PRIMA Fund Update October 2021

KLOFinancial |

Market Review in September


  • Best performing equity region/sector: Japanese TOPIX 4% in GBP
  • US S&P 500 -2.55% in GBP
  • FTSE All-Share -1.41% & FTSE 100 -0.58%
  • FTSE Europe ex UK -4.07% in GBP
  • MSCI World Growth -3.44% in GBP
  • MSCI Asia ex Japan -2.39% in GBP
  • US Nasdaq Composite -3.46% in GBP
  • MSCI World Small Companies -1.50% in GBP
  • MSCI World Value -0.93% in GBP
  • US 10-year Treasury yield up 21 basis points to 1.52% (price gone down)
  • UK 10-year Gilt yield up 32 basis points to 1.01%% (price gone down)

PRIMA Cautious


Performance* (Cumulative Total Return in GBP, net of fund’s OCF, daily data)
1 month1 yearSince Inception (17/02/2020)
PRIMA Cautious-1.72%6.45%4.05%
IA Mixed Investment 0-35% Shares sector-1.32%6.02%4.49%


  • With a lower standard deviation and average drawdown since inception, the fund appears to be taking less risk than the sector.
  • Short duration bonds have outperformed longer dated ones over 1-4 weeks, and high yield debt has also performed strongly. The Baillie Gifford Japan Trust has outperformed the IA Japan sector over 1-4 weeks, and it has been the main contributor to performance.
  • Allocation to property investment trusts has been the main detractor from performance.

PRIMA Balanced


Performance* (Cumulative Total Return in GBP, net of fund’s OCF, daily data)
1 month1 yearSince Inception (17/02/2020)
PRIMA Balanced-1.94%13.64%9.45%
IA Mixed Investment 40-85% Shares sector-1.65%16.66%11.81%


  • Since inception, the fund features lower standard deviation and average drawdown than the sector.
  • The Invesco China Equity strategy fell sharply on regulatory crackdown news. Allocations to Chinese equity and Property investment trusts were the main detractors from performance. Conversely, the Stewart Investors Asia Pacific Leaders equity strategy, bought as a defensive holding in Asia, has performed strongly in a volatile market. Similarly, the Threadneedle Emerging Markets Bond strategy has also performed strongly over 1, 2 and 12 weeks; the strategy does not have exposure to Chinese fixed interest securities and thus was not affected by the issues surrounding the Chinese property developer Evergrande, which is currently facing liquidity and solvency issues.
  • Allocation to US Smaller Companies equity performed strongly over 4 weeks, following the short-term reversal in the outperformance of large cap US stocks over small and mid-caps. This strategy is expected to outperform large caps in a rising bond yields environment.

PRIMA Adventurous

Performance* (Cumulative Total Return in GBP, net of fund’s OCF, daily data)
1 month1 yearSince Inception (17/02/2020)
PRIMA Adventurous-1.54%21.32%19.73%
IA Global sector-2.08%23.36%24.40%


  • The fund appears to be taking less risk than the sector with a lower standard deviation and less volatility.
  • Underlying Global equity strategies performed strongly over 12 weeks apart from Chinese equity, due to the ongoing regulatory backlash on local Chinese tech companies on the part of the Chinese government, and Latin America Emerging markets equity, mostly due to weakness in the price of some agricultural commodities.
  • Given the current and expected environment of rising yields on government bonds, allocation to global technology, a sector sensitive to rise in interest rates, was reduced to the advantage of the S&P 500 Equally Weighted ETF, more diversified in terms of underlying asset classes and less reliant on the technology sector. After a strong period of performance, profits were taken from the allocation to the BlackRock UK Smaller companies’ equity fund and redeployed into mid cap and large cap UK equity funds.


Actions taken:

  • Sell 2% L&G Global Technology Index Trust
  • Sell 2% BlackRock Smaller Companies Investment Trust
  • Buy 1% LF Lindsell Train UK Equity
  • Buy 1% L&G UK Mid Cap Index C
  • Buy 2% X Trackers S&P 500 Equally Weighted UCITS ETF

Data source: FE Analytics as of 30th of September 2021


Any research is for information only, it does not constitute financial advice. The value of investments and any income from them may go down as well as up, so you may get back less than you invested. Past performance cannot be relied upon as a guide to future performance. KLO Financial Services Ltd are registered in the UK, company number 08711328. We are authorised and regulated by the Financial Conduct Authority, reference 710272. For any information please visit our website