Q4 Performance Reports

Karl Le Fevre

27 January 2023

The MPI Performance Reports for Q4 2022 are now available online for you to view and download. To obtain your copy please click the button below.

Investment Managers Survey

The MPI Sterling index posted positive returns across all three risk categories as markets rounded off a very challenging year. China’s reversal of its zero COVID policy and a more positive outlook for inflation in the Eurozone helped drive prices up in October and November. As a result, the MPI Sterling Indices were up 2.49% (for Low Risk), 2.78% (for Medium Risk) and 3.23% (for High Risk) mandates. However, over the entire year, the indices had the worst performance since starting in 2010. In particular, drawdowns in Low-risk portfolios were particularly severe as the bond prices continued to come under sustained pressure in the face of higher inflation and increasingly hawkish Central Bank policy.

Our survey of 50 investment managers highlighted continued concerns over economic growth with over a half sighting this as the greatest threat to portfolio performance over the next twelve months with central bank policy error cited as the second most significant concern. Overall, around a third of managers informed us that they remain or have become increasingly cautious on the economic outlook. This picture is slightly improved from last quarter when around two-thirds of managers had a negative view.

Regarding asset class changes, there continued to be a further retrenchment in equities into governments and to a lesser extent, investment-grade bonds, with around a third of managers also extending duration. Within equities, we continue to see increases in defensive holdings. On the currency front, we saw a significant move away from USD, reversing recent trends.