Strengthening global economic data, particularly in leading indicators, deliver a strong ‘risk-on’ environment in Q3 2017

Executive Summary

• Global fixed income yields delivered mixed results over the quarter, while global equities markets advanced given a general risk-on environment. Emerging markets continued to lead global markets across fixed income and equities, supporting the strategic allocations to these asset classes across the SEI Strategic Portfolios. 
• Credit spreads continued to grind tighter, supporting general overweight positions in credit and economically-sensitive debt across the SIS programme. Longer duration bonds generally outperformed in price terms, most specifically in the US, supporting yield curve flattener positions but detracting from a general duration underweight.
• Valuation-focused and trend-following managers posted strong returns over the quarter, supporting active overweight positioning to these types of managers in the SIS programme. Selected reduction of allocation to quality-focused managers was also supportive of relative returns.
• The Growth-focused Strategic Portfolios (the Core, Balanced, Growth and Aggressive Funds, collectively “the Funds”, Sterling Wealth A share class, in GBP, net of all fees) returns ranged between 1.56% and 2.88% in Q3, comparing favourably to the 2.14% return from the FTSE All-Share Index as well as the 1.50% return delivered by MSCI World (net) Index over the same time period.
• Performance from the Growth-Focused Strategic Portfolios continued to be highly competitive over the medium term (3 years to 30 September 2017), maintaining these Fund’s positions near the top of their respective peer groups.