Chelsea's blogs are written by our research team and, as well as being published here, are all published on other third party investment websites. They are meant for your information and do not constitute investment advice.
As the year draws to a close, and before fear and panic sets in as we realise how much there is left to do before the big day, we take a moment to reflect on the year gone by, highlighting the financial winners and losers of 2024.
I’m sure many of you will be familiar with the term the Wall of Worry. This is the tendency of financial markets to increase even as economic, political, or social conditions suggest that they should be falling.
With companies buying up their own shares, foreign investors returning to the UK and attractive valuations on offer, should investors be looking closer to home for opportunities in 2025?
Most of us could benefit from a little extra income – especially now that the Bank of England has started reducing interest rates. Whether it’s to help cover rising bills, treat yourself to something guilt-free, or have more to invest, no-one is going to turn down more money in their pocket. With banks and building societies reducing the amounts they pay, in line with the cut in interest rates, there’s even more incentive for people to find alternative sources.
Mercifully, and as predicted, VCTs were left untouched by Rachel Reeves' recent budget. This was in spite of very significant tax rises in other areas; including higher CGT rates, an IHT raid on family farms and businesses, and a new IHT hit on private pensions. From 2027, pensions will no longer be exempt from inheritance tax. This new measure will have frustrated the long-considered estate-planning of many families.
It was an emphatic victory for Donald Trump in the US presidential election, while the Republicans also scooped the Senate and, almost certainly, the House of Representatives. He may be personally unpredictable, but his economic agenda is relatively clear – tax cuts, deregulation and tariffs on US imports. That has long-term implications for the US stock market, but also for stock markets around the world.
Junior Individual Savings Accounts (JISAs) have been growing in popularity over the past 13 years – but what funds can provide the best returns for your child?
I wanted to start with a trip down memory lane. To 2013 to be precise, as this was when the then governor of the Bank of England (BoE) Mark Carney introduced something called “forward guidance”.
We are less than a month away from the US election and a new incumbent will soon be setting up home in the White House for the next four years. Former president Donald Trump is currently battling it out with Vice-President Kamala Harris in a series of debates being held across the country.
Investment managers spend a long time telling you what might go wrong: capital is at risk, you may lose more than you put in, past performance is no guide. However, every now and then, it’s nice to look on the bright side. What if optimism rose? What if the global economy outpaced expectations? It is worth considering your options for a sunny day as well as a rainy one.
At its recent conference, the new government has given little away about its plans for the upcoming October budget. Those trying to plan have been forced to rely on rumours and oblique references to ‘tough choices’. Nevertheless, it is clear where change is likely to be targeted, and the potential options open to the government.
As the kids go back to school, they’ll be busy expanding brackets and mastering past participles. As adults, we’ve long since mastered algebra and rudimentary French, but there are a few lessons on investment markets that no one covered at school and it’s never too late to learn.
If the predictions are right, the Federal Reserve is likely to announce an interest rate cut when it meets on the 17th September. While recent cuts from the ECB and Bank of England are important, the Federal Reserve is key and will finally turn the corner on an era of high interest rates and persistent inflation.
UK investors have committed billions of pounds into corporate bond funds – but how are various portfolio managers using this influx of cash?
This June, at his birthday celebrations in West Palm Beach, Donald Trump said he would build a ‘great iron dome’ for the US. This dome would be a state-of-the-art missile defence shield, and – most importantly – would be made in America by Americans. According to the aspiring president, this would mean ‘jobs, jobs, jobs’.
Happy birthday to the euro!
When it comes to our investments, most of us start off with a ‘core’ – the assets or funds at the centre of our portfolio that will form the mainstay of our savings.
It’s certainly been a good year for many income investors with record dividends paid out in the first quarter. A stronger global economy, better-than-expected profits and the prospect of interest rate cuts have been the main drivers.
Paris 2024 has brought the usual Olympic mix of endeavour and disaster. From the triathletes braving the Seine, to Lady Gaga’s burlesque tribute act, it has not been boring. Among the sporting achievements, there are some useful investment parallels to be uncovered. These are five of our favourites.
Alphabet and Meta declared a dividend for the first time this year. It wasn’t a lot – just $0.2 per share in the case of Alphabet - but they now take their place alongside Microsoft, Tesla and Apple in making regular payouts to shareholders*. However, it doesn’t necessarily change the landscape for income investors.
I’m sure most people have heard of middle child syndrome. It is the belief that middle children are excluded, ignored, or even outright neglected because of their birth order.
In mid-June, Nvidia briefly became the world’s largest company, hitting a market capitalisation of over $3 trillion*. It was the culmination of a record-breaking rally in the shares, which had more than doubled for the year to date. It then saw a brief but savage sell-off, with the chip designer losing 16% in just a couple of weeks*.
Last week, the FDA approved Eli Lilly’s Alzheimer’s drug Kisunla. This is the second treatment available in the US, both drugs target plaques in the brain called amyloids to slow the progression of the disease, representing a breakthrough after decades of failures to find new treatments. It comes at an exciting time for the health sector generally: shifting demographics are creating more demand for healthcare, and there is also significant innovation happening across the sector, notably in areas such as oncology, vaccines and obesity.
Many investor portfolios are skewed towards providing a consistent income to meet their everyday needs. Dividends are a welcome reward for showing faith in a company and can be distributed in a number of ways – monthly, quarterly or annually for example – while others may choose to re-invest their dividends back into the fund or funds they have invested in.
UK investors appear to be slowly falling back in love with European companies after effectively shunning them in the years following Covid-19. Their reluctance was due to a combination of a global manufacturing slowdown, soaring inflation and the fall-out from Russia’s invasion of Ukraine. This resulted in the amount held within the IA Europe excluding UK sector tumbling from £65.2bn in April 2021 to just £59.7bn two years later*.
Having seen the curtain come down on the domestic season a couple of weeks ago, football fans will be relieved that Euro 2024 starts this Friday. The next month will see 24 of Europe’s finest battle it out over 51 matches to win the Henri Delaunay Trophy.
Interest rates are expected to start being cut over the coming months – as long as inflation doesn’t spring any nasty surprises. The Bank of England increased the base rate 14 times between December 2021 and August 2023* to combat the rising cost of living. And it seems to be working. The rate of inflation has dropped from a 41 year high of 11.1% in October 2022 to 3.2% in March 2024**. This isn’t too far off the Bank’s 2% target.
World Environment Day is celebrated on the 5th June. This year, it focuses on “Our Land, Our Future”, discussing strategies for land restoration, desertification and drought resilience. The United Nations has run World Environment Days for over 50 years. They are designed to be a way to focus policymakers, businesses and consumers on specific issues. Previous initiatives have included plastic pollution, the restoration of ecosystems, and bringing people and nature back into balance.
12 May is National Children’s Day UK – an annual event designed to highlight the importance of a healthy childhood, and how we need to protect the rights and freedoms of children and young people.
The Indian election is in full swing, with 960 million voters going to the polls. Prime Minister Narendra Modi looks set to be returned for a third term, having presided over an astonishing economic expansion that saw India’s economy grow 7.8% in 2023*.
Europe Day is being celebrated next week on Thursday, 9 May. This annual event has been held for decades to celebrate peace and unity across the continent.
Cherry blossom season in Japan (or hanami) arrived late this year, as cold weather held off the full flowering until early April. Sakura (cherry blossom trees) bursting into life marks the start of Spring in Japan, a time of newness and freshness. Market watchers will have observed a similar blossoming of the Japanese equity market of late, though possibly with much greater surprise than the expected floral display.
Asia Pacific is home to some of the fastest growing economies across the world. In 2024, it is forecast to grow at almost 6x the rate of Europe*. However, the region also has considerable variation, and this has been reflected in stock market performance over the past 12 months, with China’s weakness a notable contrast with India’s strength. This means Asian investment comes in a range of flavours.
European equities are having a bit of a moment. The Stoxx Europe 600 Index closed at a record high just before the start of the long Easter weekend, finishing its second-straight quarter of gains*. Powering the index of late has been the so-called GRANOLAS. These stocks are favoured by fund managers, but some are wary of over concentration, and say the European market has broader appeal investors should look at too.
With only a few days to go until the end of the tax year, time is running for those who are yet to make a decision on what to do with their £20,000 ISA allowance. To get some ideas, we asked the experts at Chelsea how they have positioned their ISAs this tax year and where they believe the opportunities for growth may lie.
A key benefit for ISAs is that all income generated within them is free from tax and doesn’t need to be declared on a tax return. As such, they’re a neat way to build up an additional income stream. Even if you don’t need the income today, there are reasons why prioritising income could be a good way to approach investment.
When managing our investments, many begin with a foundational ‘core’ comprising assets or funds that serve as the primary component of our savings. For some, this core might be a multi-asset fund, managed by professionals, which invests in various assets. Others prefer to construct their own core, typically incorporating UK and global equities along with bonds.
World Water Day on 22 March is a time to take a closer look at the wet stuff that makes up about 60% of the human body, the damage its scarcity can have on populations and countries, and how it is both a source of risk and opportunity for investors.
March 18th marks Global Recycling Day. The annual event was created six years ago to recognise the crucial role that recycling plays in preserving our natural resources and our planet’s future. Its focus is to emphasise the importance of recycling to world leaders and ask people across the world to think about preserving our resources.
Global funds are hugely popular with UK investors. They currently have £183.7bn in the IA Global sector, according to the latest figures from the Investment Association*.
Please remember that the value of investments will fluctuate and returns may be less than the amount originally invested. Tax treatment depends on your individual circumstances and the ISA and tax rules can change. Chelsea does not offer advice and so you must manage your ISA yourself.
Please remember that the value of investments will fluctuate and returns may be less than the amount originally invested. Tax treatment depends on your individual circumstances and tax rules can change. Chelsea does not offer advice and, if you are unsure of anything please contact an expert adviser.
It has been a bad couple of weeks recently for the renewable energy agenda. The government is planning to scrap its boiler tax, while Labour is rowing back on its commitment to green energy infrastructure. The world’s largest wind company Ørsted announced it was suspending its dividend and cutting jobs, while SSE said its renewable output was around 15% below expectations*.
Love is in the air! Valentine’s Day is here again – February 14th if you’re yet to buy a card – with its annual celebration of love and romance. We have been expressing affection to our partners with cards, flowers and gifts on this date for hundreds of years.
There is an old adage that you should hold as many bonds as your age to ensure you strike the right balance between generating returns and lowering your risk profile as you get older.
‘Under-owned, underestimated and unloved’ is how investment trust managers described emerging markets when speaking to the Association of Investment Companies at the start of 2024, which reflects both their pessimism and optimism as a new year begins.
Over the last two years, bigger has undoubtedly been better for investors. Larger companies have outpaced their smaller rivals in the US, UK and Europe, as investors have gravitated to safety and predictability. However, with the interest rate environment shifting, economic growth stabilising and market sentiment turning, small caps have started to revive. Is it time to rethink?
Investors have witnessed extreme rotations in the leading investment style – value or growth – over the past few years. In 2024 the best bet looks likely to be not one end of the spectrum or the other, but to hold a diverse middle ground.
It’s that time again when we put together our new year’s resolutions. Alongside resolving to eat healthily, hit the gym or take up a new hobby, adding some financial pledges to your list could do wonders for your well-being.
Infrastructure has become a significant investment theme, as governments around the world recognise its importance in driving economic growth. That has seen billions of pounds spent on everything from building roads, schools and hospitals to enabling technology through digital infrastructure such as data centres.
As the year comes to a close, investors would be well-advised to remember that a loss is only a loss if you crystallise it by selling out. Those who have held their nerve in 2023 have generally fared better than those who have been blown about by market noise.
The countdown to Christmas has officially started. There’s plenty of holiday cheer among shoppers this year, who will spend an estimated £24.1bn online between 1 November and 31 December*. Consumer enthusiasm is, in part, fuelled by the increasing use of flexible payment methods, while e-commerce is expected to grow by nearly 3%* over the period.
It’s nearly time to welcome 2024 – and the perfect opportunity to review your investment portfolio to ensure it still meets your needs. Here is our guide to revisiting past decisions, looking at the balance of your portfolio, and ensuring you’re on track to meet your financial objectives.
It has been a tough year for the energy transition theme. In spite of considerable progress on the adoption of renewables – including government backing for large-scale renewable infrastructure projects and ongoing recognition of the urgency of climate action - investment performance has been weak.
Bargain-hunters are counting down the days to Cyber Monday – the date on which retailers around the world offer cut-price deals on products bought online.
With the whizz bang of fireworks night just gone, we thought now would be a good time to look at volatile assets and why they are not necessarily a bad thing for long-term investors.
The cost of living crisis, the looming threat of recession, and geopolitical problems have dampened investor expectations over recent months. But there are still many innovative UK-listed companies that have continued to deliver bumper profits, despite the challenging backdrop.
Smaller companies are expected to outperform their larger cap cousins over time – but this journey is rarely smooth as there are risks involved with moving down the market-cap scale.
The adjustment to higher interest rates has been painful, just ask anyone who has had to remortgage in 2023. However, increasingly it appears that those rate rises are drawing to a close, with central bankers satisfied that they have done enough to calm inflation. For those sectors hit hard by rising rates, there may be light at the end of the tunnel. It could be time for investors to look again at a few of these unloved areas of the market.
China’s sluggish recovery has been a major disappointment for investors this year, but other emerging markets have been growing fast. For example, the likes of India and Latin America have been among the top performing markets this year*.
Thursday 12 October marks National Savings Day, an annual event created by US financial services group Capital One to help investors think about their saving (and spending) habits and what they can do to improve them if they’re not saving enough for their future needs.
Every four years, the American Society of Civil Engineers assesses America’s infrastructure and assigns grades based on its condition. In its most recent report card from 2021, it gave America a score of a C minus* - disappointingly low and pointing to clear despair in the country’s infrastructure.
It’s hard to believe Concorde’s final flight was 20 years ago – or that half a century has passed since this remarkable aircraft made its first transatlantic crossing.
It’s been a year of ups and downs for the UK stock market. Having started the year at around 4,100 points, it rose to 4,375 in February, only to fall to 4,000 in March. By April it was back up to 4,295, before falling to 3,957 in July. It then rose again to 4,198 before falling to 3,953 by the end of August. Today it is back almost where it started: 4,072*.
To say the UK stock market is unloved by investors would be an understatement. The reality is, UK PLC has been largely out of favour since interest rates were cut to record lows in the wake of the Global Financial Crisis in 2008.
Europe is packed full of world class companies – but where are the fund managers focused on this region finding the most attractive opportunities? We examined a number of portfolios in the Europe ex-UK sector to identify which industries boasted the largest share of assets under management.
When it finally put an end to its zero-Covid policy and reopened its doors to the world, many investors expected both the Chinese economy and its stock market to rebound quickly. And, having started 2023 with a bang, it seemed they were right.
The summer holidays are finally here! Children have finished school and parents are juggling the demands of work with looking after their offspring.
Things have changed dramatically for investors in the past 18 months, as rising interest rates amid an inflationary backdrop continue to spook markets. Indeed, the UK’s stubbornly high inflation figures means we are now expecting interest rates of almost 6 per cent in the UK – something that anyone under the age of 30 will not have experienced during their working careers.
Protestors have targeted various sporting events in recent weeks as part of their efforts to focus our attention on environmental concerns. Wimbledon, the second Ashes cricket test at Lord’s, the Premiership Rugby Final, the Grand National and the World Snooker Championships have all been disrupted.
Venture Capital Trusts (VCTs) are vital sources of funding for early-stage British businesses in need of growth capital. These unique investment vehicles channel the risk-bearing potential of investors into fledgling companies. By bridging the gap between risk-averse capital and risk-intensive innovation, their contribution extends beyond individual business success to fostering broader economic development.
Property has long been regarded as a useful portfolio diversifier – and an attractive way to access such assets is via Real Estate Investment Trusts (REITs). These stock market listed vehicles, which are subject to stringent regulations, give investors exposure to income-producing property assets around the world.
Artificial intelligence (AI) has exploded onto the scene in recent months, with the arrival of ChatGPT and other similar large language models (LLM).
This week marks the staging of the biggest flat race meeting in the world, as the best horses and riders descend on Royal Ascot.
Bond markets are rather jittery at present. While the latest UK data shows inflation is finally slowing down, this may not be enough to prevent further interest rate hikes.
It’s hard not to love the idea of absolute return funds. Their aim is to make you money, regardless of the economic backdrop. In challenging times, this concept is particularly seductive.
Eurovision is here again! This annual guilty pleasure sees a wide variety of singers and groups from across Europe compete in front of a global audience of millions.
Building your own investment portfolio can be a daunting task. It involves choosing the right mix of assets that align with your investment goals, risk tolerance, and time horizon. This requires a considerable amount of research, analysis, and decision-making.
Inflation is usually a dirty word in the world of bonds, but now it’s here and hopefully at least peaked, can bond funds help counter its effects?
Global dividends are still expected to increase over the coming year – despite ongoing economic uncertainty and geopolitical risks. The latest Janus Henderson Global Dividend Index is forecasting payments will rise 2.3% on a headline basis to $1.60trn in 2023*. And even though this growth rate is less than last year’s 8.4% hike to a record $1.56trn*, the news will still come as a pleasant surprise to many investors.
Healthcare companies are among the most innovative businesses on the planet and have the potential to be lucrative investments. They operate in multi-billion dollar industries that should benefit from increased demand for products and services as people are living longer.
There is a lot to love about smaller companies. They’re usually innovative, entrepreneurial and have the potential to enjoy rapid growth.
Venture Capital Trusts (VCTs) have seen their popularity soar in recent years, with the amount invested rising more than 2.5x over the past decade*. There is now more than £6.3bn invested in the sector, which saw record fund raising during the 2021/2022 tax year**.
Investing globally has become an increasingly popular way for investors to diversify their portfolios and potentially increase returns. It’s a way to tap into the growth potential of markets beyond the home country, potentially reducing risk and providing exposure to wider structural trends.
Having suddenly announced that the economy was finally reopening back in October last year, China’s equity market experienced the “mother of all U-turns” rebounding almost 50% from the trough at the end of October 2022 and February of this year*.
2023 has had a lively start and volatility in markets remains. As we approach the business end of the tax year, many investors who have yet to invest their ISA allowance will no doubt be wondering where to turn.
Stocks and Shares ISAs give investors a great opportunity to embrace a variety of exciting asset classes and innovative funds. However, a crucial component is having a core holding in your portfolio that will provide the bulk of your returns over the coming years. What are the qualities of such funds? And how can you pick the right one for your needs?
The ‘Stocks and Shares ISA’ is a bit of a misnomer because there are so many different asset classes you can invest in within the wrapper – it’s why we’ve always referred to it as an ‘Investment ISA’ instead.
By 2025, 60% of wealth in the UK will be in the hands of women*. That’s quite a statement and quite a responsibility.
It’s hard to believe, but individual savings accounts (ISAs) have been with us for almost a quarter of a century since arriving in 1999. These tax-efficient vehicles, which have revolutionised how millions of people save and invest, have undergone many changes over the years. We also have a number of ‘ISA millionaires’, which demonstrates the value of long-term investing and compounding.
Absolute return funds aim to make money whatever happens – and such a pledge will sound particularly seductive when times are financially tough. Sky high inflation, soaring interest rates, and looming fears of a recession have certainly made it a nervous start to the year for investors.
India has certainly come a long way in recent years – and its progress has made it an increasingly attractive option for investors with longer-term goals. Last year, the India stock market was one of the few to post positive returns. While 2023 has so far proved more challenging, the long term outlook is encouraging.
It’s fair to say 2022 was tough for funds investing in smaller companies, with many ending the year nursing substantial losses. They were hit by a combination of stock market volatility, a lack of enthusiasm for growth companies, and an ongoing cost of living crisis.
Emerging markets have excited investors for years – their potential for better-than-expected returns is pretty hard to beat. Unfortunately, the possibility of strong returns can go hand-in-hand with increased volatility, especially in comparison with more developed markets.
It’s that wonderful time of year again when everyone makes well-intentioned resolutions to get fit, keep in better contact with friends, and start new hobbies. However, the festive period is also the ideal opportunity to shake up your finances, cut your debts down to size, and revisit your investment decisions.
Having ‘eased’ our way through much of the past decade and beyond, 2022 was the year we started tightening our belts – in more ways than one.
While it is commonly known as the season to be jolly, it doesn’t mean that Christmas is without its stresses. Not only do we have cards to write, in-laws to entertain and nativities to watch, but the prospect of buying the perfect present is enough to leave many in a cold sweat.
Despite the economic crisis, 2022 has been pretty good for dividends so far, with companies around the world only too keen to reward shareholders.
When markets are volatile, economies are in trouble and governments are changing the goal posts, it can be unsettling for investors.
Shopaholics have had Friday 25th November etched onto their calendars for months as it’s the annual Black Friday buying frenzy. This is the date retailers slash their prices dramatically to lure shoppers into parting with their cash ahead of the festive season.
There’s been good news and bad for savers in recent weeks. The positive is that interest rates on many bank and building society accounts are on the rise. You can now get 2.5% on some easy access accounts – the highest level for a decade – and even more if you agree to lock your money away for longer*.
Europe is not only home to world leading household names, but also plenty of innovative smaller companies that make very attractive investments.
China’s ruling party hosted its 20th congress in Beijing’s magnificent Great Hall of the People last week. Held every five years, the congress is seen as the most important meeting in the Chinese Communist Party’s (CCP) political cycle.
Financial companies have long been vital to the global economy. The sector is made up of international banks, fund management firms, payment providers, wealth managers and insurance companies, amongst others.
2022 has been a tough time to be invested and it has been a very difficult period in which to produce positive returns for investors. Unfortunately, these falls are an inevitable part of investing.
Technology is everywhere. There’s no escape. Whether you’re using a smartphone, driving a car, or paying for goods in a shop, this sector will have played its part.
After winning a titanic battle with Chancellor Rishi Sunak, Liz Truss has now been appointed Prime Minister. The MP for South West Norfolk clinched 57% of votes from Conservative party members in the battle that has raged since Boris Johnson was forced to resign. But what does this mean for stock markets and investors?
As Capital Group’s Martin Romo pointed out recently: a lot can happen in 10 years, particularly when a period of extreme adversity spurs innovation and behavioural changes to help address some of the era’s biggest problems.
Responsible funds have soared in popularity over the last few years as the pressure has increased on companies to help the environment. UK investors have ploughed almost £30bn into such portfolios since the summer of 2020 and this area is still enjoying strong inflows*. Here we look at this growing sector, highlight funds that specialise in these investments, and look at where they are putting their money.
Investors are celebrating after companies paid out a bumper £37bn in dividends during the second quarter of the year – almost 39% more than the same period last year*.
For the past decade, there has only really been one show in town for investors - US equities. The S&P 500 has been the best performing equity market among its global peers in six of the past 10 calendar years* and, even when it hasn’t topped the table, it has still managed to produce positive returns of between 6-26%*.
2022 has been a depressing year so far for many investors, as global equity markets completed the worst first half of a calendar year since the 1970s. With inflation remaining stubbornly high and interest rates continuing to rise, the contagion has spread to even those asset classes that had initially done well - many commodities have reversed their previously strong upward trends in recent weeks.
How do you fancy putting your money into something a little different? Well, the good news is there are plenty of options for more curious investors.
Since the start of the year, returns on most fixed income assets have been the worst in most investors’ memories. Even ‘safe’ assets like US and UK government bonds have seen their value plummet.
I don’t know about you, but I’m counting the days until my summer holiday. It feels like ages since we’ve been able to relax for a couple of weeks in the sun.
Emerging markets have fascinated investors for decades – and for good reason. These underappreciated areas have the potential to deliver bumper returns.
It’s an exciting time to invest in global infrastructure. Numerous multi-billion-pound projects are underway across the world – and they’re providing lucrative investment opportunities.
Following a regulatory crackdown by the Chinese government, that adversely affected companies in sectors such as technology, education and property, 2021 turned into an annus horribilis for anyone investing in the Chinese equity market.
When the U.S. sneezes, the world catches a cold. And at the moment, the US is decidedly sniffly.
Bonds have long been a core part of investors’ portfolios, serving four key roles: capital preservation, providing an income, protecting against inflation and offering diversification away from equities. But are fixed income investments meeting those goals today?
Global mergers and acquisitions (M&A) hit new highs in 2021 – and a bumper number are expected to take place over the course of this year.
Over the past two years, my credit card statement has been dominated by ‘Amazon’ and ‘Deliveroo’ entries – and the odd mention of ‘Dunelm’, ‘eBay’ and ‘Next’.
With just a few days left until the end of this tax year, there are no doubt a few last-minute ISA investors still looking for inspiration.
When Jim Cramer, host of CNBC’s Mad Money, coined the acronym FANG in 2013, even he may have underestimated the exponential returns Facebook, Amazon, Netflix and Google would produce over the next decade, as the global economy increasingly digitalised.
2022 has had a rocky start when it comes to our investments. The year started with a continuation of the rotation from growth to value strategies, before persistently high and climbing inflation started rear its ugly head.
When you’re investing money on behalf of your children it’s natural to focus on the future – their future. After all, they have time on their side and any money invested has longer to work, so you can afford to take a bit more risk than you might do with your own savings.
The incredible advances within technology, medicine and the environment are transforming our lives at an incredible pace. In fact, we are living in such fast-changing times that it can sometimes be difficult to keep up in our everyday lives, let alone making sure our investment portfolios are up to date.
How do you fancy a taking a slightly more adventurous stance with part of your Individual Savings Account allocation this year? Sometimes, taking some extra risk can pay off in the long run, especially after markets have already fallen significantly as they have of late.
There is a popular poem from an unknown author, which explains three types of friends: friends for a reason, a season, or a lifetime.
With the increasing cost of living putting a huge strain on everyone’s finances, inflation is one of our biggest concerns right now.
In the first of five-weekly series looking at different options for your ISA, we take a look at defensive funds.
Is it last orders for the UK’s pub industry? I, for one, sincerely hope not. I can’t tell you how nice it was to meet in one with friends last week and celebrate a big (but belated) birthday.
When Russia invaded Ukraine last week, global stock markets tumbled. The Euro Stoxx 50 fell 5.08% that morning, while trading on the Moscow Stock Exchange was completely suspended. The FTSE 100 fared slightly better falling around 2.4%, thanks partly to it having a large weighting towards the energy sector – a sector that is benefiting from a jump in oil prices.
I hate to tempt providence, but have you seen how the UK stock market has been performing lately? While the US, Japan, Asia and Europe are all in negative territory year to date, the FTSE 100 is up. “UK large caps have been starting to outperform in recent weeks,” said *Simon Brazier, manager of Ninety One UK Alpha*.
Every few years, someone comes up with a fresh way of tackling an issue. Their solutions are often so straightforward that everyone else wonders why they hadn’t thought of it before. Such ideas can come from anywhere. Some will be driven by regulatory changes; others by general disillusionment with how something operates.
While all eyes have been on rising prices in the US and the UK, Eurozone inflation also rose to a record high of 5% last month - well above the European Central Bank’s 2% target. Food and energy prices, as well as supply chain bottlenecks, played their part in lifting it to a level not seen since the single currency was created more than two decades ago.
Joe Biden has certainly had an interesting start to his first year in office after being sworn in as the 46th President of the United States on January 20th last year. Here, we look at President Biden’s 12 months at the helm and assess the US under his leadership.
It can be comforting to invest in the world’s largest companies. Such businesses are usually household names, giants in their respective industries, and pay handsome, regular dividends.
A journalist I know recently pointed out that 2021 started off with talk of the ‘Roaring Twenties’ but ended with fears of raging inflation.
January is the month of the year when we all think about getting back into shape. We exercise more, try to lose some of the weight gained at Christmas, and maybe even start some other good habits that we optimistically put on our list of new year resolutions.
Christmas is all about spending quality time with family - and what better way to pass some time than a twist on Pictionary? Here are ten hints in the form of emojis. All you have to do is guess the Christmas songs. Enjoy!
Young children aren’t alone in wanting Santa Claus to arrive this year – investors are also keeping their fingers firmly crossed that he’ll make an appearance.
The temperature has dropped, and Christmas is officially ‘just round the corner’. But following COP26, I find myself trying striving for a more sustainable Christmas – using less plastic, producing less waste, and doing more recycling.
Amazon put the cat amongst the pigeons last week, when it told UK customers it would no longer accept Visa credit card payments from January next year due to high fees.
The 2021 United Nations Climate Change Conference - COP26 – is currently taking place in Glasgow. The renewed focus on tackling climate change is expected to spur people on to call into question how they live, shop, and even invest.
Putting your money into young, ambitious businesses, early in their development can be hugely lucrative over the longer-term.
Energy prices have sky-rocketed across Europe. Here in the UK, the price of natural gas is four times what it was at the beginning of the year and, at one point this month, it was 85% higher than the last record high posted in 2008.
UK businesses have one main wish on this year’s Christmas list: for there to be enough lorry drivers to transport goods to customers across the country.
The Cazoo St Leger Day is back at Doncaster this weekend. The oldest of Britain’s five horse-racing Classics, and the last of the five to be run each year, it marks the end of the summer sporting social calendar… and the day some market timers reinvest.
In good news for income investors, global dividends continued to rise in the second quarter of 2021, with analysts predicting that dividend payouts will return to pre-Covid levels within the next 12 months.
The Nasdaq turned 50 earlier this year. Launched on 8 February 1971 - at a starting level of 100 points - it was the first stock market in the world to trade electronically, as opposed to people dealing from a trading floor in a physical location.
The sixth report from the Intergovernmental Panel on Climate Change (IPCC) this month made sombre reading, with the UN Secretary-General saying he viewed the report as a “code red for humanity”.
Strategic bond funds have grown in popularity over the past decade. Back in May 2011 there was £21 billion invested in the sector. Today the figure has doubled to £42 billion*, as investors who appreciate the benefits of taking a flexible approach to fixed income have flocked to the sector.
When we talk about famous investors, the first name that comes to mind is probably Warren Buffet. Known as the sage of Omaha, Buffet is one of the richest men in the world, but what has been key to his success?
After almost 18 gruelling months, endless rule changes, lockdowns, vaccinations, hopes and setbacks, most legal restrictions to combat COVID-19 have finally been removed the week.
The 2020 Olympics Games will finally open in Tokyo on Friday. 12 months later than planned, with no spectators and athletes testing positive for Covid - they will be far different to the spectacular we have come to anticipate.
Americans celebrated Independence Day at the weekend, with parades, music, BBQs, fireworks and national holiday today. Investors in the US stock market have also had reason to be cheerful: the S&P 500 has returned 346.7%* over the past decade, led in the main by the giant tech stocks.
Emerging market countries account for almost 80% of the world’s population, 60% of global GDP and the majority of its incremental growth*. They also have favourable demographics - younger populations that are likely to be at the forefront of internet-driven transformation within various industries.
After a 12-month delay due to the global pandemic, Euro 2021 will finally get under way this Friday when Italy and Turkey kick things off in Rome. This football fan could not be happier.
My American Express card is once again incentivising me to shop small and shop local. Available in-store only, I can get £5 back if I spend £15 or more up to five times until the end of June.
This summer, the UK is poised for its fastest period of economic growth since the Second World War. As Britain emerges from lockdown it is anticipated consumers will start to spend the money they have saved over the past 12 months or so and economic activity will rebound sharply.
The hardest part about investing for children is probably finding the spare cash in the first place. After the bills have been paid and we’ve saved for our own futures, there is often not a lot left over. But building a nest egg for your children could be easier than you think.
In the world of investments, nothing is guaranteed and, unfortunately, the value of our holdings can go down as well as up. As we say time and again, all fund managers – no matter how good they are – will go through a period of underperformance.
“Ten years from now I think we will look back on COVID as our generation’s ‘Pearl Harbor moment’ – a period when extreme adversity spurs innovation and behavioural changes to help address some of the era’s biggest problems.
Having been in the eye of the storm last year, as lockdowns globally weighed heavily on demand, commodities are back in vogue.
After more than a decade in the doldrums, the past few months have breathed a new lease of life into value investing, as the vaccine bounce and a Brexit agreement have resulted in an upturn in performance.
If you are finding it hard to decide where to invest your money this ISA season, you are probably not alone. Decision making can be difficult and fraught with consequences at the best of times, but it appears lockdown has also made our decision-making worse than usual.
With just over a week left until the end of this tax year, there are no doubt a few last-minute ISA investors wondering where to invest their allowance and looking for inspiration.
As the global economy emerges from the pandemic, a greener future awaits. Governments around the world have committed to ‘building back better’, with plans in place to accelerate the adoption of electric vehicles, the transition to cleaner energy and more energy-efficient homes and offices.
For the first time in more than a year, professional investors do not consider the Coronavirus to be the biggest risk to global markets.
Having plummeted more than 25%* in the space of just a month, the world’s stocks markets – panicked by the onset of the global pandemic - bottomed on the 23 March 2020.
Usually, when we’re talking about a core, we’re discussing apples or a hard workout at the gym. But when it comes to our investments, the core is the base upon which our portfolio is built - those assets and investments that are considered fundamental to generating our long-term positive returns. They will tend to be steady eddies that won’t give us any nasty surprises.
It’s quite an interesting exercise when you type ‘Why invest in an ISA in 2021?’ into your computer’s search engine.
When it comes to our investments it’s often tempting to pick the most popular option – after all, if a fund has billions of assets under management, it must be doing something right.
It’s International Women’s Day on 8 March 2021. And what better time than to highlight the financial inequalities faced by the fairer sex – and to offer some practical tips on how to overcome them?
With interest rates still close to zero, bond yields low, and dividends having been cut by more than a third in some countries over the past year, income investors are no doubt wondering where to turn as we near the end of the tax year.
The Japanese stock market climbed above 30,000 last week. Although it remains well below its all-time high of 38,597, it was, nevertheless, a psychological milestone not breached by the Nikkei 225 in more than three decades.
There’s a lot of bubble talk at the moment. The US stock market is at an all-time high and climbing higher, stocks such as Tesla have been going crazy, there’s been a frenzy of small investors buying stocks based on social media hype on sites such as Reddit, and Bitcoin is close to $40,000 again – up four-fold in a year.
In rather bleak news last week, the latest UK Dividend Monitor from Link Group suggested that UK dividends may not regain previous highs until 2025 at the very earliest. Eight years of growth was wiped off UK dividends in 2020, with two thirds of companies cancelling or cutting their dividends in response to the pandemic lockdowns*.
For income investors, finding a decent yield has become harder and harder over the past decade. After the global financial crisis, when interest rates were slashed, cash savings accounts fell from paying over 5% to 0% in many cases. Even the best fixed rate Cash ISAs are paying less than 1% today*.
I’ve been working in the investment industry for more years than I care to remember, but I’m constantly learning – it’s why I love my job so much.
The so-called “January effect” is the idea that January is usually a good month for investing. First noted in 1942 by the investment banker, Sidney Wachtel, it wasn’t until the 1970s and 1980s that it really came to prominence, with a raft of academic research papers written attempting to analyse this apparent anomaly and why it may exist.
After the roller coaster ride of 2020, the question on many investors’ minds is what could 2021 hold in store?
As 2020 draws to a close, *Darius McDermott, managing director of Chelsea Financial Services*, takes a look at which funds and sectors are likely to find themselves on Santa’s nice list, and which are well and truly on the naughty list:
“In the school playground of global markets, UK equities can be found sitting forlorn and friendless at one end of a seesaw.” – Andrew Williams, Schroders
Since moving to London in 2014, I’ll admit I’ve made the most of everything there is to do here - theatres, cinemas, landmarks, pubs, clubs, museums… I’ve enjoyed them all.
Launched in November 2011 – two years into what was to become the longest bull market in history - Junior ISAs turn nine years old this month.
Infrastructure is all around us. It’s the roads we drive on, the doctor’s surgery we visit and the utilities we use. It’s very much a necessity in modern society - it is essential in guiding our everyday lives and, therefore, economic activity.
Of all Winston Churchill’s famous quotations, one which perhaps gets less airtime, but which is particularly apt today, was his suggestion to “never let a good crisis go to waste”.
Since the vote to leave the EU in June 2016 it’s been one challenge after another for UK companies and, as a result, our stock market has underperformed those of other developed countries.
The first wave of Child Trust Funds (CTFS) and Junior ISAs start to mature this month, potentially gifting teenagers a nice little windfall on their 18th birthdays.
It’s the 19th March 2020. A month ago stock markets had barely noticed the Coronavirus. Now they are in a panic. The world is going into lockdown. The FTSE 100, which had a month earlier been trading at 7,500, is now below 5,000.
After ‘Furnace Friday’ it felt like ‘Melting Monday’ yesterday, as I sat at my desk at home, trying to ignore the heat and get on with some work, whilst thinking longingly of the air-con in our office.
Back in April we asked the question: is now the buying opportunity of the century for bonds? Having spoken to a number of bond fund managers it was clear that the global market sell-off in March had made the asset class look very good value for the first time in many years.
Last week, after five days of intense negotiations, EU leaders finally reached a deal on a €750bn recovery package to reconstruct the region’s pandemic-stricken economies. An agreement on the next seven-year budget, which will be worth over €1 trillion, was also reached.
In the last few months, we have talked about the opportunity in corporate and high yield bonds, but there is one area that has gone under the radar for many investors – emerging market bonds.
2020 hasn’t been the best of years so far. Bushfires, floods, swarms of locust, pandemics, racism and oil spills have all made the headlines. It’s been almost biblical at times and we’re only half-way through.
While global stock markets have enjoyed a bounce back from the March lows, it’s feared that the ‘dividend bear market’ will last a lot longer.
It’s been a strange and worry start to the year - both in personal and stock market terms. But as lockdown starts to ease and the first children return to school, is now the time to also re-start our investments?
At this time of year, we’re usually reminded of the investment adage ‘sell in May and go away, don’t come back til St Leger’s Day.”
According to the American Association of Individual Investors, 30.6% of investors believe the stock market will rise in the next six months – an increase of 5.7% on the week before*.
A couple of weeks ago, when the UK stock market was yielding 6%, we asked if that rate was sustainable, given the number of companies announcing dividend cuts.
There is a train of thought that political, economic and social disasters can accelerate existing trends – trends that may otherwise have taken years to really take off.
It’s been an exciting couple of months in global stock markets – if cliff jumping or taking on the world’s largest water slides are your entertainment of choice.
‘Thanks’ to the stock market crash, the FTSE 100 is yielding almost 6% today*. That’s almost 60 times the Bank of England base rate and considerably higher than returns on cash.
It’s the last week of the tax year and, for those who have yet to use this year’s ISA allowance, it’s a case of ‘use it or lose it’.
Despite being the epicentre of the pandemic, the Chinese stock market has fallen very little year to date: it is down just 4.4%* compared with -12.8%* for the wider Asia ex Japan market and a shocking -31.7%* for the UK.
“Don’t Panic!” was the famous phrase of Lance Corporal Jones from the 1970s BBC Comedy ‘Dad’s Army’, set in World War II. The past few weeks have certainly given investors plenty of reasons to panic, as the Coronavirus has spread exponentially, and stock markets - reflecting the likelihood of a significant hit to global economic activity over the coming weeks and months - have seen massive declines.
The events of the past few weeks have given investors plenty of reasons to be fearful. Gone (but not forgotten) are the fears over Brexit and Trade Wars - and instead we have worries about the impact of the Coronavirus, both socially and on the global economic system.
Well, what a week that was! Global stock markets - likened to ‘Teflon’ just seven days previously, due to their ability not to let any worries stick to them – finally succumbed to the Coronavirus.
It may be hard to believe, but there was once a time when you could get an attractive yield of 4%+ from cash savings or government bond investments.
The demise of Woodford Investment Management was one the most surprising and saddest stories of 2019. Neil Woodford and the funds he managed were the bedrock of many investor portfolios for more than three decades. But a prolonged period of underperformance in recent years led to significant outflows and, subsequently, trouble for the fund manager when it came to trading an increasingly large proportion of illiquid stocks in the LF Woodford Equity Income portfolio. The result was a suspension of the fund in June last year and its closure in October.
Investors have fallen out of love with European equities, having seen returns blighted in the past decade by the Sovereign Debt Crisis and, more recently, trade wars, Brexit and the rise of populism.
As recently as ten years ago, the environment didn’t even register in the top risks for discussion at the World Economic Forum. But at Davos last week, climate change and responsible investing dominated discussions. ‘How to save the planet’ was one of the topics and speakers included teenage environmental activist Greta Thunberg and outgoing Bank of England Governor Mark Carney - who is due to take up a new role as UN special envoy for climate action and finance.
It is almost impossible to talk about Asia today, without mentioning trade wars. And, while some progress has been made, China posses such a threat to America’s dominance on the world stage, that any permanent resolution is unlikely to be found this year, or even next.
Globally, 2020 is likely to be dominated by the US presidential elections – and Trump’s actions, tweets and statements during the campaign. In the UK it will once again be Brexit.
I’m not sure where the past 20 years have gone. But here we are, just days away from the end of the second decade of the millennium. And it’s been eventful in the investment world.
I celebrated my first Thanksgiving Day this weekend. Courtesy of an American colleague, I got to sample a Turkey (one of some 45 million that are eaten by Americans on Thanksgiving day alone*), sweet potato and marshmallow mash, cornbread, cinnamon glazed carrots and homemade stuffing… followed by pumpkin pie and apple pie.
Inspired by an Invesco advent calendar we received last week, which suggests the ‘percentage feeling of festivity’ is directly correlated to the daily progression through December to Christmas Day (and some market statistics from Fidelity), we decided to take a quick look at the probability of a Santa Claus rally this year.
Many company CEOs and boards of directors today are exposed to asymmetric profiles: they can achieve psychological and financial greatness if they succeed, but if they fail, their downside is limited with the company’s shareholders, employees and even customers bearing the economic pain. Just look at all the golden parachutes ‘failed’ management has received in recent years.
If we’re completely honest it’s not the clearest of pictures out there for investors as a general election looms, Brexit is still unresolved and trade wars rage.
We thought we may finally be heading for some sort of resolution to the Brexit Saga this weekend. But Super Saturday turned into Setback Saturday and we still have no agreement.
It’s been a tail of doom and gloom on the UK high street for a number of years now. Since 2008 we’ve seen household names like Woolworths, Comet, JJB Sports, Barratts, Blockbuster, BHS, Maplin, Poundland and Toys R Us all become a thing of the past. Thomas Cook looks set to join the list following its recent collapse. Other retailers such as Top Shop owner Arcadia, Monsoon, New Look and Homebase have been forced to seek legal agreements with their landlords to shut stores and slash rent to prevent them becoming insolvent.
Active fund management (where fund managers pick which stocks or assets they will invest in) has come under increasing pressure in the past few years, as an historic decade-long bull market has seen stock markets race higher, while passive funds (those that track a stock market index) have had their own race to the bottom in terms of fees.
Finding a good investment idea at the moment is hard – mainly because, in the short-term, there is so much uncertainty. From the possibility of a hard Brexit to a last-minute deal with the EU, a possible general election, signs of a recession… and that's just here in the UK. Internationally we have trade wars, currency wars… the list goes on.
While this summer feels like it has been a turbulent one, asset classes around the world have held up remarkably well. So much so that investors following the St Leger's day adage, who sold their investments in May, would have missed out on positive returns almost across the board.
For the past 35 years, London Fashion Week – which takes place from 13-17 September - has been the definitive exhibition of British style, with more than 250 designers showcasing their creativity to a global audience of influential media and retailers.
According to the latest Janus Henderson Global Dividend Index* there is both good news and bad news for income investors. The good news is that the total amount of dividends paid to global shareholders reached a new high during the three months of April to June 2019. The bad news is that rate of increase (1.1%) was the slowest for more than two years.
It's August and, between holidays, weekends can often be taken up with weddings. This year, Chelsea has had a wedding of its own: last week, Sarah, our colleague, exchanged vows.
We seem to have been 'late cycle' since 2016, but it has been a long and slow recovery from the global financial crisis and the bull market (now the longest since World War II) has been very unloved – investors have had little faith in it since the word go. So questions about how long it can last have been raised for some time.
One million plastic bottles are bought every minute globally. In Europe, a total 58 million tonnes of plastic is used each year – 40% of which is packing. But only 30% is recycled. Indeed, since the invention of plastic, some nine billion tonnes have been produced globally, but almost seven billion has become waste.
With more than 3,000 funds to choose from in the UK, investors have to make a number of key decisions to narrow the field and make appropriate investment choices.
The UK stock market has been out of favour for some time. As Brexit uncertainty has weighed on the minds of both overseas and domestic investors, our companies and our UK equity funds have been shunned in favour of global options.
The first half of 2019 has generally been a positive one for investors, with every fund sector reporting positive returns on average*.
Next week marks the third anniversary of the EU referendum and the Brexit vote.
Neil Woodford is probably about as close to a household name as you get when it comes to investments. Over more than three decades, he has produced good returns and has a loyal following. However, over the past couple of years, the performance of his flagship Woodford Equity Income fund has been disappointing and, over the past 12 months, the value of the fund has fallen about 18%*.
When Vodafone cut its dividend last week we were reminded once again of the danger of investing in a single company, simply because it has a high dividend yield.
The main reason for investing is to earn sufficient returns to meet your financial goals. These returns will be dictated by a number of factors, but principally by your investment horizon; the risk you are willing to take; your ability to stick to your investment plan; and, finally, your asset allocation.
When Prince Harry spoke to the world's press on Monday afternoon, he could not hide his happiness at becoming a father for the first time. Beaming from ear to ear, he described his elation... before his brother then teased him about becoming part of the 'sleep deprivation society that is parenting'.
Investing in bonds is back on the radar, as a spate of central banks across the world have recently brought an end to the era of rising interest rates - before it even truly got started.
This week marks the anniversary of William Shakespeare's birth (26 April 1564) and death (23 April 1616).
Once a very popular region with investors, Asia has fallen somewhat under the radar in recent years. Hindered by worries of China's slowing growth and possible trade wars with the US, sentiment has been hit and, along with it, investment flows into Asian equity funds.
Whether you’re worried about stock markets or the economic environment, are new to investing, or don't have a lot of spare cash, investing a lump sum can be daunting. After all, no one wants to invest a large amount of money, only to see it fall in value the next day.
It’s the final week of the 2018/19 ISA season which means you only have a few days left to make use of the £20,000 tax allowance.
I'm not sure whether it was the images from last year's Blue Planet 2, or the frightening statistics I see in my research, but I've found myself wanting to make some life changes this year and do 'my bit' to cut down on the waste I generate.
There are 195 countries in the world. While it only took Phileas Fogg 80 days to make the global trip, in reality it would probably take significantly longer and would depend on how long you'd like to spend in each nation. One day per country would equate to just over six months; one week in each would take 3.7 years; a month would take 16 years – and is possibly a very nice retirement plan.
With only two weeks to go until the end of the tax year, time is running for those who are yet to make a decision on what to do with their £20,000 ISA allowance. To get some ideas, we asked the experts at Chelsea how they have positioned their ISAs this tax year and where they believe the opportunities for growth may lie.
20 March 2019 is the first day of spring. It's also just two and a half weeks from the end of this tax year. So what better time than now to spring clean your investments – especially if you have yet to make a choice as to where you will be allocating this year's ISA or pensions allowance?
In 1919, Stanley Baldwin, then Financial Secretary to the Treasury and future Prime Minister, wrote a letter in the Times newspaper. In it, he called on the rich to make donations to help pay off the national debt accumulated during the first World War.
A recent report from the International Monetary Fund* says the global economy is set to grow at a modest 3.5% in 2019 (down from 3.7 last year). However, when we look closer, we can see that almost all of this growth is set to come from emerging economies with the financial institution forecasting growth of 4.5% for them compared to only 2% for the developed world.
by Stuart Rhodes, manager of M&G Global Dividend fund
The ISA is twenty years old this year. I know, time flies, right?
We've had the Golden Globes, the Grammys, the BAFTAs and the Brits. Now the film industry is gearing up for its biggest night of the year - the Oscars.
When it comes to dividend payments, the UK has a strong heritage: not only are our companies committed to paying them, but investors also understand their importance. And we've recently a great example of their power.
The last decade has been a challenging one for income investors, especially those who prefer not to take too much risk with their money.
LF Lindsell Train UK Equity is the most consistent fund of the past decade*. The fund, run by Nick Train, has beaten its peer group sector average in each of the past 10 calendar years.
In 1969 the 50p coin replaced the 10 bob note, as part of the decimalisation of the UK currency.
We can only surmise what may happen in the coming weeks, as the UK fast approaches the date we leave the European Union. No one knows exactly what may happen, but as long as you have a diversified portfolio, any big movements one way or another in the pound or the UK stock market should be tempered to a degree.
Having threatened to quit TV if he won 'I'm a celebrity' recently, many Noel Edmunds fans were no doubt relieved he made an early exit – perhaps even voted him off in an effort to keep him on our screens.
2018 turned out to be a roller-coaster year. The FTSE 100 began January at a level of 7,648 before falling below 7,000 in March. It then soldiered on, shrugging off everything else that was thrown at it (a little like Theresa May, one might say) and reached an all-time high in May of 7,877. At the time of writing it has fallen to 6,744*.
Father Christmas, like the rest of us, is obviously very busy with last minute preparations - a 'Santa Rally' this December is yet to be seen. The adage, which suggests stocks markets generally rise in the build up to Christmas, as people are in better moods and more positive, is either late or not going to happen this year: the FTSE 100 is down 2.89%* since the start of December and the S&P 500 has fallen by 4.56%*. Asset classes around the world have, overall, disappointed in 2018. Of the 37 different sectors for funds only a handful have made any profits: technology & telecommunications (7.5%**), North American and North American Smaller Companies (5.6%** and 3.7**), property (up to 4.3%** depending on whether it's direct or 'other'), UK gilts (1.24%** for those linked to inflation and 0.28%** for those not linked) and cash (0.4%**). Every other sector is in negative territory.
With just three weeks to go until Christmas, and a growing feeling of panic about what to certain relatives, we thought it would be fun to see which Christmas-related stocks some of our favourite fund managers have in their portfolios:
Stock markets move in a series of highs and lows over the years – hopefully with the more of the former than the latter. But trying to time the peaks and troughs is impossible. As I've said many times before, if timing the market was possible, we'd all be very rich and have retired long ago!
As we all know, the value of our investments can go down as well as up – and October was a sharp reminder of this. Of the 37 different fund sectors listed, only eight managed to stay in positive territory*.
Investors could be forgiven for feeling nervous after the events of the past few weeks. Stock markets across the world nosedived, following a relatively benign summer; the UK’s FTSE 100 index is down 6% so far in October, while the S&P 500 has fallen 5.5% in sterling terms.*
"UK Labour not ruling out remain in Brexit vote”, “Flights could cease between UK and EU”, “BMW to shut Mini plant for month post-Brexit”, “Carney makes property crash warning”. That's just some of the Brexit headlines from the past couple of weeks. As the pressure increases on Theresa May and her negotiators and the deadline gets ever closer, there are bound to be more.
It has now been ten years since Lehman's Brothers was allowed to fail. It has been even longer since the UK government had to bail out Northern Rock; an event which led to people queueing on the streets trying to frantically draw out money and worrying whether our economy would ever return to normal.
Shoppers will know that this year has been another terrible one for our high streets with the likes of Toys R Us and Maplin going out of business, and a rescue deal for House of Fraser.
We're now in the throes of the US earnings season: when hundreds of publicly-traded companies release their financial statements for the second quarter of the year. Details of their earnings, expenses and net profits are reviewed by fund managers, analysts and investors and portfolios are adjusted on the findings.
Technology and US equity funds have dominated the best performers in the first half of 2018, while Latin American equity funds have languished at the bottom of the pile.
This coming Sunday will mark two years since the EU referendum, when 52% of the UK population voted to leave the bloc. Everyone knows that markets don't like uncertainty and, in the first few days following the result, UK equities plummeted.
As in every walk of life, fund managers sometimes change role within the same company, change company, take a career break or change career entirely.
In almost every fund update or piece of commentary, there are a handful of market themes which stubbornly rear their heads.
I’m sure we’d all like to think we are balanced and rational investors. In reality, though, as in every walk of life, we are susceptible to behavioural biases that can, at times, influence our decision-making.
When plastic and financial services are discussed in the same breath, we often presume the conversation is about credit cards. But, as the war on plastics intensifies, pollution, waste management and other environmental and social issues are becoming more integral in the investment discussion.
When it comes to fund management, experience can be key – especially when it comes to investing throughout a market cycle. However, the number of funds that have been run successfully by the same manager for a decade or more are few and far between because, as in all work places, fund managers move between jobs and companies.
Making a decision can be difficult and fraught with consequences: which school to apply to for your children, where to go on holiday, which energy provider to switch to... Sometimes the difficulty is down to simply having too many options; sometimes there is no obvious answer and the pros and cons of each option balance each other out.
It's not often the tax man gives us money – or at least doesn't take it – and one of the most generous allowances we receive is that of the ISA. Here are four reasons why we think making the most of this tax-wrapper is a no-brainer:
If you're looking for some ideas on how to generate attractive level of income from your investments, the good news is that there is plenty of choice: from UK dividend paying companies right through to emerging market governments bonds, there is bound to be a fund out there that fits the bill. To make life easier, we've identified four funds which, between them, offer a variety of different income streams.
Sometimes it can be hard to decide where to invest an ISA allowance, particularly if time is running out and the end of the tax year is fast approaching. To get some ideas, we asked the experts at Chelsea how they have positioned their ISAs this tax year and where they are seeing the best opportunities.
With the 5 April end-of-tax-year deadline fast approaching, we look at three different options for those investors still undecided about where to invest this year's allowance:
Leaving things to the last minute is not unusual. Whether it is homework, dissertations, tax returns or topping up your ISA, most of us are guilty of procrastinating in some area of our life and then having to do important things in a rush.
2018 hasn't been great for British companies. Having hit an all-time high in January, the UK stock market has fallen some 10% in the past few weeks, having failed to bounce back from the global stock market correction in early February.
“The new VT Chelsea Managed funds are proving to be the hot favourites this ISA season,” comments Darius McDermott, managing director of Chelsea Financial Services.
A secure financial future can sometimes feel impossible to achieve. But, believe it or not, a couple could become ISA millionaires in just over 16 years.
Over the past decade, exceptionally low interest rates have forced many cash savers into the stock market in the search for a better return. For those needing a decent level of income today, funds with high yields can be a good option. However, for those investing for the longer term, funds that can consistently grow their dividends could be a better alternative. This is because if you can invest in a fund providing meaningful dividend growth, your spending power, and therefore standard of living, should increase in the future – it allows you to keep pace with inflation.
President Trump is once again creating waves - and another vacancy at the White House. Gary Cohn, his top economic adviser, resigned this week having been unable to persuade Trump against imposing import tariffs of 25% and 10% on steel and aluminium, respectively.
When it comes to earning an income from your investments, there are various options you can consider. Firstly, you can look at the different asset classes that yield an income. Then you can look at whether you want to your income to be at a high level or whether you prefer it to be growing. Different investors will have different priorities.
27 February is 'no-brainer' day. It has been observed since 1996 and, as you'd expect, it's a day for doing things that are easy and obvious.
Dividend payments around the world soared in 2017, with 11 out of 41 countries breaking records, according to the latest Global Dividend Index report from Janus Henderson. A huge $1.252 trillion was paid out to global shareholders last year, with underlying growth of 6.8%* and every region of the globe seeing dividends increase on aggregate.
Volatility is back. After more than a year of calm in stock markets, last week was anything but. The FTSE 100 is back where it was in May of last year while the S&P 500 wiped out all its gains since December.
Every investor should know that their capital is at risk – after all, there is no such thing as a free lunch. Another cliché which lends itself to investing is that whatever goes up must come down, and this is certainly true when it comes to stock markets.
Just three weeks ago, the headlines were all about the US stock market hitting record highs. Having already been in an upward trajectory for almost nine years, the Dow Jones Industrial Index took just seven days to rocket from 25,000 to 26,000.
We are now just over a week away from the dreaded self-assessment tax return deadline which, combined with January blues, can make us feel as far away as ever from last month's festive cheer.
Sebastian O'Hara, operations assistant, Chelsea Financial Services
18 months ago, in the immediate aftermath of the Brexit referendum, property funds went through a very difficult time. Investors, worried about the uncertain future, withdrew their money in droves and many funds had to temporarily cease trading.
Hopping on the scales in the first week of the new year is no-one’s favourite task but the January weigh in is an opportunity to reassess more than your exercise and diet plan. When was the last time you ran a health check on your portfolio?
It's that time of the year again. The fairy lights have been arduously untangled, Michael Buble's dulcet tones are resonating throughout every single shopping centre in the UK and clothes which fitted perfectly just a couple of months ago are suddenly feeling snug.
In today's Autumn Budget, Philip Hammond, Chancellor of the Exchequer, declared that the world was on the brink of a technical revolution, with Britain at the forefront.
The Autumn Budget is now just a week away. Whether it's the excitement of playing along to 'buzzword bingo', guessing the colour of the Chancellor's tie, or you want to know whether filling up the car or going to the pub is going to cost you more... it’s one of the most highly-anticipated events of the year for anyone genuinely interested in their finances.
Inflation rose to its highest level in five years last month. At 3%* it was a whole percentage point higher than the Bank of England's target rate of 2%.
I recently learnt that the first day of Diwali, the Hindu festival of lights, is dedicated to celebrating prosperity. This is an official holiday in India, where I think they have good cause for celebration. Despite the impact of de-monetisation and the introduction of the Goods and Services Tax (GST), which have both had a short-term negative impact on GDP, India remains one of the fastest-growing major economies.
If your children use Instagram or 'follow' the famous in some way, you'll no doubt be aware that 'grillz' are a bit of a craze amongst celebrities. Justin Bieber recently splashed out $15,000 on a pair: 'rose gold adornments, studded with light pink sapphires' – or teeth braces to you and me.
Investment processes – important as they are – can be very dull and repetitive. Indeed, if I had a pound for every time I'd heard a fund manager describe themselves as 'bottom-up contrarian' or a 'pure growth stock-picker' I'd have likely retired by now and be sitting on a beach somewhere sipping a cocktail, rather than writing this blog on a grey day in Fulham.
First impressions can be deceiving. Looking at the table below, investors could be disappointed at the performance of the UK stock market in recent history – particularly over three and ten years.
Despite appeals from foreign leaders, the CEOs of some of the world's largest companies (including Exxon, Apple, Alphabet and Tesla), and even his own children, President Trump decided to walk away from the Paris Climate Change Agreement last month.
Brexit negotiations begin this week, almost exactly a year to the day since the UK voted to leave the European Union.
You think we’d be used to surprise political outcomes by now, but I don’t believe anyone looking at the polls six weeks ago when Theresa May called a snap election expected today’s result.
On 5th March 2009, the Bank of England moved interest rates to 'emergency levels' and began quantitative easing in the UK. In what was the sixth cut in six months, the Bank of England base rate had fallen from 5% to 0.5% - its lowest level since the central bank was founded in 1964.
After more than 20 years of stagnant growth and deflation, the Japanese economy has now experienced its longest period of expansion in more than a decade*.
Last Friday, 21 April 2017, Chelsea's staff hosted a 24-hour dart-a-thon for CASCAID - an asset management industry charity initiative to raise £1m for Cancer Research UK in 2017.
I'll admit that I'm not new to the concept of accessorising, but having just spent the past couple of weekends looking for a new car with my husband, I have to say I hadn't realised it extended to automotives. Who knew that BMW has partnered with Montblanc to make the “'next generation in luxury wearable technology”? Certainly not me. Apparently having a stylish key you can wear on your wrist that will open car doors and start the engine for you is a good reason to pick the new 5 series! I think not. I just need a bigger boot.
We live in an increasingly unpredictable and changing world. Last year in particular was full of surprises and, as one fund manager pointed out recently, if you are participating in a pub quiz in 10 years’ time and are stuck for an answer, just shout out '2016’ and there will be a decent chance that you get the question right.
According to the Office of National Statistics, consumer price inflation (CPI) rose to 1.6% in November 2016, its highest level since July 2014. Although this is still below the Bank of England's 2% target (the level they think is a sign of a healthy, growing economy), it suggests that inflation is finally starting to make a come back.
According to the Office of National Statistics, consumer price inflation (CPI) rose to 1.6% in November 2016, its highest level since July 2014. Although this is still below the Bank of England's 2% target (the level they think is a sign of a healthy, growing economy), it suggests that inflation is finally starting to make a come back.
The festive season is well and truly upon us and my childrens' Father Christmas list had been growing at an exponential rate, so I'm rather glad that it has now been posted. On the whole they've been nice this year, so Christmas morning should be fun.
At this time of year we are usually asked to give our 'outlook' for investments over the coming 12 months. Most years there is at least one area that seems to stand-out as having some potential.
You may have seen the news last week that OPEC (Organisation of the Petroleum Exporting Countries) members have agreed to reduce their oil production for at least the first six months of 2017. Unexpectedly, non-OPEC oil producers such as Russia have also agreed to lower targets. So will this mean a higher oil price in 2017?
As the Junior ISA celebrates its 5th anniversary, we asked around at the Chelsea offices to see what's popular among our staff:
I'm lucky enough to be going to the O2 this weekend to watch the boxing match between Kell Brook and Gennady Golovkin. Hopefully it will be a good fight, with no fewer than three titles up for grabs.
As parents around the country make last minute trips to the shops, spending what seems like a small fortune on new school shoes, uniform and stationery, ahead of the return to classrooms next week, it's perhaps sobering to consider that by the end of their education, many children will have debts of £44,0001
Our investment portfolios can, and should, change a lot over time. When we are younger we can afford to take more risk. After all, we have decades in which to save and time to recover from any stock market crashes. As we get older and start approaching our retirement, we then start to 'de-risk' as we can't take as many chances with our money. But what does de-risking actually mean and how should we go about it?
We're definitely at the pointy end of the Brexit debate. Bookies have the odds at around a 70%‒80% chance we'll remain in the European Union, although the polls are closer on whether we stay or split.
Uncertainty over China has put some people off Asia in recent years, but long-term investors ignore the region at their peril. In my view, recurring themes of young populations, growing middle classes and well-educated masses make the potential returns worth a bit of extra risk.
The US remains the world’s single largest economy. Indeed, at the end of 2014 its nominal gross domestic product (GDP) was more than US$17.4 trillion, according to the World Bank. That’s more than the total GDP of France, Germany, Japan and the UK put together.
The oil price is something most of us probably only ever think about as we're filling up the car. Figures of US$30, $40 or $50 a barrel on the nightly news are all well and good, but it's the 102, 105, 108 pence per litre at the pump that really gets our attention.
The arrival of the new Lifetime ISA in April 2017 seems likely to be a harbinger of wider change in the UK’s approach to long-term, and indeed retirement, saving. The creation of the new ISA has been widely acclaimed by the popular press, but will it do more harm than good as it seems poised to impact on existing policies, such as Automatic Enrolment into pension saving?
Having peaked at 7,103 on 27th April 2015, the FTSE 100, the leading UK share index, fell as low as 5,536 earlier this month – a drop of 22%. It has since risen slightly and, at the time of writing, is around the 6,000 mark.
This time last year, the price of oil had fallen to a six-year low, Europe was having deflation issues, the UK government was trying to woo voters and Aberdeen was the worst offending company in the Chelsea RedZone – our regular review of the most consistently underperforming funds – with 10 funds on the list.
The hunt for income is on. Dividend sustainability at some of the largest firms on the FTSE 100 is in doubt as profits waver and future revenue streams remain unclear, also sending share prices tumbling.
Last week, the price of a barrel of oil fell below $30 – a fall of almost 80% from its peak of $147 in July 2008, with most of the fall coming in the past 18 months. Some analysts have suggested it could fall as low as $10 per barrel, at which point oil would become cheaper than some bottled water!
Hopping on the scales in the first week of the new year is no-one’s favourite task but the January weigh-in is an opportunity to reassess more than your exercise and diet plan. When was the last time you ran a health check on your portfolio?
2015 wasn't a great year for investments. Despite the UK stock markets hitting an all-time high in April, the FTSE 100 ended the year almost flat. Other develop markets fared a bit better, but emerging markets continued their downward path, losing almost 10%. Bonds, on average, made nothing either*. Can we expect a better 2016? Personally I'm quite cautious and think the year could be just as volatile. In no particular order, here are six reasons why:
The US market has been a great place to invest since the financial crisis began in 2008. It has outperformed Europe in six of the past eight years. From 1st Jan 2008 until now, the European market is up just 17.39% compared with a rise of 107.9% in the US. A remarkable difference.
Schroder are seeking shareholder approval to merge the £29m Schroder Japan Alpha Plus fund with the £2.1bn Elite Rated Schroder Tokyo fund.
2016 could be volatile. The US has finally started raising interest rates and the UK could be next. No one expects the four usual 0.25% increases in short succession, which usually mark the start of a rate rise cycle, but markets don't like the unknown and that is what we are facing as quantitative tightening (QT) begins.
The festive season is well and truly upon us and my childrens' Father Christmas list had been growing at an exponential rate, so I'm rather glad that it has now been 'posted'. On the whole they've been nice this year, so Christmas morning should be fun.
You'd think it would be simple, wouldn't you? Identify a long-term trend, invest your money in a company (or companies) that is playing this theme, and sit back and wait for the next 30 years or so. Unfortunately, that's not the case.
Fossil fuel investing, and ultimately divesting, has been national news this year, and, as world leaders convene at the end of this month to discuss climate change, they are likely to gain even more column space.
It's a well-known fact that it's difficult to find a good, actively-managed US equity fund, which consistently outperforms the index. It's even more difficult to find a good US equity fund that produces a decent yield. Most struggle to pay 2%, which is approximately half the amount of many UK equity income funds.
If you are anything like me, you get too many emails every single day and, in a futile attempt to keep on top of them, have a 'to read later' file on your computer. So it's always good when one hits your inbox that has an interesting enough title that it gets read immediately.
I've spoken to a lot of fund managers about China, and the general consensus is that China will be OK, but the contrarian in me can't help feeling a bit uncomfortable that fund managers don't seem more worried. Nobody really wants to consider the possibility that the situation in China might deteriorate. Unemployment in China is never mentioned and, even though many agree the growth data may be exaggerated, I've never even heard anyone consider the possibility of a Chinese recession at some point. There seems to be a natural unconscious tendency to support the view that China is all right, perhaps because the alternative is too discomforting to consider.
In the third and penultimate blog in my mini-series on frontier markets, I will be looking at Vietnam – a country many still think of in terms of its eponymous war with the US in the 1970s, or the destination of choice for 'gap years', rather than as an investment opportunity. However, for many reasons, it is now being dubbed the 'new China' of the Southeast Asia region. So what is drumming up such adulation?
My day job is basically interviewing fund managers, trying to identify the ones I think will do the best for my clients. Without wanting to sound too cocky, I'm not too bad at it either – with the help of the other guys on my research team, the funds chosen for our Core Selection list (the funds we think should be at the heart of people's portfolios) have, on aggregate beaten the benchmark (the IA Flexible sector) by more than 60% over the past 14 years*.
It might come as a surprise to some people that Poland is still considered to be an emerging market, let alone a frontier market. It's the sixth largest economy in Europe, has low levels of public debt and has experienced stable growth throughout the past decade - in spite of the global recession and ongoing eurozone woes. But a frontier market it is.
Well it's been an exciting few days in global stock markets - if rollercoasters are your entertainment of choice, that is. If you're not so keen then you would be forgiven for replacing the word 'exciting' with 'worrying'. It's never nice to see your investments fall in value. Even less so, when they drop by 10% seemingly overnight.
With China imploding, Latin America in heavy decline and Russia seemingly on a path of global exclusion, the emerging market growth of yesterday is looking increasingly unattractive. So where could emerging market managers turn to now? What is the next generation of countries to move into the investment spotlight? In the first of a new series, we look at the next generation of emerging markets and see what opportunities lie ahead for investors hoping to get to the frontier of the investment world.
Since the financial crisis, countries have secretly been trying to devalue their currencies to make their economies more competitive. For a long while China was the punching bag in a secret currency war. The United States, UK, Europe and Japan all engaged in quantitative easing (QE) and devalued their currencies versus China. This helped their economies stay competitive and enabled them to export billions of pounds worth of goods to China. Chinas internal growth was able to absorb the deflationary weakness of the rest of the world for the past few years. Now that’s no longer the case and China is fighting back. A week or so ago, China shocked world markets by devaluing its currency. Stephen King, an economist at HSBC, warns that the Yuan devaluation breaks the last line of global economic defence. 'World authorities have run out of ammunition as rates remain stuck at zero'.*
Investing isn't easy. Even the best fund managers hit bad patches and their investors have had to show immense mental strength in the face of some heavy losses. Despite this, over the long term, funds with certain characteristics can do extremely well.
20th July 2015 - In just over three weeks $3 trillion has been wiped off Chinese stock markets. The horrific collapse follows a 150% gain in the Shanghai composite, after the Chinese government encouraged people to invest in the stock market.
Active management is a way of running a portfolio in order to try to outperform an index or benchmark. It is characterised by relying on a manager's stock-picking skills, believing they have the abilities to identify the best stocks available and generate a higher return from them, thus outperforming a benchmark. These funds often have higher management fees and ongoing charges than passive/index fund managers - those who aim to match the benchmark - in order to justify the more frequent trading and deeper analysis needed.
A guest blog from Malcolm Small, a well-respected expert in the field of Pensions and Investments policy.
In the asset management business there's a lot of competition to attract star fund managers. A fund group will do just about anything to steal a great manager from their rival. This means fund managers often move from one group to another. That's fine if you're the fund manager but it makes it very difficult for investors to keep up. In the past month two star managers have announced they are leaving their existing funds.
Investors are increasingly being encouraged to buy tracker funds which only seek to match a stock index, rather than trying to beat it. Academics and passive investment companies have been pushing the idea that we would all be better off in these funds because of their lower charges. A YouTube documentary, advocating passive investing, now has over a 100,000 hits. The result of this marketing push and lower costs has been a surge in tracker investments. Passive funds now account for 25% of the US market and 11% of the UK market.*
Interest rates are at all time lows and investing for income has never been harder. It wasn't so long ago that you could achieve 6 or 7% in a cash ISA. Today you'll be lucky to get 1.5%.
We have been backing Japanese equities for the past two or three years, since Prime Minister Abe’s “three arrows” of fiscal stimulus, monetary easing and structural reforms began. Arrows one and two have proved effective and, after decades of false dawns, a stimulus-pumped Japanese equity market has finally started to deliver strong returns.
With June seeing the limit on Premium Bonds rising from £40,000 to £50,000, we look at the merits of investing in them and see what sensible alternative investments there are.
The surprise majority win of the conservatives last week has resulted in a number of key roles changing hands. Some have yet to be decided, whilst others are already known. One of which is the appointment of Ros Altmann, a familiar commentator in our industry, and a champion for pensioners, who has been appointed pensions minister.
In today's low interest rate environment, investors need to make maximum use of all available asset classes when they construct their portfolios. One, often under appreciated asset class are convertible bonds. A convertible bond is simply a bond which can potentially be converted to shares.
According to the Office of National Statistics (ONS) one in three children born today will live to be 100. Those readers with a 'glass half full' attitude, or those who are familiar with the eight wonder of the world, compounding, might say that this gives our children longer to save a decent retirement pot.
After assessing many outlooks for 2015, we can say that many of the forecasts for equity market returns for 2015 have been reasonably positive.
Many ordinary people dislike the idea of investing in the stock market and it's not hard to see why. Over the past 15 years we've seen constant negative headlines. We've witnessed two huge market crashes, with the end of the tech bubble in 1999 and the recent financial crisis of 2008. Both resulted in almost a 50% decline in the UK stock market. Every few months we hear of another story of companies blowing up. The latest examples are Tesco, Balfour Beatty and Quindell, and there have also been the Madoff and Enron fraud scandals!
The changes announced in the March budget were good news for investors, and the Savers' Revolution looks set to continue. George Osborne's latest move was to scrap the 55% death duty currently levied on pensions. So, where has this left investors? Should we be putting our money in an ISA or a SIPP? The wrong choice might cost you thousands of pounds, so it's worth researching.
Property has become fashionable once again over the previous 18 months. The once maligned sector, which was characterised by large drawdowns and daily liquidity being suspended, in some cases, during the financial crisis, has two funds in the top 10 for net inflows in the seven months up until the end July of 2014.
Emerging market equities make up an important part of my investments. They’ve offered investors some exceptional returns over the long term, all be it at higher volatility. For the past few years the asset class has struggled, however, as money has flown back to the developed world after the US began tapering its quantitative easing programme. It has done better recently; whilst the UK stock market has been almost flat for the year, emerging markets have returned 10.73% year to date.*
Fund managers have had a bit of a battering recently. Not a single weekend seems to go by without some report or another claiming that actively-managed funds are expensive, fund managers fail to deliver and offer no value for investors.
I wouldn't be a true Brit if I didn't mention the weather in a blog. We complain about it all the time – it's too hot or too cold, too wet or too dry. Whatever it is, it is notoriously difficult to predict and we often get it wrong.
On 26th July 2012, amidst worries about a eurozone breakup and countries being forced to exit the euro, Mario Draghi, president of the European Central Bank (ECB), announced that he would do ‘whatever it would take’ to save the euro.
A study by the Cass Business School recently claimed that just one in a hundred fund managers consistently beat their benchmark. It suggested that investors would be better off investing in passive index trackers, which charge lower fees.
Until recently, the price of crude oil had enjoyed one of its most stable periods, with tensions following the toppling of Gaddafi in 2011 abating and both demand and supply remaining steady in the years following. However, with rise of ISIS in Iraq threatening to push one of the world's biggest oil producers into civil war, the oil price has moved out of its recent trading range and has led to market commentators taking another look at the asset class, both in terms of the oil price itself and oil equities.
On 1st January this year, Obamacare came into effect and, with it, the potential to bring more than 20 million more people into the US healthcare system. At the time, I asked a number of healthcare specialist managers, and more generalist US equity managers, if they thought Obamacare would be the 'cure-all' for the sector.
Just under two years ago, Mario Draghi, President of the European Central Bank, promised he'd do whatever it would take to save the Euro. His words alone seemed to be enough for markets and until now, he has not been tested. Last week, however, he started to make good on his promise.
Opinion on where equity markets are headed is really quite divided at the moment. On the one hand, Richard Buxton of Old Mutual, a very experienced and successful UK equity manager, whom I rate highly, has said he believes we are at the beginning of a long-term bull market. The guys at Neptune are equally bullish.
The hunt for yield is getting even harder for investors seeking income. Any hope that the recovery in the UK economy would encourage the Bank of England to raise rates was blown away last Wednesday as it was made it clear that rates would not rise until next year at the earliest.
There has been some talk in the media in recent months of a “bubble” forming in the high yield end of the bond market. I thought now would be a good time to evaluate the outlook for high yield bonds going forward and what it means for UK investors.
Despite the squeeze on budgets, caused by rising inflation and slow wage growth, consumers have been the major driving force behind Britain's rapid economic recovery. Figures out today (29th April) show that the UK economy has grown by a further 0.8% in the first quarter of this year, fuelled by unexpectedly strong consumer spending in March. While in general this is good news, it has raised concerns that the recovery remains too dependent on unsustainable growth in consumer spending. The recovery needs to broaden out.
The media and Hollywood constantly sell us the idea that investing in smaller companies is dangerous, risky and even foolish – but I think differently.
Investors' obsession with China and Japan has meant many of us have overlooked the potential of the ASEAN region, the association of South East Asian nations, made up of Indonesia, Malaysia, the Philippines, Singapore, Thailand and now also Brunei, Bangladesh, Burma (Myanmar), Cambodia, Laos and Vietnam.
There are now just a few days left to take advantage of your annual ISA allowance (£11,520 investment ISA allowance for 2013/2014). With the paltry rates on offer for cash ISAs, many investors are looking to invest in funds instead.
I'm often asked about China as an investment opportunity. Mainly because its economy has such an impact on both emerging and Asian equities, but also increasingly more on global equities.
ISAs are approaching their 15th anniversary and, over the years, any tweaks to the wrapper have generally been disadvantageous. The 2014 Budget has finally reversed that trend and the ISA has become a formidable tool for savers and investors.
This time last year markets were swooning over the Japanese prime minister, Shinzo Abe's, package of reforms, known as Abenomics. In fact, the Nikkei 225 was the top-performing developed market index in 2013 and, coming into 2014, many market commentators, including Chelsea, tipped the Japanese market for further gains. However, the Nikkei has traded sideways for the last few months and there is now talk that the big asset allocators, such as global macro hedge funds, are starting to lose patience. I thought now would be a good time to re-evaluate the prospects for Japanese equities and analyse what might be the catalyst to push the Japanese market higher.
For much of 2013 the world's big stock markets had a spring in their step, with America's main index, the S&P 500, and Japan's Nikkei 225 leading the way, with gains of 30% and 57%* respectively. However, the story in emerging markets was somewhat different, with the sector posting a loss for the year, and some markets seeing steep declines, with the MSCI Brazil, for example, down more than 20%*.
As Albert Einstein once said, compound interest is the eighth wonder of the world. He who understands it, earns it.... he who doesn't pays it. I couldn't agree more and, in my opinion, it is possibly the most important concept people can learn about when it comes to their finances.
As we head into ISA season, I always think it is interesting to see what our investors are buying. The last couple of years have seen a slight swing away from bonds to equities, but in general, the trend has been pretty similar: UK Equity Income funds have been the most popular, followed by UK All Companies and Strategic Bond, then Asia Pacific ex Japan and Global equity funds making up the top five selling sectors.
The technology sector has always been one of quite rapid change and exciting opportunities. Just 10 years ago, in 2004, many people still didn't have a mobile phone and the thought that within just a few years you would be able to use one for surfing the internet, taking photos and paying bills, was beyond most people's comprehension.
2013 saw the start of a full recovery in the UK housing market. The government has done everything possible to resuscitate the market and last year its efforts finally worked. According to the Nationwide prices rose by 8.4% in 2013, that compared to a 1.1% fall in 2012. Price changes continue to vary widely across the country. London prices rose over 15% last year compared to a rise of just 1.9% in the North of England where the increase was lowest.
With interest rates still at record lows, and tapering in the US set to begin this month, the worries over bonds and rising yields leave income investors in a bit of a quandary: higher yields mean more income but could result in capital losses. So what other options do they have?