Wise Multi-Asset Income

Investment Objective

The Fund aims (after deduction of charges) to provide:

Fund Attributes

Investor Profile

Key Details

Target Benchmark UK CPI
Comparator Benchmark (Sector) IA 40-85% Investment Sector
Launch date 3rd October 2005
Fund value 65.4 million (GBP)
Holdings 29
Historic yield 5.4%
Div ex dates First day of every month
Div pay dates Last day of following month
Valuation time 12pm
  1. Past performance is not a guide to the future and outperforming target benchmarks is not guaranteed.
  2. The historic yield reflects distributions over the past 12 months as a percentage of the price of the B share class as at 29th February 2024. Investors may be subject to tax on their distributions.

Dividend Information

Income Information

2006 1.82
2007 4.3
2008 5.03
2009 4.6
2010 4.22
2011 4.95
2012 5.29
2013 5.1
2014 5.35
2015 5.34
2016 5.49
2017 6.06
2018 6.87
2019 6.62
2020 6.09
2021 3.77
2022 5.69

Fund Ratings

Fund Commentary - February 2024

The US Federal Reserve voted to keep interest rates unchanged whilst the accompanying commentary and a subsequent interview with its chair, Jerome Powell, were designed to reign in market hopes of imminent cuts to come. With markets having entered the year expecting interest rate cuts of c.1.5% over the course of the year, starting as early as March, the central bank’s view that it is not yet appropriate to reduce rates until inflation has obviously been tamed was seen as disappointing for bondholders. Powell explicitly stated that a March rate cut was not the Fed’s base case whilst also tempering expectations for the quantum of rate cuts to come.

Subsequent strong jobs data coupled by news that inflation had fallen less than hoped and survey data showing the services component of the economy was performing more strongly than expected all served to dampen investor optimism further. Eurozone inflation slowed to 2.8 per cent in January, but the decline in underlying price measures was also less than economists expected after stripping out more volatile energy and food costs. Closer to home, the Bank of England kept interest rates steady, similarly stating that more evidence was necessary that inflation will fall all the way to its 2% target before rates could be cut. With service price inflation still high and the negative contribution of falling energy prices set to fade in coming months, the BoE could not yet declare that “the job is done”. There were some grounds for optimism, however, as weak GDP data suggested higher interest rates are having the desired effect and have cooled economic growth. Headline inflation itself remained steady at 4%, which, although higher than target, undershot forecasts unlike in the US and Eurozone.  Whereas Western Economies have been battling with elevated levels of inflation, China has recently fallen into deflation. China’s consumer prices fell at the fastest rate in 15 years in January, missing analysts’ forecasts and underlining the challenges for policymakers trying to revive investor confidence in the world’s second-largest economy. The country’s consumer price index fell 0.8% year on year in January, the fourth straight month of declines. The fall, which was steeper than the expected drop of 0.5%, comes as China’s economy contends with an extended property market decline as well as weak manufacturing and export demand. 

As was the case in January, bond markets were weak as investors further pushed back the timing of expected interest rate cuts. This month, however, there was a notable divergence in the performance of bonds and equities. While the prospect of higher interest rates in recent months has been accompanied by weaker equity markets, this was not uniformly the case last month. US equity markets extended their recent strong performance driven higher by technology names, such as Nvidia (Artificial Intelligence semiconductors), Meta (Facebook) and Amazon, as did Japan whose equity market is finally regaining the all-time high it last reached in 1984. Emerging markets benefitted from a rebound in China where expectations have grown that the authorities will increase stimulus to support the economy and financial markets. By contrast, UK equity markets lagged, particularly more interest-rate, economically sensitive small and mid-sized companies. Finally, commodity markets were mixed with stronger oil markets offset by weak performance from mining companies who face uncertain Chinese demand and higher costs.

In February, the WS Wise Multi-Asset Income Fund fell 1.4%, behind the IA Mixed Investment 40-85% Sector, which rose 1.4%. February marks the financial year end for the fund at which point the historic yield on the fund sits at 5.4%.

 Within our equity allocation, our lack of exposure to non-income producing, highly rated technology companies impacted relative performance. Whilst abrdn Asian Income, International Biotechnology Trust, Blackrock Frontiers and Polar Capital Financials performed strongly, our value equity funds (Middlefield Canadian and Schroder Global Equity Income) lagged as did our UK-focussed funds, notably Aberforth Smaller Companies and Fidelity Special Values. There is, however, some cause for optimism as part of the underperformance in each case came from investment trust discount widening whilst the attractiveness of cheap UK equity markets is being reflected in increased numbers of corporate takeovers. As an example, Aberforth’s largest holding, Wincanton, was subject to a competing bid over the month and rose a further 44%, having risen 39% the previous month on the initial approach. Property and Infrastructure are two sectors whose performance is most sensitive to shifting investor expectations around interest rates. Whilst higher rates have a negative impact on valuations, we believe the high discounts already factored in by markets to current asset values provide investors with a significant protective cushion and share prices have become disconnected from the prices at which these assets can be realised in the open market. Over the month, these two sectors again negatively contributed to performance, however, there were notable attempts by the companies themselves to demonstrate the value that fails to be recognised by the market. Within the property sector, arbdn Property Income was subject to a second takeover proposal, this time from another holding within the portfolio, Urban Logistics. We have engaged with the board asking them to consider any merger proposal against the alternative of a managed wind-down of the company. Clearly others see the attractions of the underlying property portfolio and we believe an orderly sale of the underlying holdings (predominantly within the popular industrials sector) could lead to cash proceeds closer to net asset value being realised. Within the core infrastructure sector, HICL Infrastructure announced the disposal of one of its largest holdings, a US toll-road, at a 30% premium to its latest carrying value. This compares to the shares which traded at 24% discount. Having realised proceeds of over £500m at a premium to book value over the last 12 months to prove up the portfolio value, the company has now paid back in full its debt facility and will embark on a £50m buy back of shares.

Over the month, we exited our holding in Blackrock Frontiers, which has performed strongly. We trimmed certain property holdings (TR Property and Urban Logistics) which have performed relatively strongly and which we had added to at lower levels last year. Conversely, we added to HICL where the yield on the portfolio of defensive, critical infrastructure assets looks highly attractive.