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New Court Cautious Fund GBP Rothschild & Co WM SICAV SIF Quarterly Report | Issue 20 | April 2021
Cover: Our office at New Court. This is not a promotion or solicitation of the Rothschild & Co WM
The site has been home to the SICAV SIF – New Court Cautious Fund GBP, which is not usually
business in London since 1809. available to execution only or advisory clients. When certain criteria
are met discretionary portfolios may hold the Fund, but only at
© Philippe Ruault/OMA 2012. Rothschild & Co’s discretion.
Rothschild & Co Values: All data as at 31 st March 2021 (except inflation which is until
Wealth Management 28 th February 2021 as March 2021 data figures are not yet available).
New Court Sources of charts and tables: Rothschild & Co and Bloomberg,
St. Swithin’s Lane unless otherwise stated. Past performance is not indicative of future
London EC4N 8AL performance and investments and the income from them can fall as
+44 20 7280 5000 well as rise. Fund performance is shown in pounds sterling, after all
rothschildandco.com fees, in total return, combining income and capital growth. Returns
© 2021 Rothschild & Co may increase or decrease as a result of currency fluctuations.
Wealth Management Please ensure you read the Important Information section at the end
of this document.Fund manager’s review
Investors generally grew more confident over the quarter as countries rolled out
their vaccination programmes and the outlook for the global economic recovery
brightened, while inflation expectations caused bond yields to spike.
Performance contributions Portfolio activity
The portfolio returned +4.2% in the first quarter In a particularly active quarter, we made several
and has now returned +155.9% (after fees) key changes, most notably on the ‘diversifying’
since inception (vs. +100.1% for UK inflation side of the portfolio. In January, we restructured
+2% since inception on 31st December 2003).* our inflation-linked bond exposure, selling our
This equates to an annualised return of +5.6% direct investment in US TIPS and replacing this
compared to +4.1% for inflation +2%.** with an internally managed implementation
vehicle, providing us with more diversified
Portfolio performance
exposure to inflation-linked assets globally, and
2021 began with strong performance from
the ability to more easily respond to changing
equities and commodities, as the expectation
market conditions. Currently, most of the portfolio
of a full economic recovery continued into the
is invested in medium-term US TIPS, with the
new year. Optimism surrounding COVID-19
remainder invested across Japanese, Canadian
remained the key driver of sentiment as
and Australian inflation-linked bond markets. The
vaccination programmes were announced
vehicle also holds two exchange-traded funds
globally. The promise of massive fiscal stimulus
(ETFs), providing direct exposure to breakeven
in the US (equivalent to almost 8% of GDP) also
rates of inflation in the US and Europe.
added to risk appetite, as did the continued
accommodative policy stance from most central We also added the One River Dynamic Convexity
banks globally. Fund to the portfolio for additional portfolio
protection. We have known the One River team
Equity markets were led higher by companies
for a number of years, and the Dynamic Convexity
within the financial and energy sectors, as the
Fund is a systematic long-volatility strategy which
value/growth rotation continued unabated. In
invests actively in VIX futures, VIX options and
fact, the first quarter of 2021 was one of the
equity index options. This strategy, alongside the
best on record for ‘value’ stocks relative to
ladder of put warrants and Okura, is intended to
those categorised as ‘growth’ stocks. One of the
offer robust protection in a variety of scenarios.
key drivers of this rotation may have been the
For further protection, we supplemented this with
increase in medium-to-longer-term government
a new position in a resettable Eurostoxx 50 put
bond yields, which have risen in anticipation of
warrant, which was approximately 20% out-of-the-
stronger economic growth. Benefiting from the
money at purchase and has a maturity of one year.
steepening of the yield curve, Wells Fargo shares
Finally, we also added to an existing diversifying
rose +29.9% over the quarter. The removal of
fund – the Abbey Focus Fund – in the same month.
the asset cap, in place since 2018 following the
account opening scandal, also drove this strong On the ‘return asset’ side of the portfolio, we
* The inception date of the performance. The other financial names in the increased our holding in Topicus.com in February
Fund which implements this
strategy was 13th April 2016.
portfolio also performed well, including American following its listing. We initially received shares
Performance for periods prior to Express (+17.8%) and Lloyds (+16.7%). However, as part of a spin-off from Constellation Software,
inception date is the Rothschild
& Co Wealth Management UK the standout performer this quarter was John whose European operating unit, TSS, became
Ltd GBP Cautious composite,
adjusted to reflected the Fund’s Deere, the manufacturer of agricultural and a standalone entity following its acquisition of
1% annual management charge
and fund operational costs.
forestry-related machinery, gaining over 40%. Dutch business, Topicus. Overall, we see Topicus.
com as a mini Constellation, but primarily focused
** Annualised figures are The rise in bond yields meant contributions from our
calculated on a compound basis on Europe, where we believe there are good
to best represent the results of fixed income holdings were marginally negative in
staying continuously invested opportunities for growth. Constellation Software
aggregate. The biggest detractor was the allocation
from inception of the strategy. will retain effective control of Topicus.com (owning
to US TIPS, as these assets sold off towards the
Data sources: Rothschild & Co the only ‘super voting share’) and we expect it to
and Bloomberg end of the period. Nevertheless, elsewhere on
follow Constellation’s operating model and culture.
Holdings are subject to change the diversifying side of the portfolio, our two trend
without notice. This document
followers, Abbey Capital and CFM, performed In March, we continued to trim return assets as
does not constitute a personal
recommendation or an offer well, returning +7.6% and +8.2% respectively. The equity markets rose, for example trimming John
or invitation to buy or sell
securities or any other banking commodities exposure within the CFM portfolio was Deere following its especially strong share price
or investment product. Past performance. The other significant change we
performance is not indicative particularly beneficial as most major commodity
of future performance and
sub-sectors performed well over the quarter. made was the full sale of the IVI European Fund at
investments and the income
from them can fall as well as rise. the beginning of the month, to reduce portfolio risk.
New Court Cautious Fund GBP | April 2021 | Page 3Fund performance
Since inception, the Fund has outperformed inflation +2%. As at 31st March 2021, the
net asset value per share was £27.31. The Fund size was £80.5 million.
Performance since inception (%)*
Net
175
150
125
100
75
50
25
0
-25
2004 2006 2008 2010 2012 2014 2016 2018 2020
New Court Cautious Fund GBP UK Inflation (CPI) +2%
Performance comparison – over time (%)
Since
Q1 2021 2021 2020 2019 2018 2017 inception*
New Court Cautious Fund
4.2 4.2 8.8 10.4 -3.8 4.8 155.9
GBP
UK inflation +2% 0.4 0.4 2.6 3.3 4.1 4.9 100.1
UK inflation -0.1 -0.1 0.6 1.3 2.1 2.9 43.2
Global equities 5.9 5.9 14.2 26.2 -7.7 19.8 289.6
(in local currencies)
Global equities 3.4 3.4 13.0 21.7 -3.9 13.2 389.7
(in sterling)
UK government bonds -7.4 -7.4 8.9 7.2 0.5 2.0 137.1
Sterling cashFund holdings
The Fund combines return and diversifying assets which are invested across global
markets. The return assets are held to generate capital growth over the long term;
the diversifying assets are held to protect capital and investment performance,
particularly during difficult markets.
Return assets (51.0%) Diversifying assets (49.0%)
Companies 35.5% Funds 15.3% Alternative strategies 6.0%
Admiral 2.2% Albizia ASEAN* 1.6% Abbey Capital 2.3%
American Express 3.1% Bares US Equity 2.6% Artemis Volatility Fund 0.7%
Ashtead Group 2.6% Berkshire Hathaway 2.7% CFM ISTEC 1.5%
Booking Holdings 0.9% Vanda** 1.8% CFM Trends 1.5%
Cable One 1.3% Lansdowne Developed 1.9%
Markets
Charter Communications 1.2% Portfolio protection 2.1%
Phoenix UK 2.5%
Comcast 2.3% Okura 1.0%
Ward Ferry Asian Smaller 2.3%
Constellation Software 0.8% One River Dynamic 1.0%
Co's*
Convexity
Deere 2.7%
S&P 500 2700 putFund allocations
The Fund is invested across global regions, asset classes and currencies. The fund
manager follows a diversified investment approach and aims to preserve and grow
the real value of the Fund over the longer term.
Fund holdings by asset class Fund holdings by currency
0.4% 1.1%
2.1% 5.3%
6.0% 0.5%
20.0%
29.1% 50.8%
72.8%
12.3%
Equities Fixed income Pound sterling Asian + EM
Cash and Alternative strategies US dollar Yen
cash equivalents Portfolio protection Euro Canadian dollar
Percentages may not sum to 100% due to rounding. The above currency exposure is net of foreign exchange hedges. For the purposes of more
accurately managing currency risk, where appropriate, we reflect the currency exposure of certain funds based on the underlying securities held
within the fund, rather than the denomination of the fund.
Page 6 | New Court Cautious Fund GBP | April 2021Supporting information
Rothschild & Co WM SICAV SIF – New Court Cautious Fund GBP
Type of fund A sub-fund of a Luxembourg Société d’Investissement à Capital Variable (“SICAV”).
Objective The objective of the Fund is to preserve and grow the real value of the Fund over the
long term through a diversified investment approach. The Fund may utilise a wide
range of asset classes in order to achieve its objective. These may include equities,
cash deposits, bonds, warrants, money market instruments, derivatives and forward
transactions, funds (regulated and unregulated), exposure to currencies, commodities
and property.
Launch date 13th April 2016
Share class Income and accumulation. Base currency is pound sterling.
Estimated synthetic OCF* 1.41%. This includes the manager’s fee (1.00%), other fund expenses (0.17%) and third-
party manager fees (0.24%).
Transaction costs** 0.16%
Pricing Valuation day for subscriptions: each business day
Valuation day for redemptions: weekly (Thursday)
Settlement period: T+3
Comparators UK CPI +2%. MSCI All Country World in sterling. Bloomberg Barclays Gilts Total Return Index.
Barclays Benchmark Overnight GBP Cash Index.
Tax UK Reporting status is available
* The Ongoing Charges Figure (OCF) as calculated in May 2020. The OCF is the ratio of the Fund’s total disclosable costs (excluding overdraft
interest) to the average net assets of the Fund. It is intended to provide a reliable figure that gives the most accurate measure of what it costs
to invest in the Fund. The Synthetic OCF includes the disclosed ongoing fees of the underlying fund investments weighted on the basis of their
investment proportion in the Fund. From time to time management fees may differ. This will be disclosed and explained to you in good time
before you invest.
** The transaction costs show the most recent transaction figures available.
New Court Cautious Fund GBP | April 2021 | Page 7Notes
At Rothschild & Co Wealth Management we offer an objective long-term
perspective on investing, structuring and safeguarding assets, to preserve
and grow our clients’ wealth.
We provide a comprehensive range of services to some of the world’s
wealthiest and most successful families, entrepreneurs, foundations
and charities.
In an environment where short-term thinking often dominates, our long-
term perspective sets us apart. We believe preservation first is the right
approach to managing wealth.
Important information
Rothschild & Co Wealth Management UK Limited offers
This document is distributed in the UK by Rothschild & Co Wealth
discretionary portfolio management services to its prospective
Management UK Limited. Law or other regulation may restrict the
clients and clients. We may, at our discretion, sometimes
distribution of this document in certain jurisdictions. Accordingly,
deliver our balanced portfolio for clients using a fund vehicle
recipients of this document should inform themselves about and
where it matches your requirements. We do not solicit potential
observe all applicable legal and regulatory requirements. For the
investors with materials for funds: you should only read this
avoidance of doubt, neither this document nor any copy thereof
document having already been provided with materials for our
may be sent to or taken into the United States or distributed in
standalone discretionary investment management services.
the United States or to a US person. References in this document
This document does not constitute promotion or solicitation of
to Rothschild & Co are to any of the various companies in the
the Rothschild & Co WM SICAV SIF – New Court Cautious Fund
Rothschild & Co Continuation Holdings AG Group operating/
GBP which is not usually available for purchase on an execution
trading under the name “Rothschild & Co” and not necessarily
only or advisory basis.
to any specific Rothschild & Co company. None of the Rothschild
This document is strictly confidential and produced by Rothschild & Co companies outside the UK are authorised under the UK
& Co for information purposes only and for the sole use of the Financial Services and Markets Act 2000 and accordingly, in
recipient. Save as specifically agreed in writing by Rothschild & the event that services are provided by any of these companies,
Co, this document must not be copied, reproduced, distributed the protections provided by the UK regulatory system for retail
or passed, in whole or part, to any other person. This document customers will not apply, nor will compensation be available
does not constitute a personal recommendation or an offer under the UK Financial Services Compensation Scheme. If you
or invitation to buy or sell securities or any other banking or have any questions on this document, your portfolio or any
investment product. Nothing in this document constitutes legal, elements of our services, please contact your client adviser.
accounting or tax advice.
The Rothschild & Co Group includes the following businesses
The value of investments, and the income from them, can go (amongst others): Rothschild & Co Wealth Management UK
down as well as up, and you may not recover the amount of your Limited. Registered in England No 4416252. Registered office:
original investment. Past performance should not be taken as New Court, St Swithin’s Lane, London, EC4N 8AL. Authorised
a guide to future performance. Investing for return involves the and regulated by the Financial Conduct Authority. Rothschild &
acceptance of risk: performance aspirations are not and cannot Co Bank International Limited (No 1088). Registered office: St
be guaranteed. Should you change your outlook concerning your Julian’s Court, St Julian’s Avenue, St Peter Port, Guernsey, GY1
investment objectives and/or your risk and return tolerance(s), 3BP. Licensed and regulated by the Guernsey Financial Services
please contact your client adviser. Where an investment involves Commission for the provision of Banking and Investment Services.
exposure to a foreign currency, changes in rates of exchange may Rothschild & Co Bank AG. Registered office: Zollikerstrasse
cause the value of the investment, and the income from it, to go 181, 8034 Zurich, Switzerland. Authorised and regulated by
up or down. Income may be produced at the expense of capital Eidgenössischen Finanzmarktaufsicht FINMA.
returns. Portfolio returns will be considered on a “total return”
Investment returns and the principal value of an investment
basis meaning returns are derived from both capital appreciation
will fluctuate and may be volatile. An investment in the Fund
or depreciation as reflected in the prices of your portfolio’s
involves significant risks, including the risk of loss of capital.
investments and from income received from them by way of
The Rothschild & Co WM SICAV SIF – New Court Cautious Fund
dividends and coupons. Holdings in example or real discretionary
GBP is suitable only for sophisticated investors and requires
portfolios shown herein are detailed for illustrative purposes
the financial ability and willingness to accept the risks inherent
only and are subject to change without notice. As with the rest of
in an investment in the Rothschild & Co WM SICAV SIF – New
this document, they must not be considered as a solicitation or
Court Cautious Fund GBP. No assurance can be given that the
recommendation for separate investment.
Rothschild & Co WM SICAV SIF – New Court Cautious Fund GBP’s
Neither MSCI nor any other party involved in or related to investment objectives will be achieved. Account valuations of
compiling, computing or creating the MSCI data makes any individual investors may vary and such historical returns may not
express or implied warranties or representations with respect reflect the performance of any one investor.
to such data (or the results to be obtained by the use thereof),
There can be no assurance that an investment will achieve
and all such parties hereby expressly disclaim all warranties of
returns at levels comparable to the returns reflected herein. An
originality, accuracy, completeness, merchantability or fitness for
investors’ return may be different than that of the Rothschild &
a particular purpose with respect to any of such data. Without
Co WM SICAV SIF – New Court Cautious Fund GBP because of,
limiting any of the foregoing, in no event shall MSCI, any of its
among other things, differences in the amount of capital at risk,
affiliates or any third party involved in or related to compiling,
diversification, risk tolerance and portfolio turnover.
computing or creating the data have any liability for any direct,
indirect, special, punitive, consequential or any other damages No independent party has audited the performance results shown
(including lost profits) even if notified of the possibility of such herein, nor has any independent party undertaken to confirm that
damages. No further distribution or dissemination of the MSCI such results reflect the trading method under the assumptions or
data is permitted without MSCI’s express written consent. conditions of Rothschild & Co’s investment process.
Although the information and data herein are obtained from The indices referenced herein are well-known market indices
sources believed to be reliable, no representation or warranty, which are included merely to show the general trend in the
expressed or implied, is or will be made and, save in the case markets for the periods indicated and are not intended to imply
of fraud, no responsibility or liability is or will be accepted by that the pro-forma returns were comparable to the indices either
Rothschild & Co as to or in relation to the fairness, accuracy in composition or element of risk or that the Rothschild & Co
or completeness of this document or the information forming WM SICAV SIF – New Court Cautious Fund GBP’s portfolio is
the basis of this document or for any reliance placed on benchmarked to the indices. The indices are unmanaged, may or
this document by any person whatsoever. In particular, no may not be investable, have no expenses and reflect reinvestment
representation or warranty is given as to the achievement or of dividends and distributions. Index data is provided for
reasonableness of any future projections, targets, estimates or comparative purposes only. A variety of factors may cause an index
forecasts contained in this document. Furthermore, all opinions to be an inaccurate benchmark for a particular fund and the index
and data used in this document are subject to change without does not necessarily reflect the actual investment strategy of the
prior notice. Rothschild & Co WM SICAV SIF – New Court Cautious Fund GBP.
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