Diverse fund performance over time

consistency of performance

Investment Fund returns can be contrary, as whilst short-term gains are welcomed, quite often the mid to long-term performance of any particular fund sector is more important to the prudent investor.

Recent data from the Investment Association (formerly the Investment Managers Association) shows that the performance of various sectors can differ quite considerable over the short to medium to long-term.

This can be illustrated by the fact that the 2015 year-to-date performance of the China and Greater China sector came top of the class, with a gain of 24.43%. However, its 3-year performance only put it in third place, seeing returns of 19.45%.

Top of the class over that same 3-year period goes to the UK Smaller Companies sector, recording gains of 20.1%, although its 2015 year to date performance only managed a gain of 10.82%, relegating it to 6th place over this investment period.

Consistency of performance is obviously to be desired by many investors, as can be seen by the Asia Pacific Including Japan sector, which recorded a 2015 year to date performance of 13.39%, to put it in 4th place in that period. It managed a consistent 13.63% over the 3-year period, but that only put it in 16th place in the performance league tables.

Given the multiformity of these performance figures, it is essential that investors have a widely diversified portfolio which would ensure there is not too much reliance on any given fund or sector that could damage the overall portfolio’s performance over the long-term, but still enable it to benefit from successful investment choices.

We are happy to offer advice on these issues, so would welcome you contacting us to hear our views and to help guide you through the decisions.

Professional advice is essential
When it comes to looking after our retirement planning and investments, vigilance and professional advice are essential. If you are wondering what to do, contact Robert Bruce Associates for individual assistance.
NOTHING IN THIS ARTICLE SHOULD BE SEEN AS GIVING INDIVIDUAL FINANCIAL ADVICE.

Is this the time to start investing?

Business man write check boxBusiness man write check boxBusiness man write check boxBusiness man write check boxTaking the decision to invest money can seem like a major step, but with help and advice from a professional adviser, building up a portfolio of profitable investments isn’t an unrealistic ambition.

To begin with, you need to be clear why you’re investing and what your goals are. Your adviser will want to know what plans you have for the future. These often include funding children’s education, repaying a mortgage, retiring at fifty-five; the list can be a long one.

It’s important to define your attitude to risk, which may change depending on your stage of life. For some people, the prospect of the value of their investment falling is very unsettling, while others are more comfortable with the inevitable ups and downs in stock markets at home and abroad, where exchange rate fluctuations may also affect values in sterling terms.

This year, as in most years, there will be a number of risk factors at play. The UK has to weather the policy changes that may lie in the wake of the general election; in Europe there are continuing fears of deflation, Greek debt crisis and the conflict between Russia and Ukraine. In the global economy, a question mark hangs over the pace of growth in China, while in the US the economic picture is much improved. As ever, there will be investment winners and losers amongst companies, industries and countries.

So, to counter some of these risks, and to take advantage of stocks and markets that look set to perform better, your adviser is likely to recommend investing across a range of sectors and stock markets to spread the risk. That way, a poorly-performing investment won’t greatly damage your overall returns, and your money has greater opportunities for growth.

We are here to help steer you through these decisions, so would welcome your questions and offer you our advice. Please do not hesitate to contact us.

 Professional advice is essential

When it comes to looking after our retirement planning and investments, vigilance and professional advice are essential. If you are wondering what to do, contact Robert Bruce Associates for individual assistance.

NOTHING IN THIS ARTICLE SHOULD BE SEEN AS GIVING INDIVIDUAL FINANCIAL ADVICE.

A weaker Euro may benefit exporters

Shipping smallThe recent strength of the Euro currency has frustrated large exporters profitability. With the Euro touching a rate close to $1.40, a near two-and-a-half year high against the US Dollar, export-led businesses here in the UK and elsewhere have suffered accordingly.

However, with the European Central Bank’s (ECB) President, Mario Draghi, determined to bring down the value of the Euro on the foreign exchanges, to help alleviate potential deflationary pressure in the eurozone countries, exporting businesses will benefit from this move.

Mr Draghi’s recent comments that he is considering reducing eurozone interest rates further at next month’s central bank meeting, has already caused the Euro to dip to $1.365 and many market pundits believe that the rate may fall further to maybe $1.25 by the end of this year.

This tail-wind of a lower Euro exchange rate can prove beneficial to exporters and their profitability in the short term, and so these companies may prove useful additions to any pan-European portfolios held.

Careful scrutiny of the ECB’s monetary strategy is vital to ensure beneficial timing of any investment decisions and we are happy to discuss these issues in greater detail with, so please do not hesitate to contact us.

Professional advice is essential
When it comes to looking after our retirement planning and investments, vigilance and professional advice are essential. If you are wondering what to do, contact Robert Bruce Associates for individual assistance.
NOTHING IN THIS ARTICLE SHOULD BE SEEN AS GIVING INDIVIDUAL FINANCIAL ADVICE.

UK equity market sees strong support

Real time quotes at the stock exchange.In its monthly survey of investor confidence, the Lloyds Bank Investor Sentiment Survey (LBISS) indicated that investor confidence in UK equities is at its highest level since their survey began in March 2013 and the index sat at +16.

Recording a level of +38 at the end of January, 47% of respondents held a positive view of the market and just 9% having a negative opinion, with 34% remaining neutral.

This compares with the results of the inaugural March 2013 survey which showed only 34% having a positive view, 17% negative and 38% neutral.

Head of Investment Policy at Lloyds Bank Private Banking, Ashish Misra, said of these findings: “It’s encouraging to see investors placing more faith in the UK stock market, and good news for British companies ahead of the first earnings season of 2014.

“There has been a slew of positive economic data out of the UK throughout 2013, suggesting that the recovery is gaining momentum, and it’s likely that investors’ views towards the UK stock market are reflective of this.”

Other global equity markets saw mixed sentiment, with the US market seeing net sentiment rise to +7 between December 2013 and January 2014 and the Japanese market reporting positive sentiment of +13, an increase of 5 points since the previous month. However, the wider Eurozone markets saw a decline in sentiment to -21.

Commenting further on these results, Ashish Misra said: “The increase in sentiment towards US equities was perhaps surprising given the quantitative easing taper that began just before Christmas, although US equities outperformed every other global equity market, except Japan, in 2013. We remain neutral towards the US and see the best opportunities for equity investors currently in the UK, Japan and the Eurozone.”

Professional advice is essential
When it comes to looking after our retirement planning and investments, vigilance and professional advice are essential. If you are wondering what to do, contact Robert Bruce Associates for individual assistance.
NOTHING IN THIS ARTICLE SHOULD BE SEEN AS GIVING INDIVIDUAL FINANCIAL ADVICE.

HMRC pursues second-home gains tax

The taxman is on the trail of capital gains tax unpaid on the sale of second homes and wants transgressors to own up.

If you sell assets and generate profits above the personal exemption level for any tax year, a Capital Gains Tax (CGT) liability may arise. CGT is 18% for basic rate taxpayers and 28% for higher and additional rate taxpayers; the 2012-13 personal exemption is £10,600, uplifted to £10,900 in 2013-14. Gains from shares or property are normally chargeable for CGT, but there are exceptions such as gains on Individual Savings Accounts and on a home sale, if it is your only or main residence.

‘Private residence relief’ does not apply to the sale of a second home or a buy-to-let property, so CGT is due if the gain, added to any others that same tax year, lifts the total above the exemption ceiling. Many people pay up when they make such taxable gains, but some have dodged their CGT liability, some may claim ignorance and in some cases the tax due may be uncertain. Matters can become more complex when, for example, you have let your main home and resided elsewhere for a time. Specialist advice may be required in such situations.

HMRC says its ‘property sales campaign’ targets people who have disposed of homes, in the UK or overseas, where CGT is payable. The taxman has imposed a deadline of 9 August for people to admit to any failure to pay CGT on property sales and they must meet their liability by 6 September. After that, HMRC warns, it will make careful inspection of the tax affairs of people who have sold properties other than their actual home and appear to have omitted to pay CGT. Any penalty could be greater if they have not owned up.

“Some people will not understand that selling a second home, a holiday home or a property disposed of as a gift could attract capital gains tax,” said an HMRC spokesperson. “They need to look at our website or contact us. Telling HMRC about your tax liabilities is simple and straightforward, and help, advice and support are available. HMRC will use information it holds about property sales, in the UK and abroad, to identify people who have not paid what they owe.”

Do seek appropriate advice from us if uncertain about your tax position.

Professional advice is essential

When it comes to looking after our retirement planning and investments, vigilance and professional advice are essential. If you are wondering what to do, contact Robert Bruce Associates for individual assistance.

NOTHING IN THIS ARTICLE SHOULD BE SEEN AS GIVING INDIVIDUAL FINANCIAL ADVICE.

Taking the pulse of recovery stocks

In some ways, corporate financial health behaves rather like our own. A company’s health may be good, it may be dragged slowly downhill by a concealed long-term malaise, a more obvious chronic ailment may affect it, an acute condition requiring more urgent treatment may emerge, or a major medical emergency or accident may require a blues-and-twos response and some form of life support.

The concealed long-term corporate malaise may arise from poor management, lack of response to changing markets and a failure to invest for the future. Where these shortcomings are substantial or prolonged, the symptoms of chronic financial illness may become more apparent through declining sales and profitability. Waning demand for a company’s core products or services is often the underlying cause.

Acute conditions that may affect a company’s finances can include situations where a major contract is lost unexpectedly, mass-produced goods are found to be defective by users and must be repaired or replaced, or where a competitor launches a far superior product and thereby grabs a huge chunk of market share. As for those rushed to A&E, the cause may be a physical disaster hitting the company’s operations or perhaps some form of financial irregularity that leaves a big hole in the balance sheet.

Quoted companies do not have immunity to these financial health problems and we can all probably think of some examples in each category. In most cases, the financial ill-health of a company is reflected in a substantial fall in its share price, due to fear either that it may not respond to treatment at all or that it may need the equivalent of a blood transfusion – an emergency rights issue that could water-down share values.

It is in this context that we often hear the expression ‘recovery stocks’, meaning shares that have fallen substantially in price when companies have hit hard times, but are seen to have some prospect of a return to good health. This sounds like a promising investment formula but it is important to remember that, in the way that sick people don’t always pull through, some ailing companies end up in the hands of liquidators.

One strategy for exploiting the opportunities presented by recovery stocks is to spread the risk across a number of companies, by investing through a specialist collective investment scheme. Its managers should also have diagnostic capabilities that few individual investors possess. But this is not an area for the risk-averse; the best approach may be to discuss the recovery fund option with your professional adviser to decide whether a holding would be compatible with your objectives and risk profile.  We are here to help in this regard.

Professional advice is essential
When it comes to looking after our retirement planning and investments, vigilance and professional advice are essential. If you are wondering what to do, contact Robert Bruce Associates for individual assistance.

NOTHING IN THIS ARTICLE SHOULD BE SEEN AS GIVING INDIVIDUAL FINANCIAL ADVICE.