Staying active in UK smallcap
The active-versus-passive debate is once again back in the limelight with the news this week of low-cost passive provider Vanguard’s launch of new website for personal investors. This simply adds fuel to the flames: figures from EPFR suggest that in the past 12 months, passive equity funds have… Read the article
For centuries, the parable of “The Blind Men and the Elephant”* has been used to illustrate how overemphasising a specific part of a complex situation can lead to the wrong conclusion, even if that part is indeed both real and important.
The same is true in the world… Read the article
M&A activity has begun 2017 on a positive note after falling in 2016. In this month’s update Ritu Vohora, Investment Director, considers whether the current level of activity is… Read the article
The UK stockmarket as a whole has performed very well over the last twelve months, despite the obvious disruption from the Brexit vote last June. A glance at the various indices shows that investors have paid particular attention to smaller companies – indeed it seems that the mantra has been… Read the article
Markets have reacted positively to Emmanuel Macron and Marine Le Pen going forward to the second round of the French presidential election on 7 May. Polls on the second round now show establishment figure, Macron, ahead of Le Pen by more than 10 percentage points. There’s an overwhelming likelihood of… Read the article
Stock exchanges have been at the forefront in the news recently not least following the recent failure of the proposed merger between the London Stock Exchange and Germany’s Deutsche Bourse. As in other areas of finance there is increasing focus on the need for greater transparency for investors… Read the article
Politics is important, but no-one knows what the outcome of the Brexit negotiations will be. In this month’s update Ritu Vohora, Investment Director, looks at what the facts are currently telling us about the UK economy and… Read the article
Fund managers naturally consider a range of environmental, social and governance (ESG) issues in their investment decisions – much like they have always taken non-financial factors such as corporate culture, geopolitics and regulation into account when considering investments. So ESG is not a new concept… but in recent years it… Read the article
What do Google and Facebook have in common with the recently listed Snap? Lofty valuations? Check. Internet companies? Of course. But perhaps less well known is their apparent apathy towards minority shareholders. Snap has the dubious honour of being the first ever US company to IPO shares that… Read the article
Global equities continued to rally in February driven by an improvement in both economic data and earnings expectations. In this month’s update, Ritu Vohora, Investment Director, looks at the prospect for earnings growth in… Watch the video
While 8 November 2016 will be mostly remembered for the surprise election of Donald Trump as US president, another momentous event was taking place in India at the same time. Narenda Modi, the country’s prime minister, announced the withdrawal of every Rs500 ($7.5) and Rs1000 ($15) banknote nationwide… Read the article
You’d have got good odds on a horse positively influencing South Korean corporate governance, something that now appears increasingly likely.
You may have read about the scandal under which a number of South Korea’s family-dominated conglomerates (‘chaebols’) are alleged to have made material contributions to Choi Soon-sil, a close friend… Read the article
Global equities started 2017 in a buoyant mood and in this month’s update, Ritu Vohora Investment Director, looks at sustainability of the equities rally. Is this just the result of the so-called ‘Trump boost’ or do the fundamentals suggest a different… Watch the video
When I blogged on this topic in February last year, I sounded a note of caution that 2016 was unlikely to be plain sailing for income investors. In the event, despite an uncertain start, income-seeking investors experienced another good year. Companies paid out £84.8 billion in ordinary dividends,… Read the article
A few months ago my colleague, Sam Ford, explored the magic of compounding in his excellent blog: The Greatest Shortcoming of the Human Race. In this post, I’d like to flip his ‘Power of Compounding’ on its head and explore ‘The Dangers of Discounting’.
The most conventional approach… Read the article
Stock correlations are now at their lowest level since the GFC in 2008, prompting a seismic change in the investor landscape and a more favourable, less constrained market backdrop for stock pickers. Until last year, there were long periods of high correlation – challenging for both active managers and anyone… Read the article
In the aftermath of the Brexit vote, UK interest rates and bond yields fell to their lowest levels since records began in 1694! This was mirrored by global yields and appeared to trigger a sea-change in monetary policy guidance and inflation expectations. Is this the end of the 35-year ‘bond… Read the article
Whether it’s Brexit, Trump, OPEC or the celebrity death-toll, it feels like we have lurched from one drama to the next in 2016. Stock markets have taken all this excitement and chosen to run with it – the FTSE 100, for example, looks set to end the year close to… Read the article
Amid all the hysteria about the potential headwinds that the election of Donald Trump as US president will create for emerging markets, I remain resolutely optimistic about their prospects. Up to the election on 8 November, emerging markets had undergone a remarkable recovery from a low point in January –… Read the article
Thanks to all of you who took part in the Equities Forum ‘Twelve Charts of Christmas’ Quiz.
The top prize for correctly guessing what all twelve charts showed goes to Sam Corbet of Ravenscroft, Guernsey. A Cross Bailey Black Lacquer Fountain Pen will soon be on its way to you.
… Read the article
We are publishing three charts from 2016 every day from Monday to Thursday this week with the legends and other key information missing. Each chart comes with a clue to help you identify what is being shown.
The closing date for entries is midday on Friday 16th December.
Please email… Read the article
Here is day 3 of the Equities Forum’s first ‘Twelve Charts of Christmas’ Quiz.
We are publishing three charts from 2016 every day from Monday to Thursday this week with the legends and other key information missing. Each chart comes with a clue to help you identify what is being… Read the article
Here is day 2 of the Equities Forum’s first ‘Twelve Charts of Christmas’ Quiz.
We are publishing three charts from 2016 every day from Monday to Thursday this week with the legends and other key information missing. Each chart comes with a clue to help you identify what is being… Read the article
Here is the Equities Forum’s first ‘Twelve Charts of Christmas’ Quiz. We’ll be publishing three charts from 2016 each day between now and Thursday with the legends and other key information missing. Each chart comes with a clue or a multiple choice answer to help you identify what is being… Read the article
Yesterday’s announcement by OPEC (The Organisation of Petroleum Exporting Countries) on cutting oil supply marks a significant change in strategy and effectively provides a back-stop for the oil & gas industry. OPEC said that it will reduce oil supply by 1.2 million barrels per day (mb/d) with a… Read the article
After a number of false starts, could it be that the much heralded ‘great rotation’ from bonds to equities has finally arrived? Trump’s victory in the US presidential election has accelerated a trend that began in July soon after the Brexit vote in the UK, with bond yields rising, the… Read the article
In yesterday’s blog, I discussed that while the Bitcoin currency system may not see widespread adoption, it gave us a unique piece of technology that would – Blockchain. At its heart, the Blockchain technology eliminates the need of a third party for verifying transactions. This is accomplished through… Read the article
A fistful of bitcoins . . .
There’s been a lot of attention on bitcoins and blockchains recently, in particular the latter which is being heralded as a major disrupter in financial services. In a two part series this week, I will attempt to explain and demystify the concepts of bitcoins and blockchains and look at the… Read the article
Thoughts ahead of the OPEC meeting
As OPEC (Organisation of Petroleum Exporting Countries) meets on 30 November to decide on production cuts, much uncertainty remains regarding OPEC’s collective appetite to reduce production, how the reduction will be apportioned and the likely timing of the mooted cuts.
We should not take OPEC’s actions lightly though as the… Read the article
Urban sprawl chokes cities. That was a key takeaway for me from a responsible investment conference I attended earlier this year. If we want to help reduce carbon emissions we need the cities we build today to be compact, connected and co-ordinated. The greater the area of a city the… Read the article
Cents and Sensibility – implications of Trump presidency for the healthcare sector
Don’t let the initial market enthusiasm to Trump’s victory in the US Presidential election detract from the longer-term themes investors in the healthcare sector need to consider and the limited visibility we have over how the Republicans will approach US healthcare policy.
The reaction in healthcare to the outcome of… Read the article
With Republican candidate Donald Trump winning the race to the White House, populist sentiment and anti-establishment feelings are making their presence felt at the ballot box.
Investment Director, Ritu Vohora provides an update on the market’s reaction to the US election… Watch the video
Low-volatility strategies are supposed to insulate investors from market bouts of turbulence. But lately, that’s been flipped on its head, as the strategies have underperformed and fund flows are retreating.
In the latest in our regular video series on the equities markets, Investment Director, Ritu Vohora provides an update on… Watch the video
Price is what you pay, value is what you get . . .
Guest contributor – Jean-Paul Jaegers, CFA, CQF (Senior Investment Strategist, Prudential Portfolio Management Group)
… however, what is often less debated is the impact that time can have on these variables.
This is relevant as investors’ holding periods have generally shortened and as a result the variables that influence the… Read the article
Small-cap ‘haves’ and ‘have nots’
Most investors are aware that the post-referendum UK equity market rally has not treated all stocks or sectors equally. Since 23 June, for example, the mining sector is up (+38.6%) to date, while retail stocks are down (-8.4%).
In the small-cap space, much of the recent focus post-Brexit has been… Read the article
Many investors are rightfully sceptical of executive share-based compensation, particularly in the US. But the debate is typically around the adjustments made to companies’ declared earnings or the very large payments that can result, rather than a view of the absolute level of dilution and how this should change over… Read the article
Brexit – the biggest spin-off of all time?
The thought of a ‘Brexit’ conjures up images of a drawn out, messy divorce for most – a painful process, with a net negative result. However, I believe that there are reasons to be hopeful. I think a positive analogy can be drawn between the spin-off of a company from… Read the article
As the presidential race enters the final lap, rhetoric around political drug pricing remains high and the pharmaceutical and biotech sectors are lagging the broader market year-to-date. However, in my opinion, US political drug pricing fears are overstated and investors should be more concerned about commercial drug price and market… Read the article
Pensions: unrealistic assumptions for tomorrow cause real pain today
Pensions are long-term obligations. Falling interest rates have affected both the way that companies calculate the size of these liabilities, but also the assumed growth rates of the assets that they hold in order to pay those pensions.
What is quite extraordinary in my view is that QE, which now… Read the article
European markets are facing a number of challenges, not least in the region’s banking sector as recent events highlighted. However, European equities are attractively valued and there are signs of an improving economic backdrop.
In the latest in our regular video series on the equities markets, Investment Director, Ritu Vohora… Watch the video
Can brands survive in a digital world?
Why did L’Oreal spend nearly €7.4bn on advertising and promotional activity in 2015? Why does the market value L’Oreal shares at a 70% premium to the Stoxx 600? Because conventional knowledge suggests a strong brand will allow a business to attract more consumers, retain their business and generate higher gross… Read the article
China’s transformation over recent decades has generated some great investment opportunities. But the challenge for investors has always been how to reach them. For many years, overseas investors have been restricted to a limited selection of Chinese companies. That’s now changing. As part of the Chinese government’s drive to raise… Read the article
Weaker sterling tempts foreign investors to UK shores
In my last blog I highlighted that a big effect of the pound’s weakness post Brexit is to make those UK-listed companies that may have previously appeared attractive to overseas buyers, look even better value. Whilst sterling has recovered a little from its post-Brexit lows, it is still… Read the article
If you’re a sports fan, I would imagine the last six odd weeks of coverage from both Olympic games has had you frothing at the mouth, monopolising the telly and shouting down any dissenting channel opinions. Seizure of the remote control is key to the success of this strategy!
In… Read the article
Market rewards high payouts over capex
As investors scour the globe for yield, one consequence of the low return environment is that companies making the highest payouts to shareholders are being rewarded by the market with higher valuations. This is the opposite of previous equity bull markets where it was companies investing for growth that reaped… Read the article
In the US, the clock is ticking down to November’s presidential election . . . the shock Brexit result in the UK demonstrated how voters can catch the markets unaware.
In the latest of our regular video series on the equities markets, Investment Director, Ritu Vohora provides an update… Watch the video
Lessons from George Ross Goobey
The growing disequilibrium between what bonds are implying through near-zero long-run interest rates and what equities are pricing in my view requires significant thought and attention, particularly for people saving for their pensions. I recently came across the letters of a prominent pension fund manager of the 50s and 60s,… Read the article
Having grown up in Kenya and spent lots of time in the African savannah, I have always been fascinated by herd behaviour. The annual wildebeest migration sees over two million animals migrate to find greener pastures. In their quest they may be hunted, stalked and run down by larger carnivores.… Read the article
Caveat emptor – ETFs are best left to the professionals
Exchange traded funds (ETFs) are rapidly becoming the ‘must-have’ component of an investor’s portfolio. At the end of June, assets in ETFs hit a record high of $3.2 trillion globally according to data from research consultancy ETFGI and demand shows no signs of abating. Popular with both institutional and retail… Read the article
Please note the content on this website is for Investment Professionals only and should be shared responsibly. No other persons should rely on the information contained within this website.
OKWelcome to the M&G Multi Asset Team’s Allocation blog, previously known as the Episode blog. We have changed the name of our blog to resonate better with our readers in Europe, however, the content and purpose of the blog has not changed. The Allocation blog continues to aim to provide unique market perspectives from our dedicated team of experienced asset allocators.
OK