Before we get started...
2022 performance review
This review is based on information and commentary provided by Columbia Threadneedle Investments.
2022 was a difficult year for the fund as returns on both equities and bonds were negative. In investment markets, global equities were down 15.6% whilst global bonds fell 16.3%.
Performance over the year was driven by inflationary fears. Interest rates rose significantly over the year with the ten year Gilt Yield rising (meaning prices fell). Rising interest rates negatively impacts bond performance. Through this period whilst we held a reduced investment in government and corporate bonds we retained an allocation to provide resilience if a deep recessionary environment started to appear.
Within equities, energy was the only sector that was generally positive whilst the others were negative. Whilst we have some energy sector investments, they are limited. This has hampered performance over the year. We believe holding limited energy sector investments is appropriate given the Environmental, Social and Governance (ESG) risks over the medium term where oil and energy companies will face rising costs of capital compared to greener industries.
It has been a buoyant year for the US dollar which, at one point, was up 26.6% since the start of 2022. Within our investments, we intentionally hedge (a way of reducing the risk of loss due to currency value fluctuations) away some of our overseas currency investments including the US dollar. This has meant that we have missed out on the strong performance of the US Dollar over 2022. However, our strategic positioning is based on the medium term (three to five years) and longer (circa ten years) and over that period, even with the strong US Dollar in 2022, the US Dollar was broadly stable from 2016 to 2022.
A final source of underperformance was our reliance on quality growth stocks (like those in the technology sector), over value stocks (such as oil companies and banks). This appeared a poor decision over 2022 where value stocks have significantly outperformed growth stocks. However, as our time horizon is the medium and longer term, we believe that growth companies are likely to be more resilient as we move through a recessionary environment in 2023. These companies have strong products with good price control (where prices can increase without reducing volumes) and are likely to deliver performance that is more stable over the medium to long-term.
Unit price and performance of each fund option available
This fund option is designed to provide modest growth with a lower chance of losing money than the Balanced and Growth fund options. It invests mostly in fixed interest investments with the balance in other investments such as equities, property and some cash. This is the lowest risk fund option under this bond and therefore offers the lowest growth potential.
Unit Price Date | Unit Price* | Growth (%) for the 12 months to the date shown | Total percentage growth from 4 November 2005 (launch) to 31 December 2022 |
---|---|---|---|
31 December 2022 | 189.7p | -14.4% | 89.7% |
31 December 2021 | 221.7p | -1.5% | |
31 December 2020 | 225.1p | 4.0% | |
31 December 2019 | 216.5p | 8.1% | |
31 December 2018 | 200.3p | 1.9% | |
31 December 2017 | 196.5p | 1.5% |
Unit Price Date | Unit Price* | Growth (%) for the 12 months to the date shown | Total percentage growth from 4 November 2005 (launch) to 31 December 2022 |
---|---|---|---|
31 December 2022 | 189.7p | -14.4% | 89.7% |
31 December 2021 | 221.7p | -1.5% | |
31 December 2020 | 225.1p | 4.0% | |
31 December 2019 | 216.5p | 8.1% | |
31 December 2018 | 200.3p | 1.9% | |
31 December 2017 | 196.5p | 1.5% |
This fund option is designed to provide the potential for modest growth without exposure to undue risk. It mainly invests in broadly equal amounts of equities and fixed interest investments and also other investments such as property and cash. This is the middle risk fund option and is higher risk than the Cautious fund option and lower risk than the Growth fund option.
Unit Price Date | Unit Price* | Growth (%) for the 12 months to the date shown | Total percentage growth from 4 November 2005 (launch) to 31 December 2022 |
---|---|---|---|
31 December 2022 | 238.7p | -9.6% | 138.7% |
31 December 2021 | 264.0p | 4.3% | |
31 December 2020 | 253.1p | -1.9% | |
31 December 2019 | 257.9p | 2.1% | |
31 December 2018 | 252.5p | 3.9% | |
31 December 2017 | 243.1p | 6.9% |
Unit Price Date | Unit Price* | Growth (%) for the 12 months to the date shown | Total percentage growth from 4 November 2005 (launch) to 31 December 2022 |
---|---|---|---|
31 December 2022 | 238.7p | -9.6% | 138.7% |
31 December 2021 | 264.0p | 4.3% | |
31 December 2020 | 253.1p | -1.9% | |
31 December 2019 | 257.9p | 2.1% | |
31 December 2018 | 252.5p | 3.9% | |
31 December 2017 | 243.1p | 6.9% |
This fund option is designed to provide the potential for the highest level of capital growth of the three fund options but with an increased risk to capital. This fund option invests mostly in equities with the balance mainly invested in fixed interest investments. There are also other investments such as property and cash. This is the highest risk fund option and offers the highest growth potential.
Unit Price Date | Unit Price* | Growth (%) for the 12 months to the date shown | Total percentage growth from 4 November 2005 (launch) to 31 December 2022 |
---|---|---|---|
31 December 2022 | 313.5p | -8.3% | 213.5% |
31 December 2021 | 341.9p | 16.0% | |
31 December 2020 | 294.7p | 4.6% | |
31 December 2019 | 281.7p | 4.8% | |
31 December 2018 | 268.7p | 3.7% | |
31 December 2017 | 259.0p | 12.4% |
Unit Price Date | Unit Price* | Growth (%) for the 12 months to the date shown | Total percentage growth from 4 November 2005 (launch) to 31 December 2022 |
---|---|---|---|
31 December 2022 | 313.5p | -8.3% | 213.5% |
31 December 2021 | 341.9p | 16.0% | |
31 December 2020 | 294.7p | 4.6% | |
31 December 2019 | 281.7p | 4.8% | |
31 December 2018 | 268.7p | 3.7% | |
31 December 2017 | 259.0p | 12.4% |
Columbia Threadneedle Investments