Advertising Feature Volatility in the stock market is back. At Lewington Wealth Management we are a Principal Partner Practice of St. Jamess Place, who have adopted a rigorous and distinctive investment process. St. Jamess Place select the best talent from around the world to manage clients capital. The likelihood of a global recession is the consensus view at this point, although the severity and duration of this recession is contingent on policy response to inflation. This in turn has been, and will be, varied across regions. It is worth remembering that markets reflect forward-looking expectations of earnings. Therefore, the question is whether the recent market correction is sufficiently pricing-in the impact to earnings and default rates we can expect during a recession. We find it reassuring that SJPs managers are selectively purchasing assets and using the market volatility to invest excess cash. yields have risen this year, the more active they have been as buyers of bonds. Bond buying has focused on investment grade and better-quality high yield bonds, and whilst they maintain a more cautious outlook on the economic fundamentals, they will continue to avoid lower quality bonds from companies with greater credit risks. Pzena, co-manager of the Global Value fund: investments across a wide range of asset Pzena are constantly seeking to improve the portfolios types and countries. SJPs fund managers valuation by selling stocks that are working and have decades of experience, so theyre able putting more money to work where valuations have to identify companies that can grow even in been weak, such as companies whose price increases challenging environments. have lagged behind cost inflation thus far, resulting in margin contraction a negative dynamic that is The value of an investment with believed to be temporary, as fluid management teams St. Jamess Place will be directly linked adjust operations and cost structures. As such, since to the performance of the funds selected the beginning of the year, they have scaled back or and may fall as well as rise. You may get fully exited relative beneficiaries of the prevailing back less than the amount invested. What actions, if any, have fund managers taken? environment, including names in oil services, Broadly, we have seen St. Jamess Places fund managers add risk back into funds, as widespread price declines have provided good entry points across several asset classes. Notably, substantial price declines during 2022 have resulted in attractive yields across fixed income, which more than cover perceived increased credit risk. In equities, the dispersion in returns by sector and region has resulted in a broader opportunity set for valuation-sensitive managers. more attractively valued opportunities that have yet GMO, manager of the Balanced Managed fund: pharmaceuticals and shipping/distribution. The proceeds from these sales have been redeployed into recruitment. Whatever your objectives and whatever your priorities, were here to help. Redwheel, co-manager of the UK Equity Income fund: Get in touch to learn more about SJPs distinct approach. to experience earnings normalization. These include names in several sectors, such as autos, leisure and Redwheel have been adding to cyclical stocks which have fallen significantly this year and now trade on significant discounts to our estimation of their intrinsic value. The opinions expressed are those of (Fund Manager) of (Fund Manager Company) and are subject to change at Exposure has doubled to Yield in the summer, as yields rose to attractive levels. The higher yield was partly driven by the rise in underlying government bond yields, but the real attraction was the widening spread available for taking credit risk. the fund manager believes that this very wide-spread more than compensated for the underlying risks of default. Concluding thoughts any time due to changes in market or There is no doubt that social, political and economic intended to be relied upon as a forecast, Invesco, manager of the Corporate Bond fund: money in a safe, but effective way. the past few years. In our view, long term investment via a diversified panel of leading fund managers around the world remains the best way of navigating and growing yields reached more attractive levels. The more that research, or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any strategy. The views are not necessarily shared by other investment managers or With our advice, investment solutions and regular The fund managers approach has been to invest once 01793 741246 lewingtonwealth@sjpp.co.uk lewingtonwealth.co.uk conditions have led to challenging financial markets over economic conditions. This material is not St. Jamess Place Wealth Management. reviews, you can help secure your financial future. The range of funds and services we have access to through St. Jamess Place make it easy to spread your 2 Watts Barn The Old Dairy, Badbury Swindon, Wiltshire SN4 0EU Above & Beyond Lewington Wealth Management Ltd is an Appointed Representative of and represents only St. Jamess Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the Groups wealth management products and services, more details of which are set out on the Groups website www.sjp.co.uk/products. Lewington Wealth Management Ltd is registered in England and Wales, Number 04290504. Registered Office: St Jamess Place House, 1 Tetbury Road, Cirencester, United Kingdom, GL7 1FP. The St. Jamess Place Partnership and the titles Partner and Partner Practice are marketing terms used to describe St. Jamess Place representatives. SJP Approved 22/03/2023