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Whether or not that holds for individual middle children (I write as one), there are signs that a whole generation of Britons are feeling “middle child syndrome”, at least when it comes to their retirement.
24 March 2017
Looking ahead to the next three years - and beyond - Nicholls, who joined Fidelity in 1996 as a research analyst, says that the consumption story in China will endure and intensify as a key theme.
Pushing back the state pension age to 68 from 2039 - seven years earlier than the current plan - will save the Government around £100bn. It’s a no-brainer for a cash-strapped country, so it is hard to see that the recommendation will not be implemented.
23 March 2017
The beauty of funds which invest in a range of asset classes like this one is that they should deliver a smoother investment journey than their single asset class counterparts. This fund also benefits from being able to invest in any part of the world.
Perhaps the nature of the latest rally has played its part. The FTSE 100 and, for that matter, the S&P 500 in the US, have both delivered “quiet” rallies to new highs this year, with none of the remarkable one-day climbs that might have driven headlines. By all means, these have been quiet rallies.
22 March 2017
Trump’s plans to repeal Obamacare - the biggest initiative of his presidency - have been scuppered by Republican party divisions, denting market optimism about the US president’s three-pronged promises involving tax cuts, infrastructure spend and deregulation.
Inflation measures how quickly goods and services are rising. In the past month a number of factors contributed to the rise in inflation but the main factors include food, petrol, transport costs and recreational goods ranging from books to TVs.
21 March 2017
During such periods of market volatility, I believe it is important to keep a clear head and distinguish between what we term a bond proxy and the wider market’s definition as they are very different. In this regard, investors have recently tended to label all secure dividend-paying stocks with defensive, low volatility, quality characteristics as bond proxies. At a broad sector level, this resulted in consumer staples, utilities, telecoms and healthcare all struggling over the second half of last year.
One of the remarkable features of the now eight-year-old bull market is how grudging it has been. Share prices have risen to new all-time highs on both sides of the Atlantic despite a persistent belief that all is not well with the world. From an investor’s point of view this is actually helpful because it leaves plenty of buyers on the sidelines, sheltering in bonds or cash but ready to move into the stock market when the mood lightens.
According to the Treasury numbers, the Government has collected almost three times the amount of tax than it had expected to as a result of new pensions freedoms introduced two years ago - £2.6bn versus an original estimate of £920m.
20 March 2017
The blue-chip FTSE 100 index eased back this morning but remains above 7,400. This as the world frets about Trump, Brexit, inflation, rising rates and the rest.
For an investor to find a way to sensibly, and flexibly, tap into all of these themes may seem nigh on impossible. But if you’ve spent almost three decades managing money over changing market conditions, you may find a way that works. Jeremy Podger manager of the Fidelity Global Special Situations Fund has done just this.
17 March 2017
The Federal Reserve, America’s central bank, has in recent times struggled to nudge investors in the right direction. The so-called ‘taper tantrum’ in 2013 resulted from a clumsy hint about future monetary policy tightening. More recently, over the past couple of years, the Fed has pointed to a pace of rate hikes that it has then failed to deliver. Investors have been left to make up their own mind about the trajectory of interest rates and that’s created unnecessary confusion and volatility.
16 March 2017
15 March 2017
Peculiarly perhaps, in a world rocked by political upheaval and change, China and India might seem to offer investors some relative calm and stability.
The same might be said of elections of late, with the temptation to pronounce the Netherlands the bellwether of European politics proving hard to resist for some commentators, whatever the realities of the country’s fairly distinctive political culture.
It was a long and sad battle that, at last, produced succour for Ms Brewster. She had been living with Lenny McMullan for 10 years before his sudden death, on Boxing Day in 2009.
In a number of our investor meetings over the last few months, what has come across strongly is concerns about the Trump presidency, elections in Europe and Brexit negotiations. People are also very worried about what will happen if inflation picks up. Our base case is that any pick-up in inflation will be transitory, but the fact remains that the current investment environment is tricky. These structural stresses and strains in Europe, and political upheaval in the US are happening at a time when bond yields are low.
14 March 2017
To perform as an investor, you have to get a lot of things right at the same time. Picking the right stocks is obviously important. Being bold when others are fearful, and vice versa, matters too, even if ‘time in the market’ tends to trump ‘timing the market’. But perhaps the most important determinant of investment success is making a handful of big calls right - investing in the right country or sector can make all the difference.
While Prime Minister Theresa May can claim victory as the path was cleared for her to launch the two-year process that will see the UK leave the EU, we know for sure that that is only the start of a process that will certainly result in the end of the European Union as we know it, but will also spark a whole new level of uncertainty in terms of where that leaves Britain.
13 March 2017
Brent Crude oil was lower again today at $51.26 and West Texas Intermediate is below $50.
The euro would bear most of the brunt of a Le Pen win, with euro to US dollar easily going to parity (and possibly beyond). French equity indices could be less affected given their global exposure. French government bond spreads should significantly widen, in-turn affecting peripheral European countries, with Italy, struggling under the weight of a banking crisis and leadership vacuum, particularly vulnerable. This would de-rail the European Central Bank’s quantitative easing ‘trimming’ strategy to cut the level of monthly bond purchases but remain in the market, potentially hastening the scrapping of the capital key.
10 March 2017
Since the recovery from the financial crisis began in 2009, the US market has enjoyed stellar gains, while Europe has been a perennial underperformer. In the US, political uncertainty seems to have dissipated with the Trump administration’s focus on growth seen as a boon for markets. In Europe, political risk and the rise of populism is casting a long shadow.
No one knows this better than Philip Hammond who yesterday pledged millions of pounds to develop solutions to high tech challenges including artificial intelligence and robotics, next generation batteries and new techniques for manufacturing medicines.
9 March 2017
8 March 2017
In the past, mergers and acquisitions were often about buying growth when your own business had matured and growth had begun to wane. It was a way of building market share and growing profits without having to wait for them to come to you organically over the years.
Philip Hammond is dry but self-deprecating and funny. He even poked fun at his nickname, Spreadsheet Phil, as he rattled through the traditional list of financial projections. His sense of humour was just as well, because there was precious little else in this most neutral of budgets.
7 March 2017
Tax relief on the money you pay into a pension remains, for the time being, linked to the income tax you pay. So the highest earners are offered the largest potential benefit.
Which has been the better investment over the past 20 years - the Chinese or the US stock market? Until I looked, I would probably have said Wall Street. It’s human nature to over-weight recent data and, as last week’s new all-time high for the Dow Jones index confirmed, the US has led the pack since the financial crisis. When I conducted a quick straw poll of my colleagues, however, half of them opted for Shanghai. China’s economy has been transformed over the past couple of decades - it’s not unreasonable to assume that this might be reflected in the performance of its stock market.
Asia, like other emerging markets, has historically attracted a significant political and corporate governance discount to developed markets, but is this still justified in 2017? Clearly, the external environment across the developed world has become more uncertain, but what shouldn’t be lost among the headlines on Donald Trump and Brexit is the fact that Asia itself has made important steps to promote a more stable economic and political backdrop.
Finding money for under-pressure health and social care services will be a priority, along with keeping borrowing and growth on track amid Britain’s exit from the European Union.
Just a few months in to 2017 and it seems corporate M&A activity is back on the boardroom table. It’s too early yet to say whether we’re heading back into the sort of deal-making that we saw in the second-half of 2015, when worldwide global M&A deal values rose to the highest they had been at since 2007. But activity this year already looks set to be higher than the substantial slowdown we saw in 2016. But then the major economic and political uncertainty we saw last year couldn’t help but put a dampener on corporate activity.
6 March 2017
When Philip Hammond opens up the red briefcase on Wednesday he will be facing a unique challenge: delivering a Budget speech with just weeks to go before the likely trigger date for Article 50. This entrepreneur turned bean counter faces a mammoth task: repair the country’s finances while keeping the ship steady.
In running the Fidelity MoneyBuilder Dividend and Enhanced Income funds, my strategy is very much on investing in high quality cash-generative companies with a strong and growing dividend. This focus on income-generating stocks and sectors has weighed on performance relative to the broad FTSE All Share Index in recent months. However, both funds have continued to generate positive absolute returns for investors and we have also been able to grow the income distribution to shareholders.
3 March 2017
Because according to a new study, a bottom-up approach - picking the most attractive stocks regardless of industry or country - is what delivers the lion’s share of outperformance.
Shares in Snap, the owner of messaging app Snapchat, opened at $24, up from the $17 the group priced on Wednesday evening.
The Resolution Foundation says that stronger tax receipts and a broadly resilient post-Brexit vote economy will deliver the Chancellor a £29bn windfall in his Budget.
2 March 2017
Neil Woodford, manager of wildly popular funds for Invesco Perpetual previously and now the company bearing his name, will take the reins of the brand new Woodford Income Focus Fund later this month.
Reports from the central bank’s regional offices that contribute to the Beige Book suggested a relatively robust state of affairs. There was particular mention of a tightening labour market and shortages of skilled workers, like engineers and IT specialists. All this against a backdrop of “modest to moderate” economic growth1.
Since April 2015, the options for how you access your retirement cash has been opened up to more people. We’re talking about “defined contribution” pensions here, the ones that you pay into, perhaps alongside an employer, with tax relief on contributions that are then invested to grow until the money can be accessed from age 55.
1 March 2017
That represented progress of sorts. Although it does say something about how low the bar has been set that ‘President avoids gaffe’ is a cause for celebration.
The event promises to be as intriguing as the man himself - there’s even an International Newspaper Tossing Challenge with attendees invited to take on the Sage of Omaha, who as a teenager delivered about 500,000 papers. Attended by around 40,000 people, the event significantly boosts hotel and retails sales in Buffett’s hometown Omaha and is watched online by over a million viewers with another 11.5 million catching up later via replays.
28 February 2017
27 February 2017
The Queen Elizabeth II Bridge was opened in 1991 to complement the existing tunnels joining Kent and Essex, with drivers paying a toll for each time they crossed. The original contract to build the bridge was granted on the condition that tolls be abolished in 2003 but, as users of the bridge today know, that plan was quietly dropped. The ‘toll’ became a ‘charge’ and drivers have continued to pay ever since.
Researchers from Imperial College London last week forecast that life expectancy for girls in South Korea would exceed 90 by the year 2030. A 65-year old Korean woman in 2030 will expect to enjoy another 27.5 years of life. They are remarkable predictions, but the most surprising thing about them is that anyone should be surprised. The thing about demographic changes is that they are perhaps the only things, other than death and taxes, that we can really count on.
It seems to be that every time I switch on the news or listen to the wireless (as my mother stills calls it) there seems to be hysteria over Donald Trump's actions. Much as I dislike much of what the man stands for, he is doing something radical as a politician by actually following through with his manifesto! We have clearly become so used to politicians promising one thing and doing another, that we are stunned when they actually do what they say.
24 February 2017
1. Asian companies are already paying high dividends. The dividend yield of the benchmark MSCI Asia Pacific ex Japan Index sits just under 3%, which is significantly higher than the yield of US stock indices such as the S&P 500.
Today Royal Bank of Scotland reported an overall £7bn annual loss, the ninth in a row, which included a £5.9bn hit to pay mis-selling and conduct costs, the largest of which is an expected penalty in the US for selling toxic mortgages products.
23 February 2017
Evy Hambro and Olivia Markham, managers of the BlackRock World Mining Trust plc, address this problem by taking a multifaceted approach to commodity investing. They harness the advantages of the investment trust structure to spread their portfolio across a variety of mining-related assets, many of which pay attractive dividends.
The researchers calculate life expectancy at birth and, according to their figures, an infant female born in South Korea in 2010 can expect to live 90.8 years. Life expectancy at birth for South Korean males is expected to be 84.1.
The problem was severe enough that its effects had begun to spill over to even some of the world’s most efficient, low cost miners. That spelt bad news for the UK stock market, with its heavy exposure to global mining majors. Anglo American, Glencore and Rio Tinto had just cut or cancelled dividend payments1.
22 February 2017
Between April 2016 and January 2017, the government borrowed a total of £49.3 billion, 22% less than over the same period in 2015-16, according to figures from the Office for National Statistics. If that level of borrowing continues then the total for the year ending in March 2017 would be £56 billion, which is £12 billion lower than the OBR forecast in November.
According to the latest economic data, private sector and manufacturing growth unexpectedly accelerated to near a six-year high in February across the Eurozone. And all that growth has had a positive knock-on effect on employment in the region, with job creation at its fastest since August 2007.
21 February 2017
The financial crisis made investors rethink their approach to bond investing. The upshot? No longer should they focus on a single bond asset class, or place too much reliance on traditional benchmarks.
It is true that earnings expectations have recovered but, in selected areas, they are by no means excessive. So, while the relative performance potential of cyclical shares remains attractive, a more discriminating approach will be required to separate the best opportunities from those that could disappoint.
20 February 2017
Olivia Markham and Thomas Holl, managers of BlackRock Commodities Income plc, explain that there are three reasons behind this thesis.
Countless fund managers I’ve interviewed have repeated their own favourites to me. “What the wise do in the beginning, fools do in the end", is one, as is the often repeated “we are fearful when others are greedy and greedy when others are fearful”.
That assertion was the broad thrust of new analysis from the Resolution Foundation and it reinforced a perception that the young may be losing out to the old.
17 February 2017
Podger has almost three decades of investment experience, and has been managing global equity funds for over 25 years.
1. ‘Bond proxies’: separating fact from fiction
With a largely confirmed cabinet now in place, business can begin in earnest, though while the president has firepower when it comes to issuing executive orders, his broader powers are more constrained.
16 February 2017
But Paras Anand, Fidelity’s CIO for European Equities, warns that active share - a measure of how different a fund’s holdings are from its benchmark - should not be the only metric which investors look to when evaluating funds. This is because active share merely reflects a manager’s opportunity to outperform1.
15 February 2017
Robust consumer demand – as reflected in the strong recent performance of the FTSE 250 Index – a weak pound and rising international commodity prices are behind us paying more for our goods and services.
Shares across the world were boosted today - the S&P 500 hit a new record overnight - thanks to remarks by the US Federal Reserve Chair yesterday that interest rates could rise even faster than markets expect.
In times like these, income-hungry investors may want to own high yield bonds.
There is a glass half full view of the Trump Presidency which has won the majority of investors’ attention since November. It focuses on infrastructure spending, tax reform and deregulation and it can take the credit for the S&P 500 hitting a series of new highs in the wake of last year’s election.
14 February 2017
Looking back over my tenure, we have experienced these periods before and maintain that you always have to think medium to longer term in investing. We continue to focus on buying great businesses that compound over time; an approach which underpins a strong long-term track record. In 2016, we saw such businesses de-rate which impacted performance. I would remind investors that changes such as demonetisation in India or concerns about remittances of money provide an opportunity in general, although sentiment can have a marked impact on valuation in the short term.
The young have always had to put up with being condescended to by the old. The young are lazy. The young are feckless. The young don’t know they're born. Versions of these have been heard around family dinner tables forever and all over of the world.
Less fuss has been made about the same achievement for the FTSE 250, which has hit another intra-day high this morning.
13 February 2017
Disappointing ad sales, management turnover and sluggish user growth weighed on the performance of the California based company, with results coming in below consensus Wall Street estimates. The firm’s net loss hit $167m, up from $90.2m.
10 February 2017
It is perhaps the risks around global trade which are most underappreciated. Markets have largely opted to believe in the Trump trade of higher growth, but they have chosen to ignore the potential of an adverse impact from trade policy. Slower trade growth would hold back global growth, with the disruption from higher tariffs or border taxes derailing trade flows and undermining the basis of many economies altogether.
With a total of 95 years of investment experience between the four of them, and with each having a different style, the fund is in highly-experienced and well-diversified hands.
As the moniker suggests, these equities have performed the role of bonds for income-hunters while yields from the real thing have dipped lower and lower since the financial crisis.
9 February 2017
That may be slightly overstating things because even in the latest figures another $800m or so was set aside to cover the ongoing costs of remediation. That was twice the underlying profits announced by BP in the quarter. But in the context of a total cost to shareholders of more than $60bn, the issue is clearly becoming much less significant in financial terms.
8 February 2017
Catching the market’s turning points is one of the hardest and most dangerous aspects of investment - there’s a reason it’s called ‘catching a falling knife’. It’s hard because the wisdom of crowds is much quicker and smarter at picking up on significant changes than individual investors are. Prices turn up long before any improvement is evident in the headlines and they roll over when everything still looks rosy. By the time hindsight has shown a turn is for real, you’ve missed the boat - or as James Goldsmith used to say ‘when you see a bandwagon, it’s too late’.
Avinash Vazirani, manager of the Jupiter India Fund, argues that there has never been a more exciting time to invest in Indian companies - particularly those with a domestic focus. The opportunities, he says, are considerable given the country’s youthful population, the acceleration of ‘catch-up’ growth, and the significant reforms being enacted by Prime Minister Narendra Modi.
The matter of what really drives share prices remains one of some debate. However, the level of interest rates, how equity valuations measure up versus bonds and whether corporate earnings are rising or falling are probably three good places to start.
Founded in 2014, Crux Asset Management is a relative newcomer to the City - or in precise geographic terms, London’s West End.
According to the Super Bowl Theory, last night’s win by the New England Patriots should see the Dow Jones Industrial Average lose some of its recent gains as we head through 2017. A popular indicator among US investors, the Super Bowl Theory has it that if an AFC team beats an NFC squad, which happened when the Patriots beat the Atlanta Falcons yesterday, the Dow will fall. And according to Sam Stovall, author of The Seven Rules of Wall Street, the Super Bowl Theory has been right 80% of the time since 1967.
6 February 2017
This month marked a significant new entry in my log, however, as I added to US government bonds for the first time in a long time - part of following through on the barbell strategy I’ve outlined previously. To recap, this involved adding to defensive Income assets like US government and investment grade bonds on one end, and adding to higher yielding, higher risk assets like local currency emerging market debt on the other.
3 February 2017
Addressing a gathering of industry executives at the White House earlier this week Trump said that he would be streamlining the sign-off process so “you can actually get it approved if it works instead of waiting for many, many years.”
2 February 2017
Figures last week from the Treasury and HM Revenue & Customs confirmed that, during the last three months of 2016, £1.56billion was pulled down from pensions using the new freedoms by 162,000 people.
- Lists of recommended funds, such as Fidelity’s Select 50, can help investors choose funds for their portfolios.
1 February 2017
The growth in sales of Apple’s core product, despite it now being a decade old, came as a relief to investors who have started to fret about what comes next from the world’s largest publicly-listed company. The shares rose 3% after the announcement of the latest quarterly results and, at $125, they are not far behind their all-time high of $133.
There have been studies which suggest the January barometer works more often than not over the very long term in America and that may be enough for some investors to take notice. However, there are at least a couple of problems with this.
31 January 2017
1. Asian companies are already paying high dividends. The dividend yield of the benchmark MSCI Asia Pacific ex Japan Index sits just under 3%, which is significantly higher than the yield of US stock indices such as the S&P 500.
Eurozone GDP growth rose 0.5% between the third and fourth quarters of 2016, taking growth last year overall to 1.8%. Unemployment also fell to a seven-year low but it was inflation that caught the eye, with the annual rate of price rises jumping to 1.8%.
The Danish pharmaceuticals giant, which is a world leader in diabetes drugs, is to invest £115 million in a new science research centre in Oxford over the next 10 years. Set to employ 100 scientists, the facility will work on new ways of treating type 2 diabetes, a growing problem worldwide because of the increasing prevalence of obesity and sedentary lifestyles.
30 January 2017
Woolnough started with a reflection on the past decade. Three themes stood out:
Largely trustworthy and responsible, roosters are also characterised as being outspoken and daring at times. Potentially useful attributes then in today’s fast-moving and often unpredictable political and economic climate.
27 January 2017
23 December 2016
22 December 2016
21 December 2016
20 December 2016
19 December 2016