News and views

Choices

A or B (or some of each)? For A read alpha and B, beta. No, this isn’t a Greek lesson but what is available to investors today. B is the passive bandwagon that delivers index performance at low cost and being promoted or shouted from the virtual rooftops today. You can get more specialised beta […]

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Two Rulers

Our industry is marshalled by the Financial Conduct Authority (FCA), the regulator and the Investment Association (IA), the trade body for asset management. These two are supposed to work together for the benefit of the end user – the investor. Since the FCA’s interim report on the asset management industry last November, criticising ‘active’ managers […]

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Sometimes Size is Relevant…

 …especially where populations are concerned. The three largest populations in the world are: China India USA In Millions 1,374 1,267 324 Real GDP Forecast 2017 (OECD) 6.4% 7.6% 2.3% Democracy No Yes Yes Central Bank Integrity ? Yes Yes 2017 Current Account/GDP US$ (OECD) +2.4% -0.9% -2.6% Median age of population 37.1 27.6 37.9 Where’s […]

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Why Invest?

As we approach the end of the tax year, it is a busy period for most of our adviser clients. With your time even more precious at this time of the year, we’ll start off with a look at the concept of investing. Forgive us if that sounds too rudimentary, but with all the headlines […]

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Does Active Management Still Work?

We seldom publish third party material on our website but occasionally we come across a study that is worth sharing.  There continues to be much debate concerning passive and active investing plus the use of ‘smart beta’ strategies.  This piece from Ian Lance’s team at RWC and kindly reproduced here with their permission, provides a clear […]

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Disruptive Influences

One of the key criteria in our equity manager selection is their ability and knowledge of disruptors and potential disruptors to existing companies. To us this is crucial to effective active equity management and it doesn’t just apply to thematic strategies, it pervades all of our equity managers. As a reminder, we prefer managers who […]

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A Great Wall for China

While President Trump appears to enjoy dominating the media headlines and dictating policy via Twitter, few outside Mexico will have paid much attention to the Mexican President Enrique Peña Nieto until this week. For a President with a low popularity rating, the Trump attack on Mexico and the border between the two countries has provided […]

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Response to the FCA AMR

Many in our industry will have spent much of the weekend pouring over the Financial Conduct Authority’s Asset Management Review announced to much fanfare last Friday morning by Chief Executive Andrew Bailey. It makes some good points, such as: The potential conflict of interest within investment consultants and rating agencies who also offer their own […]

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Value

Normally we like to start our blogs with a pithy title but in this case we’ve started with a one-word title. It reflects the ongoing discussion in the financial trade press about value investing versus its growth counterpart. Given the US election and the increasing likelihood of one in the UK next year after the […]

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Vive La Difference!?

The above relates to a phrase uttered by then French President, Charles de Gaulle in Montreal in 1967 for those of you either old enough or well-versed in modern French history. It was the second utterance and followed ‘Vive le Quebec libre’.  In other words, long live the difference, long live a free Quebec as […]

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Pounded

Since the result of the EU referendum, the UK currency has been on a downward path with occasional periods of stabilisation resulting in a bounce in its fortunes before it resumes its downward trend. October has seen a resumption of sterling’s slump as the rhetoric used by Theresa May at the Conservative Party Conference and […]

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Tighter than you think

Continuing our musical references, this blog’s title is in part an homage to the recent Paralympics and GB’s outstanding success excellently covered by Channel 4, accompanied by Public Enemy’s ‘Harder Than You Think’. It is also a reference to the US interest rate decision last week that voted to leave the Fed Funds rate unchanged […]

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Operation Steepener

Operation Steepener? Bond markets in the developed world are not being run with the lender/investor in mind. The purpose of loose monetary policy and quantitative easing (QE) is to reward the borrower or at least to make it cheaper to access debt. For investors in debt/fixed income and balanced mandates you need to bear this […]

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Unbalanced

More Risk – Same Return One of the intended consequences of the vast amounts of quantitative easing (QE) that have taken place in developed economies (I’ll avoid calling them ‘advanced’ as Mark Carney did yesterday as some are finding hard to move forward), is that bond yields have been crushed. QE has been generally supportive […]

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A Game of Two Halves

It’s not been a good couple of weeks for anything Euro. A ‘Leave’ result was followed last week by an ignominious England exit from the Euro 2016 football championships.  As a long-standing Crystal Palace fan, I have found that with two starters in the Welsh team and a third Palace player who regularly comes on […]

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Brexciting?

Let’s talk or write about anything other than the EU referendum or the Euro football championships. A correlation study will probably emerge between the two! We don’t know the outcome; neither do the polls. The bookies have been the best indicators in the recent history and are rightfully getting more coverage but poll predictions (and […]

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Tracking Error aka The Error of Tracking

Deviations Aptly named, it is an error to start portfolio construction with the concept of how much one should deviate from an index.  The premise that an index should be a portfolio construction tool at all is flawed.  Yes, it may reflect the wider opportunity set in any market but that makes it at best, […]

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Heading Passively To The Poorhouse

We seldom use third-party material but occasionally we see some excellent research that we feel is worth sharing. The following extract is from leading independent research company, Gavekal. Heading Passively To The Poorhouse It is astonishing the number of articles one can read all claiming to “show” that passive investments consistently outperform active money managers. […]

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Red Leicester

The East Midlands is known for being the producer of fine cheeses and while I don’t mind a bit of the above, stilton is the region’s best known cheese and can only be made in Leicestershire, Nottingham and Derbyshire.

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The Benefit of NOT Being a Billionaire

There aren’t many who can remember the song ‘Who wants to be a millionaire?’ from the 1956 film High Society sung by Frank Sinatra and the lesser known Celeste Holm – (my mother told me about it) but the answer to their rhetorical question was ‘I don’t!’ Moving sixty years on and add in a […]

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