and Turkey.
Friends First Irish Commercial Property Fund (Brought to you by Aviva) – 2019 gross performance 8.7% – No.1 Fund in the Irish Commercial Property Sector
The strong performance for the Friends First Irish Commercial Property Fund (brought to you by Aviva) during 2019 was driven by two main factors; the progression of a number of value-add and redevelopment projects managed by our team of in-house experts, combined with the Fund’s very attractive income profile. The hands-on approach to asset management made the Fund a standout performer when compared with its peer group. Winning three prestigious awards during the year demonstrated that the Fund and the team are best-in-class on both a domestic and international platform.
L&G Multi-Index III Fund – 2019 gross performance 12.4% – No.1 Fund in the cautious Multi-Asset Fund Sector
In 2018, LGIM had a larger allocation to so-called mid-risk assets than other multi-asset funds in anticipation of a rise in market volatility as the economy moved later in the cycle. This meant a larger weight to asset classes such as infrastructure, REITs and emerging market debt which benefitted the funds in 2018. In 2019, the US central bank changed tact from recent years and decided to lower interest rates, which in turn meant these mid-risk assets continued to deliver strong returns.
Strong performance across Aviva’s Multi-Asset options
Whilst not top of the leader board vs peers, our Aviva Multi-Asset and AIMS funds generated strong gross returns over the year.
MAFs 2019 performance comment: Having an overweight allocation to growth assets for most of the year helped drive returns as markets rallied Also, being very selective in bonds (favouring areas like the US and Australia) helped drive returns in the lower risk funds.
Compass 2019 performance comment: 2019 was another strong year for the Compass range. Each of the four Compass funds continue to perform well within their respective peer groups, delivering robust risk adjusted returns over all time horizons. While all major asset classes performed positively, key allocations for the range in 2019 were European (ex-UK) REITs, gold and emerging market sovereign bonds (local & hard currency).
AIMS Target Return Fund (Ireland) performance comment: Introducing new positions to benefit from falling interest rates drove returns in 2019. Also holding equities in the early part of the year helped recoup losses made in late 2018.
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1.Source: Longboat Analytics 06 January 2020. All performance quoted as at 31 Dec 2019. The returns quoted include the reinvestment of net income and are net of trading costs, but before deduction of annual management charges and other insurance contract charges and as such do not represent the returns on insurance contracts linked to these funds. Details of all charges for a particular product are available on request. The information in this document does not constitute investment advice. It does not take into account the investment objectives, financial position or needs of any particular investor.