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Multi-Asset Funds: March 2024

Some noteworthy central bank activity took place over the month – key among them, the US Federal Reserve (Fed) and the Bank of Japan (BoJ).

In line with market expectations, the Fed kept the federal funds target range unchanged at 5.25% to 5.5%. However, some noteworthy forecast revisions took place. Encouragingly, economic growth projections were lifted over the forecast horizon, although core inflation estimates were raised to 2.6% this year from a previously forecasted 2.4%. This likely resulted in committee members forecasting a shallower rate cutting cycle over the next two years. Nevertheless, the market seemingly took comfort in the fact that three rate cuts are still expected this year as risk assets rallied post the announcement. In fact, gold hit all-time highs, yet again, during the month as real rates cooled somewhat and as liquidity levels remain buoyant.

After nearly a decade, the BoJ voted 7-2 to end the era of negative interest rates lifting their policy rate from negative 0.1% to a range of 0% to 0.1%. This marks the first policy rate hike since 2007 as Japan’s largest labour union lifted wages by 5.3% which registers as the swiftest increase in 33 years. Despite also ending purchases of Exchange Traded Funds (ETFs), Real Estate Investment Trusts (REITs) and explicit targets around its yield curve control programme, the BoJ gave comfort to investors that should long-term rates rise rapidly that they will not hesitate to intervene in the fixed-income market and that financial conditions will remain accommodative. On balance, the market welcomed such dovish intent as the Yen continued to depreciate into month-end.

China’s Politburo released several targets heading into 2024. The GDP growth target was set at 5% - unchanged from the 2023 target. However, the fiscal deficit target of just 3% suggests that more support will likely need to come from monetary policy to achieve this growth projection. While provisions were made to bond issuances, their nominal amounts are small in relation to GDP levels. Overall, policies that foster a restoration of consumer confidence and support to the property sector will likely go a long way in achieving desirable growth outcomes. Accordingly, we will continue to monitor developments thereof.   

Overall, financial conditions remain relatively loose and major global central banks are largely set to cut policy rates in the coming year, although to varying degrees. Central banks will need to strike a fine balance between the magnitude of interest rate cuts and potentially reigniting inflation, particularly in the Western world. This quandary will likely remain at the forefront of monetary policy decisions this year. 


Fund strategy

Investors are optimistic, particularly in the US, pricing in a robust earnings recovery in the S&P 500 this year and next. Moreover, several research houses are also starting to lift year-end price targets. While this is certainly welcomed, we remain positioned in selected opportunities within our internal equity building blocks consisting primarily of Ashburton’s Global Leaders and Global Equity Growth Funds. Themes such as the emergence of Artificial Intelligence (AI) and the potential recovery in China are on our radar.

Our position in Nvidia has had an exemplary run this year as part of a core holding in both our Ashburton Global Leaders Fund and Global Equity Growth Fund. We are delighted that it delivered another better-than-expected earnings update and the stock remains as one of the best performing shares on the S&P 500 this year. Despite the continued upturn in the share price, several operating metrics such as profit continue to increase at a faster pace making valuation metrics even cheaper. Going forward, the Global Equity Team believes that there remains a long runway for growth because of the demand for the chips that Nvidia designs to run AI applications. 

China has displayed nascent evidence of a rebound in equity market performance more recently. We remain encouraged by the front-loading of policy supportive measures at the beginning of this year. Overall, multiples are generally low in the country and international investors are generally very underweight in the region. We remain cautious with our asset allocation sizing toward China but are aware that both investor positioning and multiples historically change rapidly once confidence returns.

This year will be another huge year for geopolitics, with a record number of elections being held globally. Inflation remains among the most important variables for investors to watch, given it tends to drive the central banks’ decisionmakers who raise or lower global liquidity levels, which affect investment markets. Overall, we continue to look for reasonably priced, high-quality companies that are compounding their intrinsic value.

The Fed have signalled their intent to slash the federal funds rate in the coming months amid the disinflationary impulse registered more recently. We are encouraged that the implied policy rate path from the future market is moving closer to the Fed’s dot plot. Nevertheless, the labour market remains tight and is some distance from what would likely create a scenario of deep rate cuts in the coming months. Accordingly, we maintain some allocation to T-bills as they remain attractive with a yield north of 5% and remain cautious of the overall level of duration in the multi-asset funds. 

Fund performance

The USD Global Growth Fund climbed 2.8%[1] while the USD Global Balanced Fund increased 2.3% compared to its Morningstar peers which rose 2.6% and 2.1% respectively. The higher equity allocation combined with outperformance in one of our internal equity building blocks, the Global Equity Growth Fund, added value over the month. Accordingly, we have delivered first and second quartile performance for each respective fund this year. Nevertheless, we remain cautious over the extent to which the Fed will cut the federal funds rate this year. We prefer to have alternative exposure to a beta neutral long/short fund as a diversifier and remain underweight duration within our fixed-income allocation.


Waystone Management Company (Lux) S.A. is regulated by the Commission de Surveillance du Secteur Financier (CSSF) (ref A00000395 & S00000734), Waystone Management Company (Lux) S.A. is a company located in Luxembourg, L-1273 Luxembourg at 19, Rue de Bitbourg. This document is issued by Ashburton (Jersey) Limited (The Investment Manager) which has its registered office at IFC1, The Esplanade, St Helier, Jersey JE4 8SJ, Channel Islands and is regulated by the Jersey Financial Services Commission. Ashburton Investments is a registered trading name of Ashburton (Jersey) Limited. In the event a potential investor requires material risks disclosures for the foreign securities included in a portfolio, the manager will upon request provide such potential investor with a document, outlining potential constraints on liquidity & repatriation of funds; Macroeconomics risk; Political risk; Foreign Exchange risk; Tax risk; Settlement risk; and Potential limitations on the availability of market information. The value of participatory interests and the income from them may go down as well as up and is not guaranteed. Past performance is not necessarily a guide to the future performance. Where an investment involves exposure to a currency other than that in which it is denominated, changes in rates of exchange may cause the value of the investment to go up or down. CIS portfolios are traded at ruling prices and can engage in borrowing and scrip lending. A full detailed schedule of fees, charges and commissions is available from Ashburton on request and incentives may be paid and if so, would be included in the overall costs. The manager does not provide any guarantee either with respect to the capital or the return of a portfolio. The manager has a right to close the portfolio to new investors in order to manage the portfolio more efficiently in accordance with its mandate. This document does not constitute an offer or solicitation to any person in any jurisdiction in which Ashburton Investments is not authorised or permitted to communicate with potential investors, or to anyone who would be an unlawful recipient. The original recipient is solely responsible for any actions in further distribution of this document and should be satisfied in doing so that there is no breach of local legislation or regulations. This is a marketing communication. Additional information about this product, including brochures, application forms and annual or half-yearly reports, can be obtained from the Manager, free of charge, and from the website: In South Africa, the Fund(s) is/are approved for promotion under section 65 of the Collective Investment Schemes Control Act 2002. The Fund Prospectus, and further information including pricing and changes, may be viewed at the Fund’s representative office in South Africa: Ashburton Management Company (RF) Proprietary Limited (“Ashburton CIS”), 3 Merchant Place, 1 Fredman Drive, Sandton 2196. Ashburton CIS is an approved collective investment schemes manager regulated by the Financial Sector Conduct Authority and a full member of the Association of Saving and Inve

[1] Performance stated in the I share class