Investing wholly in a portfolio of global stockmarket investments is not for the faint hearted. But for those who are experienced investors quite happy with high volatility our Adventure Portfolio will appeal
The portfolio consists of 8 top-flight equity managers mixing both domestic and overseas investments.
During 2009, this portfolio produced positive growth in eight out of twelve months. Its worst month was February, where the portfolio was down by 6.2%. Its best month was April, where it produced 8.4%. For the 2009 calendar year the portfolio produced a total of 25.3%.
We expect this portfolio to be volatile and to be wholly dependent on economic stability and healthy stockmarket results. Returns are not expected to be consistent, but to change wildly depending on underlying investment conditions.
It would not be uncommon for an adventurous investor to allocate a small amount of their overall wealth to a portfolio of this nature
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Thursday, 25 February 2010
Sterling's Balanced portfolio
This investment portfolio tends to be favoured by those investing for the longer term, which are most commonly pension investors. It is diverse in its approach, holding property, hedge fund strategies, equity investments and corporate bonds.
During 2009, this portfolio produced positive growth in eight out of twelve months. Its worst month was February, where the portfolio was down by 2.3%. Its best month was April, where it produced 6.1%. For the 2009 calendar year the portfolio produced a total of 21.4%.
We expect this portfolio to produce positive and consistent growth in normal investment conditions, but equally it will behave less defensively during downward movements in global stockmarkets. We would not generally recommend this portfolio for investors seeking an income. Over a period of five years we would expect the investment to produce significantly more than a bank or building society account in normal market conditions, but investors must be prepared for higher losses during periods of stockmarket decline.
Over the longer term (7-10 years), we would expect this portfolio to produce higher results than the cautious and absolute return portfolios, which is why our balanced approach tends to appeal to pension investors.
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During 2009, this portfolio produced positive growth in eight out of twelve months. Its worst month was February, where the portfolio was down by 2.3%. Its best month was April, where it produced 6.1%. For the 2009 calendar year the portfolio produced a total of 21.4%.
We expect this portfolio to produce positive and consistent growth in normal investment conditions, but equally it will behave less defensively during downward movements in global stockmarkets. We would not generally recommend this portfolio for investors seeking an income. Over a period of five years we would expect the investment to produce significantly more than a bank or building society account in normal market conditions, but investors must be prepared for higher losses during periods of stockmarket decline.
Over the longer term (7-10 years), we would expect this portfolio to produce higher results than the cautious and absolute return portfolios, which is why our balanced approach tends to appeal to pension investors.
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Sterling's Cautious Portfolio
This investment portfolio is by far our most popular. It is diverse in its approach, holding property, hedge fund strategies, stockmarket investments and corporate bonds.
With only 35% of the portfolio relying on worldwide stockmarket’s improving, this portfolio works with caution in mind. The hedge strategies employed by 40% of the funds should cushion any dramatic falls in the equity markets.
During 2009, this portfolio produced positive growth in eight out of twelve months. Its worst month was February, where the portfolio was down by 1.85%. Its best month was April, where it produced 5%. For the 2009 calendar year the portfolio produced a total of 17.5%.
We expect this portfolio to produce positive and consistent growth in normal investment conditions, whilst being defensive during downward swings. Over a period of five years we would expect the investment to produce significantly more than a bank or building society account in normal market conditions.
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With only 35% of the portfolio relying on worldwide stockmarket’s improving, this portfolio works with caution in mind. The hedge strategies employed by 40% of the funds should cushion any dramatic falls in the equity markets.
During 2009, this portfolio produced positive growth in eight out of twelve months. Its worst month was February, where the portfolio was down by 1.85%. Its best month was April, where it produced 5%. For the 2009 calendar year the portfolio produced a total of 17.5%.
We expect this portfolio to produce positive and consistent growth in normal investment conditions, whilst being defensive during downward swings. Over a period of five years we would expect the investment to produce significantly more than a bank or building society account in normal market conditions.
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Sterling's Absolute Return Portfolio
We have designed this portfolio with the risk adverse investor in mind. It employs several funds, which aim to produce returns regardless of market conditions.
This portfolio is suitable for those who do not like risk, but want higher returns than those associated to bank and building societies. We tend to find clients use this style of portfolio for ‘rainy day’ money, which they may need access to, but are likely to leave the investments untouched for a minimum period of three years
During 2009, this portfolio produced positive growth in nine out of twelve months. Its worst month was February, where the portfolio was down by 1.1%. Its best month was April, where it produced 1.9%. For the 2009 calendar year the portfolio produced a total of 8%.
We expect this portfolio to produce positive and consistent growth each year above that associated to a deposit account in all market conditions
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This portfolio is suitable for those who do not like risk, but want higher returns than those associated to bank and building societies. We tend to find clients use this style of portfolio for ‘rainy day’ money, which they may need access to, but are likely to leave the investments untouched for a minimum period of three years
During 2009, this portfolio produced positive growth in nine out of twelve months. Its worst month was February, where the portfolio was down by 1.1%. Its best month was April, where it produced 1.9%. For the 2009 calendar year the portfolio produced a total of 8%.
We expect this portfolio to produce positive and consistent growth each year above that associated to a deposit account in all market conditions
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Is it the right time to invest in property?
When the private property bubble finally burst during 2007 it also burst in the commercial property sector, but far worse. The average price of commercial property fell approximately 40% from its peak and the decline only started to level out during the summer of 2009. However, in the short term it cannot be expected that prices will start to grow at the same rate as before the financial crisis and prices will not recover to pre-crisis levels for some time. We are now living in a different world; where banks are less willing to lend and therefore are not fuelling absurd asset prices.
Nevertheless, opportunities do still exist to invest in direct property funds, which have a diverse portfolio and high profile reliable tenants to generate steady returns.
There are still many issues facing to commercial property sector and it would be naïve to believe the sector is fully out the of woods yet. Conversely, by purchasing commercial property funds at this reduced value, in the long-term (7-10 years), it could generate high rates of capital appreciation and growth in rental profits.
Invest in Property fund
Nevertheless, opportunities do still exist to invest in direct property funds, which have a diverse portfolio and high profile reliable tenants to generate steady returns.
There are still many issues facing to commercial property sector and it would be naïve to believe the sector is fully out the of woods yet. Conversely, by purchasing commercial property funds at this reduced value, in the long-term (7-10 years), it could generate high rates of capital appreciation and growth in rental profits.
Invest in Property fund
Why invest in precious metals
Ever since the dawn of civilisation man has traded precious metals for other goods and services. Even now, gold plays important part of the global economy due to its unique nature of storing wealth as a “safe haven” against inflationary pressure. The global economic uncertainty in 2009 has helped to push gold prices to an all time high of $1,200. With ambiguity still surrounding the future of the Global economy and the dollar, this is leading to above average demand for gold as a store of value. Investing in specialist gold and precious metal funds may generate more returns than a typical equity-based investment.
Investing in gold and other precious metals also directly taps into the emerging market growth story. The biggest and most important consumer of gold in the current climate is India. India presently is undergoing a massive economic transformation and is the second fastest growing economy in the world; it is logical to assume that, as India becomes wealthier, its level of gold consumption will increase. Furthermore, the number of operational mines and levels of production are set to decline in the long-term, adding more support to the price. Investing in precious metals offers more potential of greater profits than a normal fund; however, this comes with an increased amount of risk and should only be considered for a period of (7-10) years
Invest in Precious metals click here
Investing in gold and other precious metals also directly taps into the emerging market growth story. The biggest and most important consumer of gold in the current climate is India. India presently is undergoing a massive economic transformation and is the second fastest growing economy in the world; it is logical to assume that, as India becomes wealthier, its level of gold consumption will increase. Furthermore, the number of operational mines and levels of production are set to decline in the long-term, adding more support to the price. Investing in precious metals offers more potential of greater profits than a normal fund; however, this comes with an increased amount of risk and should only be considered for a period of (7-10) years
Invest in Precious metals click here
Investing in Russia and Eastern Europe
Before the collapse of the Soviet Union, very few western investors could envisage the transformation of this former empire. In just 8 years, Vladimir Putin and his Administration were able to double the size of the Russian economy and more than double the average person’s wage.
Russia holds the world's largest natural gas reserves, the second largest coal reserves, and the eighth largest oil reserves. Russia is also the world's largest exporter of natural gas, the second largest oil exporter and the third largest energy consumer. Russia is uniquely placed to capture growth in China and Eastern Europe by supplying raw materials.
Nevertheless, the Russian market is perceived to be riskier than most emerging markets and often shows more volatility than its Chinese and Brazilian counter-parts. An investment of this nature will be vulnerable to larger boom and bust cycles. However, in the long-term, it is expected to generate greater returns than the typical developed economies.
Invest in Russia and Eastern Europe Now
Russia holds the world's largest natural gas reserves, the second largest coal reserves, and the eighth largest oil reserves. Russia is also the world's largest exporter of natural gas, the second largest oil exporter and the third largest energy consumer. Russia is uniquely placed to capture growth in China and Eastern Europe by supplying raw materials.
Nevertheless, the Russian market is perceived to be riskier than most emerging markets and often shows more volatility than its Chinese and Brazilian counter-parts. An investment of this nature will be vulnerable to larger boom and bust cycles. However, in the long-term, it is expected to generate greater returns than the typical developed economies.
Invest in Russia and Eastern Europe Now
Investing in Commodities
Raw materials are the building blocks of any society; from the food we eat to the fuel we use to keep our houses warm. With the global population expected to rise by approximately 45% to 9 billion by 2040, global demand for raw materials will inevitably expand. Furthermore, this increase in the population will increase scarcity of natural resources. Therefore, the economic fundamentals suggest that investing in commodities could be a worthwhile investment if you are taking a long term view (7-10 years
By investing in commodities you are directly tapping into the economic growth stories of emerging markets such as China, India and Brazil. For example, China is now the largest consumer of all commodities, except for oil. China now accounts for 20-30% of all base metal consumption, as they quickly build infrastructure and cities. Moreover, as the prosperity rises in the world’s two most populous countries, their demand for raw materials will increase even further.
Commodities are very sensitive to price and often experience dramatic swings that can often reduce the value of your investment; however. Over the long-term (7-10 years) profits could far exceed the returns of standard UK-based equity funds.
Invest in Commodities now
By investing in commodities you are directly tapping into the economic growth stories of emerging markets such as China, India and Brazil. For example, China is now the largest consumer of all commodities, except for oil. China now accounts for 20-30% of all base metal consumption, as they quickly build infrastructure and cities. Moreover, as the prosperity rises in the world’s two most populous countries, their demand for raw materials will increase even further.
Commodities are very sensitive to price and often experience dramatic swings that can often reduce the value of your investment; however. Over the long-term (7-10 years) profits could far exceed the returns of standard UK-based equity funds.
Invest in Commodities now
Investing in climate change
Since early industrialisation, there has been a constant struggle between profit and social responsibility; from the early factories polluting the rivers to 1000s of acres of rainforest being chopped down. Moving into the 21st Century, the majority of Scientists are in agreement that the world’s climate is changing and man is directly responsible. As we enter the age of ethical consumerism, the average consumer is more aware of the social and moral implications of their purchases; thus favouring companies with a “green ethos” and carbon neutrality. The climate change funds have identified this social shift towards ethical purchasing and believe that firms that operate a green ethos will have more potential for growth in the future.
Climate change funds have been around for some time but rather than focusing only on renewable energy such as wind farms, solar and nuclear power, they tend to have a bias towards mainstream companies who are environmentally friendly or who will be affected positively by climate change. Climate change funds tend to be wholly invested equities and consequently they experience high levels of volatility, therefore it should only be considered as part of a long-term investment strategy.
Invest in Climate Change now
Climate change funds have been around for some time but rather than focusing only on renewable energy such as wind farms, solar and nuclear power, they tend to have a bias towards mainstream companies who are environmentally friendly or who will be affected positively by climate change. Climate change funds tend to be wholly invested equities and consequently they experience high levels of volatility, therefore it should only be considered as part of a long-term investment strategy.
Invest in Climate Change now
Why invest in China
The China success story began in the late 1970s, after political reforms made it possible for the Chinese people to trade goods on a free market. Three decades later the Chinese economy has grown by over 70 times and if the current economic trends continue, China is in a prime position to overtake Japan as the second biggest economy in the world. By choosing a China based investment theme you will be able to capitalise on one of the most dynamitic marketplaces in the world.
China has shown remarkable resistance to the economic downturn and it is believed that the economic growth is set to accelerate during 2010. It would be naïve to believe that China’s growth is going to be problem-free, with many Economists suggesting bubbles are already forming. However, taking a long-term investment view (7-10 years) it is undeniable that China has the potential of far higher returns than investing in traditional developed economies.
There are many funds that try to capture its remarkable growth but none we feel are as successful as the Jupiter – China Fund. The fund aims to achieve long-term capital growth through investing principally in companies in China (including Hong Kong).
Invest in China Now
China has shown remarkable resistance to the economic downturn and it is believed that the economic growth is set to accelerate during 2010. It would be naïve to believe that China’s growth is going to be problem-free, with many Economists suggesting bubbles are already forming. However, taking a long-term investment view (7-10 years) it is undeniable that China has the potential of far higher returns than investing in traditional developed economies.
There are many funds that try to capture its remarkable growth but none we feel are as successful as the Jupiter – China Fund. The fund aims to achieve long-term capital growth through investing principally in companies in China (including Hong Kong).
Invest in China Now
UK equities struggle in January
After returning more than 22% during 2009, the FTSE 100 index dropped by more than 4% during January as UK share prices, in common with other major equity markets, declined amid concerns over China’s measures to rein in economic growth.
Further worries about the strength of the global economic recovery and fears over Greece’s ability to cope with its budget deficit.
The price of crude oil dropped towards the end of the month amid increasing levels of investor uncertainty. Nevertheless, BP expects the world’s appetite for energy to grow by approximately 40% over the next 20 years, fuelled by demand from developing nations, particularly China. BP ousted Royal Dutch Shell during January from its position as Europe’s biggest oil company by market value through a combination of cost-cutting and output growth.
Luxury retailer Burberry reported better-than-expected sales growth for the third quarter, and the company expects full-year earnings to be “towards the top end” of analysts’ expectations. Pharmaceutical giant AstraZeneca announced disappointing fourth-quarter earnings and the company intends to buy back up to $1bn (£639m) of shares during 2010. UK confectioner Cadbury finally agreed to an improved takeover offer from US food manufacturer Kraft Foods. Meanwhile, the UK banking sector received a knock during the month following a warning from Standard & Poor’s Ratings Services that it does not view the UK as “among the most stable and low-risk banking systems globally”.
The UK economy finally emerged during the fourth quarter of 2009 from its longest recession on record, registering modest growth of 0.1% from the third quarter. However, this expansion was lower than expected and its fragility could provide a headache for the Bank of England’s Monetary Policy Committee and the government. Britain was the last of the G7 nations to come out of recession and the bank’s Governor Mervyn King has warned the UK will have to cope with “a long period of healing. The UK economy contracted by 4.8% during 2009 and expanded by only 0.5% during 2008.
The International Monetary Fund increased its forecast for economic expansion in the UK during 2010 and 2011, predicting growth of 1.3% and 2.7% respectively. In comparison, the organisation expects the US economy to grow by 2.7% in 2010 and 2.4% in 2011, and the eurozone economy to expand by 1% during 2010 and 1.5% during 2011. Overall, it increased its forecast for global growth to 3.9% during 2010
UK equities struggle in January
Further worries about the strength of the global economic recovery and fears over Greece’s ability to cope with its budget deficit.
The price of crude oil dropped towards the end of the month amid increasing levels of investor uncertainty. Nevertheless, BP expects the world’s appetite for energy to grow by approximately 40% over the next 20 years, fuelled by demand from developing nations, particularly China. BP ousted Royal Dutch Shell during January from its position as Europe’s biggest oil company by market value through a combination of cost-cutting and output growth.
Luxury retailer Burberry reported better-than-expected sales growth for the third quarter, and the company expects full-year earnings to be “towards the top end” of analysts’ expectations. Pharmaceutical giant AstraZeneca announced disappointing fourth-quarter earnings and the company intends to buy back up to $1bn (£639m) of shares during 2010. UK confectioner Cadbury finally agreed to an improved takeover offer from US food manufacturer Kraft Foods. Meanwhile, the UK banking sector received a knock during the month following a warning from Standard & Poor’s Ratings Services that it does not view the UK as “among the most stable and low-risk banking systems globally”.
The UK economy finally emerged during the fourth quarter of 2009 from its longest recession on record, registering modest growth of 0.1% from the third quarter. However, this expansion was lower than expected and its fragility could provide a headache for the Bank of England’s Monetary Policy Committee and the government. Britain was the last of the G7 nations to come out of recession and the bank’s Governor Mervyn King has warned the UK will have to cope with “a long period of healing. The UK economy contracted by 4.8% during 2009 and expanded by only 0.5% during 2008.
The International Monetary Fund increased its forecast for economic expansion in the UK during 2010 and 2011, predicting growth of 1.3% and 2.7% respectively. In comparison, the organisation expects the US economy to grow by 2.7% in 2010 and 2.4% in 2011, and the eurozone economy to expand by 1% during 2010 and 1.5% during 2011. Overall, it increased its forecast for global growth to 3.9% during 2010
UK equities struggle in January
Record year for corporate bonds
Sales of pan-European corporate bonds reached a record €1 trillion (£880bn) during 2009 amid surging demand for high-yielding assets as investors sought an alternative to volatile equities and low yields on cash deposits.
The London Stock Exchange’s new corporate bond exchange launched this month and aims to attract individual investors to the corporate bond market.
Sterling-denominated corporate bonds returned a record 15% during 2009, compared with a return of -12% during 2008, according to Bloomberg and Bank of America Merrill Lynch. However, according to data compiled by Bloomberg, sales of corporate bonds have flagged and borrowing costs are rising for the first time in around two months. Global bond sales fell by 52% during the third week of January compared with the previous week.
According to Bloomberg, Virgin Media issued the largest-ever release of sterling-denominated high-yield debt during the month. High-yield debt is graded BBB- by Standard & Poor’s and below Baa3 by Moody’s Investors Service. Demand for higher-risk debt has risen amid an environment of relatively low returns on government bonds and investment-grade bonds. Moody’s Investors Service expects the default rate among speculative-grade companies, currently running at 12.5%, to drop to 3.3% during 2010.
Royal Bank of Scotland issued €2bn of debt due in 2017, while Barclays issued €2bn of seven-year bonds. Rail and bus operator National Express issued £350m of bonds during January, its first-ever bond issuance. Meanwhile, Cambridge University is reported to be contemplating an issue of long-dated bonds in order to take advantage of the rally in credit markets. This move would be highly unusual for a UK university, although some educational establishments in the US and Europe have issued bonds. According to Bloomberg, Lancaster University issued £35m of bonds in 1995.
The pound reached a four-month high against the euro during the month, boosted by the news that US food giant Kraft’s controversial takeover of UK confectioner Cadbury had finally been agreed. The takeover shows that overseas cash is coming into the UK to buy British assets, which have become relatively cheap.
Meanwhile, during December, UK inflation posted its fastest-ever increase compared with the previous month. Inflation is now running at 2.9% compared with 1.9% in November, a rise of one percentage point over the month, and well above the Bank of England’s rolling 2% target. The news fuelled concerns that interest rates might rise sooner than expected.
Record year for corporate bonds
The London Stock Exchange’s new corporate bond exchange launched this month and aims to attract individual investors to the corporate bond market.
Sterling-denominated corporate bonds returned a record 15% during 2009, compared with a return of -12% during 2008, according to Bloomberg and Bank of America Merrill Lynch. However, according to data compiled by Bloomberg, sales of corporate bonds have flagged and borrowing costs are rising for the first time in around two months. Global bond sales fell by 52% during the third week of January compared with the previous week.
According to Bloomberg, Virgin Media issued the largest-ever release of sterling-denominated high-yield debt during the month. High-yield debt is graded BBB- by Standard & Poor’s and below Baa3 by Moody’s Investors Service. Demand for higher-risk debt has risen amid an environment of relatively low returns on government bonds and investment-grade bonds. Moody’s Investors Service expects the default rate among speculative-grade companies, currently running at 12.5%, to drop to 3.3% during 2010.
Royal Bank of Scotland issued €2bn of debt due in 2017, while Barclays issued €2bn of seven-year bonds. Rail and bus operator National Express issued £350m of bonds during January, its first-ever bond issuance. Meanwhile, Cambridge University is reported to be contemplating an issue of long-dated bonds in order to take advantage of the rally in credit markets. This move would be highly unusual for a UK university, although some educational establishments in the US and Europe have issued bonds. According to Bloomberg, Lancaster University issued £35m of bonds in 1995.
The pound reached a four-month high against the euro during the month, boosted by the news that US food giant Kraft’s controversial takeover of UK confectioner Cadbury had finally been agreed. The takeover shows that overseas cash is coming into the UK to buy British assets, which have become relatively cheap.
Meanwhile, during December, UK inflation posted its fastest-ever increase compared with the previous month. Inflation is now running at 2.9% compared with 1.9% in November, a rise of one percentage point over the month, and well above the Bank of England’s rolling 2% target. The news fuelled concerns that interest rates might rise sooner than expected.
Record year for corporate bonds
Emerging Markets suffer a large sell-off
The sell-off in January was not kind to emerging markets. Asia Pacific excluding Japan was the worst-performing sector, dropping 5.68%, but the Global Emerging Market grouping also suffered, falling 3.84%.
Emerging markets, particularly China, sold off savagely as risk aversion took hold of global investors.
In stark contrast to many developed economies, worries centred around too much growth rather than too little. In China, fourth-quarter annualised GDP figures showed a rise of 10.7%, giving a rise for the full year of 8.7%. International investors had initially seen the Chinese government’s prediction of a rise of 8% as optimistic but the country looks set to overtake Japan as the world’s second largest economy within months.
But this growth had its downside. Inflationary pressures are starting to emerge with consumer prices rising 1.9% year-on-year in December, compared to 0.6% for the previous month. The government is making moves to curb excessive lending by banks and may start tightening interest rates sooner rather than later. Retail sales rose 17.5% in December.
The story is similar in India, where the government is also trying to reduce bank lending to cool growth. Rates are likely to rise after industrial output grew by an unexpected 11.7% in November. Inflation data, due out this month, is expected to show consumer prices rising at around 7%.
The Chinese stockmarket was the hardest hit, with the Shanghai SE 180 index falling 11.07%. The Hang Seng also reflected the disaffection with Chinese stocks, falling 7.95%. The Indian S&P CNX 500 index fell 4.3% while the Brazilian iBovespa index dropped 4.6%.
The Russian RTS index was the one exception. It rose 2% over the month – one of the very few global indices to post a gain. This was little to do with Russia’s economic situation, which continues to be weak. There has been rising business activity, but at an unexciting pace, particularly for an emerging market. Traditionally, the market has simply crept up with the oil price, but the oil price dipped by around $9 (£5.80) a barrel in January. The answer may simply be that Russia looked relatively cheap and attracted global investors looking for a bargain in emerging markets.
Eastern Europe as a whole was also stronger, with countries such as Turkey and Israel posting double-digit gains, according to MSCI Barra. The major markets of Hungary and the Czech Republic all saw rises over the month as investors decided that the risks for the region were dissipating.
Emerging Markets suffer a large sell-off
Emerging markets, particularly China, sold off savagely as risk aversion took hold of global investors.
In stark contrast to many developed economies, worries centred around too much growth rather than too little. In China, fourth-quarter annualised GDP figures showed a rise of 10.7%, giving a rise for the full year of 8.7%. International investors had initially seen the Chinese government’s prediction of a rise of 8% as optimistic but the country looks set to overtake Japan as the world’s second largest economy within months.
But this growth had its downside. Inflationary pressures are starting to emerge with consumer prices rising 1.9% year-on-year in December, compared to 0.6% for the previous month. The government is making moves to curb excessive lending by banks and may start tightening interest rates sooner rather than later. Retail sales rose 17.5% in December.
The story is similar in India, where the government is also trying to reduce bank lending to cool growth. Rates are likely to rise after industrial output grew by an unexpected 11.7% in November. Inflation data, due out this month, is expected to show consumer prices rising at around 7%.
The Chinese stockmarket was the hardest hit, with the Shanghai SE 180 index falling 11.07%. The Hang Seng also reflected the disaffection with Chinese stocks, falling 7.95%. The Indian S&P CNX 500 index fell 4.3% while the Brazilian iBovespa index dropped 4.6%.
The Russian RTS index was the one exception. It rose 2% over the month – one of the very few global indices to post a gain. This was little to do with Russia’s economic situation, which continues to be weak. There has been rising business activity, but at an unexciting pace, particularly for an emerging market. Traditionally, the market has simply crept up with the oil price, but the oil price dipped by around $9 (£5.80) a barrel in January. The answer may simply be that Russia looked relatively cheap and attracted global investors looking for a bargain in emerging markets.
Eastern Europe as a whole was also stronger, with countries such as Turkey and Israel posting double-digit gains, according to MSCI Barra. The major markets of Hungary and the Czech Republic all saw rises over the month as investors decided that the risks for the region were dissipating.
Emerging Markets suffer a large sell-off
Cautious Portfolio up 17.5% during 2009
Our proactive approach has produced considerably less volatility, whilst out performing the average manager by almost 3% during 2009. This is how we did it…
There was a very different feeling when we started 2009 compared to now. Our clients had been fortunate enough to hold larger cash balances than normal during the main part of the financial crisis, but by the end of 2008 had established more conventional approaches to this risk category.
Our cautious portfolio started 2009 without property exposure, still relatively defensive against our competitors, but well placed to take part in the general recovery in the investment markets.
Our first change was from the beginning of February, where we recommended more exposure to funds in the Absolute Return Sector. We switched from a UK Equity Fund and a Global Bond Fund (at significant profit) into two Absolute Return Funds. We felt that the Absolute Return Funds would fair better should market conditions deteriorate.
Subsequently the global equity markets dropped significantly, giving this portfolio a massive head start. The Cautious Managed Sector as a whole had fallen by 7.64% from 1st of January to 6th of March, whilst the combined portfolio was only down 3.5% over the same period.
Although, from this point the market rallied strongly, the portfolio remained well placed and ahead of the pack. On the 1st of September, we recommended that the portfolio held more in equities – even with more stockmarket investments the potential downside risk was less than most of the other managers in the sector. We switched from one of the cautious holdings into a US Equity Fund. Investors immediately capitalised on further market gains and benefited from growth in the strength of the dollar against the British pound.
During the first part of 2010, we have asked investors to consider including commercial property, reducing some exposure to both fixed interest and equities. We also switched a manager who we felt should have done better during 2010 for a similar investment.
Our proactive approach is now available for online investors. Remember, our services are purely advisory - we do not make any alterations to your portfolio without your prior consent.
Cautious Portfolio up 17.5% during 2009
There was a very different feeling when we started 2009 compared to now. Our clients had been fortunate enough to hold larger cash balances than normal during the main part of the financial crisis, but by the end of 2008 had established more conventional approaches to this risk category.
Our cautious portfolio started 2009 without property exposure, still relatively defensive against our competitors, but well placed to take part in the general recovery in the investment markets.
Our first change was from the beginning of February, where we recommended more exposure to funds in the Absolute Return Sector. We switched from a UK Equity Fund and a Global Bond Fund (at significant profit) into two Absolute Return Funds. We felt that the Absolute Return Funds would fair better should market conditions deteriorate.
Subsequently the global equity markets dropped significantly, giving this portfolio a massive head start. The Cautious Managed Sector as a whole had fallen by 7.64% from 1st of January to 6th of March, whilst the combined portfolio was only down 3.5% over the same period.
Although, from this point the market rallied strongly, the portfolio remained well placed and ahead of the pack. On the 1st of September, we recommended that the portfolio held more in equities – even with more stockmarket investments the potential downside risk was less than most of the other managers in the sector. We switched from one of the cautious holdings into a US Equity Fund. Investors immediately capitalised on further market gains and benefited from growth in the strength of the dollar against the British pound.
During the first part of 2010, we have asked investors to consider including commercial property, reducing some exposure to both fixed interest and equities. We also switched a manager who we felt should have done better during 2010 for a similar investment.
Our proactive approach is now available for online investors. Remember, our services are purely advisory - we do not make any alterations to your portfolio without your prior consent.
Cautious Portfolio up 17.5% during 2009