September 2021
Activity
Our equity exposure was reduced following a disciplined allocation process and we took advantage of higher bond yields reinvested proceeds of a maturing bond.
Transparency
At month end our net equity exposure was 22% and our bond duration was 3 years. We have exposure to four markets in the equity momentum strategy and remain active in eight other areas; synthetic equity options, global infrastructure, renewables, property, corporate bonds (short dated), government bonds, alternatives and opportunistic. We hold equity index options as upside and downside hedges.
Positive contributors
Other Alternatives +0.02%
Negative contributors
Specialist Property -0.69%
Synthetic -0.44%
Renewable Energy -0.23%
Corporate Highlights
Our real assets businesses announced four new acquisitions, two divestments, and five equity placings over the month. We had three meetings with company management teams and six pre-IPO meetings. A number of new real asset investment opportunities are planning to come to market following buoyant sentiment for the asset class. With a wide variety of strategies and area of focus it remains paramount to draw distinctions between the degrees of asset quality, long-term growth potential and the strength of governance structures. Engagement with new management teams provide an important and valuable insight to the dynamics of the sectors we invest in and the investment opportunities available.
Outlook
A mini taper tantrum and concerns over energy prices are pointing to a nervous start to the final quarter of the year. From a positioning perspective our short duration bonds are well positioned to benefit from rising yields and our equities maintain a high level flexibility enabling us to adapt quickly to changing market conditions. Overall, we remain very comfortable with our current positioning and continue to focus on our dynamic equity allocation process, short duration bonds, and real assets investments centred around our “Pillars of a functioning economy” theme.