July 2021 Mid Monthly Update


‘Football’s Coming Home’ may have grated on some given its repetition but, despite the defeat in the final to Italy, it could be argued that football did come home as a whole new audience was drawn to the game by the influence of the England team.


Even if you’re not a football fan, it would have been difficult not to be swept up in England’s journey to the final of the delayed Euro 2020 football championships.  Not least the goodwill created by the manner in which the team, manager and staff have portrayed themselves to the wider public.  The anthem of ‘Football’s Coming Home’ may have grated on some given its repetition but, despite the defeat in the final to Italy, it could be argued that football did come home as a whole new audience was drawn to the game by the influence of the England team.

To quote Her Majesty, the Queen who wrote to manager, Gareth Southgate on the eve of the final:

“I want to send my congratulations and that of my family to you all on reaching the final of the European Championships and send my good wishes for tomorrow with the hope that history will record not only your success but also the spirit, commitment and pride with which you have conducted yourselves.”

Embedded in that quote is the word ‘conducted’ and the impact of that conduct in bringing many people together along a journey and the pride that diluted the disappointment of losing in the final.

Conduct Unbecoming

Of course, what spoiled the impact of the England team’s conduct and the manager’s leadership (read his pre-tournament ‘Dear England’ letter here if you get the chance), was the racial abuse, suffered principally by those that missed penalties, after the loss to Italy.  Totally unacceptable and the morons responsible need to be held to account.  One of their number eschewed the cloak of anonymity provided by social media and has been found to be employed by a leading national estate agent.  I wonder how that will end.

FCA Conduct

As I write this month’s mid-monthly update, I am in the middle of a two-morning course run by the Investment Association (IA), ‘Managing Conduct Risk Within Investment Management Firms’. The IA run some excellent courses and Conduct Risk is something we all take seriously.  The Financial Conduct Authority (FCA) has been in the news this month principally due to its publication in the first week of July of ‘Authorised fund manager’s assessment of their funds’ value’. The FCA were critical of the processes that some Authorised Fund Managers (aka ACDs) used to deliver Assessments of Value (aka Value Assessments).  If you have the time, it can be read here.

The industry regulator’s attempts to improve the transparency and image of the investment industry raises some interesting questions:

  • Are ACDs best placed to carry out value assessments, or are consultants better equipped to fulfil that function?
  • Should ACDs be appointed by investment managers just like a custodian?
  • Despite stating that they are not price-setters, isn’t that what is happening if price is the determining factor of value?
  • Is the increased regulatory cost burden causing consolidation of providers and narrowing choice just like it has to financial advisers?

It will be interesting to see how this develops.  The FCA’s recent paper Consumer Duty, ‘treating customers well’ is a step in the right direction though.

Inflation – What Inflation

This week has seen the release of the latest inflation data in the US and UK.  Both have caused financial journalists to write about inflation getting out of control.  Much has been written about the US, so we’ll focus on the UK.  The chart below sourced from Bloomberg, shows the pick-up in inflation from last year’s pandemic induced lows:

You would expect bond yields to be headed higher as pundits and journalists alike are questioning whether inflation is indeed transitory or not. The following graph, sourced from, illustrates the movement in ten-year UK government (gilt) yields this year.  Yes, yields increased markedly from their lows as the first concerns over inflation were voiced, but more recently yields have fallen from their highs.  Was the earlier rise an overreaction or are bond markets quite sanguine about inflation prospects?  Either way, at substantially below the Bank of England’s target, they represent a poor investment choice for investors.


Lower bond yields have helped equities, and ‘growth’ equities have enjoyed something of a rebound against their ‘value’ counterparts.   Readers will know we treat those labels with a degree of contempt.

Identifying long-term, thematic growth investments is our goal which leads me on to Chrysalis Investments Limited, an investment company listed on the London Stock Exchange.  It is rare for us to comment on individual holdings but with our inboxes peppered with emails about the attractions of private equity (there’s clearly a lot of capital about), it seems fair to highlight an investment that seeks to invest in high growth, innovative and disruptive private companies.  The closed ended investment company wrapper is appropriate and transparent.  Having invested in Chrysalis since its IPO in November 2018, the Dynamic and Growth Funds have enjoyed the returns generated by Richard Watts and Nick Williamson, the co-managers.

Your Money

There has been little change to either fund this month.  In Dynamic, we topped up our holding in a focussed real asset investment trust via a fund raise, and in Growth; switched from a successful European equity fund into a more focussed offering from the same provider.

At the start of July, we were delighted to learn that the Dynamic Fund had been selected as one of the top five mixed asset funds by FTAdviser.

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