Tanya Southworth

Please take a moment to read my latest blog considering an optimal portfolio construction in a new dynamic equity-bond correlation regime: https://lnkd.in/eh-7HmFN

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The aim of the Roadmap is to put forward an investor and solutions-focused perspective on some of the key public policy priorities to boost low-carbon investment in the UK for the next five years. Read more in 'Boosting low-carbon investment in the UK: A Policy Roadmap' 📖 https://bit.ly/4d3GaN9 #LowCarbon #UKEconomy #Policy

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2024 is delivering on its promise to be a big year in #geopolitics with Rishi Sunak calling a UK General Election for 4 July. Absent major surprises, we don’t expect this one to be a market moving event. The opinion polls are strongly skewed towards a victory for Keir Starmer’s Labour and macro-economic policy differences are far smaller than they were in 2019 when Boris Johnson squared up against Jeremy Corbyn. November’s election in the US is a different matter altogether. The polls are close enough for either Biden or Trump to win the Presidency and there are major geopolitical forces hanging on the outcome. See the blog post for more details including a chart of UK GDP, inflation and base rates since 2010. Not a promising backdrop for the incumbent. https://lnkd.in/dPUVicu9

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There are over 100 MPS solutions now in the market - how can advisers possibly differentiate? Cost and performance are clearly important, but as an industry (on the investment side) we can do much more for clients. It's time to start moving MPS/multi-asset investing forward - bringing real value to advisers and the end client - by delivering solutions relevant to varying needs, in a simple and coherent manner. Alongside our Core portfolios, we launched our Satellite portfolios over two years ago. We are able to cater for clients that have varying time horizons and goals - from wealth accumulators to those in retirement - using model portfolio building blocks. Using our tech, an adviser recently built a custom portfolio for their client in retirement: £500k pension pot, needing £25k a year; + £100k in an ISA, for income. Desire to leave some legacy. The solution: - £400k in Growth Core portfolio (working away growing capital) - £100k in Cash Plus Satellite portfolio (4 years worth of cash, still earning 5%) - £100k in ISA in High Income Satellite portfolio (generating tax free 5-6%) = sequencing risk reduced; client feels personal circumstances met and has less market anxiety; easily understood and implemented in 20 mins. ...this is Consumer Duty.

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With thanks to PA Future, Michael N., and Kaso Legg Communications . If you want to find out more about the relationship between cattle ranching and futures markets, check out the article below, where George Cotton contributes. #commodities #investing

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Hello everyone. Hope your week has started well. I just wanted to highlight some excellent reporting from Jamie Colvin in Citywire - see article in first link below. Tom Poynton has also had the ingenious idea to create a "forum" to garner an understanding of retail investors' understanding of the many issues facing the investment companies sector (the link is in the article). Our campaign has often highlighted how new well-intended Consumer Duty regulations have turbo-charged the negative impact of IC "cost" disclosures. Recent attention has rightly been given to one aspect of this turbo-charging: retail platforms wrongly interpreting "value" and "cost" and not only misinforming consumers, but now banning them from investing in investment companies based on utterly floored logic. Do these platforms have the expertise to be making these judgements? Where they do not and they outsource, has there been proper due diligence on third parties used to make assessments of value? https://lnkd.in/eA4SHXjW We will not rest. Have a good week. Ben https://lnkd.in/eh9G9NWM

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How are retail investors navigating market volatility? Great to speak to a podcasting master, in the form of Carl Hazeley from Finimize, about the results of the latest Modern Investor Pulse - lifting the lid on retail investor trends. Listen to the latest abrdn Macro Bytes episode here -> https://lnkd.in/e73BV6dc

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Has anyone else worried about DC pots and the largely impossible trade-off between how much you'll need, how long you'll live and how much risk to take to name but a few? If investment practitioners have these thoughts something ought to be done about it and this is exactly what our colleagues have started here. Please read this today and help us campaign! https://lnkd.in/etQ9-98x

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Afternoon, my latest blog on Labour spending and the possible impact on rates and gilts.

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An interesting article in Citywire this morning by Henry Cobbe, CFA (see below). https://lnkd.in/einXyGNY It would be remiss of me not to make the following points: 1) Public markets 'discount' (take into account) known recurring expenses. Take two listed closed-ended investment companies ('investment trusts'): A and B. Both Boards employ investment advisers who invest the trust's capital in identical cash deposits bearing 0% interest. Let's assume a 5 year management contract. A's adviser charges 1%, B's 2%. Will the share prices be the same? Of course not. B's share price, all other things equal, will be c. 5% lower to account for higher fees over the life of the management contract. Investors invest in the share price NOT the NAV. Expenses are a drag on the NAV NOT the share price. It has to be so otherwise there would be a risk-free arbitrage to short B and long A. It is inappropriate to treat these expenses in the same way we do the ongoing charges of open-ended funds and aggregate them in total cost figures (whether that's a fund of funds or a wealth management portfolio). Platforms should also not disclosure the figure to retail investors in this misleading way. Look what happened when BH Macro upped fees by 1% - the shares fell by c. 10% to discount the increased drag on NAV. I went into more detail on these issues in the below blog, and show why it is appropriate to aggregate ongoing charges of open-ended funds, but not expenses of investment trusts: https://lnkd.in/eSiyEMn5 2) Mr Cobbe has deployed a straw man. I am not aware of anyone campaigning for no disclosure. First, there is and always has been, as much disclosure for investment trusts as there is for other listed corporate entities via UK Listing rules (the reports and accounts). Second, we have been campaigning for additional disclosure via our "Statement of Operating Expenses". This would surface operating expenses in an appropriate way, express them as a percentage of NAV (for use alongside other relevant information such as premium / discount) to enable cross-comparison with open-ended funds and other investment trusts. We recognise that investment trusts share characteristics with open-ended funds, and we need disclosures that recognise that. But some trusts resemble operating companies (and compete with them) more than collective investment schemes. Crucially, the listing on a public market is a key differentiating feature and matters hugely for how expenses are disclosed. Disclose. Don't Double Count.

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Note: The following is my personal musing and not necessarily the view of GHC Capital Markets Limited It is with admiration that I post Ros Altmann’s latest column. No one has offered more support to UK 🇬🇧 #financialservices than the former Minister for Pensions, heading the campaign from within the UK House of Lords alongside her “partner in crime” Sharon Bowles, reflecting the anomalous cost disclosures regime for Members of The Association of Investment Companies (AIC)…. https://lnkd.in/e_GHBw8E are many in the industry who have assisted but the fact is, it requires political intervention to change the law). It puts to shame the House of Commons. She’s at it again, this time urging the UK government 🇬🇧 to support domestic #markets. There are many who ask why should UK 🇬🇧 #pensionfunds #institutionalinvestors and #retailinvestors allocate more of their savings at home? The lessons are there for us all IMO, if we don’t encourage! Ros is quite right to point to the effect that perceived de-risking of Pension Funds in particular has had. There was mass reduction of #equity exposure, it was going to have an effect…simple #supply and #demand tells us that. #Regulation encouraged pension funds toward greater matching of #assets to #liabilities and the shift to bonds, reflecting the locking in of returns in a lower for longer #interestrate and #inflation environment. Many people blame the speed at which UK 🇬🇧 interest rates rose on Liz Truss and Kwasi Kwarteng’s failed attempt to stimulate growth and reduce the #tax burden. However, that ignores what has similarly happened around the world! I’m not a #maths or #economics genius! However, even I could work out that the 2022 reversing of QE was always going to have an impact. We of course couldn’t have predicted war in Ukraine. But we could have been more ready to react better to rising rates of interest and inflation. I just hope we manage to learn the lessons quicker than in the one country, who in the late 1980’s early 1990’s, lost its way in terms of the value of its domestic market and is only now back to its peak of that time. I refer of course to Japan 🇯🇵. So-called “Abenomics” and in particular the implementation of painful structural reforms to return the economy to a growth path is, I would suggest, finally paying off. It was effective in supporting large firms by boosting #equity markets and nurturing a sense of #stability. Japan (and German) recovery after the Second World War (for the 50 years or more that followed) was stopped by corruption, together with the collapse of Communism across the Eastern Bloc. It coincided with the rise of the European Union 🇪🇺 only now being challenged again by events in Ukraine, and before that Brexit. To kick-on, the UK 🇬🇧 and it’s markets need the support of dometic #investors. Our economy is dominated by the service sector, it’s an industry too vital not to be supported. Now is the time to act! #socialmedia

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Hi The attached note looks at seasonal patterns in shares and whether its time to “sell in May and go away” along the lines of the old share market saying. The key points are as follows: Seasonal patterns in shares gave rise to the saying “sell in May and go away, buy again on St Leger’s Day.” However, seasonal patterns can’t always be relied on so while investors should be aware of them, betting on them solely to drive investment decisions is not wise. We continue to see shares having reasonable returns this year but expect a more constrained and volatile ride over the rest of the year than was the case in the first three months. All the best Shane

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I often refer to select specific investment options as “assets and earnings” plays where one gains exposure to tangible assets and growing profits at the same time. Whitbread (in the FTSE 100) ticks this box for me. The shares have retreated significantly from previous highs and thus have not been part of the increased buoyancy we have witnessed in the blue chip index in the recent past. This is Premier Inns in disguise with most of the business in the UK. Capital growth potential with a growing dividend not to mention always a possibly of takeover interest, an interesting opportunity perhaps. This is not investment advice and everyone must do their own research in determining suitability.

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What's new in the UK Wealth Management industry this week? We're experiencing more surge in M&A activity, fueled by a recent investment move by a sovereign fund wealth manager from Norway. The fund has acquired a 37.5% stake in a UK wind farm, signaling significant implications for the sector: ✅ Encouraging wealth managers to consider integrating renewable energy assets into their portfolios ✅ Putting pressure on UK wealth managers to align with ESG principles ✅ Requiring UK wealth managers to improve transparency regarding the effects of their investments Investments in renewable energy projects like UK wind farms are reshaping the industry, pushing for more sustainable and ESG-focused investment approaches. To build confidence in the sustainable sector and meet evolving client expectations, UK wealth managers must adapt to these changes to stay competitive. #HSAAdvisory #WealthManagement #UK #M&A #Sustainability #ESG

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Multiple bfinance asset owner surveys indicate that a significant slice of investors value diversity from external asset managers. Yet is DEI a meaningful factor in manager selection in practice? A new bfinance paper investigates, and shares a snapshot of firm-level diversity within the investment management industry: https://okt.to/rizhb0

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We have included commodities in multi asset funds at Royal London since 2016, making us one of the largest commodity investors in the UK. My own experience in commodities goes back to my time at Merrill Lynch in the early 2000s. As with other core asset classes, we pay attention to the strategic case for investments in commodities as well as shorter term tactical drivers. Likewise, we look to blend passive exposures with active strategies that consider environment, social and governance (ESG) factors where possible. Commodities bring inflation resilience to a portfolio and they’ve been particularly valuable in the post pandemic cost of living crisis. Tactically we’re positive. Supply is tight almost everywhere we look, there are geopolitical risks that could tighten things further and demand is stronger than anyone expected a year ago, with upside risks if the global manufacturing cycle continues to pick up.

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