Is the inflation rise just a temporary spike?

On January 27, 2011, in Uncategorized, by simondixon

Is the inflation rise just a temporary spike?

While some economists worry about the effect of rising inflation, investment managers remain unworried by the issue.

According to the Association of Investment Companies (AIC), investment managers believe that the rise in inflation is down to commodities and will not be sustained.

Mark Dampier, head of research at Hargreaves Lansdown, said that investors need to think of the stock market and the economy as separate concerns.

"Investors should concentrate on quality fund managers and not try to guess final outcomes, as views are so polarised," he said.

Meanwhile, Finsbury Growth and Income Trust manager Nick Train believes the real threat to western economies is deflation.

He explained that all the evidence points to the current rise in inflation being representative of shocks in the commodity market rather than a devaluation of purchasing power.

The AIC revealed earlier this week that the UK's sluggish recovery is prompting greater interest in the Chinese investment market.


'Value investment' helps Henderson Global to produce returns

Henderson Global Investors believes its value investment style is helping to insulate its shareholders from a volatile market.

The group has announced that it increased the net asset value of The Bankers Investment Trust PLC by 13 per cent in the year to October 31st 2010.

In addition, Henderson Global Investors oversaw a five per cent increase in dividends during the same period.

Portfolio manager Alex Crooke said that the value approach had ensured strong performance in the face of muted inflation.

Looking ahead to 2011, Mr Cooke said that he does not expect a significant rise in economic activity, but he is optimistic on the market's prospects.

"We have a wide variety of holdings that offer steady growth at valuation levels which look attractive compared to the anticipated return from bonds," he said.

Investment manager BlackRock recently suggested that investors will turn away from bonds in the next 12 months, looking instead to equities for returns.


FCSC to levy investment firms to pay compensation

On January 21, 2011, in Uncategorized, by simondixon

FCSC to levy investment firms to pay compensation

The Financial Services Compensation Scheme (FSCS) has announced that is introducing a new investment levy to cover the cost of claims.

It has revealed that the cost of paying claims from failed major investments has increased sharply in the last year, and as such is looking to raise an additional £326 million.

The FSCS has confirmed that firms involved in investment intermediation and in investment fund management will meet the costs, the bulk of which are for claims against Keydata Investment Services, Lifemark.

FSCS chief executive Mark Neale says he recognises that this levy comes at a difficult time for many investment firms, but the organisation has a duty to compensate customers.

"[We] need to levy the industry for the continuing costs of the failures so we can protect investors. No matter how difficult it may be, we have to meet our obligations to consumers," he said.

The FSCS recently launched a new campaign to raise customer awareness of the services the group offers.


AIFMD to hurt investment opportunities

On January 21, 2011, in Uncategorized, by simondixon

AIFMD to hurt investment opportunities

Investors may find that they are hampered by "unnecessary detail" added to the Alternative Investment Fund Managers Directive (AIFMD).

This is the view of the Investment Management Association (IMA), which was responding to the European Securities and Markets Authority's Call for Evidence.

The IMA director of authorised funds and tax, Julie Patterson, believes that any further regulation should not hurt investors' abilities to access the investments and strategies they want to take.

"We support the principle of harmonisation, but detailed regulations could cause detriment to investors and run counter to the overarching principles articulated by the commission," she said.

Ms Patterson also pointed out that the AIFMD is already extremely detailed, insisting that further tinkering with the legislation is unnecessary.

The IMA recently defended the role of investors in response to a consultation paper from the Department of Business, Innovation and Skills, claiming that most investors operate with long-term growth strategies.


FSA introduces new investment adviser regulations

On January 21, 2011, in Uncategorized, by simondixon

FSA introduces new investment adviser regulations

The Financial Services Authority (FSA) has confirmed that retail investment advisers will need to obtain a specific accreditation in order to offer advice.

After January 2013, any adviser wanting to give investment advice will need to hold a Statement of Professional Standing (SPS) the financial regulator announced.

The FSA will issue an SPS based on certain criteria being met, namely that the advisers act in the public interest, further the development of the profession, carry out effective verification services and use appropriate control systems.

Sheila Nicoll, the FSA's director of conduct policy, said these new measures will help to restore public trust, which is vital for the recovery of the sector.

"A Statement of Professional Standing will be a vital indicator for customers that the person they are dealing with is subscribing to a code of ethics, has up-to-date knowledge, and is appropriately qualified," she said.

The FSA recently fined Barclays £7.7 million for "investment advice failings".


Investors set to turn away from bonds?

On January 18, 2011, in Uncategorized, by simondixon

Investors set to turn away from bonds?

Investment manager BlackRock believes that investors will increasingly look away from bonds in the next 12 months.

Equities are the way to go, the money manager suggests, with a positive outlook for the year ahead threatening to persuade many investors to switch classes.

Speaking to Reuters, the group's head of portfolio management Richard Kushel said the biggest backing opportunities will develop in the US and Asia.

In addition, he expects dividend paying stocks to emerge as a viable alternative to fixed income, although the availability of credit remains a concern.

"We see our client demand is very high for that. That is a way to get income relative to the way investors traditionally got it in bond markets," he told the news agency.

BlackRock recently claimed that investors looking to maximise returns during the economic recovery should look to small and mid-cap companies with exposure in the emerging markets.