eViewpoint | Chelsea Financial Services

VCT season starts early amidst rumours of income tax relief cuts

Rumours are circulating that the government will cut the initial income tax relief available on Venture Capital Trusts (VCTs) from 30% to 20% in its November Budget.

Annual tax allowance check list

Each new tax year we get a set of annual allowances. Many can't be rolled over, hence the widely used term at this time of year: 'use it or lose it'. As we enter the last week of the current tax year, we outline six allowances, so you can check you are making the most of them.

Where we're putting our ISA money

If you're a bit stuck for ideas this ISA season, we've asked our fund research team where they're putting their money.

The Chelsea Selection is a list of around 100 of our top-rated funds.

As regular readers of our Viewpoint magazine will know, we added nine new funds to this list earlier this month.

Autumn Statement 2016

The past few years have seen quite drastic changes to the way we save for retirement, so this statement was a less eventful affair.

VCTs – A year-round investment opportunity

Among other reasons, the tax benefits of investing into a Venture Capital Trust (VCT) have long made them an attractive proposition for investors. These benefits include:

2016 speed-dating event

On 10th August 2016, Chelsea co-hosted its inaugural fund manager speed-dating event. However, it wasn't romance on offer – it was a story! We got a number of trade and national journalists together with eight of our favourite fund managers, and gave them five minutes to get an investment scoop.

2016 Olympics: which funds would feature in track and field events?

The 2016 Olympics kick off tomorrow. Here, we take a light-hearted look at which funds and managers may compete in some of the most popular track and field events:

Have your say on the yield targets of equity income funds

More than 20 funds have been ejected from the IA UK Equity Income sector in recent months, as they have fallen foul of the yield requirements (110% of the yield of the FTSE All Share).

Changes to Cautious Growth and Income EasyISAs

Whilst Henderson UK property is suspended, investors are unable to buy or sell holdings in the fund. So the Chelsea research team has temporarily replaced the Henderson UK Property fund in the Cautious and Income EasyISAs.

Henderson Property fund manager interview

Henderson UK Property fund, along with many other UK commercial property funds, is currently suspended from trading. This means you cannot currently buy or sell units in these funds.

New lead manager for Newton Asian Income

Zoe Kan promoted to lead manager of Newton Asian Income

ECB buys corporate bonds

As Draghi flashes his corporate credit card, which funds have also been buying European corporate bonds?

Five property funds change their pricing

Aberdeen, Henderson, M&G, Standard Life and Threadneedle have all moved their commercial property funds to 'bid' pricing due to a large number of outflows from the sector as a whole. This means that if an investor now wants to redeem their holdings, they will effectively be charged more for doing so. However, the change to bid price does mean a lower entry price for new investors in the funds.

Top selling income funds in the ISA wrapper*

Rank Fund IA Sector 1st CF Woodford Equity Income UK Equity Income 2nd Jupiter Income Trust UK Equity Income 3rd Invesco Perpetual Monthly Income Plus Sterling Strategic Bond 4th Henderson Strategic Bond Sterling Strategic Bond 5th Henderson UK Property Property 6th Standard Life Investment UK Equity Income Unconstrained UK Equity Income 7th Threadneedle UK Equity Alpha Income UK Equity Income 8th Newton Global Income Global Income 9th PFS TwentyFour Dynamic Bond Sterling Strategic Bond 10th Artemis Income UK Equity Income *Top selling funds producing an income amongst Chelsea ISA clients, 1st January to 4th March 2016

Negative interest rates – negative for savers but positive for investors?

In 2015, the talk was all about when interest rates would finally rise. In 2016, however, the direction of central bank policy seems to have gone into reverse and conversation has now turned to negative interest rates.

ISA investments in January

*ISA investors shun bonds in favour of UK & global equities*

Pension tax relief

The face of pensions may once again be changing beyond recognition, with the first checkpoint being less than two months away. On 16th March the chancellor will present the next Budget, when tax relief for higher-rate tax payers looks likely to come under scrutiny.

Chelsea Flower Show Competition Terms & Conditions

*Prize draw terms and conditions* 1. This competition is open to readers of Chelsea Financial Services monthly newsletter. Entrants must be residents of the UK, Channel Islands, Isle of Man and Republic of Ireland aged 18 years or over. Employees of Chelsea Financial Services, their families or anyone else associated with this competition are not eligible to take part. 2. All information detailing how to enter this competition forms part of these terms and conditions. It is a condition of entry that all rules are accepted as final and that the competitor agrees to abide by these rules. The decision of the judges is final and no correspondence will be entered into. Submission of an entry will be taken to mean acceptance of these terms and conditions. 3. Entries should be submitted by email only. Entrants should include their own name, address, telephone number. Entries will not be returned. 4. All entries must be received by 12:00 hours on 17th May 2017. The draw will take place on that afternoon. 5. Only one entry per person. Late, illegible, incomplete or defaced entries will not be accepted. No responsibility can be accepted for lost entries and proof of sending will not be accepted as proof of receipt. 6. The winner will be notified on 17th May 2017, using the details they have provided on their competition entry. 7. One entrant shall win two tickets to the Chelsea Flower Show on Friday 26th May 2017 and up to £100 towards expenses. 8. The winner may be required to take part in publicity, and agrees to have their name and county published on both Chelsea Financial Services website and in a future issue of the newsletter. 9. The winner’s name and county may be disclosed to anyone who writes within one month after the published closing date, stating the date of publication and enclosing a stamped addressed envelope addressed to Chelsea Financial Services, St. James Hall, Moore Park Road London SW6 2JS. 10. The prize as described is available on the date of publication. The prize is non transferable and there is no cash alternative. 11. Events may occur that render the competition itself or the awarding of the prize impossible, due to reasons beyond the control of the Promoter. Accordingly the Promoter may, at its absolute discretion vary or amend the promotion and the entrant agrees that no liability shall attach to the Promoter as a result thereof. 12. English law applies and the exclusive jurisdiction of the English Courts shall prevail.

Stewart Investors fund manager changes

A number of Stewart Investors funds (previously branded First State) had a change of lead manager announced this week.

Octopus Titan VCT

Octopus Titan VCT has reopened with a new £50m top-up option, giving investors the opportunity to buy into a mature portfolio with new and exciting businesses potentially being added to it shortly. Octopus Titan, with £215m assets under management, is already the largest VCT on the market, which they believe gives them the greatest opportunity to invest into companies with the highest growth potential as those companies will come to them first for funding.

Chelsea's hidden gems

We take fund research very seriously at Chelsea. Our sole goal is to find the best funds on the market for our clients and, over the past 14 years since we established our Core Selection and Selection lists, we have been very successful. Looking back at the funds we have chosen for the Core Selection in that time, they have beaten the IA Flexible benchmark by more than 62%*. Click here to read more about our research.

Is this a healthy correction?

*Philip Saunders, co-head of Multi-Asset at Investec, asks if this is a ‘healthy correction’ or the onset of something more sinister*

Why panic in financial markets is overdone

*Eric Chaney, Head of Research at AXA Investment Managers (AXA IM), outlines why panic in the financial markets seems overdone*

Market volatility and fixed income

*Mark Holman, CEO TwentyFour Asset Managment, gives the fixed income viewpoint on August market falls*

Putting the volatility into context

*Putting the volatility into context: Dr. David Stubbs and Alex Dryden, JP Morgan*

Clive Hale's view on markets

*Views on market falls: Clive Hale, director, FundCalibre*

Monthly Investing

*Monthly Investing*

How to spot a pensions scammer

As Ros Altmann, Minister for Pensions, has said recently, “Scammers aim to catch you off guard so they can steal your hard-earned savings. They wreck people's lives; it is as plain and simple as that.”

Aviva Asia Pacific Property

As at noon on 20th July 2015, trading in the £160m Aviva Asia Pacific Property fund has been suspended.

Northern VCT changes

The Chairman on Northern VCTs 1, 2 and 3, has written to shareholders to let them know that, in the light of the government's recent Summer Budget announcement, which contained proposed restrictions on the types of new investments which may in future be treated by VCTs as qualifying holdings, the board has decided to suspend the operation of the company's Dividend Investment Scheme (DRIS) with immediate effect.

Housa

*House Price Trackers: Adding some diversification to a portfolio*

What the 2015 Summer Budget means for your savings and investments

Pensions

Greek deal by Sunday?

The Greek saga feels like it really is coming to a head now. Last night a full EU28 leaders summit was called for Sunday, which will follow a Eurogroup meeting to take place on Saturday. Greece has formally been given a “last chance” to present a detailed application for a third bailout by Thursday night, along with conditions it is prepared to accept. The difference this time is that should the Greek proposals not be acceptable then the Eurogroup will be discussing a Grexit. Jean Claude Juncker confirmed last night that they already have a “Grexit scenario planned in detail”. In addition, Donald Tusk, President of the European Council, confirmed that an “inability to find agreement may lead to the bankruptcy of Greece and insolvency of its banking system”.

Newton Asian Income removed from Core Selection

Following the resignation of Jason Pidcock from Newton, and the announcement that he will be moving to Jupiter Asset Management, Chelsea has removed the Newton Asian Income fund from both the Core Selection and the Balanced Equity Junior EasyISA.

Possible changes to pensions tax relief

In its election manifesto, the Conservative government promised to amend the current pension tax relief rules for the UK's highest earners (those earning more than £150,000 per annum). This promise could be kept as early as the emergency summer budget on 8th July 2015.

The PFS Downing UK Micro-Cap Growth fund is now available on the Chelsea FundStore

An alternative to the Marlborough Nano-Cap Growth fund, this fund has been run by Judith Mackenzie since 2011, but remains very small with less than £40m assets under management. Judith uses her stock-picking skills to create strong capital growth by investing in UK-based smaller companies, typically with a market capitalisation of between £20m-£150m. This micro-cap fund has a concentrated portfolio of 25-30 holdings, selected from the Numis Smaller Companies Index. Each chosen company is one which the manager believes to be undervalued by the market. The fund has performed well since Judith took it on and has outperformed its micro-cap peer group, as well as doing well compared with the smaller companies sector average.

Bond correction

Regular readers of our Viewpoint magazine will know that, while bonds still offer good diversification characteristics to a portfolio and are a source of income, we haven't be a fan of of the asset class for a good three years now. Bonds have been coming to the end of a 30-year bull run and had become very expensive. Last month saw the start of a long overdue correction in most bond markets – a correction which has gained momentum in the past week or so. *However, we not think investors should panic unduly.*

Cash Reserve

With the deadlines looming some investors start to panic and are unsure where to invest their ISA allowance.

ISA deadlines

The ISA allowance for 2015/16 is £15,240 and will remain the same next tax year. If you want to contribute to your ISA before the new tax year please be aware that the deadlines are as follows:

Where does our research team invest their ISA?

We asked our research team to talk about funds that they hold in their ISA and to explain the thought process behind these selections.

ISA and pension deadlines

The deadline for the end of the 2014/15 tax year is fast approaching, and many of you have not used your ISA and/or pension allowances.

First State changes

Popular fund providers First State Investments have recently announced that, as of 1st July, the business will divide into two investment teams – the Edinburgh-based Stewart Investors and Hong Kong-based First State Stewart Asia.

Benefits of investing in an ISA

After the 5th April any unused ISA allowance will be lost forever. ISAs have always been a flexible and simple investment wrapper, allowing you, in 2014/15, to save £15,000, and £15,240 in 2015/16. The majority of investors hold the money as cash or investments and pay no tax on the growth or income they receive from the product.

Happy birthday Venture Capital Trusts!

Venture Capital Trusts (VCTs) are a long-running government initiative designed to encourage individuals to invest in small, unquoted but potentially high-growth businesses by providing various tax breaks. To this end VCTs play an important role in filling the funding gap left by banks, who are unwilling to lend to small companies. As a reminder, here are the current tax benefits of VCTs for subscriptions of up to £200,000 per tax year (tax benefits are dependant on individual circumstances and subject to statutory change): TAX BENEFITS OF VENTURE CAPITAL TRUSTS

Junior ISA

Making full use of your child’s Junior ISA allowance could give them a huge advantage in later life. Most of us missed out on the chance to invest through our first 18 years through no fault of our own. Smart parents are now realising the value of investing over this long time period and making investments on their child’s behalf.

Budget 2015 news

The Chancellor announced a range of new reforms, ahead of the general election this May.

ISA and pension deadlines

The deadline for the end of the 2014/15 tax year is fast approaching, and many of you have not used your ISA and/or pension allowances.

How to become an ISA millionaire

*1) Be disciplined and patient*

Learn to buy online

As per any changes to your account, you will need to start by logging in. The can be done by clicking SIGN IN/OUT and completing the log in details.

FundCalibre announce new Elite Rated funds

Following the second quarterly investment committee meeting, FundCalibre have awarded an Elite Rating to a range of funds. The addition will take the number of Elite Rated funds to 126.

Top 10 ISA funds

With Cash ISAs offering a relatively low return on investments, it is no wonder that many Chelsea clients continue to invest into Investment ISAs. Whilst there is more risk with Investment ISAs, compared with cash, the risk may be worth taking.

Portfolio scan/comparison report

The portfolio scan and comparison report tool allows you to create a portfolio and view the breakdown and performance of a portfolio as a whole.

Charting tool

Start by selecting the fund you would like to look at. In this case, let's choose Legg Mason Clearbridge US Aggressive Growth. If you would like a reminder of how to find the fund simply click here.

Easy portfolios

If you are reading this article, it is likely that you are one of many Chelsea clients who invest in one of our portfolios, whether it be within an ISA or the pension wrapper.

Chinese New Year

The Chinese economy remains a mystery in many ways and the equity market, in its many guises, is relatively cheap but very much unloved. So, as we begin the Year of the Sheep, is 2015 the year to follow, or go against the herd?

Look round our website

You can get onto the research tool a number of ways, depending on where you are in the site. If you are on the home page simply click “Research Centre” and then “Research funds”.

Schroders charge increase

Schroders has announced that it will be increasing the ongoing charge figure (OCF) for the Schroder Recovery fund, in order to bring it into line with the costs of other funds in their range.

Top ten pension funds

If you are in your 20s, 30s or 40s, and saving for retirement, you will have a longer investment horizon than someone in their 50s or 60s. You may therefore have a very different attitude towards the level of risk you can take and the amount of time you have to save.

Use our website - switching funds

In our last newsletter we looked at how to register for an account on Chelsea FundStore. Once you have registered, within 48 hours you will have gained access to your account. If you need to be connected quicker, simply call us in the office. To switch, using our research centre, please follow the steps below.

Investment dinner

The two fund managers debated a number of burning issues facing investors in 2015.

Inflation and your investments

To understand how inflation, disinflation and in turn deflation could affect investments, it is only sensible to first understand what these terms, thrown around by the media, actually mean.

Beginners guide to investing

Investing is not nearly as hard as you might think. Anyone can do it, and be successful, as long as they understand a few basic principles. Investing in the stock marker is also a great way of improving your own financial education. It's a vital skill, which is undertaught in schools, but is so fundamentally important.

Use our website – register and navigate

*Register* To open an account with Chelsea you need to start by registering on our website.

Free Junior ISA

I am sure you have wondered to yourself, “why is my three year old more interested in the box than in the toy I have just spent 45 minutes assembling?” Now this can be, for some people, part of Christmas, but how about something a little different. A junior ISA?

Lindsell Train now available through Chelsea

We are extremely pleased to announce that the Lindsell Train UK Equity fund, managed by Nick Train, is now available on the Chelsea FundStore.

Autumn statement

The Autumn statement has reaffirmed the government's commitment to put savers and investors at the heart of their election pledge, boasting a fast growing economy and new ISA rules, to name but a few.

Russia

Russia is cheap – but then cheap doesn't necessarily mean value. The rouble has also plummeted in value, giving investors the potential for a double kicker if stocks are to come back. The problem lies, of course, in Putin's bellicose approach to foreign policy and whether he plans another iron curtain.

Bonds

The world's major central banks have been in uncharted waters for the past five years. The extraordinary experiments in monetary policy have led to historically low levels of volatility, markets awash with liquidity, and record low bond yields. It has made predicting bond price movements very difficult.

Brazil

While it is clear that BRIC was never going to be a homogeneous group in terms of stock returns, I think never before has each nation had such a varied set of opportunities and challenges.

UK

While the UK economy has been performing well, there are a number of corporate, economic and political headwinds which mean the outlook for UK economic growth is less clear going forward. Ernst & Young cite UK profit warnings at their highest Q3 level in six years, mainly due to competitive price pressures, so we can see that, despite the chancellor's sanguine outlook, we are not out of the water yet. Deflation is looming as is eurozone contagion. In the third quarter, there were 69 profit warnings issued by UK companies, compared with 56 in the third quarter of 2013.

US

The comeback will continue if US firms continue to do well. Currently, the US is the only region to boast earnings growth above 2008 levels, while Europe, Japan and emerging markets continue to lag their pre-crisis growth. Its economy is growing too, and employers have added more than 200,000 jobs for nine straight months, the longest such streak since 1995.

Global

A wise man once said that the stock market is a very efficient mechanism of transferring money from the impatient to the patient. 2015 could be all about holding our nerve and being patient – and getting used to a lower return environment.

Commodities

Commodities have suffered a spectacular reversal in fortune. Once all the rage, they have now been spurned by investors, sending prices across soft and hard commodities spiralling downwards.

Commercial property

Money pouring into the sector is an indicator it may have another good 12 months, but yields have fallen quite a bit in the past few months as a consequence. Sentiment is good and, outside London, there is still some value. The London residential housing market is a potential bubble candidate (now the most expensive housing market in the world by price per sq ft) and average prices are now about 14 times the median London salary, although I think a crash is unlikely in the near term if the UK economy continues to do well. My instinct is that we still have a few more years of gains before the next crash.

Absolute return

Given the obvious uncertainty, investors may like to consider absolute return funds. These funds help to reduce portfolio volatility by focusing on investments with fixed investment terms carrying low risk or by hedging risk, most commonly by using futures and options as well as selling stocks short that they believe will fall in price. I feel it is of paramount importance to have a dynamic and well-established team with a honed process, that can adapt and process inevitable market volatility, if choosing an absolute return fund.

India

India has had a strong year in terms of stock-market returns infused by a Modi victory and there is still more to go. The reforms will have a positive effect and the stock market is cheap.

China

China is beginning to move from an export-driven economy to a more domestic-based one. There are huge challenges, but long term, reforms could make it a better prospect for investors, as the Chinese stock market becomes more investor-friendly in terms of share buy-backs and dividends and the growing middle class continues to consume. Also, with the liberalising of markets, it is clear investors are being put at the forefront of the policy-makers' thinking.

Japan

The case for Japanese equities is simple: most other developed markets look fully valued in comparison. Japan is an exception; Japanese shares trade at a 1.3 price-to-book ratio, less than half that of US stocks. The stocks are cheap relative to their own history. Japan’s stock market currently has a price-to-earnings ratio that is only 37% of its 10-year historical average. The unprecedented flow of QE is also a tailwind for the Land of the Rising Sun. For once, Japan may not flatter to deceive, which is positive.

Europe

As the eurozone sinks deeper into economic malaise, there is a danger of further unrest in Europe. This is highlighted by the growth in popularity of anti-immigration, right wing parties. Le Pen leads in the polls in France, and in the UK UKIP is obviously doing well. However, Europe is cheap and Draghi will do whatever he can to drive markets higher. Europe has a universe of 3,000 stocks, so there are plenty of opportunities for a good bottom-up fund manager - returns will improve if the focus towards fundamentals continues and I am seeing early signs of that. But on a one-year view I am positive on Europe because of expected QE.

Fund update

*Fidelity International Fund* The Fidelity International fund will be merged with the Fidelity Open World fund on 28th November 2014.

New Elite Rated funds

FundCalibre Email Header

Japanese economy

In December 2012 Mr Abe launched an ambitious growth strategy, now known as "Abenomics". His aim was to revive Japan's economy and pull it from 20 years of deflation and set out on the right course for growth. Billions were pumped into the economy, with the bank of Japan printing billions of yen of new money, and using it to purchase governments bonds. It went further and pushed the value of the yen down (which made Japanese exports cheaper) and also encouraged investors out of bonds and into stocks. It looked like it was working and by mid-2013 Japan's economy was back on track. Earlier this year, however, the prime minister took a gamble and increased the Japanese equivalent of VAT from 5% to 8%, for the first time in 20 years.* The rise in the stock markets was only benefiting the minority of rich people. The BBC news reported that 80% of Japanese people do not hold stocks. This, coupled with the stagnant income and tax increase, maent that the majority stopped spending. Gross Domestic Product (GDP) fell to an annualised 1.6% from July to September, compared with forecasts of a 2.1% rise. That followed a revised 7.3% contraction in the second quarter, which was the biggest fall since the March 2011 earthquake and tsunami.* The snap election, planned for December, is to consolidate Abe's power and to seek a mandate to delay a further increase in taxes (expected to rise to 10% in 2015). The economy shrank 0.4% in the third quarter from the second, and in reaction the dollar went above 117 Japanese yen before settling back at 115.69 at the beginning of the week. The benchmark Nikkei 225 index, meanwhile, closed down almost 3% to 16973.80, constituting its biggest one-day drop since August.* With doubts about policy continuity, confidence in the government and general market nervousness, this could be negative for stocks. This next month is going to be interesting in Japan's economy.

Pension for the self-employed

In the budget, the Chancellor announced new reforms to pension investors. The government also introduced “auto-enrolment” in 2012. Within the latter scheme both employers and workers must pay into a qualifying pension scheme ready for retirement. The total minimum contribution is currently set at 2% of earnings (0.8% from the employee, 1% from the employer and 0.2% as tax relief) unless, of course, you were to opt out.

M&S vouchers

We are always being asked by the national press for people to take part in case studies. If you are interested in taking part, please email info@chelseafs.co.uk with your name, address, and contact telephone number. If you are chosen to take part in a case study, and it goes ahead, we will send you £50 Marks and Spencer vouchers, as a thank you.

Fund manager update

Both Philip Ehrmann who currently manages the Jupiter China fund and Kathryn Langridge who manages Jupiter Global Emerging Markets are both leaving Jupiter Asset Management at the end of the year.

Fund update

*Hermes Multi Strategy Credit*

Bank stress tests

The tests, in 2010, gave a clean bill of health to Ireland’s two biggest banks, just months before the Irish banking system disintegrated. History repeated itself in 2011 when Dexia, a Belgian bank, was given the all clear, only to be bailed out a short time afterwards. It is perhaps with these catastrophic failures in mind that the European regulators were so eager for this new set of stress tests, the results of which came out on October 27th, to be up to the job.

Junior ISA

£84,000, that is nearly £8,000 per year. With university fees increasing, and weddings costing, on average, £24,700*, £8,000 per year doesn't seem quite such a milestone.

Will Aid

Who will benefit from your life savings when you die? Dr Kate Woodthorpe, a sociologist from the University of Bath, recently wrote a report for SunLife looking at the “cost of dying”. The actual cost of dying has risen by more than 10% since 2013*, with the average cost of a funeral increasing by 87% since 2004*. Dr Woodthorpe explained that “we don't have a culture of talking about death, which means we often don't plan properly, and we need to address that”.

Fund manager update

*First State Global Emerging Markets*

Brazilian election

It is always difficult to predict the Brazilian election, as we saw with Marina Silva's dramatic defeat in round one on the 5th October. Brazilian polls are notoriously inaccurate, but if fellow emerging market powerhouse India is anything to go by, we are in for an enthralling finish. Since Narendra Modi and his BJP party took power in May, the Indian market has rallied by around 25%. There has been optimism in the region surrounding Aécio Neves and his centre-right Party of Brazilian Social Democracy. He won 33.6% in the first round of votes but critics feel he has “struggled to persuade poorer Brazilians the reforms he espouses”^. However recent forecasts from the polling stations present a different story; “Aécio Neves has 45% of the total prospective votes heading into a runoff with President Dilma Rousseff of the Workers’ Party, who would garner 43%, according to polling firms Datafolha and Ibope”^^^

What to do when markets drop

Since September we have witnessed a decline in the UK market, with it falling over 6%*.

Fund Calibre

The service has been established as a joint venture, which combines the quantitative skills of Albemarle Street Partners and Chelsea's industry-renowned research.

Pension versus EasyISA

Along with our successful ISA wrapped product, Chelsea are now pleased to announce the Cofunds SIPP, via Chelsea FundStore.

Red Zone

Following its purchase of Scottish Widows, Aberdeen has the largest number of underperforming funds. By assets, however, BlackRock wins hands down, with £8.4 bn* of assets in the RedZone.

How has the referendum affected the markets?

After months of campaigning, by both the “Better Together” and the “Yes campaign”, we finally have the result. Whilst it was still pretty close, was it as close as we were all expecting? Looking back at how the markets were affected has been quite interesting, from a fall in the pound in the beginning of September to the threat of many big businesses moving south of the border if the result wasn't to their taste. Lloyd’s Banking Group finished the 8th September down 3%*, along with Standard Life and Scottish and Southern Electric (SSE), who were down 2.7%* and 2.38%* respectively, when the “Yes” campaign took the lead. Were investors starting to panic? Would the situation start to snowball out of control? Would the pound be worthless by the end of the referendum?

Woodford Equity Income

The Invesco Perpetual High Income fund opened in 1988, under the watchful eye of Neil Woodford. Every £1,000 that was invested at launch was worth just short of £24,000* when Neil quit the management role late last year. On his departure, investors and peers were eager to find out if he could do the same again.

Recent and upcoming fund manager changes

*Schroders UK Opportunities*

Artemis to launch new US funds

Next month the following funds will be launching, which we anticipate will be available on Cofunds, upon launch:

European markets

*What has happened?*

Moscow to Beijing – Trans-Siberian investing

*Russia*

Greater dividends for global equity investors

Global equity investors are enjoying a bumper year for dividends, according to the latest Global Dividend Index from Henderson Global Investors.

NISA top up

To top up simply:

Convert your holdings

Many of you may still be invested in what are called implicit, or bundled funds. In these funds you will be charged typically 1.5% AMC (annual management charge). From this 1.5%, around half was kept by the fund manager and the remaining half was returned to the platform and broker as commission.

The Strong Pound

Over the past year, sterling has jumped ahead of many other currencies, gaining 13% against the dollar and 10% against the euro, according to the BBC. It is also stronger against emerging market currencies, with the pound strengthening 24% against the Turkish lira. Whilst investors can take advantage of these cheap currencies when investing in emerging markets, caution should be taken, as this market can be extremely unpredictable.

New pension rules confirmed

“Pensioners will have complete freedom to draw down as much or as little of their pension pot as they want, anytime they want” - George Osborne

Marlborough Nano-Cap Growth fund reopens

Having closed the fund to new investments almost immediately after its launch in October 2013, Marlborough have reopened the fund for a limited period only.

Scottish Independence and the impact on UK stock markets

I'm not much of a sports fan, I'll admit. So it was a welcome relief from the football when I sat down, with a cup of tea, a couple of weeks ago to watch “Scotland: for richer or poorer” on BBC2 with Robert Peston and pondered what effect the imminent vote may have on stock markets.

RedZone change

No fewer than seven funds which featured in the Chelsea RedZone earlier this year, have had a change of manager.

Unicorn manager passes away

It is with extreme sadness that we share the news that Unicorn Asset Management's John McClure has passed away.

Miton manager resignation forces Cautious Growth EasyISA change

Martin Gray, manager of the Miton Special Situations Portfolio, has resigned from the company after 20 years. As a result, the fund has been taken off the Chelsea Core Selection and has been replaced in the Cautious Growth EasyISA Portfolio by Henderson UK Property.

ECB Draghi

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.

Investors move into large-caps

In December, our outlook for the coming 12 months touched on the fact that both small and mid-cap stocks had done extremely well and we suggested that 2014 may well see large and mega-caps do better. That rotation seems to have started with large-caps returning just over 3% year to date, whilst small and mid caps have struggle to reach 1%*.

Will the FTSE ever break through the 7,000 barrier?

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 that, should the UK market break through 7,000, we are at the beginning of a long-term bull market. The guys at Neptune are equally bullish.

Income update

As regular readers of this newsletter and our Viewpoint magazine will know, we have had concerns over fixed income investments for some time now. As Iain Stealey, co-manager of JPM Strategic Bond reiterated recently: “Fixed income investors have a problem. They need bonds to counter volatility and provide income, but interest rates are going to rise, which means they are sure to be vulnerable to losses.” But what are the alternatives?

L&G Dynamic Bond

Richard Hodges, manager of the Legal &General (L&G) Dynamic Bond Trust, has announced his resignation from the firm. We believe this to be a real blow to L&G. The fixed income team is well-resourced, but Richard was the stand-out manager.

Early-bird ISA

If you have the money available, why not invest early on this tax year? Early birds who invested their full ISA allowance in the average UK equity income fund on the first working day of the last tax year, rather than leaving it to the last minute, would have seen their £11,520 investment rise by more than 17%, to £13,493.98*.