Publications -

Global Matters Weekly – 5 September 2022

The Law of Lindy

by Tom Delic

— Often the most successful new businesses are centred around ideas that satisfy age-old basic human wants and needs.

In 1964, American author and academic Albert Goldman wrote an article in US magazine The New Republic, titled ‘Lindy’s Law’. While dining at Lindy’s, a New York delicatessen, Goldman became interested in the discussions that took place between entertainment industry veterans who frequented the restaurant and would analyse the latest televised comedy shows. While the Lindy effect is a useful heuristic to apply across many aspects of our lives, we can also use it as a filter in the portfolios we manage for clients.


Market Snapshot

  • Global equities fell by 3.3% last week
  • Commission President Von der Leyner is considering various measures to deal with the current cost of living turmoil
  • Brent crude fell by 7.9% over the week to $93.0 a barrel
  • Gold fell by 1.5% to $1712.2 per ounce

Global Matters Weekly – 22 August 2022

Navigating fund fees and finding value

by Gary Moglione

— New regulations in the UK are making it increasingly difficult for multi-asset funds to hold investment trusts.

As investors in the investment trust market, we have seen the UK market grow significantly over the years. In addition to diversification and access to many asset classes not usually available to retail investors, closed-ended trusts have significantly outperformed open-ended funds over the long term. In the UK, over the ten years to September 2021, the average investment company returned 265% versus the average open-ended fund returning 70%.


Market Snapshot

  • Global equities fell by 1.6% last week
  • In Ukraine, talks with President Zelensky, UN Secretary General António Guterres, and Turkish President Recep Tayyip Erdoğan were held in Lviv with Turkey acting as the key interlocutor between Ukraine and Russia
  • Brent crude fell by 1.5% over the week to $96.7 a barrel
  • Gold fell by 3.1% to $1747.1 per ounce

Global Matters Weekly – 15 August 2022

Change – it’s a constant

by Gary Moglione

— We need to operate closer to the frontiers of where technology is going.

Back in February I gave a sob story of my childhood of how the 1970s and early 80s saw “austerity” hit my household, including my father’s industrial clothing factory closing down. Recent developments on the Continent, brings another childhood memory to mind; cold housing. Admittedly, the central heating system, decades past its use by date and an insufficiently insulated house, was not conducive to staying warm. However, an article caught my eye in the Financial Times this week that showed the average temperature in British homes has risen considerably since the 1970s; even those that actually had central heating in 1971 saw average temperatures rise from circa 14C to 18C today.


Market Snapshot

  • Global equities returned 3.0% last week, marking the first fourth consecutive weekly advance this year
  • Stocks rallied after US data showed signs that inflation, while still elevated on an annualised basis, had started to slow
  • Brent crude rose 3.4% last week to $98.15 a barrel
  • Gold rose 1.5% last week to $1802.4 per ounce

Global Matters Weekly – 08 August 2022

Shinzo Abe; a tragic death but a promising legacy

by Robert White, CFA

— Japanese equities should form an important part of any truly global portfolio today.

Japan has been in the headlines for the sad and shocking death of Shinzo Abe, one of the few truly visionary democratic leaders in modern times. The former Prime Minister was instrumental in transforming Japan’s economic and military ambitions, and while both remain a work in progress, he became a revered figure on the international stage. As investors, we are optimistic about the opportunity in Japanese equities; not only are they cheap, but nascent structural reforms and robust corporate profitability should provide a healthy tailwind over the coming years.


Market Snapshot

  • Global equities rose 0.6% last week
  • China responded to US House Speaker Nancy Pelosi’s visit to Taiwan with 3 days of military tests and drills that encircled the island
  • Brent crude fell by 14.4% over the week to $94.12 a barrel
  • Gold rose 1.4% to $1790.57 per ounce

Global Matters Weekly – 01 August 2022

Build up not out

by Richard Stutley, CFA

— Debt is a great way to ruin a good investment.

I met with one of our underlying global listed property managers last week and I thought some of the discussion points were worth repeating here. Until such time that we all live in the metaverse, what is happening with physical space remains important, with implications for investors beyond dedicated property buyers.

From a sector perspective, we discussed the supply outlook for industrial/logistics space, following Amazon’s announcement earlier this year that they plan to mothball several new warehouse projects and sublet excess space.

 


Market Snapshot

  • Global equities rose 3.6% last week
  • The Federal Reserve Systems’ fourth rate hike this year raised interest rates by 75bps to 2.5%, as forecast
  • Brent crude rose 6.6% over the week to $110.01 a barrel
  • Gold rose 2.2% to $1765.94 per ounce

Global Matters Weekly – 25 July 2022

Finding your anchor

by Stephen Nguyen, CFA

— Debt is a great way to ruin a good investment.

What a difference a few months make. After a relatively calm year in 2021, we have witnessed several asset classes posting significant losses in the first half of 2022, including equities, credit, and sovereign bonds. We have seen an increase in volatility, and traditional diversifiers like government bonds have failed to provide protection as their correlation with risky assets has risen. The increase in correlation between bonds and equities has caused major headaches for the traditional multi-asset investors.

 


Market Snapshot

  • Global equities rose 3.6% last week
  • The Federal Reserve Systems’ fourth rate hike this year raised interest rates by 75bps to 2.5%, as forecast
  • Brent crude rose 6.6% over the week to $110.01 a barrel
  • Gold rose 2.2% to $1765.94 per ounce

Global Matters Weekly – 18 July 2022

Outrunning dinosaurs with artificial intelligence

by Lorenzo La Posta, CFA

— We need to operate closer to the frontiers of where technology is going.

I am a Millennial, born in the early 90s, which makes me probably one of the last generations to have experienced life before digitalisation took over. Maybe I was too young to be afraid of the millennium bug, but as a kid, using the internet meant monopolising my home’s landline.

Digital technologies, once a premium item for few, are today embedded in all aspects of our lives and have brought significant changes and improvements to the way we live and operate.


Market Snapshot

  • Global equities fell 1.3% last week
  • Following his visit to Saudi Arabia, US President Joe Biden announced Saudi Arabia was ‘committed to support global oil market balancing’
  • Brent crude fell 5.5% over the week to $101.16 a barrel
  • Gold fell 2.0% to $1708.17 per ounce.

Global Matters Weekly – 11 July 2022

Inflation Licked Bonds

by Alex Harvey, CFA

— When it comes to inflation though, postage costs are probably not front and centre of people’s minds.

Before the 4th of April this year, it cost 85 pence to send a letter first class in the UK. After that date you have needed to stick another 10 pence stamp onto your letter to maintain its first-class status. But if you had a ‘1st’ class stamp knocking about in a drawer, it effectively increased in value by an inflation busting 11.7% this year (and 11.8% the year before that).

When it comes to inflation though, postage costs are probably not front and centre of people’s minds.


Market Snapshot

  • Global equities returned 1.7% last week
  • Slightly improving labour and production data saw most equity markets rise
  • Brent crude fell by 6.3% to $104.7 a barrel
  • Gold fell by 3.8% to $1742.7 per ounce.

Global Matters Weekly – 4 July 2022

Buy Now, Paid Lots

by Matt Connor

— High-yielding and undervalued companies may provide investors with attractive returns.

Over recent years, the acronym ‘BNPL’ has dominated headlines due to the stratospheric rise of companies such as Klarna and Clearpay offering consumers a modern spin on a type of credit that was made popular in the twentieth century, instalment plans. Headlines associated with Buy Now, Pay Later have overwhelmingly been negative as regulators look to crack down on loose lending amid the cost-of-living crisis.

In this week’s Global Matters Weekly we focus on ‘BNPL’ stocks; high dividend-yielding companies within our UK Equity portfolio that you can Buy Now, (and be) Paid Lots.


Market Snapshot

  • Global equities fell 2.2% last week
  • G7 ministers have reportedly agreed to explore imposing a cap on Russian gas and oil exports in the hope that it will help cushion the impact of higher energy prices on western economies
  • Brent crude fell 1.3% over the week to $111.6 a barrel
  • Gold fell 0.8% to $1811.4 per ounce.

Global Matters Weekly – 27 June 2022

Inflationary pressures

by Jackson Franks

With the construction industry under significant pressure, current asset owners may be the beneficiaries. Due to the ever-rising costs in developing a new asset, the new supply coming to the market is minimal. Berkley Group, one of the UK’s largest home builders, recently announced that the number of new homes being built in London could halve in the coming years because of these rising costs. With a lack of new supply entering the market, competition for existing space may intensify, enabling landlords to take advantage as supply and demand dynamics shift across sub-sectors.


Market Snapshot

  • Global equities fell 2.0% last week
  • The World Bank became the latest body to downgrade their global growth forecast and openly warned about the risk of stagflation, now projecting a 2.9% rise in GDP for 2022 compared to a 4.1% estimate in January
  • Brent crude rose 2.8% to $123.1 a barrel
  • Gold fell 0.1% to $1848.8 per ounce.