INVESTMENTS! – Active versus Passive or Active and Passive.

Some Advisers have debated long and hard whether Active or Passive Investing is better in the long term.

In more recent years, the passive advocates’ voices have been heard loud and clear but this of course misses the point that there remains a number of hugely talented fund managers who have managed to beat the market, some by a significant margin, over time. The key, of course, is being able to find them.

I am fairly agnostic in this debate and believe that it is important to give clients the choice of both active and passive solutions while at the same time sticking to my mantra of Diversify, Diversify, Diversify, and matching whatever portfolio is best for the Client in terms of his or her Risk Profile at a reasonable cost.

I try to give my clients a balanced view on both sides of the argument and allow them to make an informed decision on choosing one strategy against the other.

There is of course a third way and that is blending the two strategies to give a good mix and using the investment house’s expertise in choose which funds should be actively managed and which should be passively managed. That choice is not set in tablets of stone and the blend is open to movement between both strategies depending on circumstances.

Of course like all investments, past performance is not indicative of future performance and the value of investments may go down as well as up. Also, the income generated by investments is not guaranteed and may fluctuate. Lastly you should be aware that you may receive back less than the amount that you invested.

If you would like more information, on this subject ( or any other, for that matter ), please feel free to contact us. A no obligation meeting is available should you wish. And I’ll buy the coffee!



Talking to clients about Ethical and Sustainable investing

Stock Prices Slide as Market Volatility Returns

One of our favoured Investment houses, SEI, has commented on the current position of the Stock Market’s volatility.  The extended period of calm for equity markets in recent years has come to a halt, pulling global markets lower.

While declines can be disconcerting, they are a normal development in the course of market movements.  The volatility serves as a reminder of the value of focusing on achieving goals rather than on daily stock price movements.

They comment that Investors have enjoyed a long period of relative calm in financial markets, making the return of market volatility an unwelcomed interruption. Volatility can be unsettling, but its been seen it before. Market movements of 2% or more have been frequent occurrences at various periods in the past, and declines of 10% or more have historically occurred about every two years.

In their view (and ours), putting energy into developing and maintaining an investment plan that is designed to help you achieve your goals within a timeframe and level of risk of your choosing is the prudent approach. This is the foundation of investment strategy. The objective is to create diversified portfolios designed to provide more consistent returns over time.

And as I constantly tell clients, it’s not the timing of the market, it’s the time in the market!

Ethical Investing – Now a Main Stream Investment Strategy?

 Twenty years ago, ethical investing was seen very much as a pure values-based, exclusionary investment process.

Over time, this has developed into sustainability and engagement and now there are more funds focusing on companies which make a positive impact on their environment.

According to one IFA, “There is a pervading view that values-led investing is still about negative exclusion. 

“The market has become increasingly complex and unless advisers have a personal interest in the area, positive investing is not likely to be viewed favourably.”

The growth of funds available is important, as ethical bank Triodos revealed most investors want their money to create positive change by investing in progressive and pioneering businesses. 

Its latest research says 79 per cent of investors want to see a fairer and sustainable society, but 67 per cent of investors have never been offered ethical or sustainable investment opportunities.

While it’s encouraging to see further evidence of the growing demand for sustainable and responsible investment opportunities, the fact that two thirds of investors have never been offered them suggests a worrying disconnect.

The survey also revealed 55 per cent of people believe businesses have the power to solve many of the biggest challenges the world faces today, and 71 per cent say businesses have the power to create positive social and environmental change.  Should your investments be of an Ethical Nature.  At ABFM we advise a large number of clients on Ethical and Socially Responsible Investing.  We can take account of your risk profile and diversify your investments at the same time. 

If this is of interest to you, give us a call.



The disappearance of the Cofunds brand name

Aegon is dropping the Cofunds brand name as it moves users onto an upgraded version of the platform.

After acquiring Cofunds in August last year, Aegon has been working on integrating the platform with its Aegon Retirement Choices offering, bringing many of Cofunds’ features into ARC.

The decision to dispense with the Cofunds branding puts to bed one of the oldest names in the UK platform market.  

Brexit and Diversification

Since the UK electorate’s decision to leave the European Union (EU), the past 17 or so months have been interesting ones, to say the very least, for UK equity investors, and none more so than for those of us focused lower down the market capitalisation scale.

But the UK market is a diverse and internationalised one and, somewhat surprisingly perhaps, the FTSE 250 index among others, generate around 40% and 50% of their collective turnover from overseas earners. As such, our view of the world is still firmly coloured from a global perspective.

Many Investment managers like to look ahead and hold a 12-month view of the prevailing global economic and financial market conditions. And according to many, on current evidence, relative to history, we are in the midst of a period of reasonable if not spectacular growth. The US, China, Japan and, belatedly, the Eurozone, are all showing signs of increasing momentum.

By contrast, commentators feel that the UK looks stuck in the limbo of a rather slower pace of growth. Brexit-related uncertainty does now seem to be weighing on consumption and investment across the UK economy and, anecdotally at least, international investors are being put off by the apparent lack of progress in the UK’s exit negotiations.

All of which I would suggest, are good reasons for using the Multi Manager Diversified approach we use with the vast majority of our clients.