Skip to main content
UK: Suitable for retail and professional clients.
8 minute read

Cirilium Portfolios

Your monthly snapshot of the Cirilium Portfolios, crafted by your portfolio managers, Ian and Sacha and chief investment officer, Marcus Brookes.

Ian Jensen-Humphreys

Portfolio Manager

Sacha Chorley

Portfolio Manager

Marcus Brookes

Chief Investment Officer & Managing Director

1. Market summary

Global equity markets retreated 0.8% in August with both developed and emerging equity markets in decline. This was partially due to the ongoing economic slowdown in China and its knock-on effects for global manufacturing sectors. Meanwhile, uncertainty as to the direction of US interest rates soured investor sentiment with rate-sensitive sectors such as technology and consumer staples being especially impacted.

Fixed income

In a notable development, the credit rating agency Fitch downgraded the US from Triple-A, the highest rating, to Double A+. Fitch cited the nation’s increasing debt and an “erosion of governance” as its key rationale. The US announced ambitious borrowing plans in August which sparked a brief rise in US Treasuries (US government bonds) before they retreated to deliver a loss of 0.6%. Meanwhile, UK gilts (UK government bonds) fell by 0.5% with UK corporate bonds (issued by companies) down by 0.2%.

Source: Quilter Investors as at 31 August 2023. Total return, percentage growth in pounds sterling except where shown, rounded to one decimal place. The performance shown for global equities is represented by the MSCI World Index; US equities by the MSCI USA Index; European equities by the MSCI Europe ex UK Index; UK equities by the MSCI United Kingdom All Cap Index; emerging markets by the MSCI EM (Emerging Markets) Index; US Treasuries by the ICE BofA US Treasury (GBP Hedged) Index; UK gilts by the ICE BofA UK Gilt Index; and UK corporate bonds by the ICE BofA Sterling Corporate Index.

2. Performance review

The Cirilium Portfolios suffered losses ranging from 0.5% for the Cirilium Conservative Portfolio to 1.6% for the Cirilium Adventurous Portfolio. Equity markets struggled due to renewed weakness in Chinese economic data which underlined its anaemic post-covid recovery alongside increased fears that interest rates would stay higher for longer than anticipated due to persistent inflation. This naturally impacted the higher-risk Cirilium Portfolios which have greater equity exposure.

Performance summary (%)

  Cumulative performance Discrete annual performance to end of July
  1 month YTD 1 year 3 year 5 year Since
2022 - 2023
2021 - 2022 2020 - 2021 2019 - 2020 2018 - 2019
Cirilium Conservative -0.5 -0.3 -2.4 -4.0 -1.6 37.7 -2.4 -9.4 8.6 1.6 0.9
IA Mixed 0-35% Shares -0.6 1.1 -1.3 -3.0 1.7 35.9 -1.3 -8.2 7.1 0.6 4.2
Cirilium Balanced -0.8 1.3 -1.2 3.5 3.6 111.9 -1.2 -9.1 15.3 0.0 0.1
IA Mixed 20-60% Shares -0.9 1.7 -0.3 3.7 6.8 74.5 -0.3 -7.2


0.0 3.1
Cirilium Moderate -1.2 1.6 -0.9 8.0 6.5 157.6 -0.9 -10.0 21.1 0.5 -1.9
IA Mixed 40-85% Shares -1.3 2.9 0.4 10.6 15.3 108.6 0.4 -6.6 17.9 1.3 3.0
Cirilium Dynamic -1.4 1.5 -1.0 10.8 6.2 165.0 -1.0 -11.7 26.7 0.2 -4.3
IA Flexible -1.4 2.6 0.4 12.6 17.3 106.2 0.4 -6.1 19.4 2.2 1.9
Cirilium Adventurous -1.6 2.1 -1.2 13.9 7.9 18.5 -1.2 -10.3 28.6 -0.2 -5.1
IA Flexible -1.4 2.6 0.4 12.6 17.3 25.0 0.4 -6.1 19.4 2.2 1.9

Source: Quilter Investors as at 31 August 2023. Total return, percentage growth, net of fees, rounded to one decimal place of the R (GBP) Accumulation shares. The Cirilium Conservative Portfolio launched on 30 March 2012; the Cirilium Balanced Portfolio, the Cirilium Moderate Portfolio, and the Cirilium Dynamic Portfolio launched on 2 June 2008; and the Cirilium Adventurous Portfolio launched on 1 June 2017.

The net asset value (NAV) of an investment trust is the total value of its underlying holdings, less its liabilities. A trust’s NAV can be more than, or less than, the value of its quoted shares.

How our fixed-income holdings performed

Fixed-income portfolio flat as interest rates stabilise

Our fixed-income holdings delivered muted returns in August as benchmark interest rates stabilised somewhat following sharp rises in prior months. Our non-traditional fixed-income holdings, such as the Janus Henderson Asset Backed Securities Fund and the Wellington Emerging Local Debt Advanced Beta Fund, both delivered small gains. The weakest holding was Blackstone Loan Financing (held in the Cirilium Moderate and Dynamic Portfolios); this fell sharply on news of an extraordinary general meeting that could lead to a vote to wind up the company.

How our alternative holdings performed

Positive returns from diverse sources

The alternatives portfolios generated positive gains. Returns were largely manager-specific, rather than the result of a top-down theme. The best performance came from Ediston Property (held in the Cirilium Conservative and Balanced Portfolios) which rallied over 10% on speculation that the board’s strategy review would lead to a sale of the portfolio. At the same time, the Cooper Creek North America Long-Short Equity Fund continued its recent fine performance by rallying a further 5.2%, with share price declines in the fund’s ‘short’ positions driving returns.

Portfolio Activity

We continued to focus on transitioning the portfolios to their preferred exposures. By the end of August, we had mostly completed the equity portfolio transition. The latest change being the addition of the M&G European Strategic Value Fund to help balance the portfolios’ existing European growth-tilted holdings. We also continued to build positions in some equity investment trusts, namely the JP Morgan Emerging Markets, Fidelity European, and the JP Morgan American investment trusts. We also completed the disposal of the Sands Global Leaders, River & Mercantile Global Sustainable Opportunities, and the Premier Miton European Sustainable Leaders funds. Within the alternatives holdings we continued to build positions in the Sandbar Global Equity Market Neutral Fund and the UBS CMCI Commodity Carry UCITS ETF.

During the month we sold out of:

  • Sands Global Leaders
  • River & Mercantile Global Sustainable Opportunities
  • Premier Miton European Sustainable Leaders

We continued to build positions in:

  • M&G European Strategic Value Fund
  • JP Morgan Emerging Markets
  • Fidelity European
  • JP Morgan American investment trusts
  • Sandbar Global Equity Market Neutral Fund
  • UBS CMCI Commodity Carry UCITS ETF

3. Investment outlook

The global economy has continued on a trajectory that implies a ‘soft landing’ or ‘muddle through’ environment: growth is slowing (but not too severely) while inflation is falling, but slower than most of us would like. Consequently, we don’t see many compelling opportunities at current market levels, where valuations are neutral and profit growth uncertain. Therefore, we are positioned fairly cautiously, close to our strategic asset allocation (SAA), with high cash weightings. Meanwhile, the notable absence of consensus as to likely market direction accounts for why many markets remain range-bound (where the price stays between a specific high price and a low price).

Keep or share a PDF of this article

This article is now provided as a PDF version for easy sharing, printing or saving for later.

View or download PDF