Investment Model Portfolios for Adviser Firms

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Tom Sparke, Investment Manager

Stock market indices have fallen over the last 24 hours on the widely expected introduction of trade tariffs by the US, mainly directed at China, to come into effect in around a month’s time (after a ‘comment period’), meaning that the uncertainty caused by these moves may be prolonged.

From the details that have emerged, the tariffs will likely affect $50bn worth of imported goods and the proposed tariff level will be 25%, which the White House believe will be sufficient to block trade in the affected areas.  The list of specific goods to be targeted will be released early next week but will include aerospace, information communication technology, and machinery.  The tariffs themselves will not have a fundamental impact on China (initial estimates show this would affect around 0.25% of China’s GDP), but the larger worry is over the potential escalation of these measures and a descent into a ‘trade war’.

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Ethical Investments

From Blue Planet II showing how our oceans are full of plastic or the banning of plastic microbeads in soaps and cosmetics to the rise of Fairtrade products, it has been hard to escape the realisation that people are waking up to ethical and environmental concerns. This increasing awareness isn’t just limited to the physical products we buy, either – more investors are choosing portfolios that support their views on social and ethical concerns as well as meeting their financial goals and objectives. [click to continue…]

Tom Sparke, Investment Manager

As you may have observed there were significant downward movements in US equities yesterday and markets have opened negatively this morning in most regions.  As we have alluded to in recent communications, the threat of a pull-back in stock markets has been hovering over us for some time and the catalyst was one that we had been watching closely.  The initial source of worry was the stronger-than-expected US employment and wage growth data at the end of last week.  While this sparked concerns of higher inflation and, consequently, more interest rate increases than anticipated, the driver of much of the volatility in markets was largely due to the increased volume of trading in Exchange Traded Funds (ETF) and by high-frequency traders, which exacerbate severe market movements.  As ETFs make up nearly 20% of US trading volumes markets can move very quickly on these sort of unusual movements. [click to continue…]

Investment Market Review & Outlook January 2018

Happy New Year! We hope that you have had a wonderful break over the festive season and are looking forward to 2018.

For the second year running we have been positively surprised by the resilience of markets, with near record low levels of volatility across asset classes, as well as indices at or near all-time highs. Although valuations appear lofty, we still see positivity in many areas including Europe, Japan and Asia.

Over the last quarter, higher rated bonds performed better than most in Fixed Interest, but we maintain our low interest rate sensitivity stance to protect capital whilst collecting a handsome yield. Global growth and continued Quantitative Easing (QE) should help to support fragile bond-issuers, but we remain selective in the credits we are exposed to.

Our considered equity allocation proved beneficial over the period as our higher conviction areas provided the best performance. We remain underweight UK as we perceive that there are better opportunities elsewhere which we expect to continue over the next quarter.

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Investing in India

With the UK’s most recent economic figures showing a likely slowdown in expansion and the US potentially moving toward the same, investors might be forgiven for looking elsewhere for returns.  Even China, the current ‘powerhouse’ of global growth in recent years, has lower growth targets now as the country has matured enormously over the last decade.  Against this backdrop, India – the world’s largest democracy – has become a relevant and exciting prospect for growth-hungry investors.

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