Such is the vast size of the world's leading pharmaceuticals firms, that many investors will already have a small exposure to the Health Care sector, via their exposure in many of the world's global equity funds. What many investors don't realise, however, is that a niche industry of specialist Health Care-focussed investment funds have been available for over 25 years.
Healthcare funds invest in the stocks of companies that operate within the healthcare sector. This encompasses a wide range of industries, detailed further below. The managers of these funds seek out companies that have upside potential from new drugs, discoveries, patents, products and even procedures.
Historically, the fortunes of Health Care funds have been greatly attributable to two major influences; political events and demographic shifts, both of which are particularly topical at the moment.
The appointment of Barack Obama as U.S President has caused understandable excitement in the Health Care fund industry, given his pre-election promise of a shake up in the American medical system. The provision of medical insurance to the estimated 46.3 million residents currently without any arrangements, and the task of improving what has historically been a much-criticised state system could prove extremely fruitful for the many companies in the vast Health Care industry.
The impact of socio-demographic movements over recent years also looks promising for the Health Care fund industry. Whilst such funds are widely considered as a defensive holding (after all, the need for medical care is universal and often independent of economic cycles), the rise in prominence of 'emerging market' countries ensures that the gap between the standards of medical provision and solutions worldwide, become ever smaller. For example, several India-focused healthcare funds have been launched recently as India's healthcare services market undergoes robust expansion. According to Technopak Advisors, the USD35bn Indian healthcare industry is projected to touch over USD75bn by 2012 and USD150bn by 2017. As medical standards in such countries improve, so do life expectancy rates which, in-turn, favours medical supply companies.
There are highly specialised Health Care funds available, with significant differences amongst them. For example, some specialize in big pharmaceuticals, including some of the world's largest drug companies such as Pfizer Inc and Johnson & Johnson. Other healthcare mutual funds specialise in biotechnology stocks. Such funds invest primarily in companies that use biological processes in the development or manufacture of a product, or in the technological solution to a problem. There are also healthcare funds that own hospital companies, makers of medical devices, distributors of medical supplies, and so on.
Well diversified Health Care funds which invest across the many specialist sectors of the industry prove to be the most popular, particularly when held as an investment via a pension or a holding in a life assurance contract. Derek Tanner, manager of the the Hansard Invesco Healthcare fund (MC22, available in both HIL and HEL) looks back at 2009, and forward to 2010, commenting "The health care sector was favoured during the quarter as investors saw more action around the US health care reform efforts.
It is important to note that not all health care companies will be affected by health care reform in the same way. Some industries, like health care equipment and biotechnology, are less exposed. Managed health care will be among the most directly impacted by efforts of health care reform.However, we believe fear is largely baked into these stocks that are now trading at major discounts. As a result, we continue to overweight these sectors.
We tend to believe the future of health care is in biotechnology rather than pharmaceuticals. Within biotech, our emphasis is in profitable large-cap companies that are generating sufficient free cash flow rather than small-cap start-ups that typically lack liquidity and earnings."
Showing posts with label QROPS Adviser Notes: QROPS Advice investing within QROPS. Show all posts
Showing posts with label QROPS Adviser Notes: QROPS Advice investing within QROPS. Show all posts
Thursday, 4 March 2010
Friday, 19 February 2010
QROPS Advice: Investment News: Spotlight on Japan
Anybody that has followed global markets over the past 20 years will know that the root causes attributable to the recent financial crisis are by no means new. As recently as the early 1990s, the world's second largest economy, Japan, was in meltdown as a direct consequence of a 'bad debt' issue, caused, in part, to overly-relaxed lending practices by its local banks. This lending fuelled a property bubble which was unsustainable (resting, as it did, on unrealisable land values), turning many debts bad. This ultimately resulted in many banks having to be bailed out by the government, a very familiar story of late...
The fall-out of the catastrophe was appropriately named "the lost decade", owing to the lack of economic activity that followed in the region. As with technology stocks that famously failed in the late 1990s, Japan became massively out of favour with investors, as the value of the local stock exchange spiralled ever lower. Both local market participants, as well as foreign investors have had relatively little exposure to Japanese equities ever since, with many not appreciating the substantial turnaround in Japanese corporate fortunes, as a deeply unloved and under-owned asset class.
However, indicators suggest that Japan is once again returning to favour. It has been a promising start to the New Year for Japanese equities, with foreign investors piling into the market, buying a net USD17.3bn worth of stocks in January alone, the largest monthly purchase in three years. That compares with a net outflow of foreign money in the rest of Asia of USD3.35bn, according to data from Nomura. Japanese machinery orders rose the most in nine years from a record low, and 'domestic orders', an indicator of business investment in the next three to six months, climbed 20.1 percent in December from a month earlier.
Again, as with Technology company valuations, the lessons learned from 'the lost decade' have prepared many of Japan's leading companies for a promising future, with extremely healthy balance sheets and price earning ratios reflecting excellent value when compared to stocks elsewhere.
Whatever your view of the Japanese economy as a whole, the fact remains that Japanese firms still dominate and lead many global industrial sectors from autos, via specialist materials and capital goods to consumer items, e.g., from Suzuki to Nintendo. Therefore as the global economy regains its composure, Japanese firms should disproportionately benefit from their geographically well diversified sales base, particularly their exposure to the BRIC countries.
Looking ahead for Japan, Chris Taylor of Neptune Investment Management, commented "We expect improved corporate earnings from the global companies that have little dependence upon the domestic economy. They will be helped by their substantial exposure to non-OECD economies which will continue to expand strongly, contributing about two-thirds of likely global economic growth. The combination of these factors should see such Japanese firms collectively turn in the highest prevailing rate of earnings expansion across the globe."
The fall-out of the catastrophe was appropriately named "the lost decade", owing to the lack of economic activity that followed in the region. As with technology stocks that famously failed in the late 1990s, Japan became massively out of favour with investors, as the value of the local stock exchange spiralled ever lower. Both local market participants, as well as foreign investors have had relatively little exposure to Japanese equities ever since, with many not appreciating the substantial turnaround in Japanese corporate fortunes, as a deeply unloved and under-owned asset class.
However, indicators suggest that Japan is once again returning to favour. It has been a promising start to the New Year for Japanese equities, with foreign investors piling into the market, buying a net USD17.3bn worth of stocks in January alone, the largest monthly purchase in three years. That compares with a net outflow of foreign money in the rest of Asia of USD3.35bn, according to data from Nomura. Japanese machinery orders rose the most in nine years from a record low, and 'domestic orders', an indicator of business investment in the next three to six months, climbed 20.1 percent in December from a month earlier.
Again, as with Technology company valuations, the lessons learned from 'the lost decade' have prepared many of Japan's leading companies for a promising future, with extremely healthy balance sheets and price earning ratios reflecting excellent value when compared to stocks elsewhere.
Whatever your view of the Japanese economy as a whole, the fact remains that Japanese firms still dominate and lead many global industrial sectors from autos, via specialist materials and capital goods to consumer items, e.g., from Suzuki to Nintendo. Therefore as the global economy regains its composure, Japanese firms should disproportionately benefit from their geographically well diversified sales base, particularly their exposure to the BRIC countries.
Looking ahead for Japan, Chris Taylor of Neptune Investment Management, commented "We expect improved corporate earnings from the global companies that have little dependence upon the domestic economy. They will be helped by their substantial exposure to non-OECD economies which will continue to expand strongly, contributing about two-thirds of likely global economic growth. The combination of these factors should see such Japanese firms collectively turn in the highest prevailing rate of earnings expansion across the globe."
Investment News: 11% per annum with early maturity opportunities, ISA ELIGIBLE
Prima Platinum Plan 4
Key Features
• Investment returns linked to the performance of the FTSE 100™ and DJ Eurostoxx 50™ (the Indices)
• No Index growth required to achieve quoted returns
• Early maturity will be triggered as long as the level of both Indices are at or above their Opening Levels at any Plan anniversary.
• Investors will lose some or all of their money if one or both Indices have fallen by more the 50% at any close of business during the investment term and the Final Level of one or both Indices is below its Opening Level, or in the event of the issuing bank failing to make the payments due under the Plan.
• Capital will be returned in full at maturity, provided neither of the Indices have fallen by more than 50% below their Opening Levels during the investment term
• Available to 5 March 2010
Target Market
This investment could be suitable as part of an investment portfolio for investors who
• understand and are used to equity investment, and
• are able to invest for a period of up to 6 years, and
• are prepared to accept a degree of risk to their capital in return for a higher potential growth than would be available via a deposit based investment
Key Dates
Offer period
To 5 March 2010, except for ISA transfers, where applications must be received by 26 February 2010.
Strike Date
12 March 2010
Opening Level
Close of Business on 12 March 2010
Final Level
Close of Business on 14 March 2016
Annual measurement dates
14 March 2011, 12 March 2012, 12 March 2013, 12 March 2014 and 12 March 2015, 14 March 2016
Maturity date
28 March 2016
http://www.meteoram.com
You should refer to the brochure which contains full details of the Prima Platinum Plan 4.
Telephone enquiries to: Derry Thornalley 01664 444625 or email derry.thornalley@aifsg.com
Key Facts
Investment Term: 6 years and 14 days, with the potential for early maturity. Early maturity will be triggered if the levels of both Indices are at or above their Opening Levels on an anniversary date of the Plan.
Availability: As direct investments, ISAs and ISA Transfers, and for pension funds, trustees and companies.
Indices FTSE 100™ & DJ Eurostoxx 50™
Investment Return 11% per annum (simple) for each year the Plan is in force, so the returns at each possible early maturity date would be 11% (end of year 1), 22% (end of year 2), 33% (end of year 3); 44% (end of year 4); 55% (end of year 5) or, if the plan runs the full 6 year term, and the Index Levels are at or above their Opening Levels, 66%.
If the Index Levels are below their Opening Levels no investment return will be payable.
Capital Return Capital will be returned in full at maturity as long as the Indices have never fallen by more than 50% of their respective Opening Levels at close of business on any day during the investment term. If one, or both, Indices have fallen by more than 50% and the Final Level of one, or both, Indices is less than its Opening Level capital will be reduced. The reduction will be 1% for each 1% the Final Level of the lower performing Index is below its Opening Level. If one, or both Indices have fallen by more than 50% you will receive a full return of capital as long as the Final Levels are at least equal to their Opening Levels. Please see the brochure for a full explanation of the calculation, plus examples.
Counterparty Risk The securities will be issued by Rabobank, which has a current rating of ‘AAA‘ by Standard and Poor’s. If Rabobank were to fail to meet the repayments due to us, you could lose some or all of your investment. The credit rating is subject to change during the offer period and the term of the investment. Counterparty risk is common to all similar investments. All references to the credit rating are correct as at the date of the brochure.
Tax Under current tax legislation gains on assets held in an ISA will be free from any tax, while gains on direct investments will be subject to Capital Gains Tax.
Interest Interest will be credited on subscriptions received and held in our client account up to the investment date, subject to a minimum interest addition of £10.00.
Charges There are no initial or ongoing charges. Charges are included in the pricing of the investment.
Early encashments and transfers during the investment term will be subject to an administration charge.
Commission 3% initial commission.
Securities Securities will be structured to provide the returns shown in the plan brochure, and purchased for each investor. These will be notes or warrants.
Key Features
• Investment returns linked to the performance of the FTSE 100™ and DJ Eurostoxx 50™ (the Indices)
• No Index growth required to achieve quoted returns
• Early maturity will be triggered as long as the level of both Indices are at or above their Opening Levels at any Plan anniversary.
• Investors will lose some or all of their money if one or both Indices have fallen by more the 50% at any close of business during the investment term and the Final Level of one or both Indices is below its Opening Level, or in the event of the issuing bank failing to make the payments due under the Plan.
• Capital will be returned in full at maturity, provided neither of the Indices have fallen by more than 50% below their Opening Levels during the investment term
• Available to 5 March 2010
Target Market
This investment could be suitable as part of an investment portfolio for investors who
• understand and are used to equity investment, and
• are able to invest for a period of up to 6 years, and
• are prepared to accept a degree of risk to their capital in return for a higher potential growth than would be available via a deposit based investment
Key Dates
Offer period
To 5 March 2010, except for ISA transfers, where applications must be received by 26 February 2010.
Strike Date
12 March 2010
Opening Level
Close of Business on 12 March 2010
Final Level
Close of Business on 14 March 2016
Annual measurement dates
14 March 2011, 12 March 2012, 12 March 2013, 12 March 2014 and 12 March 2015, 14 March 2016
Maturity date
28 March 2016
http://www.meteoram.com
You should refer to the brochure which contains full details of the Prima Platinum Plan 4.
Telephone enquiries to: Derry Thornalley 01664 444625 or email derry.thornalley@aifsg.com
Key Facts
Investment Term: 6 years and 14 days, with the potential for early maturity. Early maturity will be triggered if the levels of both Indices are at or above their Opening Levels on an anniversary date of the Plan.
Availability: As direct investments, ISAs and ISA Transfers, and for pension funds, trustees and companies.
Indices FTSE 100™ & DJ Eurostoxx 50™
Investment Return 11% per annum (simple) for each year the Plan is in force, so the returns at each possible early maturity date would be 11% (end of year 1), 22% (end of year 2), 33% (end of year 3); 44% (end of year 4); 55% (end of year 5) or, if the plan runs the full 6 year term, and the Index Levels are at or above their Opening Levels, 66%.
If the Index Levels are below their Opening Levels no investment return will be payable.
Capital Return Capital will be returned in full at maturity as long as the Indices have never fallen by more than 50% of their respective Opening Levels at close of business on any day during the investment term. If one, or both, Indices have fallen by more than 50% and the Final Level of one, or both, Indices is less than its Opening Level capital will be reduced. The reduction will be 1% for each 1% the Final Level of the lower performing Index is below its Opening Level. If one, or both Indices have fallen by more than 50% you will receive a full return of capital as long as the Final Levels are at least equal to their Opening Levels. Please see the brochure for a full explanation of the calculation, plus examples.
Counterparty Risk The securities will be issued by Rabobank, which has a current rating of ‘AAA‘ by Standard and Poor’s. If Rabobank were to fail to meet the repayments due to us, you could lose some or all of your investment. The credit rating is subject to change during the offer period and the term of the investment. Counterparty risk is common to all similar investments. All references to the credit rating are correct as at the date of the brochure.
Tax Under current tax legislation gains on assets held in an ISA will be free from any tax, while gains on direct investments will be subject to Capital Gains Tax.
Interest Interest will be credited on subscriptions received and held in our client account up to the investment date, subject to a minimum interest addition of £10.00.
Charges There are no initial or ongoing charges. Charges are included in the pricing of the investment.
Early encashments and transfers during the investment term will be subject to an administration charge.
Commission 3% initial commission.
Securities Securities will be structured to provide the returns shown in the plan brochure, and purchased for each investor. These will be notes or warrants.
Tuesday, 16 February 2010
QROPS Advice: Spotlight on Protected Funds
Broadly speaking, recent market volatility has split investors into one of two categories; those that are willing to take advantage of the opportunities that market movements represent, and those that are unsure of the future and instead wish to focus, primarily at least, on preservation of their wealth.
Capital protected funds serve as a solution to each type of investor, providing exposure to the upside of equity markets, whilst maintaining a level of protection that gives the investor peace of mind in the knowledge that not all of their investment is at risk.
An 'Investment Sentiment' survey conducted towards the end of 2009 by the UK's Investment Management Association found that almost 70% of investors still want to put money into capital protected funds. For 2008 and 2009, sales by fund type, via an investment bond (as opposed to direct investment into the fund), show that such funds rank as the second and third most popular choice respectively.
The basic principle of most capital protected funds is that the majority of the investors' money goes into an active 'basket' of equity stocks (the basket of many funds available will have a specific focus, e.g. emerging markets), with an amount being kept aside for investment into a capital protection solution; it is this element of the fund that is used to protect a proportion the fund's value, the amount set aside determining the amount of protection available (e.g. 90%, 80% etc).
On this basis, investors in such funds should bear in mind that they will not benefit as much from an increase in value of the active portion of the fund, as they would have done if they were instead invested in a traditional, 100% equity fund. However, the relatively small sacrifice of growth potential, in return for capital protection is what makes such funds so particularly appealing to investors that are approaching retirement, or simply unsure about future volatility.
It is common practice for capital protected funds to be managed by two distinct parties; an investment manager to maximise growth from the active element of the fund, and a specialist provider of capital protection solutions. The latter will have experience in trading sophisticated financial instruments which, ultimately, provides the 'safety net' element of the fund.
Colin Graham of BlackRock, managers of the active element of the Hansard Multi-Asset Protector fund commented "Of the other positions held in the portfolio, the recent strong performance of the BGF (BlackRock) US Flexible Equity Fund has been driven by the Fund's focus on quality stocks, with an emphasis on healthcare and energy, at the expense of financials and consumer staples. Meanwhile, the performance of the BGF World Health and Science Fund was well supported by strong stock selection of the vast majority of sub-sectors, including healthcare providers and services.
While we remain focused on the improving economic outlook, our positions are relatively modest, reflecting the risks to these views and our anticipation of a moderate, rather than buoyant, prospective return environment. As such, and in the expectancy of ongoing economic and market volatility, we continue to allocate risk in a diversified fashion."
Capital protected funds serve as a solution to each type of investor, providing exposure to the upside of equity markets, whilst maintaining a level of protection that gives the investor peace of mind in the knowledge that not all of their investment is at risk.
An 'Investment Sentiment' survey conducted towards the end of 2009 by the UK's Investment Management Association found that almost 70% of investors still want to put money into capital protected funds. For 2008 and 2009, sales by fund type, via an investment bond (as opposed to direct investment into the fund), show that such funds rank as the second and third most popular choice respectively.
The basic principle of most capital protected funds is that the majority of the investors' money goes into an active 'basket' of equity stocks (the basket of many funds available will have a specific focus, e.g. emerging markets), with an amount being kept aside for investment into a capital protection solution; it is this element of the fund that is used to protect a proportion the fund's value, the amount set aside determining the amount of protection available (e.g. 90%, 80% etc).
On this basis, investors in such funds should bear in mind that they will not benefit as much from an increase in value of the active portion of the fund, as they would have done if they were instead invested in a traditional, 100% equity fund. However, the relatively small sacrifice of growth potential, in return for capital protection is what makes such funds so particularly appealing to investors that are approaching retirement, or simply unsure about future volatility.
It is common practice for capital protected funds to be managed by two distinct parties; an investment manager to maximise growth from the active element of the fund, and a specialist provider of capital protection solutions. The latter will have experience in trading sophisticated financial instruments which, ultimately, provides the 'safety net' element of the fund.
Colin Graham of BlackRock, managers of the active element of the Hansard Multi-Asset Protector fund commented "Of the other positions held in the portfolio, the recent strong performance of the BGF (BlackRock) US Flexible Equity Fund has been driven by the Fund's focus on quality stocks, with an emphasis on healthcare and energy, at the expense of financials and consumer staples. Meanwhile, the performance of the BGF World Health and Science Fund was well supported by strong stock selection of the vast majority of sub-sectors, including healthcare providers and services.
While we remain focused on the improving economic outlook, our positions are relatively modest, reflecting the risks to these views and our anticipation of a moderate, rather than buoyant, prospective return environment. As such, and in the expectancy of ongoing economic and market volatility, we continue to allocate risk in a diversified fashion."
Wednesday, 3 February 2010
QROPS Advice: Investment News: Spotlight on India funds
A vast majority of investors are aware of the phenomenal economic growth that India has achieved over recent years, with most benefitting from this via an exposure in a traditional 'BRIC' fund. However, whilst the majority of BRIC funds have posted excellent returns, a growing number of investors have instead recently chosen to invest directly into Indian-focussed equity funds.
The outlook for the Indian economy is very positive, uncommon amidst a global recession. This is confirmed by the recent revision of the IMF's economic growth forecasts for 2010, adjusting that of India to 7.7 percent from an original forecast of 6.4 percent (the same forecasts predict an average of approximately 3.9 percent, at a global level).
One of the reasons behind the excitement around India lies in its current economic state, unlike other most other economies labelled 'emerging', India is truly in its economic infancy. It is the country's place towards the bottom of the development ladder that makes it compelling for investors, representing relative immaturity and therefore greater growth potential.
Each of the four BRIC constituent countries owes its growth to different roots; the phenomenal rise of China can be greatly attributed to a thriving export and manufacturing industry, whereas Brazil and Russia's boom relied on a natural abundance of much-needed commodities.
In comparison, India's story is very much a domestic one. Private domestic consumption accounts for 57% of GDP in India compared with only 35% in China. Additionally, India's population is soaring: by 2025, it's projected to surpass China's. The demographic changes will provide a well educated, English speaking, young and vibrant workforce to India, in contrast to the ageing population problem that China currently faces.
Whilst a loyal and expanding domestic economy are essential to the growth of any country (the Chinese government is actively looking to create such conditions, such is the domestic demand for western products), India recognises that it has to look outside of its own boundaries to enact long-term economic development. Plans are afoot with much-needed significant development in India's infrastructure, which would stimulate the development of a manufacturing sector that lends itself to a vast resource of young workers.
Foreign investment (also known as 'speculative' or 'hot' money) inevitably follows any success story, more so against an economic backdrop such as the current one. Following similar steps to China, it is thought that the Indian government is likely to introduce measures to control unprecedented foreign investment ($17 billion of funds flowed into Indian equities last year, appreciating the Indian Rupee over 10% since Q1-end 2009); a higher reserve ratio requirement to its banks or a curb on interest payments to non-resident investors are just two of the ways that this could be achieved. Whilst this may have a short term negative effect on stock markets, it demonstrates a responsibility that puts India in a much better place, long term.
Sanjiv Duggal, manager of the Hansard HSBC Indian Equity fund (MC101, available in HIL & HEL) commented "The consumer discretionary and real-estate sectors have underperformed recently on concerns of measures by the central bank. But we expect interest rates to normalise following the sharp easing by the central bank in 2008. We think consumption should remain robust in 2010. GDP growth forecasts for the current fiscal year ending March has been steadily revised up from around 5% to around 7%. This upward revision has come despite the poor monsoon affecting farm output as industrial production has been strong."
Hansard has a variety of fund links across a diverse range of asset classes, whether your clients have a conservative, balanced or adventurous outlook. To find out more about any of our fund links please contact your Hansard Account executive who will be able to assist you further.
The outlook for the Indian economy is very positive, uncommon amidst a global recession. This is confirmed by the recent revision of the IMF's economic growth forecasts for 2010, adjusting that of India to 7.7 percent from an original forecast of 6.4 percent (the same forecasts predict an average of approximately 3.9 percent, at a global level).
One of the reasons behind the excitement around India lies in its current economic state, unlike other most other economies labelled 'emerging', India is truly in its economic infancy. It is the country's place towards the bottom of the development ladder that makes it compelling for investors, representing relative immaturity and therefore greater growth potential.
Each of the four BRIC constituent countries owes its growth to different roots; the phenomenal rise of China can be greatly attributed to a thriving export and manufacturing industry, whereas Brazil and Russia's boom relied on a natural abundance of much-needed commodities.
In comparison, India's story is very much a domestic one. Private domestic consumption accounts for 57% of GDP in India compared with only 35% in China. Additionally, India's population is soaring: by 2025, it's projected to surpass China's. The demographic changes will provide a well educated, English speaking, young and vibrant workforce to India, in contrast to the ageing population problem that China currently faces.
Whilst a loyal and expanding domestic economy are essential to the growth of any country (the Chinese government is actively looking to create such conditions, such is the domestic demand for western products), India recognises that it has to look outside of its own boundaries to enact long-term economic development. Plans are afoot with much-needed significant development in India's infrastructure, which would stimulate the development of a manufacturing sector that lends itself to a vast resource of young workers.
Foreign investment (also known as 'speculative' or 'hot' money) inevitably follows any success story, more so against an economic backdrop such as the current one. Following similar steps to China, it is thought that the Indian government is likely to introduce measures to control unprecedented foreign investment ($17 billion of funds flowed into Indian equities last year, appreciating the Indian Rupee over 10% since Q1-end 2009); a higher reserve ratio requirement to its banks or a curb on interest payments to non-resident investors are just two of the ways that this could be achieved. Whilst this may have a short term negative effect on stock markets, it demonstrates a responsibility that puts India in a much better place, long term.
Sanjiv Duggal, manager of the Hansard HSBC Indian Equity fund (MC101, available in HIL & HEL) commented "The consumer discretionary and real-estate sectors have underperformed recently on concerns of measures by the central bank. But we expect interest rates to normalise following the sharp easing by the central bank in 2008. We think consumption should remain robust in 2010. GDP growth forecasts for the current fiscal year ending March has been steadily revised up from around 5% to around 7%. This upward revision has come despite the poor monsoon affecting farm output as industrial production has been strong."
Hansard has a variety of fund links across a diverse range of asset classes, whether your clients have a conservative, balanced or adventurous outlook. To find out more about any of our fund links please contact your Hansard Account executive who will be able to assist you further.
QROPS Advice: Investment News: America economic recovery taking hold
The dollar declined as stocks rose amid signs that the economic recovery is taking hold, fanning demand for higher-yielding currencies such as the South Korean won and the South African rand. The Dollar Index, which tracks the U.S. currency against those of six major trading partners, dropped for a third day before a report due to be published that is thought to show U.S. service industries expanded at the fastest pace in more than a year. The pound rose versus the euro and the dollar after data showed U.K. consumer confidence jumped. The euro extended two days of gains against the dollar on Wednesday as European Commission President Jose Barroso said the body will back Greece's plans to cut its budget deficit.
QROPS Advice: Investment News: Gold Gains
Gold gained for a third day on Wednesday as the dollar extended a decline, fuelling investor appetite for the metal as an alternative asset. Silver also climbed. "Price levels below the $1,100 an ounce level apparently attract buyers who consider this level as a lucrative entry point," said Eugen Weinberg, a senior analyst with Commerzbank AG.
QROPS Advice: Investment News: Sales up in Germany
Retail sales in Germany, Europe's largest economy, increased in December as the improving economic outlook bolstered Christmas spending. Sales, adjusted for inflation and seasonal swings, rose 0.8 percent from November, when they dropped a revised 1.7 percent, the Federal Statistics Office in Wiesbaden said on Wednesday.
QROPS Advice: Investment News: Brazil Up
Brazilian stocks gained on Tuesday, completing the biggest two-day rise for the Bovespa index since November, as commodities rallied and industrial production increased more than analysts' forecast. Brazil's industrial production jumped to a greater than expected 18.9 percent in December, after having contracted 14.7 percent a year ago, the national statistic agency said on Wednesday.
QROPS Advice: CHINA "Speed bump"
The tumble in China's stocks is a "speed bump" and won't last for more than three months before rallying, said Christopher Wood, chief strategist at CLSA Ltd. The benchmark Shanghai Composite Index has declined 8.3 percent this year, the second-worst performer among 94 global stock gauges, on concern government measures to curb credit growth and control inflation will hurt growth. "The reason China is down the most is because the Chinese government is the first to make tightening moves," Wood said. "This correction, which may run for two to three months, is the opportunity to invest in banks, property, consumer stocks in China."
QROPS Advice: Investment News: Big Ideas for 2010
This month I thought I'd share with you with my hit list of individual shares for 2010 – these are companies or funds that have been promoted on to my watch list and are likely to find their way into my portfolio at some point during the year.
Three themes dominate - the first and most important is emerging markets, but with a very selective twist. I want really interesting growth stories that have a great long term story. I'm also keen to keep building up my existing heavy utility/infrastructure holdings and my oil equipment, mining and oil company investments. Lastly I'd like to slowly build up a stronger value tilt but around special situations as I like the idea of a larger margin of safety in what I think will be very dangerous markets.
In the emerging markets space I'm interested in
• VinaCapital Vietnam Opportunities (VOF) which is a closed-end fund last seen trading at around $1.50 compared to an NAV of close to $2.40 a share. Everyone I talk to in the fund management world really rates the fund management firm Vinacapital as the best in the sector and I'm a long term bull on Vietnam. I'm waiting for an entry point below $1.35
• I've been carefully watching Agriterra for some time now and I think the point may soon come where I take a punt. This is run by a bunch of CAMEC veterans and is probably the purest London listed play on African agriculture and food processing. I've held back from taking the plunge up until now because of worries about the company's low profile in London, but at two recent fund conferences I talked to professionals who said they had recently built stakes in Agriterra.
• Ocean Wilsons is a brilliant way of buying into the Brazilian story at a reasonable price. This London listed vehicle has two major assets, the first is a dominant shareholding in the highly regarded local Brazilian infrastructure and marine services firm Wilson & Sons plus there's also a massive wad of cash and market investments sitting on the balance sheet as an added extra. Wilsons could be a big beneficiary - via its tugs division - of the massive investment by Petrobras in its deep-water fields.
• The Indonesia Fund is a US-listed, Aberdeen-managed closed-end fund. It's not especially cheap and Indonesia has had a good run, but again I'm very interested in the big, long term picture here. Indonesia has a large range of quantity of blue chips with strong financials and a great growth story. I'd like a small investment in this but I'll probably wait until emerging markets pull back a little more.
Over in the infrastructure and resource and resource equipment space I have four potentials…
• I like the look of an US-listed infrastructure fund called Brookfield Infrastructure Partners. This closely resembles British listed peers such as 3i Infrastructure and HICL (HSBC's infrastructure vehicle) but it boasts a more diversified portfolio, a better yield and a greater discount to NAV.
• International Power is likely to find its way very soon into my portfolio. The whole shennanigans about its abortive takeover doesn't faze me - either it does get taken over for north of 400p or it will continue to produce some very solid results, and a great dividend yield. I also like it's very diversified mix of utility assets
• Avanti Communications is not your usual infrastructure play in that it's expensive and loss making, but a number of the UK brokers have been featuring this as one of their big bets for 2010 based on the firm's HYLAS satellite roll out plans over the next few years. This is my best UK growth punt
• Last but no means least I like the look of Pressure Technologies which is a relatively cheap, UK based manufacturer of high pressure, seamless steel gas cylinder. This is a play on a number of themes including biogas, the government's new-for-old boiler initiative and the oil equipment industry. All for a PE of well under 9, a decent balance sheet and a growing order book.
My last big theme is that value bias. I have my sights set on two ideas, both US based (I have a growing US bias because I believe the American economy will recover very strongly over the next year).
• Hedge fund Third Point Offshore has shares listed on the UK market at a chunky 20 per cent dividend to NAV. I've been watching Dan Loeb's idiosyncratic but successful fund management style for some time and I strongly recommend that investors have a look at his quarterly letters. Mr Loeb is famous in the US for his outspoken shareholder activism but I'm more attracted by his unconstrained contrarian take on a range of asset classes including beat-up corporate bonds and mortgage-backed securities.
• Mr Loeb's also put me onto a US firm called TransDigm, which is an aerospace aftermarket supplier and a classic value stock with strong margins and great recurring revenues.
Written by:David Stevenson
http://www.investorschronicle.co.uk/Columnists/GuestColumnists/article/20100202/cdc2eebe-0fe5-11df-ba8b-0015171400aa/Big-ideas-for-2010.jsp
Three themes dominate - the first and most important is emerging markets, but with a very selective twist. I want really interesting growth stories that have a great long term story. I'm also keen to keep building up my existing heavy utility/infrastructure holdings and my oil equipment, mining and oil company investments. Lastly I'd like to slowly build up a stronger value tilt but around special situations as I like the idea of a larger margin of safety in what I think will be very dangerous markets.
In the emerging markets space I'm interested in
• VinaCapital Vietnam Opportunities (VOF) which is a closed-end fund last seen trading at around $1.50 compared to an NAV of close to $2.40 a share. Everyone I talk to in the fund management world really rates the fund management firm Vinacapital as the best in the sector and I'm a long term bull on Vietnam. I'm waiting for an entry point below $1.35
• I've been carefully watching Agriterra for some time now and I think the point may soon come where I take a punt. This is run by a bunch of CAMEC veterans and is probably the purest London listed play on African agriculture and food processing. I've held back from taking the plunge up until now because of worries about the company's low profile in London, but at two recent fund conferences I talked to professionals who said they had recently built stakes in Agriterra.
• Ocean Wilsons is a brilliant way of buying into the Brazilian story at a reasonable price. This London listed vehicle has two major assets, the first is a dominant shareholding in the highly regarded local Brazilian infrastructure and marine services firm Wilson & Sons plus there's also a massive wad of cash and market investments sitting on the balance sheet as an added extra. Wilsons could be a big beneficiary - via its tugs division - of the massive investment by Petrobras in its deep-water fields.
• The Indonesia Fund is a US-listed, Aberdeen-managed closed-end fund. It's not especially cheap and Indonesia has had a good run, but again I'm very interested in the big, long term picture here. Indonesia has a large range of quantity of blue chips with strong financials and a great growth story. I'd like a small investment in this but I'll probably wait until emerging markets pull back a little more.
Over in the infrastructure and resource and resource equipment space I have four potentials…
• I like the look of an US-listed infrastructure fund called Brookfield Infrastructure Partners. This closely resembles British listed peers such as 3i Infrastructure and HICL (HSBC's infrastructure vehicle) but it boasts a more diversified portfolio, a better yield and a greater discount to NAV.
• International Power is likely to find its way very soon into my portfolio. The whole shennanigans about its abortive takeover doesn't faze me - either it does get taken over for north of 400p or it will continue to produce some very solid results, and a great dividend yield. I also like it's very diversified mix of utility assets
• Avanti Communications is not your usual infrastructure play in that it's expensive and loss making, but a number of the UK brokers have been featuring this as one of their big bets for 2010 based on the firm's HYLAS satellite roll out plans over the next few years. This is my best UK growth punt
• Last but no means least I like the look of Pressure Technologies which is a relatively cheap, UK based manufacturer of high pressure, seamless steel gas cylinder. This is a play on a number of themes including biogas, the government's new-for-old boiler initiative and the oil equipment industry. All for a PE of well under 9, a decent balance sheet and a growing order book.
My last big theme is that value bias. I have my sights set on two ideas, both US based (I have a growing US bias because I believe the American economy will recover very strongly over the next year).
• Hedge fund Third Point Offshore has shares listed on the UK market at a chunky 20 per cent dividend to NAV. I've been watching Dan Loeb's idiosyncratic but successful fund management style for some time and I strongly recommend that investors have a look at his quarterly letters. Mr Loeb is famous in the US for his outspoken shareholder activism but I'm more attracted by his unconstrained contrarian take on a range of asset classes including beat-up corporate bonds and mortgage-backed securities.
• Mr Loeb's also put me onto a US firm called TransDigm, which is an aerospace aftermarket supplier and a classic value stock with strong margins and great recurring revenues.
Written by:David Stevenson
http://www.investorschronicle.co.uk/Columnists/GuestColumnists/article/20100202/cdc2eebe-0fe5-11df-ba8b-0015171400aa/Big-ideas-for-2010.jsp
Friday, 29 January 2010
QROPS Advice: Investment News: WORLD'S BEST MARKETS
A good index-tracking fund can and should be one of the core components of any diversified portfolio. But there's a problem with ETFs. They provide a simple, efficient and cheap solution to lots of investment difficulties yet private investors have been slow to buy them. There are several reasons for this including our continued love affair with star fund managers.
But a bigger problem is probably what's been called the 'biscuit tin' problem – defined by one chief executive of an ETF firm as "investors not knowing what the heck our ETF actually tracks. We'd say it tracked the so and so MSCI index and they'd look at us blankly".
This brutal assessment gets to the heart of the problem. To get the best from low-cost trackers, you need to understand what the fund is actually tracking first.
It's all about the index
Indices are not all equal. Track an imperfect index that's poorly constructed, overweight in just a few shares (say banking stocks in 2008) and you'll end up destroying a large chunk of your money despite all the academics' talk about efficient markets and perfectly optimised portfolios. But there is a huge range of major markets that can be tracked using mainstream indices – nearly all the big asset classes and markets boast an index that's become a part of everyday language. In the US, for example, the level of the Dow Jones Industrial Average or the S&P is the subject of intense daily discussion on a number of major news programme s, while here in the UK all the major news organisations talk hourly about the current level of the FTSE 100 index of major London listed blue-chip companies.
The key for investors is to work out which indices – and markets – really matter and then work out how best to invest in these markets. FTSE Group alone calculates more than 120,000 indices.
In many liquid, mature markets index-tracking funds are probably the cheapest and arguably the best way of buying long-term exposure. Remember that an index-tracking fund will only ever buy the most popular stocks that are increasing in value – it's a giant weighing machine that is heavily influenced by momentum, so if a market and thus an index is overweight popular mining stocks, expect the ETF to be equally overweight.
by: David Stevenson
But a bigger problem is probably what's been called the 'biscuit tin' problem – defined by one chief executive of an ETF firm as "investors not knowing what the heck our ETF actually tracks. We'd say it tracked the so and so MSCI index and they'd look at us blankly".
This brutal assessment gets to the heart of the problem. To get the best from low-cost trackers, you need to understand what the fund is actually tracking first.
It's all about the index
Indices are not all equal. Track an imperfect index that's poorly constructed, overweight in just a few shares (say banking stocks in 2008) and you'll end up destroying a large chunk of your money despite all the academics' talk about efficient markets and perfectly optimised portfolios. But there is a huge range of major markets that can be tracked using mainstream indices – nearly all the big asset classes and markets boast an index that's become a part of everyday language. In the US, for example, the level of the Dow Jones Industrial Average or the S&P is the subject of intense daily discussion on a number of major news programme s, while here in the UK all the major news organisations talk hourly about the current level of the FTSE 100 index of major London listed blue-chip companies.
The key for investors is to work out which indices – and markets – really matter and then work out how best to invest in these markets. FTSE Group alone calculates more than 120,000 indices.
In many liquid, mature markets index-tracking funds are probably the cheapest and arguably the best way of buying long-term exposure. Remember that an index-tracking fund will only ever buy the most popular stocks that are increasing in value – it's a giant weighing machine that is heavily influenced by momentum, so if a market and thus an index is overweight popular mining stocks, expect the ETF to be equally overweight.
by: David Stevenson
QROPS Advice: Investment News: The case for multi-asset funds
The first month of 2010 has been marked by a deluge of multi-asset fund launches. A week ago, Heartwood Wealth Management announced the launch of its CF Heartwood Cautious Multi-Asset and Growth Multi-Asset Funds, which will be followed soon with the launch of the Balanced and Balanced Income Funds. The new multi-asset funds will invest primarily in third party funds, including alternatives, structured products and derivatives as appropriate.
Other recent launches include Prudential's range of five multi-asset funds with different risk levels: Defensive, Cautious, Cautious Growth, Balanced and Adventurous, and Scottish Widows Investment Partnership (SWIP)'s SWIP Multi-Manager Optimal Multi-Asset Fund, a higher risk/return follow-up to its cautious SWIP Multi-Manager Diversity Fund launched in 2007. Allianz Global Investors is another provider expected to launch a multi-asset fund.
The recent hike in multi-asset fund launches brings some truth to predictions by industry players and independent financial advisers (IFAs) that multi-asset funds will be the "hot financial product" of 2010. The term 'multi-asset funds' refers to funds which invest across several asset classes and fund managers, which means investors are not exposed to the market gains or losses of just one asset class. Ultimately, multi-asset managers create the potential for capital growth and the conditions where the better performers may offset the poor performers.
Investors' desire to spread investment risk, coupled with the low interest rate environment in which it is hard to get returns on cash, have been touted as some of the reasons behind the increased focus on diversified strategies.
Another, more pressing, reason behind the spate of launches is the need for IFAs to meet the demands of growing regulation, such as the Financial Services Authority's (FSA) Treating Customers Fairly (TCF) initiative and the Retail Distribution Review (RDR). These require IFAs to ensure a fair deal for consumers and consider as wide as possible a range of investment products to meet client risk and investment objectives.
So what benefits do multi-asset funds hold for the private investor?
By: Leonora Walters
Other recent launches include Prudential's range of five multi-asset funds with different risk levels: Defensive, Cautious, Cautious Growth, Balanced and Adventurous, and Scottish Widows Investment Partnership (SWIP)'s SWIP Multi-Manager Optimal Multi-Asset Fund, a higher risk/return follow-up to its cautious SWIP Multi-Manager Diversity Fund launched in 2007. Allianz Global Investors is another provider expected to launch a multi-asset fund.
The recent hike in multi-asset fund launches brings some truth to predictions by industry players and independent financial advisers (IFAs) that multi-asset funds will be the "hot financial product" of 2010. The term 'multi-asset funds' refers to funds which invest across several asset classes and fund managers, which means investors are not exposed to the market gains or losses of just one asset class. Ultimately, multi-asset managers create the potential for capital growth and the conditions where the better performers may offset the poor performers.
Investors' desire to spread investment risk, coupled with the low interest rate environment in which it is hard to get returns on cash, have been touted as some of the reasons behind the increased focus on diversified strategies.
Another, more pressing, reason behind the spate of launches is the need for IFAs to meet the demands of growing regulation, such as the Financial Services Authority's (FSA) Treating Customers Fairly (TCF) initiative and the Retail Distribution Review (RDR). These require IFAs to ensure a fair deal for consumers and consider as wide as possible a range of investment products to meet client risk and investment objectives.
So what benefits do multi-asset funds hold for the private investor?
By: Leonora Walters
QROPS Advice: Investment News: Spotlight on Technology Funds
Following the much-publicised bursting of the 'dot.com' bubble in 2000, many investors have understandably ignored technology funds as being part of their investment portfolio. Catastrophic losses followed unprecedented excitement around a new sector that promised so much yet ultimately delivered, for some, almost nothing.
Technology funds became a victim of their own success in a very short space of time, in January 1999 investors put just GBP5m into technology funds, in January 2000 they attracted GBP238m (source: Investment Management Association (UK)). The future value of technology equities was vastly over estimated, and when these expectations were not met, the industry duly collapsed.
However, anybody that has kept a close eye on the development of technology funds since 2000 will know that it now represents a very real, if not relatively unknown, investment opportunity (the Lipper Science and Technology Funds sector average returned 69.31percent in 2009). Learning from the mistakes of a decade ago, technology companies started focusing on profits and cash flows rather than just revenue growth, so much so that the technology sector is now in very healthy financial shape, with either little or no balance sheet debt. More importantly, valuations based on technology companies represent an honest reflection of future worth, unlike they did 10 years ago.
Whilst the sector didn't escape the effects of the recent global recession, it has emerged relatively unscathed owing to an almost unique appeal to both retail and business markets. Consumers' seemingly insatiable appetite the latest technology gadgets; mobile phones, multi media and gaming consoles, plasma and LCD TVs etc., coupled with need for IT infrastructure solutions to accommodate the rapid growth of many financial centres based in emerging market economies, has served as a regular and diverse income stream for many new and established technology firms.
From innovative smartphones to 'tablet' computers and 3-D TV, technology consumers and investors have a lot to look forward to in 2010 and beyond. Warren Tennant, manager of the Hansard Invesco Global Technology fund (MC23, available in both HIL and HEL) has greater confidence in the medium-term outlook and continues to be encouraged that the coordinated global stimulus will positively affect the global economy. Going forward, he sees the possibility for improvements in credit markets, stabilisation of demand patterns and conditions for secular growth. And have consistently highlighted the long-term positive trends for technology in the team outlook.
Hansard has a variety of fund links across a diverse range of asset classes, whether your clients have a conservative, balanced or adventurous outlook. To find out more about any of our fund links please contact your Hansard Account executive who will be able to assist you further.
Technology funds became a victim of their own success in a very short space of time, in January 1999 investors put just GBP5m into technology funds, in January 2000 they attracted GBP238m (source: Investment Management Association (UK)). The future value of technology equities was vastly over estimated, and when these expectations were not met, the industry duly collapsed.
However, anybody that has kept a close eye on the development of technology funds since 2000 will know that it now represents a very real, if not relatively unknown, investment opportunity (the Lipper Science and Technology Funds sector average returned 69.31percent in 2009). Learning from the mistakes of a decade ago, technology companies started focusing on profits and cash flows rather than just revenue growth, so much so that the technology sector is now in very healthy financial shape, with either little or no balance sheet debt. More importantly, valuations based on technology companies represent an honest reflection of future worth, unlike they did 10 years ago.
Whilst the sector didn't escape the effects of the recent global recession, it has emerged relatively unscathed owing to an almost unique appeal to both retail and business markets. Consumers' seemingly insatiable appetite the latest technology gadgets; mobile phones, multi media and gaming consoles, plasma and LCD TVs etc., coupled with need for IT infrastructure solutions to accommodate the rapid growth of many financial centres based in emerging market economies, has served as a regular and diverse income stream for many new and established technology firms.
From innovative smartphones to 'tablet' computers and 3-D TV, technology consumers and investors have a lot to look forward to in 2010 and beyond. Warren Tennant, manager of the Hansard Invesco Global Technology fund (MC23, available in both HIL and HEL) has greater confidence in the medium-term outlook and continues to be encouraged that the coordinated global stimulus will positively affect the global economy. Going forward, he sees the possibility for improvements in credit markets, stabilisation of demand patterns and conditions for secular growth. And have consistently highlighted the long-term positive trends for technology in the team outlook.
Hansard has a variety of fund links across a diverse range of asset classes, whether your clients have a conservative, balanced or adventurous outlook. To find out more about any of our fund links please contact your Hansard Account executive who will be able to assist you further.
QROPS Advice: Investment News: Home prices in 20 U.S. cities rose in November
Home prices in 20 U.S. cities rose in November for the sixth consecutive month, signalling the industry that precipitated the worst recession since the 1930s is stabilizing. The S&P/Case-Shiller home-price index increased 0.2 percent from the prior month on a seasonally adjusted basis, after a 0.3 percent rise in October, the group said on Tuesday. The gauge was down 5.3 percent from November 2008, exceeding expectations and the smallest year-over-year decline in two years.
QROPS Advice: Investment News: France's growth may exceed forcasts
France's 2010 economic growth may exceed the government's 1.4 percent forecast, President Nicolas Sarkozy said. France's economy emerged from recession last year, growing 0.3 percent in the second and third quarters, and prompting the government to double its economic forecast. Sarkozy was more confident than his finance minister on employment, pledging an end to job losses in the "coming weeks, months."
QROPS Advice: Investment News: German business confidence rises
German business confidence rose more than economists forecast to an 18-month high in January as the global economic recovery boosted exports. Rising foreign sales, fuelled by Asian demand, may help offset a slide in domestic spending and ensure Germany's economy continues to expand. The government said last week it will raise its 2010 growth forecast to 1.5 percent from 1.2 percent even as some of its stimulus measures expire. Europe's largest economy shrank 5 percent last year, the most since World War II. Tuesday's report "laid to rest some of the concerns that the economy is running out of steam," Carsten Brzeski, an economist at ING Group said.
QROPS Advice: Investment News: Chinese banks have begun restricting new loans
Chinese banks have begun restricting new loans, responding to a push by regulators to contain credit after a surge in lending in the first half of this month. The China Banking Regulatory Commission last week said lenders that failed to meet any of more than a dozen regulatory requirements have been told to limit lending. The watchdog said not all banks have been asked to rein in credit. "Five major banks we have contacted today all suggested they received instruction from banking regulators last week to slow down new lending, but not stop new lending," HSBC Holdings Plc economist Hongbin Qu said.
QROPS Advice: INVESTMENT RULES OF THE ROAD
Diversification. It's a core principle of investing. Don't put all your eggs in one basket, and all that. Multi-asset funds promise diversification at a stroke, because they invest in various asset classes rather than just shares, just bonds, just property and so on. But you still need a manager who knows what he's doing. Call 0044 (0)1664 444625 for professional impartial advice.
Thursday, 28 January 2010
QROPS Advice: Investment News: UK economy out of recession
The UK economy has come out of recession, after figures showed it had grown by 0.1% in the last three months of 2009. The economy had previously contracted for six consecutive quarters - the longest period since quarterly figures were first recorded in 1955. There have been recent recovery signs - last week UK unemployment fell for the first time in 18 months. Bank of England policy makers will study the data as they assess the strength of the recovery and decide next week whether to halt bond purchases and prepare to withdraw emergency stimulus measures.
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