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%.
- 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
After a torrid six months, with global equities suffering a 20% decline and most developed world sovereign bond markets producing negative returns each month in the first half of this year, there was finally relief in July. Led by Wall Street, with the S&P 500 up over 9% in the month, the MSCI World index returned 7.9%, while the JPMorgan Global Government Bond index returned 1.9%. Riskier parts of the bond market, which had sold off heavily in the first half of the year, recovered sharply, with US investment grade bonds +3.2%, high yield bonds +5.9%, and emerging market debt +4.0%.
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.
- 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
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.
- 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
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.
- 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