I had a good meeting with my Coronation consultant this week. He always brings a specific point or subject to talk about. This time it was about the Emerging Market sector of their international equity holdings and how this sector had performed so far, which has not been great over a one year time line. He talked through the cycle they believe this sector is in and their stance on holding and waiting. I said I was not concerned about 1 year returns. He thanked me, commenting that it was usually only the properly qualified IFA guys who held the correct approaches to investment timelines.
Then I also had good conversations with a Marriott Fund Manager this week. While going over a client’s portfolio, which I often do without you knowing or needing to be reported to, I noticed that in two separate unit trust funds there were two out of character changes in income. (Income, not capital growth/loss) One was a 10% drop quarter on quarter dividend payment and the other was a 77% increase of income quarter on quarter. I emailed the fund manager that I usually speak to, querying each of these two events. I received a phone call back from him later in the morning. He outlined the events coming through the funds from the underlying assets or strategies that created these two different income patterns, explaining that they were once-off events. I was happy with his explanation. (In separate and stand-alone unit trust funds, the fund has to distribute whatever income they receive from the underlying assets to investors in the same quarter that they receive it in. In managed solutions products they can spread the distributions more evenly over the monthly payments) He ended off by saying, “We’re impressed this side, you are the only guy who asks these questions!”