Investment News: Chinese Fund Investors Post Dismal Results as Tech Rivals Soar

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Forbes Advisor’s editorial team is independent and objective. To help us in our journalistic work and continue to offer this content for free to our readers, we receive invoices from companies that promote it on the Forbes Advisor site. This comes from two main sources.

First, we offer paid placements for advertisers to showcase their offers. The invoices we receive for those placements show how and where advertisers’ offers appear on the site. This site does not include all companies or products available on the market.

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Investors with a China-oriented budget performed abysmal in 2023, in stark contrast to those who favored tech portfolios, writes Andrew Michael.

A study of the fund’s functionality in 2023 highlighted many other fortunes experienced in the two investment sectors.

Referring to the Investment Association’s universe of 50 investment sectors, representing £8. 8 trillion controlled through AI members in the UK, Quilter Cheviot found that of the 43 poorest investment sectors were invested in China.

Bottom of the pile came abrdn’s China A Share Equity fund which, according to Quilter Cheviot and Morningstar data, produced a negative 29.2% return over the course of 2023. The next nine worst-performing funds also came from the China sector, with each one registering losses of more than 25% (see Table 1).

Nick Wood, head of fund research at Quilter Cheviot, said: “China has pulled back in a year when its Covid reopening was expected to produce big returns. Abrdn China A Share Equity has found itself at the bottom of the functionality rankings, given that 42 of the last 43 budgets are Chinese, it is evident that the country as a whole has faced abundant headwinds.

In contrast to the malaise that has plagued investors in China, the past year proved to be particularly more successful for generation investors, with several budgets in this sector ranked among the top 10 best-performing budgets of the entire AI universe in 2023 (see Table 2).

The best-performing actor, Nikko AM ARK Disruptive Innovation, led by ARK founder Cathy Wood, a company synonymous with American investment. Other managers that produced returns above 50% during the year include Liontrust, T. Rowe Price & Legal

Quilter’s Nick Wood said: “It is clear technology stocks are very much back in vogue, despite the high interest rates that were supposedly going to hamper them. The ‘Magnificent Seven’ stocks [including Microsoft, Apple and Nvidia] have brought tech funds back to the fore, with the top 10 performers being almost exclusively focused on this sector.

“Clearly the artificial intelligence boom of 2023 has helped to drive these funds up from the doldrums they found themselves in at the beginning of last year and will have rewarded investors who stayed patient and invested through the difficult period.

Wood added that the dominance of the generation sector last year was such that only one non-tech-dominated fund, Lazard Japanese Strategic Equity, is among the top 20 most sensible funds.

Ben Yearsley, director at Fairview Investing, said: “From a fund perspective, there were only two stories in 2023, generation and China. The generation was great, China was terrible.

“China has been the big loser at the back of the fund industry charts, with an average fund squandering more than 20% in 2023. Actually, sentiment will have to be replaced at some point, with ridiculously cheap stocks. “

The FTSE 100 index, the barometer of primary stocks on the British stock market (3 January) celebrates its 40th anniversary at a time when London’s reputation as a financial centre has never looked more vulnerable, writes Andrew Michael.

Also as “the Footsie”, the FTSE 100, along the S

These indices provide stock investors with an indication of how the markets are performing, as well as the functionality of individual companies. They also provide the foundation on which passive investment vehicles, such as index funds, are built.

The UK Blue Chips Index is made up of the hundred largest UK corporations by length or market capitalisation, indexed on the London Stock Exchange. “Market capitalization” is calculated by multiplying the percentage value of a company by the number of outstanding percentages.

Currently, the two largest corporations in Footsie, with a market capitalisation of around £167 billion at the beginning of January this year, are oil manufacturer Shell and biopharmaceutical company AstraZeneca.

Launched in 1984, the FTSE 100 took over as the main stock market measure for pre-eminent UK listed companies from the FT 30 index, which dated from 1935.

The Footsie’s arrival pre-empted a new generation of individual investors who flooded into the market following the privatisations of formerly state-controlled businesses such as British Gas and British Telecom.

Nowadays, the Footsie is overseen by data firm FTSE Russell, which reviews the index each quarter. Companies can be promoted to, or be relegated from, the index depending on their size as dictated at the end of specific trading days each year.

Last fall, after a 14-year hiatus, the Marks store

Rob Morgan, lead investment analyst at Charles Stanley, said: “Some of the original 100 companies, such as M

“The absolute failure rate has been low given the immediate technological upgrade we have experienced over the past four decades, illustrating the benefits of investing in blue-chip companies. While those aren’t the most interesting investments, disappearances tend to be rare among giant corporations and their sustainability can be a source of cash flow and dividends for investors.

The 40th anniversary of the Footsie comes at a time of great upheaval for the City of London. Today, UK stocks account for about 4% of the evolved market, as measured by the MSCI World Index, up from 10% a decade ago. A year later, London also moved to the United States as the headquarters for several corporate IPOs.

One of the accusations levelled against the index itself is that its composition is aging. Critics say its composition is too concentrated on stocks from the “old economy,” adding banks, insurers and mining corporations, while it lacks the tech corporations that have propelled rival indexes. , adding the S

Jason Hollands, CEO of Bestinvest, said: “The Footsie has become a concentrated index, ruled by its biggest beasts. The five largest corporations now account for about one-third of the index. While they are primary corporations worth considering, investors deserve to bear in mind that across all UK markets, adding up the Alternative Investment Market, there are over a thousand index companies to invest in and therefore there are many more opportunities beyond the FTSE 100. “

“Although many consider the FTSE 100 corporate types to be ‘boring’ compared to the expansion dynamos of the US market, strong corporations that pay decent dividends can remain hot in times of uncertainty and existing FTSE 100 valuations are of very reasonable fact. compared to these. to the story it may just be a smart access point.

Richard Hunter, Head of Markets at Interactive Investor, said: “There is no doubt that the index has fallen out of favour with institutional and foreign investors lately, driven by a backlash to Brexit, in which the UK as a whole has failed as an investment destination. “. Get over it.

“At a time of wonderful enthusiasm for high-growth stocks, especially technology stocks in the U. S. , the U. S. In the U. S. , where the prospect of synthetic intelligence has led tech corporations called the ‘Magnificent Seven’ to stellar returns, especially last year, the tech sector’s FTSE100 apparent lack of exposure has been a hindrance.

“Investors seeking growth have moved away from the UK’s main index as its parts are seen as beyond the expansion phase. Although they are more reliable, cash-generating, and stable, many of their businesses are considered to have modest expansion prospects. as representatives of the “old economy”.

Laith Khalaf, head of investment research at AJ Bell, said: “Looking at old functionality data, it’s hard to avoid the conclusion that Footsie’s peak productive days are these. An annualised decline of 5. 2% since its launch is already smaller than its European and US counterparts, but it also belies the fact that most of this expansion has occurred in the first two decades of the FTSE 100’s existence. An idyllic youth has given way to an austere adult life for the British index.

“Since 2000, the FTSE 100 index has deteriorated, while other indices in the evolved market appear to have advanced. Since the turn of the century, the FTSE index has risen by just 0. 4% on an annual average, to 6. 1%. annualized rise in the price of the S

In contrast to this view, Jason Hollands of Bestinvest considers it essential that the expansion of the index is only a small part of the Footsie’s retrospective figures: “In terms of percentage points, the FTSE hundred is up 447%. Since its inception and over the next five years, it only saw an increase of just 15%, which is modest compared to the U. S. S-Index. U. S.

“While it is undeniable that the FTSE Hundred Index has been vastly outperformed by the functionality of US equities, the functionality of FTSE Hundred issuances is a very partial picture of the returns achieved, as the overwhelming majority of the overall returns achieved in the UK stock market, In fact, it’s practical. All real returns, once inflation is taken into account, come from dividend payments.

“When these are included and reinvested, the total return from the FTSE 100 over the last 40 years is 2,219% and over five years it is 39%.”

The Financial Conduct Authority (FCA) is undertaking a sweeping overhaul of UK stock exchange board regulations after a number of companies shifted from the City of London to New York, writes Andrew Michael.

Listing regulations set out the criteria that a company must meet if it wishes to list its shares for public sale.

The UK’s monetary regulator has put forward proposals that it says “will make the UK’s directorship regime more accessible, efficient and competitive”. The move comes after the FCA published a consultation paper in May this year on what a new directory regime would look like. .

This included a merger of the standard and premium segments of the market and scrapping a requirement for firms to get shareholder approval for major deals. The FCA said the changes were aimed at “encouraging a greater range of companies to list in the UK and compete on the global stage”.

The FCA claimed that the amendments could lead to the collapse of more UK-listed groups, but responded that this was justified by continued economic activity.

The regulator said: “The proposals may simply lead to a higher likelihood of bankruptcies, however, the proposed adjustments would better reflect the risk appetite that the economy desires for growth. “

Over the past year, the London market has experienced a series of setbacks as several companies, including well-known chipmaker Arm, took their business overseas, primarily to the U. S. market.

There are concerns about the UK’s existing board regime, which critics say has deterred corporations from listing on the domestic market. In the discussion paper accompanying the May consultation paper, the FCA described the existing regulations as “too complicated” and “burdensome”.

Sarah Pritchard, Executive Director of Markets and International at the FCA, said: “We are harnessing the excitement of the UK’s capital markets and helping the UK’s competitiveness and growth. In doing so, it is vital that others think about what they can in turn, to ensure that the UK remains an attractive location for companies wishing to raise capital.

Bim Afolami, Economic Secretary to the Treasury, said: “The UK is the leading investment platform in Europe, but it is a globally competitive country and we are in no way complacent. We need to make the UK the capital of the world. , attracting the world’s brightest and brightest corporations.

Online investment platforms and private self-investment pensions (SIPPs) have been ordered to avoid charging interest on clients’ money if platform fees are already imposed, writes Andrew Michael.

Millions of retail investors use investment platforms to buy and sell shares of corporations and investment funds.

In a letter to the platforms’ CEOs this morning, the Financial Conduct Authority (FCA) called on companies to “immediately stop the practice of double deduction,” saying it is not in line with the recently adopted rules on customer obligations, designed for customers to get a smart monetary policy. results. decisions.

A “double deduction” occurs when platform providers withhold accrued interest on customers’ money and also qualify an account payment or management payment on the same amount. The regulator said it expects the companies to finalize the procedure by the end of February 2024.

AJ Bell is the first platform to reveal adjustments to the interest rates it will pay in money following the FCA warning. It has announced increases to its spot rates as well as a series of value cuts worth £14 million. The adjustments will come into effect from next April with a higher interest rate paid on pension withdrawals, 3. 45% for balances under £10,000 and 4. 45% for balances over £100,000. The provisional balances will yield 3. 95%.

For gigantic amounts deposited in individual savings accounts (ISAs) and pension accumulation accounts (pension budget in the process of being created), new monetary rates of 2. 7% and 3. 95% respectively will be introduced. Currently, ISA clients with holdings worth less than £10,000 get 1. 95%, while those holding between £10,000 and £100,000 get 2. 45%.

The platform also announced that the charges levied on customers to buy and sell investments including shares, exchange-traded funds, investment trusts, and bonds via the AJ Bell D2C platform are being reduced from £9.95 to £5 a trade. Dealing charges for frequent traders, defined as customers that place 10 or more trades in the preceding month, will reduce from £4.95 per trade to £3.50 next spring as well.

The FCA notes that the amount of interest earned through some firms has increased as rates have risen over the past two years.

An FCA survey of 42 platform providers found the majority retain some of the interest earned on customers’ cash balances which, according to the regulator “may not reasonably reflect the cost to firms of managing the cash”.

It added that, in June 2023 alone, those providers which retained interest collectively earned £74.3m in revenue from this practice.

For more information read our article on the investment platforms that lately pay the interest rate to their clients.

The FCA told CEOs that it expects firms to “ensure that the withholding of interest on money balances provides a fair cost and is understood by consumers, in accordance with the duty to the consumer, in particular the effects of value and cost tax and consumer understanding. “”.

He adds: “We are also very concerned about the practice of some corporations withholding interest and charging account fees or fees from customers’ money. This practice will most likely cause confusion among customers and we do not do this to demonstrate that a company is acting with intelligent faith, is acting honestly, calmly, and openly, and is acting in a manner consistent with moderate customer expectations.

Sheldon Mills, executive director of consumers and competition at the FCA, said: “Rising rates mean greater returns on cash. Investment platforms and SIPP operators need now to ensure how much of the interest they retain and, for those who are double dipping, how much they’re charging customers holding cash, results in fair value.

“If they can’t make their case, they’re going to have to make changes. If they don’t, we will intervene. “

Foreign investors have acquired a record share of the U. K. stock market, while Americans and U. K. institutions such as insurance and pension companies have noticed the proportion of domestic inventories they own falling sharply, writes Andrew Michael.

According to figures from the Office for National Statistics (ONS), shares of UK-based companies indexed on the London Stock Exchange stood at £2. 42 trillion at the end of 2022.

Of this, the proportion of UK shares held by overseas investors, including global investment funds and sovereign wealth funds, stood at a record high of 57.7%, up from 56.3% two years earlier.

By comparison, Americans living in the UK saw their holdings of British stocks increase from 12% in 2020 to 10. 8% last year.

According to the Investment Association, investors have withdrawn around £44 billion from budget exposure to UK shares since 2016.

Looking back over a longer period, the proportion of UK shares held through the pension budget and insurance corporations has fallen significantly further, from 45. 7% in 1997 to 4. 2% last year, the lowest figure recorded.

While insurance companies and pension budgets have been big backers of the domestic stock market, they have declined especially in recent years due to factors, coupled with changes in pension regulations, that have pushed investment strategies more toward “safer” assets such as bonds.

Performance contributed to performance, with a stock market index such as the S

As we approach the year 2024, professional investors seem reluctant to increase their exposure to the UK stock market.

Sharing their thoughts on the investment outlook for the year ahead, a panel of commentators told Forbes Advisor that retail investors deserve to broaden their exposure to the steady source of income sector to stay on top of what can be a tough time in the markets. .

When asked how investors could better position themselves in an environment of “higher and longer” interest rates, the panel was unanimous in suggesting that they turn to steady sources of income, i. e. , through government bonds or “gilts. “

Laith Khalaf, head of investment research at AJ Bell, said: “The UK stock market is increasingly adapting to the control of foreign investors and, in a globalised market economy, this is perhaps not a surprise. However, the United Kingdom accounts for a declining percentage of the MSCI World Index due to its poor functionality relative to the S

“Obviously, UK investors are also facing cost of living pressures, which have understandably reduced their propensity to invest in UK shares. This scenario is compounded by the fact that in recent years, UK investors UK funds have increasingly sought and opted to sell their UK equity funds, largely in favor of global offerings.

“Pension funds and insurance companies have also been retreating from UK shares. The thing that will really prompt pension schemes and other investors to plump for UK shares is the prospect of superior returns.”

A U. S. stock trading app that helped spark a stock-buying frenzy is launching in the U. K. after failing three years ago, writes Andrew Michael.

Robinhood, which has been propelled to the forefront of the GameStop stock trading saga known as “meme inventories” in which small individual investors take on giant financial institutions, has opened a waitlist for UK customers, the first step in its expansion into the UK.

Share dealing apps and online investment trading platforms allow retail investors to buy and sell shares, funds, and other investments directly, instead of using the services of a financial advisor.

The boom in DIY investing over the past decade, partly driven by the Covid-19 lockdown period, means that the market has become increasingly competitive and saturated.

US share trading rivals Public. com and Webull also entered the UK market this year.

Robinhood plans to roll out its brokerage in the U. K. , giving its customers the opportunity to buy more than 6,000 U. S. -listed stocks. In the U. S. , adding Amazon, Apple, and Tesla. La company announced that it will come with a feature that will allow 150 of the most traded stocks. U. S. stocks are available to buy and sell 24 hours a day, Monday through Friday.

Robinhood is one of the many platforms that offers its consumers commission-free trading and collects exchange fees. The company says it will pay its consumers 5% interest on money held on the platform.

With other approaches taken from provider to provider, navigating and comparing fees related to the stock trading app market and online investment trading platforms can prove tricky. To learn more about the supplier’s chargers, read our detailed information here.

We also look at investment platforms that are lately paying cash interest rates.

Robinhood’s second foray into the U. K. market follows an earlier attempt that failed following operational issues in the U. S. and the outbreak of the pandemic.

In 2021, the company played a central role in the meme stock frenzy which saw the value of some unfashionable shares, including the retailer GameStop, soar to their highest level in years.

Vlad Tenev, CEO and co-founder of Robinhood, said: “Since we introduced Robinhood ten years ago, our vision has been to expand overseas. As a hub for innovation, global finance, and more no-nonsense tech talent, the UK is an ideal place to launch our first foreign brokerage product.

Robinhood said it aims to offer the ability to hold shares in an individual savings account, as well as stocks outside the U. S. , in the future.

Tenev added that he is “enthusiastically” engaging with the U. K. ‘s monetary regulator, the Financial Conduct Authority, to unload compulsory licenses to offer those services.

The Financial Conduct Authority (FCA) announced a package of measures to fight so-called “greenwashing”, writes Bethany Garner.

Greenwashing is the practice of making false or misleading claims about a product’s environmental effect to attract investors.

According to government data, investors are concerned about sustainability when choosing their investments, and annual investments in low-carbon sectors more than doubled in real terms between 2018 and 2023.

But according to a study by the FCA, investors are convinced that the sustainability claims that companies make about their investment products are genuine.

The FCA’s new regulations target investor confidence and will require all authorised firms to ensure that any sustainability claims they make are “fair, transparent and not misleading”.

The regulator is also introducing sustainability labels, with the aim of helping investors understand what their cash is used for, based on a transparent set of targets and criteria.

These regulations aim to prevent corporations from labeling or marketing monetary products as “sustainable” when in fact they are not.

Sacha Sadan, head of environmental, social and governance (ESG) at the FCA, said: “We are implementing an undeniable and easy-to-understand regime for investors to judge whether the budget meets their investment wishes; This is a step for client coverage as the popularity of making sustainable investments grows.

“By gaining confidence in the sustainable investment market, the UK will be able to position itself at the forefront of sustainable finance and reap the benefits of being a leading centre for foreign investment. “

The anti-greenwashing rules will come into force on 31 May 2024 and companies will be required to use the new investment labels from 31 July 2024. The naming and marketing rules will be implemented from 2 December 2024.

Fintech specialist Saxo has launched an online trading platform offering UK investors access to thousands of funds, writes Andrew Michael.

Trading platforms allow retail investors to buy and sell budgets and other investments, such as stocks, directly instead of a money advisor.

Saxo, which already offers equity trading to its UK clients, said it had compiled a list of more than 6,000 global fund manager budgets that included Baillie Gifford, BlackRock, Fidelity, JP Morgan and Vanguard.

The list of funds includes more than 500 equity budget portfolios and 2,000 constant income streams portfolios, as well as a variety of specialized budgets targeting sectors such as biotechnology, energy, mining, healthcare, technology, telecommunications and utilities.

Like a handful of its rival trading platforms, Saxo said investments can be made without commissions or platform fees on fund purchases.

In comparison, AJ Bell’s trading account charges a transaction payment of £1. 50, while the investor’s interactive trading account costs £3. 99.

Saxo’s annual “custody” fee, the amount charged to clients for holding and managing their investments on the platform, is calculated based on the length of the portfolio and is applied in three tiers.

The “classic” account charges 0. 4% on assets between £0 and £160,000, while the “platinum” account charges 0. 2% on amounts between £160,000 and £800,000. The fee is reduced to 0. 1% for VIP accounts over £800,000.

In comparison, Hargreaves Lansdown, the UK’s largest fund platform, charges a fee of 0. 45% on the first £250,000 invested and 0. 25% on holdings between £250,000 and £1 million. Fees drop to 0. 1% between £1 million and £2 million, while wallets over £2 million are exempt from custody fees.

Despite consumers being squeezed by the ongoing cost-of-living crisis and inflationary pressures, investment fund providers attracted a net inflow worth £1.2 billion during the third quarter of 2023, according to the Investment Association.

The biggest sales budget came from the steady-source of revenue sector, adding British bonds, corporate bonds, and other government debts.

Charlie White-Thomson, CEO of Saxo, said: “The release of Saxo’s fund offering coincides with an era of market volatility and geopolitical tensions.

“I have supported active control, adding budget as a vital component of any well-diversified portfolio. We deserve to bring in some of the most productive minds in the world of asset control, through budget, to help us and improve our functionality and help us navigate those volatile money markets.

NatWest shares will be put up for public sale, in a move reminiscent of the privatization of the British public sector in the 1980s, writes Andrew Michael.

Chancellor Jeremy Hunt, in his autumn speech yesterday, said the government was seeking to return the taxpayer-funded bank to personal property through an advertising campaign that will echo the “Tell Sid” campaign used to publicise British Gas’ moves in 1986.

British taxpayers are the largest shareholder in the NatWest Group, whose retail brands include NatWest, Royal Bank of Scotland, Ulster Bank and Coutts, when the government prevented the company from collapsing with a £45 billion cash injection after the 2007 financial crisis.

The funding gave the state an 84.4% stake in the company. Despite offloading blocks of shares to institutional investors such as company pension funds in recent years, taxpayers remain NatWest’s largest investor with a 39% holding.

All percentage disposals to date have resulted in a loss to the taxpayer. NatWest’s percentages are trading lately at around £2. 04, particularly below the £5. 02 paid through the government at the time of the initial bailout.

A percentage sale to the retail investing public would likely be presented at a lower value than the existing percentage value to inspire demand. The NatWest Group recently lost its chief executive, Alison Rose, who resigned in July following a dispute sparked when her personal bank, Coutts, closed the accounts of former UK Independence Party leader Nigel Farage.

Paul Thwaite, NatWest’s acting chief executive, welcomed the government’s announcement. He said, “I’m very focused on getting the bank back. “

Laith Khalaf, head of investment research at AJ Bell, said: “The ‘Tell Sid’ crusade was iconic in its time and, for some, will evoke memories of their first pleasure in owning shares and acquiring a stake in UK plc by making an investment in British Gas when the company was privatised.

“The sale of part of the government’s stake in NatWest to retail investors will most likely strike a chord with some of the original Sids and Sidesses, as their appeal is likely to lie in an older population that is focused on their source of income rather than growth.

“Collectively, we all already own a percentage of NatWest as a result of the bailout, and the government’s removal from the shareholder register and a retail sale of percentages will move this deal from a mandatory majority stake to a voluntary majority position. “few. “

Will Howlett, money analyst at Quilter Cheviot, said: “The government has committed to selling its 39% stake in NatWest until 2025/26 and will now explore features to free up a percentage of sale to retail investors over the next 12 months.

“We see that the fact that the government reduces its stake to 0 is more symbolic that it has no implication in the bank’s strategy. As such, we believe it is the fundamentals of the company that are more vital in determining the functionality of the percentage value than any technical issues caused by a percentage that cut into its stake.

“In 2015, the government did propose something similar with regard to its stake in Lloyds, but these plans were shelved. It will be interesting to see if this ends up going ahead or not.”

Bank stocks tend to be a smart source of dividends and can also provide a diversified investment portfolio, while currency stocks offer an “old economy” counterpoint to portfolios that include trendy tech stocks.

Investors who don’t have the time, experience, or inclination to study individual banks, but still need exposure to the sector, could buy specialized exchange-traded funds (ETFs) focused on finance, adding exposure to the banks.

Read our in-depth article on bank ETFs to learn more.

Retail investors deserve to broaden their exposure to the steady source of income sector to stay on top of what could be a challenging era in the markets next year, according to a panel of investment experts, writes Andrew Michael.

This is a component of Forbes Advisor UK’s investment outlook for 2024, which asked them about the retail investment landscape.

When asked about the best way investors could position themselves for “higher for longer” interest rates, the panel was unanimous in suggesting a move into the fixed income sector, especially via government bonds, also known as gilts, or by upping existing holdings.

Jason Hollands, managing director of investment platform Bestinvest, said: “Many investors have ignored government bonds since the [2007/08] global currency crisis and focused solely on stocks. We now live in a different environment and bonds can offer welcome diversification. .

Kasim Zafar, chief investment officer at EQ Investors, said: “Bonds now offer very high yields, so they once again feature prominently in portfolios with a bias, for now, towards short-term maturities. “

Justin Onuekwusi, chief investment officer at St James’s Place, said: “Rising interest rates have been worth revisiting the steady source of income sector, which has been straightforward with more than a decade of near-zero base rates. Within a steady source of income, some portfolios in the high-yield bond market produce low double-digit returns, while investment-grade bonds are between 5% and 10%, which should not be mentioned.

When asked which region could perform well for investors in 2024, most stakeholders pointed to the United States as the market to watch.

Kasim Zafar, of EQ Investors, said: “The U. S. economy. It appears to be the most protected from shocks that could occur next year and is already further along in its financial cycle than most other regions. “

Karen Lau, investment director at JM Finn, said: “The US remains the strongest contender to lead us out of the current economic climate.”

Claire Bennison, Head of Investment Solutions at Tatton Investment Management, said: “Regionally, it is difficult to bet too much against the US, although emerging markets remain a key opportunity. “

In terms of sectors that could produce the goods next year, the panel pointed to the rise of artificial intelligence as one to watch. Arlene Ewing, divisional director at Investec Wealth & Investment, said: “AI could be the emerging sector to succeed as major players like Apple, Microsoft and Tesla continue to dip their toes in the space.”

Against a backdrop of persistently high inflation, emerging debt prices, and geopolitical shocks in the Middle East and Ukraine, next year is shaping up to be another challenging year for markets. This could be further affected by the UK and US access to a political “supercycle” with primary elections in the country.

When asked what maximum vital recommendation they could give to investors, the panelists emphasized that they remain invested in the market, diversified, and have long-term goals in mind.

Jason Hollands, from Bestinvest, said: “Investors want to focus on their long-term goals and not go through the noise and short-term events. When headlines are bad, it’s usually a smart time to invest, but it never seems like it in the moment.

Justin Onuekwusi, of St James’s Place, pleaded with investors: “Hold on to your investments and avoid the temptation to ‘time’ the markets, [because] even professionals can’t get it right.

He added: “Remember, the biggest threat to keeping pace and building wealth is inflation. “

Corporate dividends distributed around the world fell 0. 9% to £346 billion between the second and third quarters of this year, thanks in part to massive cuts by oil producers and mining companies, writes Andrew Michael.

Dividends are invoices to shareholders that are paid twice a year through corporations on their annual profits. According to fund manager Janus Henderson’s Global Dividend Index, the most recent headline figure is higher than expected, despite its decline from last quarter.

Taking into account things like extraordinary/special dividends and currency movements, the company said underlying dividend expansion in the third quarter was 0. 3 percent, adding that nine out of 10 companies increased their distributions or kept them flat during the period.

But it adds that two significant dividend cuts have limited the overall core expansion rate, which would otherwise have been 5. 3%.

Brazilian oil producer Petrobras cut third quarter dividend payments by £7.9 billion year-on-year, the second period running where it had significantly reduced payouts. Australian mining company BHP slashed its payout by £5.6 billion due to sharply falling profits as a result of declining commodity prices.

Dividend payments from UK companies, which account for around 7% of payments worldwide, stood at £22.4 billion in Q3, down by 4.8% compared with the same period in 2022. Janus Henderson said “lower mining payouts largely balanced increases from banks and utilities”.

The fortunes were combined in the regions. In North America, dividend expansion slowed for the eighth consecutive quarter, but still generated a figure of £133 billion. In Europe, payments soared by almost a third over the same period to £21 billion in the third quarter.

Looking ahead, Janus Henderson has lowered its overall dividend forecast for 2023 from £1. 34 billion to £1. 33 billion to reduce special dividends.

Ben Lofthouse, head of global equity revenue source at Janus Henderson, said: “The obvious weakness in global dividends in the third quarter is not a cause for concern, given the significant impact a handful of companies have had. In fact, the sense and quality of the expansion looks greater this year than it did a few months ago, as payouts are now less reliant on one-time special dividends and volatile exchange rates.

“Corporate dividend expansion sometimes remains strong across a wide range of sectors and geographies, with the exception of commodity-related sectors such as mining and chemicals. However, it is not unusual and investors They understand it well, that commodity dividends rise and fall with the cycle, so this weakness does not recommend a broader malaise.

Wealth manager St James’s Place (SJP) has suspended trading on its £924 million asset fund and deferred requested redemptions on two of its budget that also invest in traditional retail, writes Andrew Michael.

This comes less than a week after rival investment firm M

The SJP’s resolution means that investors cannot, for now, withdraw or make cash contributions to its main real estate fund, which owns a portfolio of offices, warehouses and shops. The company announced that it would apply a temporary relief of 0. 15 percent to emissions. to the fund’s annual control commission.

At the same time, redemptions are to be deferred in two other SJP property portfolios, one being a £563 million life fund and the other a £838 million pension arrangement. Deferrals mean investors can still ask for their money back, but requests could take longer than usual to fulfill.

SJP described the suspension of the fund as a “proactive measure to protect clients’ interests,” adding that the overall strategy is designed to “manage potential dangers and stability” of the three funds.

The company attributed the move to the difficult situations seen in the advertising real estate sector, adding to the drop in demand, the space that was left vacant after Covid due to workers fleeing home and the fact that “customers have increased their withdrawals or limited their investments”.

Since the beginning of last year, UK property funds have suffered outflows of nearly £1 billion, according to data provider Calastone.

METER

Tom Beal, chief investment officer at St James’s Place, said: “A combination of points led to our resolution to suspend transactions at the Real Estate Investment Trust and defer bills at pension and life insurance funds. This action also points to the challenge of having to sell homes temporarily to generate cash. Selling homes under such pressures would possibly result in the fund manager promoting them for less than their true market value, which can also result in monetary losses for the fund and its investors.

“During this suspension period, we will assess market situations and monitor asset valuations within the fund. We are committed to resuming negotiations as soon as we are happy that the situations are right.

Separately, St James’s Place has announced it will waive the fees it charges consumers to withdraw their investments from the business. It said it would also limit the amount charged for initial and ongoing monetary recommendation, as well as what clients pay to invest in their funds.

The series of changes, which will come into force from 2025, were introduced in July by the Financial Conduct Authority in the regulation on customer obligations.

Oil’s skyrocketing price has helped London regain the crown of Europe’s largest stock exchange from rival France, according to Bloomberg data, writes Andrew Michael.

The London Stock Exchange lost top spot to Paris last autumn, as measured by market capitalisation. But, a year on, calculations show that the size of the London Stock Market is now $2,888.4 billion, compared with $2,887.5 billion for Paris.

London has been boosted in recent weeks by its heavy exposure to “old economy” stocks, adding energy giants Shell and BP. The wholesale value of oil has risen due to cuts from sources across Russia and the Organization of the Petroleum Exporting Countries and, more recently, developing geopolitical turmoil in the Middle East.

In contrast, the Paris market has lost about $270 billion since its peak in April, with luxury brands in the country’s flagship index under pressure due to China’s economic slowdown.

The three largest companies on the CAC 40, the French stock index equivalent of the Footsie in London – LVMH Moët Hennessy Louis Vuitton, L’Oréal, and Hermès International – are down 21%, 5% and 10% respectively.

Market commentators said the news that London has regained the more sensible place does not worry investors. Russ Mould, chief investment officer at AJ Bell, said: “From a prestige point of view, it would possibly make a difference and the same is true from a liquidity point of view. In other words, the ease with which stocks and shares can be bought and sold.

“But from a fundamental point of view, not really. If investors are picking individual stocks because they are looking at the competitive position of those businesses, their management acumen, financial strength and operational performance, none of those factors are affected by whether London’s market cap is bigger than Paris, or vice-versa.”

Jason Hollands, chief executive of Bestinvest, said: “While this will make headlines and likely fuel a social media buzz among others with strong perspectives on both sides of the Brexit debate, it has no effect. “for investors.

“The relative sizes of equity markets are going to compete, with the two main points being exchange rate fluctuations and differences in the composition of the sectors to which the market is exposed and in their functionality at any given time.

“The UK market has a significant weight in energy and commodities, so the recent spike in oil costs has contributed to its value. In the end, this is due to production cuts in Saudi Arabia and Russia, not domestic factors. »

In terms of global ranking, the World Federation of Stock Exchanges places London in ninth position and the New York Stock Exchange in first position with a market capitalization of $25 trillion. It is followed by the technology-focused Nasdaq index, priced at $22 trillion.

China’s Shanghai Stock Exchange ($6. 7 trillion) and Japan’s Stock Exchange ($5. 9 trillion) are also among the top five.

Last month, British investors abandoned the “actively controlled” equity budget in favor of “passive” investments controlled through computers rather than human inventory pickers, writes Andrew Michael.

According to the most recent fund flow index from the Calastone global fund network, investors abandoned £206 million of actively controlled share budget in September 2023, preferring passively controlled portfolios, adding index budget.

Calastone said algorithm-based investments such as index funds attracted £1. 1 billion of investor inflows last month “as volatility in bond markets over the summer forced a review of stock market valuations. “

In recent days, in reaction to fears that loan prices will remain higher for longer globally, a sustained sell-off in sovereign debt (adding in UK government bonds and US Treasuries) has seen some of those investments earn returns to degrees never seen before. 2008 currency crisis.

So far this year, entries to the passive budget amount to £5. 35 billion, a stark comparison to the £7 billion that has disappeared from the equity budget.

According to the network, among geographic sectors, equity budgets making investments in the UK have fared the worst in terms of higher outflows. Last month, investors dumped £448 million from the UK budget, the 28th time in a row that portfolios invested in domestic stocks have suffered net redemptions.

The environmental, social and governance (ESG) budget has also been hit by investors in months. September saw the fifth consecutive month of capital outflows, which Calastone described as a “clearly emerging trend. “

On a more positive note, the global budget remains the sector of choice for investors, attracting £981 million last month. In addition, the emerging market budget, which focuses on making investments in emerging economies, continued its most productive functionality since Calastone’s record for nine years. behind.

Edward Glyn, head of global markets at Calastone, said: “The distaste for UK equities is a structural trend that domestic and international investors are unwilling to break, despite attractive valuations. Meanwhile, inflows to emerging markets in 2023 reflect attractive prices after very steep falls from their 2021 peak.”

UK investors ditched funds exposed to stocks and shares last month at their greatest rate since last autumn, choosing to divert money instead towards investments with cash-like characteristics, Andrew Michael writes.

According to the latest fund flow index from global fund network Calastone, investors ditched the £1. 19 billion equity budget in August this year as the flight to lower-risk investments, such as market budgeting, accelerated.

Calastone said the equity budget outflows in August were the seventh-worst month on record in nine years of recordkeeping. To fill this gap, the network said the species ended up in the so-called refuge budget.

These come with cash investments in the market, with the sector benefiting from an influx of £673 million last month, the largest amount recorded since March 2020, which coincided with the start of the coronavirus pandemic.

The money market budget invests in portfolios of short-term cash deposits and high-quality bonds maturing in one to two years. They are touted as a haven for investors to park their money in times of market uncertainty.

Although they are not risk-free, money market funds are designed to provide a high level of stability and liquidity – making them relatively easy to sell – while also delivering a return that is likely to be greater than that from a short-term cash deposit available from a bank or building society.

Calastone reported that the U. K. ‘s stock budget was hit hardest by withdrawals last month, with investors fleeing for £811 million, the most since February this year. He added that August 2023 was the 27th consecutive month that investors pulled their money out of the UK-centric budget.

Outflows from the environmental, social and governance (ESG) budget also reached £953 million net, the fourth consecutive month of outflows and bringing the total outflow figure for May this year to £1. 96 billion of pounds. To put this sector in context, before 2023, a month had seen capital outflows since the start of the so-called ESG boom in early 2019.

Edward Glyn, Head of Global Markets at Calastone, said: “Fear was a big motivator in August. Disappointing economic data in the UK showed that core inflation has proven resilient to interest rate rises.

“This had investors running for the safety of cash and money-market funds. With savings interest rates and yields on safe-haven money market funds at their highest level since 2007, it doesn’t take much to cause a rout.

“The move out of ESG funds has gathered pace in a remarkable reversal after the boom in recent years. Four months of outflows signals a new trend emerging that fund houses will have to work hard to counteract.”

Marks & Spencer (M&S) is returning to the UK’s leading stock market index of blue-chip companies four years after it was demoted, following a surge in the share price of the high street retailer, Andrew Michael writes.

FTSE Russell, the global provider of stock indices, showed (Wednesday, August 30) that Mr.

As a result of the redesign, which adjusts the parts of the index according to their length measured through market capitalization, M

As part of the rebalancing, four companies leaving the FTSE 100, to join the second-tier FTSE 250 index, are the house builder Persimmon, fund management firm Abrdn, insurer Hiscox, and chemicals company Johnson Matthey.

The redesign comes into effect at the close of business on Friday, September 15. From that point on, the so-called passive investment funds, intended to follow the functionality of the “Footsie”, will retire their holdings in the shares of the relegated and reposition their portfolios when the new additions officially come into force on Monday, September 18.

Initially excluded from the FTSE hundred in September 2019, M

Victoria Scholar, Chief Investment Officer at Interactive Investor, said: “Despite the cost-of-living crisis and feeling the pressure, M

“The company has effectively embarked on a significant shift under Stuart Machin’s leadership, which involves restructuring its store fleet and investing in generation and e-commerce. “

After being relegated from the Footsie at the height of the currency crisis in 2008, the company returned to the blue-chip index in 2013. But more recently, Persimmon has found himself in the eye of the storm.

Richard Hunter, head of markets at interactive investor, said: “The housebuilding sector as a whole is currently on shaky foundations, with Persimmon’s particular exposure to first-time buyers an additional strain. The company’s shares have fallen by 19% in 2023, by 39% over the past year, and by 70% from the pre-pandemic peak of £32.30 it achieved in February 2020.”

UK-listed companies paid out dividends worth just over £26 billion ($31 billion) in the second quarter of this year, a drop of about 12% compared with the same period in 2022, according to the latest figures from investment firm Janus Henderson, Andrew Michael writes.

Dividends are invoices to shareholders that companies typically pay twice a year from their profits. They are a vital source of income for investors, as part of a retirement plan strategy to supplement state pension entitlements.

Despite a fall in payouts from UK businesses, Janus Henderson’s latest Global Dividend Index reported that global overall dividends rose to a record £490 billion ($568 billion) between April and June this year,  a 4.9% increase on a headline basis compared with the second quarter in 2022.Taking into consideration one-off special dividends and other factors, the investment firm said that underlying growth stood at 6.3%, adding that the majority of companies (88%) either increased payments, or held them steady, in the second quarter of this year. (Read more here about why companies pay dividends).

Helped by record payouts from businesses based in France, Germany and Switzerland, dividends from European companies rose overall by about a tenth in quarter two of this year, reflecting strong profitability from the financial year covering 2022.

The most important driver for this region came from the higher dividends contributed by the banking sector, followed by those paid out by vehicle makers.Contributing to the figures, the UK banking giant HSBC restored its quarterly dividend for the first time since the start of the coronavirus pandemic in 2020 and at a higher level than many commentators had expected.

According to Janus Henderson, the bank is currently the world’s second-largest dividend payer, one position ahead of the Mercedes-Benz group and yet Nestlé, the Swiss-based food producer.

Looking ahead, and against an anticipated slowdown in global economic growth for the rest of this year, the investment firm forecasts that pay outs will reach $1.64 trillion over the course of 2023.

Ben Lofthouse, Head of Global Equities at Janus Henderson, said: “Most regions and sectors are delivering dividends in line with our expectations. Markets now expect global earnings to remain flat this year, after hitting record highs in 2022. When communicating with corporations around the world, they are now more cautious about prospects.

Bitcoin’s value jumped more than 7% to roughly $28,000, after a U. S. court ruled that Bitcoin was not allowed to go to $28,000. The U. S. Supreme Court ruled that the country’s monetary regulator should reject a request through a virtual fund manager to release an exchange-traded fund (ETF) that tracks the value of the cryptocurrency Bitcoin. flagship token, writes Andrew Michael.

Asset watchdog firm Grayscale (Tuesday) obtained a landmark court ruling opposing the Securities and Exchange Commission (SEC) to convert its flagship vehicle, Grayscale Bitcoin Trust, into an ETF.

ETFs have become increasingly popular among investors in recent years, as they combine the features of buying stocks and shares directly with the benefits of holding more diversified mutual funds.

In Washington, D. C. , a federal appeals court ruled that the SEC, the U. S. equivalent of the U. K. ‘s Financial Conduct Authority, should dismiss Grayscale’s claim.

A panel of judges in the Court of Appeals said the SEC’s rejection was arbitrary because it failed to explain the different treatment between Bitcoin futures ETFs and spot Bitcoin ETFs.Futures are part of a wider range of sophisticated investment and trading products known collectively as derivatives. A spot Bitcoin ETF is an open-ended fund that can issue or redeem shares based on demand.

The court case has come under scrutiny from the asset control and cryptocurrency industries that have long been seeking to convince the SEC to approve a spot Bitcoin ETF.

Both argue that such a fund would allow investors to gain exposure to Bitcoin, but without having to own it. But the regulator is concerned that Bitcoin ETFs may simply be vulnerable to manipulation.

The latest ruling puts pressure on the SEC after it issued a series of enforcement actions against crypto providers this year, including Coinbase and Binance, the world’s largest crypto exchange.

The SEC said it was reviewing the court’s ruling and now has forty-five days to accept the ruling, seek review or appeal to the U. S. Supreme Court. Despite recent events, if Grayscale decides to file any further filings, lawyers said there is no guarantee of good luck as there is an option for the SEC to reject it on other grounds.

UK retail investors are turning their backs on the regional budget in favour of global equity portfolios, writes Andrew Michael.

Investors have channelled more than £50 billion into funds whose remit allows them to invest anywhere in the world since 2015, while shunning portfolios over the same period that are limited to holding UK stocks and shares.

The latest data from Calastone, the global fund network, has shown that over the past eight years, the global budget has seen a net inflow of £51. 3bn.

By contrast, all other geographic fund sectors (adding up the recently undervalued UK-focused portfolios as well as those invested in Europe and Asia-Pacific) attracted a total of just £909 million of new capital.

Calastone said that, since the beginning of 2015, the global budget industry has noticed net outflows of money on average only once every 11 months. This compares to once every two months for the budget known across all other regional methods combined.

The trend toward a global budget particularly began to increase two years ago and has been driven in part by the popularity of ethical-style environmental, social and governance (ESG) budgeting.

Since July 2021, the global budget has seen a net inflow of money of almost £19 billion, while the regional budget has lost more than £21 billion over the same period.

Aimed at making an investment around the world rather than in a single country or region, the global budget will also offer investors the merit of potentially greater diversification.

In practice, however, the global budget is skewed toward the United States, which has grown roughly twice as fast as the U. K. economy over the past 15 years, helped in part by the good fortunes of corporations such as Apple, Microsoft and Alphabet. .

Calastone’s figures confirm recent trends that have seen domestic investors outside the UK looking for investment opportunities elsewhere.

Separate figures from the Investment Association (IA) show that a decade ago, the price of the budget allocated to an investment in UK corporations was double that invested in the overall budget. By May this year, the scenario had changed, with £166 billion retained in the global budget. , compared to £140 billion exposed in domestic portfolios.

Edward Glyn, Calastone’s head of global markets, said: “There is a clear logic in opting for global funds. Most of the world’s most successful companies operate globally, so where they are listed is immaterial. Global funds mean investors get exposure to these stocks.

“They also save investors the worry of trying to pick winning regions – retail investors typically lack the time and expertise to stay on top of which parts of the world are on the up and which are on their uppers.”

Online payments company PayPal will sell cryptocurrencies on its platform for at least 3 months starting October 1, writes Mark Hooson.

In a message to consumers today, Aug. 15, PayPal said it will resume cryptocurrency sales until an anonymous date “in early 2024,” while taking steps to comply with new Financial Conduct Authority (FCA) rules.

In the meantime, PayPal says, consumers will continue to sell or hold their cryptocurrencies on the platform while introducing more steps into the acquisition procedure to meet regulatory requirements.

The publication refers to a set of measures through the FCA and the Advertising Standards Authority planned for October 8, under which crypto companies will have to introduce transparent threat warnings and allow a 24-hour cooling-off period. hours to give new consumers time to think. your decision.

Last week, PayPal announced the upcoming launch of its own U. S. dollar-pegged stablecoin, PayPal USD (PYUSD), which will allow U. S. consumers to send and transfer PYUSD to others and pay for secure online purchases.

PYUSD is a stablecoin, which means that its price is pegged to a fiat currency, in this case, the U. S. dollar. Therefore, the price of a PYUSD deserves to be the same as the price of $1.

The stablecoin is issued through the Paxos Trust Company, an authorized limited target that is accepted as valid for the company.

PayPal, which has allowed users to trade other cryptocurrencies such as Bitcoin on its platform since 2020, says PayPal will be available in USD in the coming weeks. It’s unclear if or when PYUSD could launch in the UK.

Today’s announcement from PayPal shows how the industry is responding to what’s been a year of increased scrutiny of and regulatory influence on cryptocurrency.

This year, several banks have placed limits on how much their consumers can spend per day on crypto exchanges. In some cases, invoices have stopped altogether. For example, Nationwide will block invoices to Binance.

HSBC, Nationwide, NatWest and First Direct are some of the banks that have introduced daily crypto limits in direct response to warnings issued by the FCA. The limits, however, can be as high as £5,000 per day.

Introducing its daily limit of £1,000 in March, NatWest said £329 million was lost due to crypto scams in 2022, with men over the age of 35 at most at risk.

The investment budget value of approximately £50 billion has been flagged as consistently underperforming “dogs” through online investment service Bestinvest, writes Andrew Michael.

The company saw an underperforming budget value of a total of £46. 2 billion, a significant increase from budget value 44 of just under £20 billion revealed through previous Bestinvest studies six months ago.

The firm’s Spot the Dog analysis defines a ‘dog’ fund as one that fails to beat its investment benchmark over three consecutive 12-month periods, and which also underperforms its benchmark by 5% or more over a three-year period.

A benchmark is usually a stock market index such as the UK’s FTSE 100 or US S&P 500, against which the performance of a fund is compared.

Global equity markets are off to a better start to 2023 than last year’s poor performances. But Bestinvest said it has squeezed more budget into its “niche” because most of the profits come from a handful of very giant corporations that profit from the burgeoning synthetic intelligence sector. than a broader resurgence of business performance.

The global budget sector recorded the number of dog budgets, with 24 lagging, compared to 11 reported six months ago. These were budgets that were either not exposed to the successes of the “mega-caps” or had a lower weighting relative to the benchmarks against which they are measured.

Bestinvest said: “Even if experienced investors are content that short-term markets will be affected by the existing challenging economic conditions of emerging interest rates and peak inflation, they will be less complacent if they later realise that their investments have performed even worse than the markets. what you invest your budget in. Array”

Bestinvest identified Baillie Gifford’s Global Discovery fund as the worst-performing portfolio overall, having racked up a three-year underperformance record of -70%. St James’s Place was described as the worst-performing manager across an array of funds worth nearly £30 billion “with its paw prints on six measly mutts”.

Jason Hollands, chief executive of Bestinvest, said: “Every fund manager will revel in the weakest periods, whether it’s a run of bad luck or sticking to a taste or procedure that would possibly become temporarily outdated. It’s imperative whether it’s structural or short-term and investors deserve to ask themselves a few questions before deciding whether to stay with a fund or transfer to it.

“This includes if a fund is too large, which can limit its agility, or if sophisticated but significant adjustments have been made to the control equipment. Also, is the manager moving away from an approach that was once effective, or is it now?burdened with more responsibilities? »

Global equity stocks and equity budgeting were definitely held in the first six months of this year, with a portfolio benefiting in particular from the existing synthetic intelligence (AI) boom, writes Andrew Michael.

According to the most recent figures from FE Fundinfo, the five best-performing global equity budgets generated returns of more than 28% between January and June this year, with L’s synthetic intelligence fund generating returns of more than 28% between January and June this year.

The prospect of AI (computational processes that mimic the movements of humans) has sparked a race among American tech giants to be at the forefront of this technological revolution.

Other global equity high-flyers were: PGIM Jennison Global Opportunities (31.7%); Xtrackers MSCI World Consumer Discretionary (28.7%); SSGA SPDR MSCI World Consumer Discretionary (28.7%); and MS INVF Global Opportunity (28.3%).

FE Fundinfo said other fund sectors that have performed well so far this year are global emerging markets, where the most productive operating fund was Artisan Emerging Markets with a six-month return of 14%, and UK All Companies, where Liontrust UK’s focal fund was the most productive with a 12. 9% recovery.

The knowledge provider added that the sector with the best performance was the generation and technological innovation, whose budget produced an average decline of 24. 8% between January and June of this year. He said, “This sector has demonstrated remarkable expansion and has outperformed other sectors in this era. “thanks to the AI revolution. “

Next came Latin America, where funds achieved an average return of 11.9%, followed by North America with 8.3%.Charles Younes, head of manager selection, FE Investments, said: “Throughout the first half of 2023, the top-performing funds have consistently demonstrated their expertise in their respective investment categories. These funds have delivered impressive returns, showcasing their strong performance, robust strategies, and ability to generate substantial growth for our investors.”

The Financial Conduct Authority (FCA) is tightening regulations governing the promotion of monetary and social media products, adding a crackdown on influencers, writes Andrew Michael.

The FCA says social media has an increasingly vital channel for businesses looking to advertise their products and talk to consumers more temporarily and effectively.

But he cautioned that the complex nature of money means that low-quality, large-scale promotions on social media, particularly in relation to investment and credit products, can lead to “significant harm to consumers. “

To counter this, it has launched an eight-week consultation for stricter guidance, saying Brits seeking financial advice on social platforms will likely have discovered “unfair, unclear or misleading marketing”.

Finfluencers (Americans or accounts with a large following) have become increasingly popular as families struggle with the challenge of the burden of life. The most productive influencers have a large follower base of hundreds of thousands on platforms like TikTok and YouTube.

The FCA said: “Often, those influencers have little wisdom about what they are promoting. This lack of expertise is reflected in the sheer number of promotions that are illegal or non-compliant, making it more likely that consumers will see low-quality data. on social media.

Last year, the regulator ordered businesses to amend or remove almost 10,000 promotions, nearly 15 times the number compared with 2021. Over the same period, it also published 1,900 alerts to consumers about potential scammers, up more than a third on the previous 12 months.

The regulator has also highlighted examples of misleading or unclear adverts failing to communicate the risks of a product. This included the use of TikTok to promote debt counselling and a buy-now-pay-later Instagram advert that failed to explain the risks associated with unregulated credit.

According to the FCA, nearly 60% of under-40s who invested in high-risk products in 2021 said they had based their decisions on social media posts. Research from consultancy MRM shows that almost three-quarters of young people say they trust information provided by social media influencers.

Lucy Castledine, from the FCA, said: “We have noticed an increasing number of classified ads that do not comply with the rules put in place to prevent harm to customers. We need other people to stay on the right side of our rules, which is why we’re updating our rules to explain what we expect from businesses when they market monetary products online.

“And for those who advertise products illegally, we will take action against them. “

Myron Jobson of Interactive Investor said: “The presence of finfluencers is a headache for the regulator. The references of many finfluencers are, at best, weak or even non-existent. But there are also a number of experienced monetary professionals and Highly professional social media outlets offering fake advice.

The regulator’s latest initiative for customer coverage follows a multi-pronged strategy that affects all facets of the money services market.

From July 31 this year, the FCA will introduce a broad “duty to consume” for money service providers in the UK, with the aim of helping consumers make “sound money decisions”.

Venetia Jackson, a financial services attorney at Pinsent Masons, says, “Consumer duty puts consumers at the center of a company’s thinking. If implemented effectively, it means consumers will have the same confidence when they buy their monetary products as they do when they do. “purchases for their homes.

Later in 2023, the watchdog will also implement a new set of advertising regulations targeting crypto corporations that market to UK consumers.

Starting Oct. 8, this will involve banning incentives to invest in crypto assets, such as “refer-a-friend” bonuses. Crypto corporations are also introducing transparent threat warnings and a 24-hour era of reflection to give investors time to think about their decision.

The FCA describes crypto assets as “risky” and warns potential investors that they could lose all their cash speculating in the sector.

The UK’s financial regulator, the Financial Conduct Authority (FCA), has written to dozens of investment platforms to find out how much of the interest they receive from cash and bank deposits is actually passed on to their customers, Andrew Michael writes.

The FCA’s letter to “some 40” self-invested investment platforms and pension providers was described by the regulator as a “request for specific knowledge”. The correspondence included questions to vendors about the main points about “changes in visitor interest. “

This is the difference between the interest that providers pay their clients who have deposited cash with them and the amount that providers make having invested these sums on the money markets.

The platforms pay interest of between 1% and 2% on clients’ monetary balances in general investment accounts. But with the Bank of England’s bank rate lately at 5%, analysts say providers in this sector stand to make off with many millions of pounds through this practice over the course of a year.

The regulator’s resolution to touch investment platforms follows a broader initiative that saw major banks summoned through the watchdog to justify the low interest rates paid through their easily accessible savings accounts.

The regulator said consumers were feeling the effects of the emerging charges and the steady increase in the borrowing charge. He added that consumers deserve to be treated when it comes to the interest they get from monetary products and that this applies to money held on investment platforms as well as bank accounts.

An FCA spokesperson said: “We’re currently in a climate of rising interest rates. What we’re trying to do here is put in place a series of measures to ensure that customers receive both value for money from providers and a fair amount on their cash – whether that’s held in bank deposits or via investing and pension accounts.”

The spokesperson added that the FCA would analyse the data it received from platform providers and “could use a number of metrics to determine whether the amounts being passed on to consumers are fair and offer value for money”.

In recent years, the number of do-it-yourself investors in the UK who manage their investments and pensions via online investing platforms and mobile trading apps has increased significantly. The figure now stands at approximately nine million users.

Later this month, on July 31, the FCA will impose a broad “consumer duty” on money service providers in the UK that will “focus on supporting and empowering their consumers to make sound monetary decisions. “

The regulator asked the platforms how they would manage the retained interest in light of the new rules. It is believed that providers had until July 27 this year to respond to the request for data.

Given the proximity of the new Consumer Duty regime to this date, the FCA rejected the claim it had been slow to tackle the issue of investment platforms and the amount of interest they pay to clients. 

The Treasury is consulting on plans for an environment that would pave the way for virtual securities, such as the long-debated central bank virtual currency (CBDC).

The Digital Securities Sandbox (DSS) would allow developers to create new infrastructures for virtual assets as part of transitory adjustments to existing legislation, and with the strength to replace legislative frameworks as they occur.

The sandbox is said to be the UK’s first Financial Market Infrastructure (IMF) sandbox, made imaginable thanks to the recently passed Financial Services and Markets Act.

A CBDC is a state-issued virtual currency that does not use coins or banknotes, with transactions recorded on an encrypted ledger. As a state-backed currency, a CBDC would be exactly the same price as physical silver. So, £10 in the form of CBDC would be the same price as a £10 note.

According to a survey conducted by the Bank for International Settlements (BIS), 93% of central banks operate with a CBDC.

Treasury has perspectives on the DSS consultation (located here) over the next month.

Meanwhile, British multinational bank Standard Chartered has revised its outlook for Bitcoin. In April, the bank predicted that BTC would reach £100,000 (£77,000) by the end of 2024, but now predicts that the leading cryptocurrency will reach £120,000. (£93,000) at the time.

According to Reuters, a Standard Chartered bank report this week said that bitcoin miners who currently mint the 900 new bitcoins produced each day would soon need to sell fewer to cover their energy and computing costs.

One of its top currency analysts, Geoff Kendrick, estimated that even if miners sell 100 percent of their new coins, they could start owning 70 to 80 percent of the coins if the value reaches $50,000.

Bitcoin is trading lately at $30,418 (£23,556), down from last week’s high of $31,395 (£24,313).

Speculations about the long-term price of Bitcoin have been increasing as time runs out until next year’s “halving. “Starting in April 2024, the amount of BTC awarded to miners for effectively adding a block to the blockchain will be halved, from 6. 25 BTC to 3,125 BTC.

The effective compression of Bitcoin’s origin rate pushes costs up to that point.

UK investors ditched funds exposed to stocks and shares last month at their greatest rate since last year’s controversial mini-budget, replacing them instead with fixed income investments and those with cash-like characteristics, Andrew Michael writes.

According to global funds network Calastone’s latest Fund Flow Index, investors dumped equity funds to the tune of £662 million in June this year, as the flight to lower-risk investments such as bond and money market funds accelerated.

Calastone said last month’s outflow of inventory funds was one of the worst on record. He added that the coins raised “went directly to a steady source of revenue funds, which saw net inflows of £880 million, and to the coin markets, which saw net inflows of £503 million. “

Fixed-income investments tend to have a lower risk profile than classic capital budgeting and come with assets such as bonds: loans made by investors to governments and companies in exchange for interest and, possibly, a return on capital.

Money market funds, which invest in portfolios of short-term cash deposits and high-quality bonds maturing in one to two years, are also touted as low-risk investments and are seen as a safe haven in which investors can park their money. uncertainty in the market.

Calastone reported that UK stocks were hit hardest by withdrawals last month, with investors fleeing £612 million, the 25th consecutive month of net sales. Outflows from environmental, social and governance funds, or ESG-themed funds, also reached a net total of £369 million, the worst month on record for the sector and the third month of outflows.

Edward Glyn, head of global markets at Calastone, said: “Fixed income funds and their money market cousins have not looked so attractive since before the global financial crisis. At the same time, recession fears are stalking equity and property markets. Investors are nervous and the result is a flight to safety.

“Lately, money markets allow investors to earn a revenue stream of 5% or more with very low risk, while steady-source funds, which invest in longer-term bonds than spot market bonds, offer the opportunity for the highest returns. in years. “

Litecoin (LTC), one of the world’s largest altcoins, hit a 12-month high in recent days before major adjustments to the way its miners are rewarded.

Altcoins are currencies more than Bitcoin, the leading cryptocurrency. Miners earn coins in exchange for validating transactions on the respective blockchain.

LTC hit £87. 50 yesterday, July 2, up more than 122% from the same time last year and surpassing its previous high of £85. 39 in February.

The altcoin, which has a market cap of £6 billion, began to emerge in mid-June when it was trading at £57. 74. Over the next two weeks, LTC jumped about 51%.

The reason for this recent rally is that we are about a month away from Litecoin’s next “halving,” an event that only happens once every four years.

Like many cryptocurrencies, Litecoin miners who take part in validating transactions and adding them to the blockchain are in with a chance of earning a reward for their time and effort.

Litecoin miners have lately received 12. 5 LTC for the block of transactions they upload to the blockchain. However, this will be updated between August 4 and August 8 (depending on network conditions). From this point on, the prizes will be halved to 6. 25 LTC.

Since next month’s halving effectively decreases the rate of Litecoin’s supply by half, this is expected to upset the balance between supply and demand for the altcoin, and put upwards pressure on its price.

A trend emerged before Litecoin’s halving in August 2019. In the seven months leading up to this halving, the altcoin rose from around £25 to around £107 in July of the same year. However, LTC had fallen back to around £30. until the following January.

U. K. government bond yields hit their levels since 2008 earlier this week as investors bet that U. K. interest rates would continue to rise, writes Andrew Michael.

UK government bonds, called gilts, are loans issued through the government when you need to borrow money. The nominal interest rate is constant at the time the bond is issued; However, because the value of the bond itself can fluctuate, the actual yield varies.

For example, a £100 bond might have an interest rate, called a coupon, of 5%, meaning the bondholder receives £5 per year. If the holder pays less than £100 to get the bonus, the return is well in excess of 5%.

This applies the other way around if the acquisition costs £100, so returns can be said to move in the opposite direction to the price.

Yields have risen in recent weeks as costs have fallen. On Tuesday, yields surpassed a point recently reached after last September’s controversial mini-budget, announced through then-Prime Minister Liz Truss.

At that time, the Bank of England was forced to take emergency measures in the bond markets, amid turbulence that caused a sharp increase in the public debt burden.

On Tuesday, the yield on two-year government bonds rose by 19 core issues to 4. 83% as the value of government debt fell. Last fall, the yield on two-year bonds peaked at 4. 64%.

The rise in yields came after ONS data showed annual wage and bonus growth rose 7. 2% in the year to April, up from 6. 8% in the previous month.

The strong wage data is mainly due to 8. 7% inflation in the UK in April, suggesting that UK value inflation is slowing down to return to headline levels more slowly than the Bank of England had predicted.

The figures also showed that employment grew by 250,000 against a forecast of 162,000 confirming a view that the UK economy is not slowing down sufficiently for the Bank of England to pause the pace of monetary tightening.

Susannah Streeter, head of markets at Hargreaves Lansdown, said rising wages “risk fuelling inflationary fires and reinforcing expectations that the Bank of England will have to keep raising interest rates”.

Yael Safin, chief economist at KPMG said: “If there was still any doubt about the direction of monetary policy, these data should solidify another interest rate increase from the Bank of England next week and probably more in the coming months.”

The Bank’s resolution on rate setting will be announced on Thursday, June 22.

Shilen Shah, head of fixed income at Investec Wealth & Investment, said: “The rise in gilt yields is not unexpected given recent data prints that indicate underlying inflationary pressures remain relatively high. We continue to see value in short-dated gilts given the historically high yields available.”

James Lynch, steady source of income manager at Aegon Asset Management, said: “The cases for why two-year bond yields have roughly the same diversity as they did in September last year are completely different. [In 2022] the British pound plunged less than £1. 07 per US dollar as investors lost confidence in the UK’s sense of fiscal responsibility.

“The reason why two-year gilt yields have been rising has been data and the market interpretation of the Bank of England’s response [to inflation], not fiscal responsibility. The data have been stronger on measures which the Bank cares most about: inflation and wages. The ONS wage data was quite startling, with private sector wages running at an almost 10% annualised rate over the last three months.”

The s

Boosted by gains in major technology stocks, the index – a bellwether reflecting the wider US stock market – closed up 0.6% at 4,293.93. The tech-heavy Nasdaq 100 index also enjoyed a good day, with a rise of 1.3%

The functionality of the S

Yesterday, the S&P 500 crossed the widely accepted investing boundary that separates a bear market, defined as when prices fall for a sustained period, from a bull market, which is characterised by rising prices and increasing optimism on the part of investors.

Markets have remained buoyant in recent months, with investing sectors such as tech and media having rebounded from a disastrous 2022 on the hope that the worst is over.

Russ Mould, chief investment officer at AJ Bell, said: “After a dismal 2022 for US equities overall, investors are pleased to have returned to their previous form. After all, this component of the market has made many other people rich in the ten years. In the years since the global currency crisis, it is very likely that many portfolios in the UK will have maximum exposure to the US.

In recent months, the advancement of synthetic intelligence (AI) has given further impetus to generation stocks that dominate the S.

From self-driving cars to surgery-performing robots, AI is helping to transform major areas of people’s lives. The potential opportunity created by this high-growth, multi-billion pound market has prompted a wave of corporate investment and interest in companies that operate in this sphere.

AI investment budgets are attracting increasing interest from investors.

Russ Mould, chief investment officer at AJ Bell, said: “The US index is now up 20% from its recent low high, driven by corporations like Nvidia, the ultimate game in synthetic intelligence, and meta-platforms that have cut costs. Thanks to job cuts and benefited from higher-than-expected income.

“The key question is what happens next. With plenty of signals suggesting we might see a recession soon, investors will be asking themselves if they should bank recent gains in US stocks or stay put and hope any economic downturn is only shallow and quick to pass.”

Matt Britzman, equity analyst at Hargreaves Lansdown, said: “If you look at where the market sits now in absolute terms, it’s not too hard to make a case that it’s justified at current levels. The worry is how fast it’s risen and the concentration within a select few names.”Mr Britzman added that this week’s interest rate-setting announcement from the US Federal Reserve, coupled with the latest inflation data, will be influential: “Markets are pricing in a rate pause with scope for further hikes down the line.”

New cryptocurrency investors will have a 24-hour cooling-off period in which they can change their minds about their trades, according to new regulations issued through the UK’s monetary watchdog, writes Mark Hooson.

The Financial Conduct Authority (FCA) today set strict new marketing regulations for crypto firms that will come into effect on Oct. 8. The FCA’s crackdown, which does not go so far as to fully affect the crypto sector, aims to ensure that buyers perceive the dangers involved.

The watchdog wants people to have “the wisdom and pleasure of investing in cryptocurrencies” and expects those who sell cryptoassets to set out risk warnings and for their advertisements to be clear, fair and not misleading.

Another regulator, the Advertising Standards Authority (ASA), has already banned several crypto classified ads because they are irresponsible or misleading. This includes posters from crypto exchange Luno, which told consumers in 2021 that “it’s time to buy Bitcoin” without transparent warnings. about the risks.

From October, the FCA says that the marketing of fabrics will have to be accompanied by warnings such as: “Invest only if you are willing to lose all the money you are investing. This is a high-risk investment and you shouldn’t expect to be vigilant if something goes wrong. Please take 2 minutes to receive more information.

Under the new rules, cryptocurrency exchanges will no longer offer monetary incentives to consumers who introduce them to a friend.

The new cooldown will mean that consumers will have to wait 24 hours after the directory on an exchange before they can place their first trade.

Sheldon Mills at the FCA said: “It is up to people to decide whether they buy crypto. But research shows many regret making a hasty decision. Our rules give people the time and the right risk warnings to make an informed choice.  

“Consumers should still be aware that crypto remains largely unregulated and high risk. Those who invest should be prepared to lose all their money.”

Dan Moczulski, head of trading platform eToro in the UK, said that regulation of the crypto sector wants to strike the right balance: “We want to make sure that efforts to ensure that clients don’t have the accidental result of making offshore business more available and attractive. . This would not be for British customers.

The FCA’s announcement helps keep regulatory attention on the cryptocurrency market, after a select committee of Treasury deputies last month called for the industry to be regulated in the same way as gambling, saying it has “no intrinsic value” and has “no useful social purpose. “”

David Ostojitsch, a spokesperson for the Association for Financial Advice and Personal Investment Management, said the new regulations threaten to create a “halo effect” that would gain advantages in the crypto market: “Obviously, crypto assets have a long-term role, but only if they are advertised and targeted to the right people.

“Crypto assets are unregulated, highly volatile, and therefore pose a huge threat and only deserve to be invested through complicated investors who perceive the threat they are taking, not through mass-market investors. Here there is a significant threat that consumers will assume that crypto assets are crypto assets because they are advertised through an FCA-regulated user or company. Again, we must emphasize that this is not the case.

The US Securities and Exchange Commission (SEC) has filed a lawsuit against crypto exchange Coinbase for violating securities laws, a day after launching legal proceedings against its rival Binance, writes Mark Hooson.

Today’s filing in the Southern District of New York alleges Coinbase has never officially registered as a broker, national securities exchange or clearing agency, and offered customers unregistered securities via its staking-as-a-service program.

The filing reads: “Since at least 2019, Coinbase has made billions of dollars by illegally facilitating the purchase and promotion of crypto-asset securities.

“The SEC alleges that Coinbase intertwines the traditional services of an exchange, broker, and clearing agency without having registered any of those functions with the Commission as required by law.”

Gurbir S. Grewal, director of the SEC’s Division of Enforcement, said: “You simply can’t ignore the rules because you don’t like them or because you’d prefer different ones: the consequences for the investing public are far too great.”

The SEC’s lawsuit seeks “injunctive relief, return of ill-gotten gains plus interest, consequences, and equitable relief. “

In response, Paul Grewal, Coinbase’s legal counsel and general counsel, said: “The SEC’s reliance on a purely coercive method in the absence of transparent regulations for the virtual asset industry hurts the economic competitiveness of the United States and corporations like Coinbase that have a demonstrated commitment to compliance.

“The solution is a law that allows fair road rules to be developed transparently and implemented equitably, through litigation. In the meantime, we will continue to operate as usual. “

Binance, one of the world’s biggest crypto exchanges, is being sued over claims it mishandled customer deposits and lied to investors.

The United States Securities and Exchange Commission is accusing Binance of commingling billions of dollars of customers’ money with company revenue, in violation of US financial rules. 

The Commission also claims that Binance, which has around 100 million users worldwide, secretly sent its customers’ budgets to a separate organization, Merit Peak Limited, controlled through Binance founder Changpeng Zhao.

The additional 136-page filing claims that the exchange misled investors and regulators about its ability to stumble upon manipulative trades, and did not do enough to save U. S. investors from the platform. -Binance’s unregulated foreign form.

U. S. consumers are expected to use their local, regulated platform, Binance. us

The lawsuit, filed in U. S. District Court in Washington, D. C. , alleges that the stock exchange and Mr. Zhao “enriched themselves with billions of U. S. dollars while putting investors’ assets at significant risk. “

The thirteen counts in the case relate to Zhao’s reinstatement and disqualification from serving as an officer or director of any registered entity that issues securities.

Binance responded to the filing in a blog post, writing: “We are disappointed that the US Securities and Exchange Commission chose to file a complaint today against Binance seeking, among other remedies, purported emergency relief.  

“From the beginning, we have actively cooperated with the SEC’s investigations and have worked hard to address their questions and concerns. “

Arguing that the allegations did not warrant enforcement action, Binance accused the Commission of undermining the US’ role as a global hub for financial innovation.

It’s been a tumultuous year for Binance. In March, the U. S. Commodity Futures Trading Commission (CFTC) issued a ruling on Binance. The U. S. Department of Homeland Security said that Binance had properly registered with the appropriate government and violated regulations designed to combat cash laundering.

The legal filing said Binance operated using an “intentionally opaque” global corporate structure to minimise regulatory scrutiny and maximise profits.

Laith Khalaf, head of investment analysis at AJ Bell, said: “The robust language used by the SEC, along with the lengthy list of charges, suggests this latest fiasco to engulf the crypto market is going to rumble on for some time. The price of Bitcoin took a tumble on the back of the news, and at the moment it feels like the crypto bubble is suffering death by a thousand punctures.

“Cryptocurrencies are a highly volatile asset in a loosely regulated market, so investors want to be prepared to accept a variety of threats before jumping in. Cryptocurrencies pose threats to consumers. Frauds and scams are common, but even if you’re buying valid cryptocurrency, the ultimate apparent threat is the possibility of significant losses.

“The UK’s Financial Conduct Authority suggests that it is seeing more and more evidence of addictive behaviour by some crypto traders, and you can learn lessons from the gambling industry in terms of how to manage this, such as identifying such behaviour and potentially setting transaction limits on secure accounts.

“But the golden rule for crypto buyers remains not to invest any money you aren’t willing to lose in its entirety.”

IMI, the Birmingham-based engineering firm formerly known as Imperial Metal Industries, joins the FTSE 100’s list of UK index companies, writes Andrew Michael.

Conversely, the British Land real estate company has lost its position in the UK’s blue-chip primary stock index.

The new quarterly reshuffle, announced through index compiler FTSE Russell, will begin at the close of trading on Friday, June 16 and will take place when markets open on Monday, June 19.

WE Soda, the world’s first manufacturer of herbal laundry detergents, will go public on the London Stock Exchange in a bid to bolster the market’s reputation to attract companies.

London’s largest initial public offering is due to take place later this year. If the move goes ahead, the likely £5 billion to £7 billion valuation would rank the company in the top 80 or so largest UK publicly-listed businesses and propel it straight into the FTSE 100.

Changes in major stock indices, such as London’s FTSE 100 and the S

Starting in mid-June, index trackers and ETFs (designed to mimic the functionality of the “Footsie”) will withdraw their positions in the shares of relegated companies and adjust their holdings to be compatible with the new holder.

Each quarter, FTSE Russell reviews each of the indices it compiles to see if any of the companies should be relegated or promoted.

For a company to register on the FTSE 100, it will need to have a market capitalization (the number of its percentages multiplied by the percentage value) that would place it in the top 90 in terms of size.

To exit the FTSE 100, a company’s market capitalisation would have to be less than that of the 110th largest company on the UK stock market.

These widened barriers prevent corporations from continuously bouncing between the FTSE 100 and the FTSE 250, which represents the UK’s next 250 largest corporations.

Susannah Streeter, Head of FX and Markets at Hargreaves Lansdown, said: “IMI has noted its percentage value by more than 23% year-to-date and raised its full-year earnings forecast after strong functionality in the first quarter of 2023. . »

The Financial Conduct Authority urges young people to adopt the same method for investing as for dating, writes Andrew Michael.

FCA research among 1,000 investors aged between 18 and 40 who also use online dating services found that, when it comes to dating, they think longer-term and are less influenced by social media than when it comes to investing.

Nearly a portion (48%) of respondents said they were dating to find a potential life partner. But the same group said its investment clients were significantly lower.

According to the FCA, only 2% of respondents said they had worked for an investment period of more than five years, while one in seven (14%) said they had invested some period of time in mind.

The FCA also found that other people were 18% more likely to be influenced by social media when making investment decisions in their dating choices.

The study, conducted as part of the FCA’s InvestSmart campaign, also looked at how young investors would react to a “red flag” on the date and timing of investing.

Potential red flags arise when someone is late for an appointment or is rude to waiters, while in the context of investing, this applies to difficulties withdrawing cash from an investment or when an investment opportunity is only available for a short period of time. time.

The FCA said that men would be more likely to continue with a date despite spotting a red flag – 49% compared with 39% of women – and would also be more likely to push on with an investment, even after identifying a warning sign (39% of men compared with 28% of women).

Browsing a prospective date’s social media was found to be the most popular way to prepare for a date (57%), a third (33%) said they could forget about hype on a potential partner’s social profile. By contrast, only a fifth of respondents (20%) said they might forget about the investor hype.

The findings come a week before the FCA is teaming up with Celebs Go Dating’s Anna Williamson to host an occasion for young investors Swipe Left, Invest Right: How dating principles can be applied to investing, to inspire them to embrace the same principles. principles as they do in meetings.

Lucy Castledine, director, consumer investments at the FCA, said: “We have seen the temptation of high-risk investments increase as consumers balance stretched household finances against the immediate thrill of a quick return. But this may mean investors are ignoring the red flags.

“We need investors to rethink their technique by spotting similarities with their own love lives and applying the same mindset, thinking long-term, doing their studies and prioritizing values that align with theirs. “

Vanessa Eve, investment manager at Quilter Cheviot, said: “The advance of technology and the fact everything is now just a touch of a button away means we interact with our love life in a very similar way to our investments.

“What is quite evident from this knowledge is the fact that only 2% of young investors have a time horizon of more than five years to invest, while 14% have none. Investing is long-term and not a way to get rich. Quick plan. In fact, returns can be life-changing if someone is willing to take a break for at least five years, but preferably much longer to see the true effects of compounding.

The International Organization of Securities Commissions (IOSCO), which oversees foreign money markets, targets investors through a comprehensive technique for the regulation of cryptoassets and virtual markets, writes Andrew Michael.

Its consultation process includes proposals for an 18-point plan that would place guardrails around the crypto investing sector. The UK regulator, the Financial Conduct Authority, is a member of IOSCO.

Today’s announcement follows last year’s collapse of FTX, the high-profile cryptocurrency exchange. In March of this year, FTX founder Sam Bankman-Fried was accused of bribing Chinese government officials with the song worth $40 million.

The bribery charge came on top of a dozen counts already faced by the former FTX boss, whose company failed last November after it was unable to meet a wave of withdrawal demands from customers.

The demise of FTX sent shockwaves not only to the crypto industry, but also to the entire monetary system, as evidenced by the huge number of diverse corporations that owed money to the stock market.

At present, the global crypto industry operates with a patchwork of regulations where other jurisdictions impose their own rules.

In the UK, for example, where an estimated one in ten adults own crypto assets, the Financial Conduct Authority does not look kindly on the sector and warns consumers about the threat of a blanket loss for any investment they make.

Last week, lawmakers on the Treasury Select Committee said that cryptocurrency trading had “no useful social purpose,” adding that the asset’s elegance contained “no intrinsic value. “The committee called for the sector to be regulated in the same way as gambling.

Jean-Paul Servais, President of IOSCO, said: “Now is the time to put an end to the regulatory uncertainty that characterizes crypto activities. It’s time for regulators to work together across borders and jurisdictions to make investor coverage and market integrity reputable in crypto-asset markets.

Susannah Streeter, head of forex and markets at Hargreaves Lansdown, said: “This move by IOSCO is aimed at protective investors, but it will also propel crypto into the mainstream. As it turns out, Bitcoin has been boosted by news of this concerted effort for industry, with an increase of more than 2%.

Bitcoin, the most prominent among thousands of cryptocurrencies, has gained 64% year-to-date, recovering in large part from the sharp declines it suffered in the second half of 2022.

The consultation procedure ends on July 31, 2023 and IOSCO hopes to finalize its recommendations by the end of this year.

Unless Congress reaches a deal to raise the country’s debt limit, the U. S. government is on the verge of running out of money, which could cause global monetary chaos as the world’s largest economy is unable to pay its debts, writes Andrew Michael.

U. S. politicians have been locked in a debate for weeks over whether to lift or suspend the country’s so-called “debt ceiling,” which dictates how much cash the U. S. government can borrow.

Also known as a debt limit, it is a budget limit that restricts the total amount of money that the U. S. government can borrow. The U. S. government can borrow to meet its needs. These cover everything from paychecks for federal workers, the military, Social Security, and Medicare, to interest payments. on the existing national debt, up to the tax refund.

This limit has parallels with the tax regulations set in the UK by the Chancellor of the Exchequer. In the United States, however, the limit is set from the outside and independently of decisions about the amount of government spending and the level of taxation. .

Currently, the ceiling stands at just over $31 trillion. That figure was surpassed earlier this year, when the U. S. Treasury Department implemented “extraordinary measures” to provide the government with more liquidity and buy time to find a solution.

Treasury Secretary Janet Yellen has now warned that, if intensive negotiations between Democrats and Republicans are not resolved soon, the US administration will not have enough money to pay its debts as early as 1 June.

The political dispute came to a head this week when U. S. President Joe Biden met with Republican House Speaker Kevin McCarthy to continue high-stakes negotiations.

But if “Date X” — the moment when the Treasury runs out of budget — is passed raising the debt ceiling, the monetary implications would be enormous.

On the one hand, the U. S. would not pay its federal workers or military personnel, while businesses and organizations that rely on state investment would also be in monetary jeopardy.

At the same time, the country would technically default and possibly not be able to fulfill purchases of Treasuries and Treasuries (the United States’ bonds issued by the British government).

Commentators describe a full-blown default as an unprecedented occasion with far-reaching consequences. In theory, if the U. S. defaulted on its debts for the first time in history, it would cause the value of its government-backed debt to plummet.

U. S. debt is widely regarded as the safest asset in the global monetary system. Most of it, just over two-thirds, is held by local establishments such as the Federal Reserve and in the retirement budget and mutual budget.

About a third is foreign-owned, however, with Japan being the largest holder at around $1.1 trillion. In addition, China owns nearly $900 billion in US debt while the figure for the UK is about $650 billion.

If the U. S. were to default on its obligations, it could lead to a sharp rise in borrowing prices in the country, which would most likely have consequences for borrowing prices around the world.

Ryan Brandham, head of global capital markets, North America, at Validus Risk Management, said: “Many of the current issues facing the US today, such as widening wealth gaps, social unrest, inflation problems, printed money, bulging government debt and a weakening ability to pay internal and external obligations, have been associated with the fall of powerful empires all through history going back to at least the Roman Empire. So the risk is real.”

The Organisation for Economic Co-operation and Development said: “Failure to reach an agreement would result in more severe macroeconomic shocks given the current duration of the federal budget deficit and the moves needed to close it quickly. “

According to Schroders: “The x-date would mark the point at which the Treasury runs out of funds. After disappointing tax receipts for 2022, much now hinges on how revenue shapes up through May. If this can sustain the government into mid-June, when quarterly tax payments are due, the Treasury is likely to be able to make it through much of July and perhaps even to August.”

In this context, Schroders adds that his message to investors is to hope for success, but plan for failure: “Wherever possible, portfolios deserve to be liquid and diversified to ensure that capital can be temporarily redeployed, given the volatility seen in past episodes of debt limits. . the tightrope. “

Lawmakers on the Treasury Special Committee say cryptocurrency trading “has no intrinsic price and no useful social purpose” and should be regulated in the same way as gambling.

The cross-party organization of MEPs said that the cryptocurrency market poses significant threats to consumers, given price volatility and the risk of losses, and looks more like gambling than a money service.

They are involved in that regulating cryptocurrencies as a typical monetary service unduly legitimizes the market, giving consumers the impression that cryptocurrencies are protected, which the committee believes is not the case.

HMRC estimates that one in ten UK adults own or have held crypto assets.

Committee chair Harriett Baldwin MP, said: “The events of 2022 have highlighted the risks posed to consumers by the cryptoasset industry, large parts of which remain a wild west. 

“With no intrinsic value, enormous volatility of value, and no discernible social good, customer trading of cryptocurrencies like Bitcoin looks more like gambling than a monetary service and should be regulated as such. »

The report notes that the committee recognizes the potential importance of cryptocurrency-enabling generation for the money industry. He also called on the government and regulators to keep pace with developments in the long term.

Ivan Ivanchenko, CEO of crypto trading platform Phinom Digital, criticized the report, saying, “Treating crypto trading as a game would be a step backwards for the UK’s virtual currency aspirations and another demonstration that the country is facing a sea of bureaucracy. . »

Mike Stimpson, of monetary advisor Saltus, said: “Our studies show that interest in virtual assets continues to grow at a steady pace, especially among younger investors.

“Almost half (47%) of respondents in our latest Wealth Index survey reported that they hold at least some digital assets, up from a third six months ago, while among those aged under 24, the number is almost two thirds (65%).

“But the crypto sector is incredibly volatile — whether it’s up or down — because it’s so complicated to set a fair price for crypto. This, combined with the immaturity of the sector and a lack of regulation, means that there is a significant threat to investors.

“As with any investment, crypto investors need to take advice. A professional adviser will be able to help them build a financial plan which invests in a diversified portfolio to generate the returns necessary to deliver that plan.”

Last month the European Parliament gave the green light to its Markets in Crypto Assets (MiCA) bill, which will bring crypto assets into regulation alongside traditional financial services. 

EU lawmakers, to be enacted next year, hope MiCA will protect investors and protect them from monetary crimes and market manipulation.

The UK’s monetary regulator, the Financial Conduct Authority (FCA), has called for an overhaul of the UK’s percentage board regulations after several high-profile corporations abstained from the City of London in favour of IPOs on Wall Street, writes Andrew Michael.

In recent months, London’s appeal as a location for companies looking to float their shares has come into question after several firms, including the chip designer ARM Holdings, favoured New York over a domestic listing.

Data from the UK Listing Review shows that the number of UK listings has fallen by 40% since 2008. In recent years, continental European exchanges have also attracted increased attention from companies looking to float.

In a consultation paper, the FCA says it needs to reform and simplify regulations to “help attract a wider diversity of businesses, inspire choice from festivals and investors. “

In practice, this would mean bringing the current rulebook more into line with that of the US, while removing a series of investor protections – a decision which, if implemented, has been described as concerning by commentators.

The regulator has proposed replacing London’s existing “premium” and “standard” scoring framework with a single formula containing fewer rules.

The premium directory imposes compliance and disclosure requirements higher than the minimum EU requirements for an indexed company.

As it stands, corporations with a premium score are eligible to be included in FTSE indices, market barometers tracked through so-called “passive” investments, such as index trackers and exchange-traded funds.

According to the FCA, a single equity category would “remove eligibility requirements that can deter early-stage companies, be more permissive on dual class share structures, and remove mandatory shareholder votes on transactions such as acquisitions to reduce frictions to companies pursuing their business strategies”.

The proposals also come with concessions that allow founders of newly indexed corporations to retain more strength by allowing other categories of shares with other voting arrangements.

Regulations requiring “related party transactions” to be put to a vote of all shareholders would also be eliminated, a restriction that would have prompted Arm’s owner, SoftBank, to list in New York.

There would also be the scrapping of the need for companies to demonstrate a three-year track record before listing, and the requirement for listed companies making acquisitions larger than 25% of their own market value to put the deal to a shareholder vote would also be removed.

Removing the existing board regime would constitute one of the biggest reforms to UK securities market regulations since the Big Bang of the 1980s, which revolutionised the way London works and cemented its position as a leading global hub in areas such as investment management.

While broadly endorsing the need for change, commentators expressed fears that the proposals, if implemented, could simply undermine investor protection.

Richard Wilson, head of investing platform interactive investor, said: “We strongly support the principles behind listing rule reform to make the UK more competitive, but eroding shareholder rights risks undermining market standards, and this is not the right answer.

“Two-class structures, with differentiated voting rights, erode shareholder rights. Distorted rights distort governance and accountability. One share, one vote is the foundation of shareholder democracy and we are concerned that The specter of dual-class shares, which we have actively lobbied against, continues to hover.

“Reference to removing mandatory shareholder votes on transactions such as acquisitions is another major red flag.”

Kevin Doran, chief executive of investment platform AJ Bell, said: “The loss of ARM Holdings in the US market has obviously hit the government and the FCA hard.

“As the crown jewel of the domestic tech sector, the fact that the company chose the US as its new home when returning to public markets is a sign of how far the UK has fallen since the company de-listed in 2016.”

The FCA closes on June 28, 2023.

Despite understandable concerns, particularly about investor protection, the FCA’s proposals to prevent a flood of corporate exits from the London market from turning into an avalanche have been welcomed in the City of London and beyond, writes Andrew Michael.

The FCA’s goal is a good one: to make the UK in general, and London in particular, a more attractive and competitive environment in which index corporations can thrive. That’s why it’s applauded.

But for those adjustments to ultimately achieve the desired effect and reinvigorate the domestic market, it will most likely require more than a replacement for the UK’s board rules, despite its widely regarded prestige as the golden style of corporate behaviour.

The proposed reforms come after an era of turbulence for the City, amid rumors that it has lost its appeal as the United States takes control – that is, when it comes to companies contemplating an initial public offering (IPO). . As stated by Julia Hoggett, chief executive of the London Stock Exchange. She has warned that London has become complacent in its role as Europe’s dominant monetary center and now wants to compete “scruffy and hungry. ” Roger Clarke, chief executive of IPSX, the real estate exchange, said: “The FCA is beginning to recognize that a culture that seeks to completely eliminate threats will completely eliminate returns, reducing the UK’s investment appetite. This benefits no one and will lead to disastrous long-term outcomes for retirees and savers.

“An accidental result of years of progressive regulation in the face of the threat of investors has been the disappearance of the entrepreneurial and cutting-edge spirit of money markets that established London’s global dominance.

“Investors can be trusted to take responsibility for their investment decisions. Regulated markets are essential, risk-free markets are an illusion. “

According to the Association of Investment Firms (AIC), other people under the age of 40 are more familiar with cryptocurrencies as a potential way to make money than with premium stocks, mutual funds, or bonds.

The industry framework conducted a survey of people in their 20s and 40s who said they weren’t investing lately.

The AIC found that 70% are aware of cryptocurrencies such as bitcoin, significantly more than those familiar with conventional savings and investment options such as stocks and shares (59%), Premium Bonds (46%), investment funds (23%) and investment trusts (18%).

Exchange-traded funds (ETFs), an affordable way for retail investors to access an inventory allocation, fared even worse, clocking in at 12%.

The Financial Conduct Authority, the U. K. ‘s regulator, is warning consumers about the unregulated nature of cryptocurrencies, reminding them that crypto assets can potentially fail with an overall loss of capital.

The investment industry will be dismayed that funds, trusts, and ETFs (which are touted as tactics for retail investors to gain a foothold in making an investment) lack the awareness related to crypto assets in the eyes of potential younger investors.

Respondents told the AIC that the main barrier to investing (57%) is a lack of understanding and knowledge. They also blame the cost-of-living crisis (53%) and not having enough money in general (45%) as other stumbling blocks.

Also on the agenda are concerns about markets and the state of the economy, as well as the concept that making an investment is too risky in general.

Annabel Brodie-Smith, AIC communications director, said: “Some of us may find it shocking that young people are most aware of cryptocurrency as an investment option. But this demonstrates that the investment industry needs to do more to help young people understand the range of investment options, the risks involved and how investing can help them save for the future.”

More than 300,000 investors in the collapsed share income source fund managed by Neil Woodford will get up to £235 million in redemption following an investigation through the Financial Conduct Authority, writes Jo Thornhill.

The city’s regulator found that Link Fund Solutions (LFS), the administrator and administrator of the Woodford Equity Income Fund, had made “critical errors and errors” in managing the fund’s liquidity since September 2018.

This meant that investors who withdrew their cash from the fund benefited disproportionately from access to maximum liquid (or available) assets, while those who continued to hold assets in the fund were treated unfairly and ultimately suffered monetary losses. Regardless, the fund was frozen in June 2019.

Link Group agreed to the recovery plan, which will benefit investors who had cash in the fund at the time of its suspension, subject to the sale of LFS and its other assets.

It will also depend on the approval of eligible investors and other creditors of the LFS, and the compensation plan itself will want to be approved through the courts.

If the proposed £235m repayment is paid, investors will have recovered around 77p in sterling. The remedies presented under the program cover investment losses, but they cover losses resulting from LFS’s conduct.

A total of £2.56 billion has already been paid to investors since the suspension of the fund from the distribution of proceeds from the sale of investments.

Therese Chambers, the FCA’s Executive Director of Enforcement and Market Surveillance, said: “The FCA’s investigation has raised serious considerations about Link Fund Solutions’ control over the liquidity of the Woodford Equity Income Fund.

“LFS shares appear to have significant losses for investors who remained in the fund at the time of its suspension. “

Woodford created the Equity Income Fund in 2014 after 26 successful years of fund control at Invesco. It was a popular and high-profile choice among investors, and as of mid-2017, the fund had over £10 billion in investor money.

But a number of poor potential investment options and an increasing number of unlisted assets in the fund have led to heavy losses. Investors began to worry, and withdrawals from the fund snowballed. The fund had to be suspended on June 3, 2019, preventing investors from accessing its cash. At the time, the fund had £3. 7 billion at its disposal.

Woodford was laid off through Link Fund Group later that year and the fund closed. Some of the cash was returned to investors through the liquidation of the fund and the sale of assets.

The FCA says that more data on the LFS programme will be provided in July 2023 and that the formula documentation, which aggregates the full main points of the FCA’s findings, will be available as soon as possible in the fourth quarter of 2023.

The FCA said that if approved, the redress Scheme offers investors substantially more than is otherwise available from LFS alone and more than would be achieved by any other means, given the contribution by Link Group.

Private equity firms are rounding up London Stock Exchange-indexed corporations with renewed vigor, buoyed by the economic outlook that has improved prospects for potential M&A activities (M&A).

These companies use the cash raised through investors to invest in companies where they can make money by stimulating their expansion and acquisition strategies, or through other means of financial engineering.

In the second half of 2022, M&A activity all but dried up after surging inflation, rising interest rates and market uncertainty combined to produce a rise in the cost of debt, plus a growing gap in corporate valuations.

This year, however, the City of London has seen a return to negotiations as recession clients begin to fade and signs of economic stability emerge.

Apollo Global Management, the U. S. personal capital giant, has stepped up its efforts in London with two measures.

The first was a fifth bid – now raised to 240p a share – for Wood Group, the FTSE 250 company oilfield services and engineering firm, that values the business at around £1.7 billion. Wood Group said it had decided to engage with Apollo to see if a firm offer can finally be made.  

The second announcement saw Apollo take aim at THG, formerly known as The Hut Group, the beleaguered online retailer. THG, the owner of Cult Beauty and other cosmetics brands, acknowledged it had received a non-binding, “highly preliminary” proposal from Apollo, although the latter has not confirmed the approach.

Victoria Scholar, chief investment officer at Interactive Investor, said: “THG shareholders have had an incredibly difficult time with this stock, which is down around 90% since its listing on the London Stock Exchange in September 2020. “Buying for personal equity reasons could simply put an end to this bad chapter. Many corporate brands, including LookFantastic and MyProtein, have recently faced high raw material costs, specifically whey protein, which have squeezed their margins.

In a separate announcement, the payment products and services company, Network International, confirmed it had received a non-binding proposal from CVC Advisers Limited and Francisco Partners Management. It indicated that it would be supporting the £2 billion bid from this consortium of private equity firms.

Separately, Dechra Pharmaceuticals said last week it is in talks about a possible £4. 6 billion offer from Swedish company EQT.

Hyve, the exhibition company, has been the subject of a £480 million acquisition strategy by Providence Equity Partners, while nearly a third of Industrials REIT shareholders have subsidised Blackstone’s £511 million all-cash offer for the owner of a multi-lease business park.

Twitter, the microblogging site acquired last year through Elon Musk for $44 billion, has partnered with investment site eToro to allow Twitter users to see the real-time costs of stocks, cryptocurrencies and other assets such as exchange-traded budgets (ETFs). commodities, writes Andrew Michael.

Starting Thursday, a new ‘$Cashtag’ feature will be added to the Twitter app that will allow users to view market charts on a variety of monetary tools and click on eToro to see more data about the asset in question. and have the opportunity to invest.

A $Cashtag is a ticker symbol preceded by a dollar sign. The $Cashtag of Musk-owned Tesla, for example, is $TSLA.

Elon Musk recently said at a currency convention that he needs Twitter to be “the largest monetary establishment in the world. “

Twitter added $Cashtags pricing information in December 2022. Since then, according to the company, the feature has been widely followed with more than 420 million searches for the term since the beginning of 2023.

Twitter said search activity is ramping up around results ads. For example, when tech giant Apple released its results for the last quarter of 2022 on February 2 of this year, searches for $Cashtags skyrocketed to 8 million.

Twitter added that the maximum $Cashtag used is $TSLA (Tesla), with $SPY (SPDR S

An eToro spokesperson said the move would eventually cover more than just U. S. stocks. “We expect the association to see thousands of tickers functioning as ‘cash tags’ with access to the eToro platform to be more informed. These are being added gradually. ” The spokesperson also claimed that today’s announcement did not go as planned. “There have been some teething issues, adding the fact that cryptocurrencies aren’t active, something we’re fixing with Twitter. “

Chris Riedy, Twitter’s vice president of global sales and marketing, said: “Twitter is what’s falling and what other people are talking about right now. We believe that genuine replacement starts with conversation, and that finance and investing are becoming more appropriate. vital in this conversation. ” We are pleased to partner with eToro to provide Twitter users with more information about the market and greater access to trading capabilities. Twitter will continue to invest in the progress of the #FinTwitter community.

Yoni Assia, CEO and co-founder of eToro, said: “Financial content on social media has helped teach many other people who felt left out through more classic channels. Twitter has become a hugely important component of the retail investment community — it’s where millions of investors go every day to access financial news, percentage information, and conversation.

“As a social investment network, eToro was built on those same principles: community, sharing wisdom, and greater access to money markets. There is strength in sharing wisdom, and by turning an investment into a business organization, we can achieve greater effects and succeed together.

Zoe Gillespie, chief investment officer at RBC Brewin Dolphin, said: “Although eToro is not incorporated into the social media platform, the Twitter link can potentially gain financial advantage through referrals to the platform. “

Gillespie added: “We advise caution when social media and making an investment are strongly linked. We also inspire investors to determine their sources, making sure that everything they invest in is regulated and that they perceive the dangers related to unregulated systems like cryptocurrencies.

The Financial Conduct Authority (FCA) and the Advertising Standards Authority (ASA) have teamed up with Truth TV star Sharon Geffka to teach monetary influencers – the “finfluencers” – about the dangers of selling products, writes Andrew Michael.

Finfluencers use platforms like Instagram and TikTok to provide financial information and advice (from the basics of a stock trader to how to buy assets) via social media, to hundreds of thousands, or sometimes even millions, of followers.

Strict rules govern the provision of financial advice, with licensing, qualifications, and procedural requirements to be followed before any financial advisor is allowed to disseminate his or her knowledge to the public.

There are also strict regulations on what corporations can and cannot say when it comes to monetary promotion and advertising.

Earlier this year, the FCA warned against finfluencers offering unauthorised investment recommendations after seeing the number of misleading ads increase 14-fold in 2022.

Many of them come from social media influencers who the FCA says are a cause for concern.

Today’s announcement from the FCA and ASA sees the couple with Ms. Geffka, a former Love Island contestant and self-proclaimed social media influencer.

The FCA and ASA say they will work with influencers and their agents, providing them with clear information about what could constitute illegal monetary promotion.

Part of the initiative includes an infographic for influencers that defines what they check before accepting branded offers for monetary products and services.

The FCA said it would also invite finfluencer brokers and the Influencer Marketing Trade Body to a roundtable discussion on illegal monetary promotions.

Sarah Pritchard at the FCA said: “We’ve seen more cases of influencers touting products that they shouldn’t be. They are often doing this without knowledge of the rules and without understanding of the harm they could cause their followers.

“We need to work with influencers to keep them on the right side of the law, as this will also help other people avoid scams or overly risky investments. “

Sharon Gaffka said, “When you walk out of an exhibition like Love Island, you’re bombarded with opportunities to advertise branded products and paintings. If, like me, you’re new to these types of paintings, it can be a little overwhelming. “

“This campaign with the FCA and ASA will hopefully make sure other influencers stay on the right side of the law and prevent them from unknowingly introducing their followers to scams or high-risk investments.”

Tom Selby, from investment platform AJ Bell, said: “One of the most demanding situations facing UK regulators is that, when it comes to social media, influencers are unregulated Americans offering unregulated products in a world that is incredibly difficult to track and monitor. In the worst-case scenario, influencers can inspire their fans to invest in fraudulent schemes and end up wasting everything.

“The fact a lot of this activity happens outside of the regulated space is likely why the FCA is focusing on educating those pushing out messages to their followers.”* The FCA has ordered discretionary fund manager WealthTek to stop operations and arrested a man linked to the case. 

Today, the regulator said it had taken “urgent action” in the High Court to appoint three representatives from BDO LLP to take control of WealthTek, which also operates as Vertem Asset Management and Malloch Melville.

The appointment of BDO LLP is on an interim basis and pending a further court hearing.

The equity budget – those focused on equities – regained favour with UK investors last month, even as turmoil in the banking sector threatened to roil global stock markets, writes Andrew Michael.

Investors added £960 million net to their equity fund holdings in March, the influx since December 2021, according to Calastone’s latest fund flow index.

The stock proved popular with investors despite considerations of banking problems in the U. S. and Switzerland, coupled with the collapse of Silicon Valley Bank and UBS’s takeover of troubled banking giant Credit Suisse.

Calastone described this as a “significant shift” in January and February, when investors sold more stock-based budget than they bought. Global budgets, which invest in a basket of stocks, were the main beneficiaries of increased investor confidence, attracting £1. 69mn.

However, Calastone said UK-focused equity funds continued to haemorrhage cash, with investors pulling a net £747 million out of UK funds last month, the 22nd consecutive month where the sector suffered from a net outflow of money.

Edward Glyn, head of global markets at Calastone, said: “The relatively strong performance of UK equities since the bear market began just over a year ago has not improved sentiment. If anything, we have seen outflows accelerate.”

While investors continue to shun domestic equities, other sectors proved more attractive in March, including index tracking funds, which recorded net inflows of £909 million, and emerging markets funds, which were bolstered to the tune of £393 million.

Another sector that performed poorly in March was budget invested in accordance with environmental, social and governance (ESG) principles.

While the ESG budget continues to generate cash, it did so at a greatly reduced rate last month: £218 million, around two-thirds less than the industry’s monthly average over 3 years.

Calastone’s Glyn said: “The ESG gold rush is probably past its peak. A multitude of points are at stake, adding up the increased weighting of underperforming generating stocks in ESG portfolios, a greenwashing backlash, and a reorientation of marketing activity across fund managers.

Virgin Money has entered the burgeoning DIY market for investment platforms and trading apps with the launch of a service that provides a reduced diversity of investment features across 3 threat profiles, writes Andrew Michael Array.

Would-be investors can open a stocks and shares individual savings account (ISA) or a non-ISA investment account. Each has a minimum contribution of £25.

Investors can choose from three options: conservative growth, balanced growth, or adventurous growth.

Virgin says each option, incorporating funds managed by Virgin Money Unit Trust Managers, offers customers a diversified portfolio invested in companies with “good environmental, social and governance (ESG) credentials”.

The supplier says they come from corporations that adopt sustainable investment policies and targets, have positive shareholder engagement policies, or supply products and facilities that support the transition to a low-carbon economy.

In terms of cost, the same payments apply to ISA stocks and shares and the non-ISA account, broken down into an annual account payment of 0. 3% on the investment price combined with an annual asset control payment of 0. 45%.

A lump sum contribution of £1,000 investment would therefore cost an investor £7.50 assuming no growth. Virgin Money confirmed that investors wishing to swap from, say, a balanced growth option to cautious growth can do so penalty-free.

Customers who open a new Virgin Money ISA or non-ISA percentage and percentage account of at least £5000 until June 30, 2023 will also get 8000 issues to spend on Virgin Red, the company’s rewards club subsidiary.

To qualify, investors will need to hold on to invested cash until the end of July this year. Customers will also get the issuances if they transfer an existing investment before September 29, 2023.

Jonathan Byrne, managing director of Virgin Money Investments, said: “The world of making an investment can be complex and intimidating. That’s why we’ve designed our new investment service to be undeniable and understandable for everyone.

Wealth manager Rathbones to join rival firm Investec Wealth

With the decision subject to shareholder approval, the companies will continue to operate independently of each other for the time being.

However, assuming the deal comes to fruition, money advisers expect a corporate restructuring of this length to result in some administrative turmoil for clients as new business emerges.

It is not yet clear what the possible effect of this agreement will be on the workers of both companies.

The UK’s wealth control sector has become increasingly competitive in recent years, with companies striving to achieve significant scale while also struggling to retain attracted customers through relatively smart so-called passive investments. market, which rely on computer algorithms rather than human administrators.

The combined entity will be known as the Enlarged Rathbones Group and will operate under the logo called “Rathbones. “

Rathbones will factor in new percentages in exchange for 100 percent of Investec W’s equity

The deal provides Investec with an implied equity value – a measure of its worth – of £839 million.

It includes its investment and wealth control operations in the United Kingdom and the Channel Islands, but omits Investec Bank’s Swiss-based business and the company’s offshore wealth control operations, both wholly-owned subsidiaries of the Investec Group.

Clive Bannister, Chairman of Rathbones, said: “This transaction only presents compelling strategic and monetary logic, but also accelerates Rathbones’ expansion strategy. Operating at scale allows the organization to offer an even more attractive proposition to consumers and colleagues, supporting long-term expansion and meaningful pricing for Rathbones’ shareholders.

Fani Titi, CEO of Investec Group, said: “The strategic compatibility of the two corporations is compelling with complementary strengths and functions to the overall proposition for clients. “

Laith Khalaf, Head of Investment Analysis at AJ Bell, said: “The strengthening will enable corporations to cut costs. The reason for the merger lies primarily in the two companies’ shared interests in drawing up money plans and discretionary control of wealth for the wealthy. valued customers. A merger of corporations of this duration will result in adjustments for all parts of any of the corporations. “

Ben Yearsley, chief investment officer at Shore Financial Planning, said: “It makes sense for shareholders to merge the two companies, but there will inevitably be consequences and an era of uncertainty for customers and staff.

The company is delaying its plan to sell its stake in NatWest by two years as volatility hits the banking sector following UBS’s acquisition of Credit Suisse and the collapse of Silicon Valley Bank, writes Andrew Michael.

The Treasury still owns 41. 5% of NatWest, having spent nearly £46 billion to bail out the organisation (then known as the Royal Bank of Scotland) following the 2008 currency crisis.

With an initial 84% stake, the government has reduced its stake since 2015 through a combination of deals that add large-scale “targeted buying,” where NatWest applied to buy its own inventories through inventory marketplace Array, as well as a drip buyback plan. -introduce NatWest inventories to the market.

The reintroduction of percentages to the market, which began in July 2021, resulted in a percentage sales value of approximately £3. 7 billion.

Initially, the government’s plan to move NatWest to personal property would end next August. But the government also said it would only sell its shares “when it represents a smart price for cash and market situations allow. “

Amid turbulence for the global banking sector, UK Government Investments Limited (UKGI), the framework that manages taxpayer engagement in the bank, announced today that the scheme will run for two years.

NatWest shares, which traded at 265 pence for the year, peaked at 310 pence in February before retreating amid a sell-off in bank shares as investors worried about developments in the sector, specifically in the United States and Switzerland.

Earlier today, the bank’s shares were trading at 267p.

Andrew Griffith, the Treasury’s economic secretary, said: “We are committed to making NatWest full personal property again. Today’s extension marks a vital step in achieving that goal, ensuring that we get the most productive price for the taxpayer when we sell our shares.

Victoria Scholar, chief investment officer at Interactive Investor, said: “If the banking crisis subsides in the coming weeks, we may see opportunistic buyers return to the market, buying NatWest shares and others at a discount. However, if new flaws in the formula are revealed, banks could come under additional promotional pressure. “

The government has launched a consultation on the purpose and scope of regulation for environmental, social and governance (ESG) ethical ratings as part of a range of measures in its updated Green Finance Strategy, Andrew Michael writes.

ESG investing, which applies filters to potential inventory selections made through a fund manager, has a familiar strategy in the investment control landscape.

With other credentials being equal, companies that actively support change across a number of measures – as determined by ESG research and the ratings applied by advisory organisations – will find themselves nearer to the top of a fund manager’s ‘buy list’ than their rivals.

But with the many metrics and ratings available, a long-standing fear in ESG is the lack of standardized criteria for classifying an investment as ethical, green, or sustainable.

Ultimately, this can lead to confusion among both retail and institutional clients of investment managers, the risk being they allocate their money to an investment of dubious credentials which has either been falsely promoted or marketed incorrectly.

Earlier this week, the Financial Times reported that the ESG ratings of many budgets would be revoked and the ratings of thousands more downgraded, based on a review by MSCI, the provider of stock indexes.

According to the Treasury, ESG scores have become increasingly influential, with 65% of institutional investors employing them at least once a week: “With projections that $33. 9 trillion in global assets under control will have ESG points within 3 years, the importance of having reliable ESG scores data is critical and growing. “ESG scores, which assess companies’ control over ESG risks, opportunities and impacts, are a key component of this. It is right that they play their part by providing valuable data to market component participants. “It will need to be supported and encouraged to promote transparency and generate strong effects to gain advantages from UK markets and end consumers. Developing the market for credible ESG scores is a genuine opportunity for the UK, building on its strengths as an open, forward-thinking and sustainable global monetary centre.

The Treasury says its consultation sets out a proposed policy to integrate ESG ratings providers into the UK’s regulatory perimeter and will cover ratings provided through UK and foreign corporations to UK users.

The consultation ends on 30 June 2023. You can submit your feedback to ESGRatingsConsultation@hmtreasury. gov. uk

The Treasury has shelved plans for the Royal Mint to launch its own non-fungible token (NFT), less than a year after it was set the task as part of the UK’s forward-looking approach to cryptocurrency, Andrew Michael writes.

NFTs are virtual assets (i. e. , a physical presence) that constitute real-world objects, such as exclusive artwork or memorabilia from memorable sporting moments.

Along with cryptocurrencies, such as Bitcoin, NFTs make use of blockchain technology – a multi-point computer ledger designed to safely store digital data.

Among the most well-known NFTs is a series known as Bored Ape Yacht Club, which allows the user to own an exclusive symbol of an ape.

In April 2022, current Prime Minister Rishi Sunak, in his former role as Chancellor of the Exchequer, petitioned the Royal Mint for an NFT later that summer.

No details were given about what image or object the NFT might represent, nor whether the entity would eventually end up being used to generate funds for the UK exchequer.

At the time, the government described the request as one of a series of measures aimed at making the UK “a hub for the generation and investment of crypto assets. “

But the resolution appears to be at odds with the stance of the regulator, the Financial Conduct Authority, which issues warnings to consumers about the crypto industry, reminding them that crypto assets are unregulated and pose a significant risk.

According to the Royal Mint, the Treasury’s NFT proposal will be kept “under review”.

Chancellor of the Exchequer Andrew Griffiths MP made the announcement in Parliament (Monday) in reaction to a written query from Harriet Baldwin, a Conservative MP from West Worcestershire and chair of the House of Commons Treasury Special Committee, who asked whether NFT creation is still an issue. Treasury Policy.

Commenting on the announcement, Ms Baldwin said: “We have not yet seen a lot of evidence that our constituents should be putting their money in these speculative tokens unless they are prepared to lose all their money. So perhaps that is why the Royal Mint has made this decision in conjunction with the Treasury.”

In recent months, the crypto industry worldwide has been rocked by a series of setbacks including the collapse of the FTX crypto exchange at the end of 2022 plus, earlier this month, the failure of three crypto or crypto-related banks in the US: Silicon Valley Bank, Silvergate and Signature.

At the time of writing, it is also conceivable that Binance, the world’s largest cryptocurrency exchange, could be banned from operating in the United States after violating the country’s monetary regulator (see article here).

NFT prices, which in some cases had reached degrees of millions of pounds, collapsed last year following the demise of FTX.

In recent weeks, the spotlight has been on banks, with the collapse of Silicon Valley Bank followed by the emergency bailout of Credit Suisse through its former rival UBS, writes Jo Groves.

Fears of a full-blown banking crisis have caused bank stocks on both sides of the Atlantic to fall sharply. The Dow Jones U. S. Banking Index fell 9% last week while the FTSE 350 banking index fell by one level before recouping the maximum of its losses.

Investors looking to “buy on dips” have sparked a record point of trading in currency stocks over the past fortnight, according to investment platform Freetrade. Topping the “buy” list is rental asset specialist bank Paragon, with an increase in purchases of almost 1,900%, followed by FTSE giants Prudential and HSBC.

Alex Campbell, head of communications at Freetrade, said: “For many of those stocks, this proves to be an ideal opportunity to start a new role or complement an existing one.

“With UK banks trading well below a three-year average price-to-earnings ratio of around 15 times, now is arguably the time for investors to secure an attractive access point and start claiming healthy dividends. “

Looking at the bigger picture, David Dowsett, global chief investment officer at GAM Investments, said: “We don’t think what happened with Credit Suisse will derail the case for making an investment in the European financial sector. This is a painful and historic situation, but it is still widely noted as unique.

“On the banking sector as a whole globally, it is important to stress that this is not a bad asset problem. The [2008/09] global financial crisis was such a problem, where banks had significant assets on their balance sheets that were not worth anything or worth very little. This is not the case this time.”

However, investor confidence in the sector remains fragile, with specific considerations about the effect on smaller U. S. regional banks, which are less regulated.

Danni Hewson, head of economic research at AJ Bell, said: “The forced marriage between UBS and Credit Suisse has today eased some of the tensions in the global banking sector, but investor confidence has been severely affected and, despite liberal demands for economic stamping, there are still some visual cracks.

“Trust is crucial when you’re asking depositors to stick with you, and many of those depositors still feel safer switching to bigger banks which have been subject to greater regulatory scrutiny, though the outflow of cash has been slowing following last week’s interventions.”

The cancellation of £14 billion of Credit Suisse’s AT1 bonds also sent shockwaves through the banking sector. These bonds are designed to be converted into shares if a lender encounters monetary difficulties and were therefore considered a relative safe haven.

While Switzerland is the only jurisdiction where bondholders can take the hit ahead of shareholders, the write-off has spooked holders of AT1 debt in other banks. This may lead to a rise in the cost of capital and stricter lending criteria for the wider banking sector.

There are a number of budgets covering the broader monetary sector so that investors have a more diversified portfolio of bank stocks.

These come with the Xtrackers MSCI USA Financials exchange-traded fund, which tracks the MSCI USA Financials index. Alternatively, the actively controlled Janus Henderson Global Financials fund invests in a basket of UK and foreign currency companies.

Looking ahead, it remains to be seen whether recent interventions by the authorities will restore calm to the banking sector or more demanding situations lie ahead.

The collapse of Silicon Valley Bank (SVB) in the U. S. The U. S. currency that matured last week continues to weigh on bank stocks around the world as investors worry about lenders’ monetary fitness, writes Andrew Michael.

Shares of several US regional banks, including Phoenix-based Western Alliance and San Francisco-based First Republic, closed sharply lower on Monday despite comments from US President Joe Biden that his management would do “whatever it takes” for depositors.

Shares in the UK’s largest banks also plunged in London on Monday with Barclays and Standard Chartered falling by more than 6%.

Rob Burgeman, investment manager at RBC Brewin Dolphin, said: “Sentiment has weighed on percentage costs but, considering the current situation, we don’t think UK banks should be classified in the same way. than their American counterparts.

“The regulatory regime in the UK and Europe is far tougher and unlikely to slacken any time soon. This may well, then, be a buying opportunity.”

Earlier in the day (Tuesday), shares of Japan’s largest banks fell sharply as markets reacted to Monday’s sell-off in the U. S. banking sector amid growing uncertainty over interest rates following the collapse of SVB.

Last Friday (March 10), SVB, a bank that dealt primarily with tech startups, acquired through the U. S. Federal Deposit Insurance Corporation (FDIC) the U. S. Securities and Exchange Commission. The U. S. government is focused on maintaining monetary stability.

The move came amid growing concerns that the bank, the 16th-largest U. S. bank by assets, represents a systemic element to the U. S. and global monetary system.

Daniel Cassali, chief investment strategist at Evelyn Partners, says: “SVB’s problems are due to insufficient threat management: “To earn higher returns, SVB has invested its customers’ deposits in long-term bonds, but as interest rates have risen more than 12 months, SVB has invested in long-term bonds. Array: the price of these bonds has fallen. Above all, SVB was unable to cope with this threat, leaving the bank with a significant unrealized loss. “

As concerns grew about SVB’s monetary situation, consumers began withdrawing their cash last Thursday (March 9). SVB sold its maximum liquidity bonds to meet deposit demands, which had a negative effect on the bank’s profits and the price of its capital on its balance sheet.

SVB’s plunge prompted investors to sell U. S. bank stocks last Thursday, and the stock spread across Europe last Friday. Investors remained bearish on banks this week as the fallout from SVB’s collapse becomes better understood.

Yesterday, following government and the Bank of England intervention, HSBC bought SVB’s UK subsidiary for £1, bringing relief to hundreds of tech firms that had warned they faced bankruptcy without help.

Janet Mui, head of market analysis at RBC Brewin Dolphin, said: “Despite the support put in place by the US Federal Reserve. and the UK Treasury, markets remain jittery about the broader effect of SVB’s fallout. Bank stocks are collapsing and investors are rushing to safety.

Will Howlett, equity analyst at Quilter Cheviot, said: “Although the UK government had to negotiate a deal for the UK subsidiary, the SVB incident is a real exception in the US banking sector.

“SVB failed to adequately hedge its dangers, as evidenced by the large proportion of ‘long-duration’ interest rate assets it held that were purchased in the post-Covid ultra-low interest rate era, as well as short-term deposits from venture capital funds. Equity-backed tech corporations almost completely exceed the government’s insurance threshold.

“As such, we do not see systemic issues for banks and this is unlikely to trigger a ‘new’ financial crisis.”

Jack Byerley, deputy IT director at wealth manager WH Ireland, said: “We have warned that excesses in the unprofitable and speculative segments of technology markets would be vulnerable in a world where cash is no longer ‘free’. We have noticed this has been happening in the stock markets for the past 18 months and is now declining in the monetary system as a whole.

Quilter Cheviot’s Howlett said: “That doesn’t mean there isn’t volatility for investors – bank stocks have sold off in recent days following the collapse of SVB. The result may simply be that interest rates are not raised through central banks to the point that some expected.

“This will most likely lead to a reduction in banks’ profits as the net interest margin (the amount they qualify for credit, relative to the rate applied to deposits) shrinks. However, this will lead to a challenge on those banks’ balance sheets and “Conversely, the largest U. S. banks are experiencing an acceleration in deposit inflows as a result of those fallouts. “

Commentators acknowledge that this is a difficult time for U. S. banks. But they add that bank interest rates around the world are likely to stabilize once it becomes clearer that this is an isolated incident and that the categories of the 2008 crisis have been drawn.

The fallout from SVB’s collapse has taken its toll on tech company valuations, with the tech-heavy Nasdaq Hundred Index falling 4% this week.

Baillie Gifford’s Scottish Mortgage Investment Trust suffered an even bigger 6% drop, with its tech holdings SVB, clients Wise and Roblox.

SVB has provided banking services to approximately a portion of all venture capital-backed generation corporations in the United States. SVB’s UK arm had more than 4,000 customers, plus customer review site Trustpilot and software provider Zephyr.

There’s also been a knock-on impact on the larger tech firms, with Meta and Alphabet among the beneficiaries of advertising spend by technology start-ups. 

Alex Campbell, head of communications at Freetrade, comments: “In the wake of this collapse, all eyes are now going to be on the Fed and other central banks. This is especially true for technology firms that have seen their valuations slashed as rates have quickly risen to combat inflation and investors have been forced to rein in growth expectations.” 

However, the generation sector could see some respite, with the option for the Federal Reserve to suspend its interest rate increases, or even reduce them, to repair stability.

Dr Campbell adds: “These stocks would be seen as a significant inflection point and generation stocks promising long-term gains could take advantage of a rally on the back of that subdued acquiescence. “

Major cryptocurrencies have rallied in the days since the collapse of Silicon Valley Bank, the 16th-largest US bank with close ties to the technology start-up sector, at the end of last week.

While bank stocks traded lower on global markets, Bitcoin (BTC) went from around £17,000 on 10 March to around £20,000 today, up 17%. Ethereum (ETH) went from around £1,200 to £1,378, up 14%.

SVB and Signature, a U. S. bank that collapsed over the weekend, have been used through crypto corporations such as Avalanche and Ripple for banknotes between cryptocurrencies and fiat currencies.

The U. S. government’s intervention in SVB deposits has stimulated market confidence.

Stablecoins, which are pegged to fiat currencies such as the dollar and aim to maintain parity with their fiat counterparts, were the first to be hit by SVB’s run.

USDC fell to 88 cents over the weekend, its lowest level in three years. Since then, the stablecoin has returned to a value of $0. 99.

Hargreaves Lansdown is no longer charging fees to hold investments and trade online in its Junior Stocks & Shares ISA (JISA). It has also reduced its platform fee for Lifetime ISAs (LISAs).

It is the latest provider to reduce fees amid a fierce festival between investment platforms to attract investors who make their own investments.

The existing and new JISA will no longer pay platform fees for investments (previously 0. 45% per annum, capped at £45 for shares, investment trusts and exchange-traded funds).

There will also be no dealing fee (saving customers £5.95 per trade) and no foreign exchange fees on trades in overseas investments.

The company has also reduced its annual platform payout on LISA from 0. 45% to 0. 25% (up to £1 million, capped at £45 for shares).

Trading fees remain unchanged between £5. 95 and £11. 95 (depending on trading frequency). LISA helped others under the age of 40 save for their first home.

Clients will pay the fees charged through the underlying investment provider, e. g. Annual fees charged through fund managers.

Ruchir Rodrigues at Hargreaves Lansdown, comments: “We believe saving and investing is for the whole family – across multiple generations. We can see parents and grandparents are withdrawing cash to support their children and grandchildren during these challenging times.

“We also recognize the desire to inspire more young generations to save and invest to improve their monetary resilience. We believe this is the most important fiscal year-end not only in a generation, but also in generations.

“Our changes to our Junior ISA and Lifetime ISAs are the start of creating legacies that will last generations for our children and their children.”

This is worrying for the London Stock Exchange, writes Andrew Michael.

CRH, Europe’s largest construction fabric company, announced last week that it would move its main stock exchange directory from London to New York.

And SoftBank, which owns Arm, the Cambridge-based semiconductor designer whose products can be discovered on Apple’s iPhones, turned down a national directory despite intense pressure from politicians ahead of Arm’s initial public offering.

Russ Mould, chief investment officer at AJ Bell, said: “It deserves to be an honour to be indexed in the UK, but that honour is diminishing.

CRH said its decision to cross the Atlantic later this year was because the company “came to the conclusion that a number one board in the U. S. “The U. S. would provide greater commercial, operational, and acquisition opportunities. “

It says the move will further boost its “successful integrated solutions strategy,” adding that it will lead to “even greater degrees of profitability, profitability and liquidity for our shareholders. “

As noted by the Dublin-based FTSE 100-listed company, it expects the United States to be a key driving force for long-term growth, while North America is responsible for three-quarters of the group’s profits.

Several other companies are thought to be reviewing the merits of using London for a primary listing.

But Victoria Scholar, chief investment officer at Trading Platform Interactive Investor, said it’s not all doom and gloom: “While the media has paid close attention to Arm’s decision not to publish a directory in London and CRH’s move to New York, we are far from seeing a mass exodus from the London market.

“After Brexit, many considerations were expressed about London’s ability to maintain its position as Europe’s leading monetary centre. But so far, the City seems to be holding on. “

That said, Ms Scholar acknowledges that making London a destination for technology companies has been problematic: “One of the biggest challenges for the UK market has been the difficulty in attracting tech giants to undertake IPOs on the London Stock Exchange. New York continues to be the go-to destination for tech behemoths, with the Nasdaq exchange boasting giants like Apple, Amazon and Microsoft.

“Although the FTSE 100 enjoyed relative resilience last year, thanks in part to its dearth of technology stocks, this has long been a complaint and meant the UK large-cap index had not benefited from the gains. “The government had enjoyed the technological boom before 2022. “

“There have also been high-profile tech blunders in London, coupled with Deliveroo’s calamitous IPO and the drop in THG’s percentage price, reinforcing the sense of caution towards the UK among tech corporations deciding where to list. “

In February, it emerged that the oil giant Shell had considered moving the Anglo-Dutch energy group from London to the US, while those who have already taken the plunge include  plumbing group Ferguson and the formerly AIM-listed biotech company Abcam.

In recent weeks, Flutter Entertainment, Sky Bet and Paddy Power, the major Dublin-based and Footsie-listed sports betting corporations, said it was contemplating a new U. S. board. After the good fortune of his U. S. -based sports betting company, he was able to find his way to the U. S. U. S. Fan. Duel.

Separately, Ascential, the FTSE 250 news and events group, said it would spin off its virtual trading and list it in New York.

The main explanation for why companies are increasingly looking to the U. S. market than the London market is the broader investor base and the larger pool of potential investment capital.

However, David Schwimmer, managing director of the London Stock Exchange Group, is unaware of the recent outflows: “We are in the world’s largest foreign monetary centre and we continue to attract capital and corporations that have that kind of external outlook. “. »

Victoria Scholar of Interactive Investor added: “There is no doubt that, in the post-Brexit environment, investors have been nervous about the outlook for the UK market. But the pound’s weakness has investors looking to London, especially for potential mergers and acquisitions. lenses that are more attractively priced in British pounds.

But what are the implications for shareholders if a company they are invested in decides to swap exchanges?

Ms Scholar said: “In practical terms for UK investors, companies can voluntarily de-list. This would mean that investors would have to sell their shares before or after delisting. This doesn’t necessarily affect the price of those shares, depending on the explanation. Why the decision.

UK investors channelled £1.4 billion into investment funds in January 2023, with bond portfolios the big winners as equity funds continued to leak cash, Andrew Michael writes.

The most recent figures from the Investment Association (IA) show that, overall, cash flowed into the investment industry in the first month of this year, ending a 10-month streak of withdrawals.

Against the backdrop of a challenging economic environment and with turbulent markets, UK investors withdrew a record £26 billion from funds during 2022, the first time a net outflow has been reported.

At £1. 6 billion, the AI said the bond budget saw inflows in January 2023, up from £392 million the previous month.

British bonds, corporate bonds and other government bonds dominated the association’s best-selling sectors last month as investors turned to safe, high-quality fixed-rate assets whose functionality was shaken last fall following the government’s contentious mini-budget in September under Liz Truss. and Ki Kwarteng.

At the other end of the spectrum, investors continued to fill their equity funds, which saw withdrawals totalling £913 million in January.

Capital inflows into the North American and Asian equity budget, £363 million and £133 million respectively, were overshadowed by outflows of £1. 4 billion from the UK equity budget and an additional £155 million from European portfolios.

Investors who withdrew their money from the budget exposed to UK equities earlier this year could make their decision.

The FTSE 100 stock index of leading company shares is up by just over 5% in the year to date and the general consensus from a panel of investment experts that spoke to Forbes Advisor UK last month suggested that UK shares were likely to continue rising throughout the course of 2023.

Chris Cummings, executive leader at IA, said: “We can look ahead to a more powerful year for investors with consistent sources of income, with interest rates continuing to rise as we emerge from a low interest rate environment.

“On the other hand, UK stocks experienced the worst capital outflow since January 2022. The negative news circular about the state of the UK economy may have an effect on investor sentiment towards the UK. “

Bosses at some of the UK’s largest businesses are braced for a wave of takeovers this year, as foreign buyers line up to pounce on attractively priced London-listed companies, Andrew Michael writes.

According to research from investment bank Numis Securities, the prospects for merger and acquisition (M&A) activity are likely to strengthen during 2023.

The effects of the bank’s annual M&A survey highlighted increased optimism about deals in the UK and an expectation of outperformance of shares traded in the domestic market.

Last week, it emerged that two UK-listed companies – energy services company Wood Group and events business Hyve – were takeover targets for US private equity firms. 

Last month, Numis surveyed 80 managers of FTSE 250 companies, including leading executives and leading monetary officials, as well as 200 institutional investors, adding up to UK pension funds.

It found that, despite the challenging economic and financial environment for takeover activity, characterised by high inflation, rising interest rates and market volatility, nearly nine-in-10 FTSE 250 directors (88%) viewed UK companies as being vulnerable to takeovers.

An even greater proportion of company bosses – 94% – said they expect to undertake deals themselves this year, an eight percentage point rise compared with this time last year.

Numis said: “The largest proportion of FTSE 250 directors think that domestic corporate buyers will be the source of increased competition, but private equity is seen as a significant secondary source of competition and much more likely than overseas corporates.”

Despite a brighter outlook, Numis said M&A hurdles remain: “Investors have been transparent about the challenging situations dealing with this year – the monetary environment, regulatory adjustments and the economic outlook were the top three. »

In terms of regulation, corporations cited festivals and national security hurdles as the main obstacles to reaching an agreement.

The survey highlights the importance of M&A returns in the overall return of an investment portfolio, with 10% of institutional investors describing M&A returns as “unimportant to their portfolio. “

Investors withdrew £53. 9 billion from the UK’s stocks, bonds, and options investment budget in 2022, writes Andrew Michael.

Including an inflow of £12. 7 billion in money market investments, withdrawals amounted to a record £41. 1 billion for the year.

The UK budget was worth a total of around £2 trillion at the end of 2022, up from £2. 27 trillion last year. This is the first decline since 2018.

The figures come from Refinitiv, the insights provider of the London Stock Exchange. The analyst attributed the exodus to several factors, adding the war in Ukraine, rising inflation and emerging interest rates.

He added that the cash market budget itself experienced withdrawals in the first three quarters of 2022, when “in the fourth quarter the situation changed strongly. “

According to the company, cash “flowed into those vehicles” after the questionable Liz Truss/Kwasi Kwarteng mini-budget in September, with the pensions budget looking for liquidity in an era of market turmoil.

The stock budget saw the biggest outflows last year, at almost £35 billion. In this figure, the UK budget suffered the most, with investors taking more than £23 billion from the UK’s share budget, the UK’s source of revenue and small businesses. and mid-cap budgeting.

By contrast, even at the height of the 2007/08 currency crisis, investors withdrew only £8 billion, a modest amount.

It remains to be seen whether last year’s trend for underappreciated British stocks will continue. The UK stock market has performed quite well since the start of 2023, with the FTSE hundred index of blue-chip companies surpassing the 8,000 mark for the first time. (see article below).

Year-to-date, the index is up nearly 5%, while the FTSE 250 (which represents the UK’s next 250 largest corporations) is up around 3%.

The Financial Conduct Authority (FCA) today launched a consultation on the future of the UK asset management sector to ensure it can innovate and remain competitive following Brexit – with advisers hoping reform will lead to lower charges, writes Jo Thornhill.

The sector, which manages more than £11 trillion in assets, is still covered by EU law. The FCA needs to introduce reforms for the customer experience and help the industry remain competitive on the outside stage.

It is expected to publish its findings and proposals later in the year.

Kevin Doran, managing director of AJ Bell Investments, said: “Today’s publication from the FCA is one of the few birds in the industry for true consultation.

“In the absence of concrete new proposals, the next three months will give the industry time to fly a kite on some of the Brexit dividend proposals. Any opportunity to advance some of the more archaic practices within the industry will have to be seized with either hand.

“I hope we can use this opportunity to make it less difficult for clients to invest, through cost reduction, transparency and making other people feel smart about investing. “

Among the questions in the FCA’s discussion paper is whether rules should be relaxed around investment in ‘tokenised’ assets, such as stablecoin and other cryptocurrencies.

The government is moving forward with the next phase of its plans for crypto assets in the UK and is exploring whether to control crypto asset portfolio activity.

The Treasury and the Bank of England are working to create a virtual currency for the UK’s central bank.

Camille Blackburn, FCA, said: “The UK has the opportunity to update the asset control regime. We need to hear from a wide diversity of voices on how we can apply existing criteria and what we deserve to prioritize for maximum benefits. consumers, businesses, and the global economy as a whole. Comments in reaction to the consultation should be submitted by 22 May 2023 by emailing dp23-2@fca. org. uk or using the online feedback form at the FCA. website.

The UK’s stock market index of leading company shares has broken through the 8,000 level for the first time in its 39-year history, writes Andrew Michael.

The FTSE surpassed this psychologically significant figure in intraday trading as it hit a point of 8,003 before pulling back.

UK share prices have continued to edge up since the start of 2023, buoyed by a strong performance from energy companies – including BP and Shell – and on the back of renewed takeover talk in the banking sector.

The FTSE 100 is the UK’s best-known stock market index and one of the leading signs of corporate performance. Created in 1984, the index is made up of the hundred largest corporations indexed on the main stock market of the London Stock Exchange through capitalization. – is calculated by multiplying the percentage value of a company by the number of outstanding percentages.

Primary oil company Shell is Footsie’s largest company, valued at around £167 billion. Frasers Group, the retailer, is the smallest component, around £4 billion.

Despite a cocktail of economic headwinds, the Footsie’s functionality held up in 2022, generating a modest return for investors of around 4%. This is in contrast to other primary stock market indices, such as the S.

The divergence in performances came about because of the composition of each index, with the FTSE 100 continuing to include a high proportion of so-called ‘old economy’ dividend-paying stocks including those from the oil & gas, commodity and financial sectors.

Businesses operating in these spheres performed well on the back of a number of factors including soaring energy prices and rising interest rates.

John Moore, senior investment manager at RBC Brewin Dolphin, said: “The FTSE 100’s move from a disadvantaged index to new all-time highs shows how temporarily global investing can change. During the Covid-19 pandemic, tech corporations and expansion stocks were hugely in vogue – very few of which feature in London’s main index.

“Now, with inflation persistently high, elevated oil prices and interest rates rising, the consumer staples giants, oil and gas explorers, mining groups, and financials that make up the FTSE 100 are looking at a much more supportive near-term environment.

“It’s a healthy lesson that each and every dog has their day. While the history of the past decade has largely focused on the rise of the tech sector, the stock market, on the hunt for the future, sees 10 very different factors. Years ahead with money generation, resilience, and self-funded expansion will likely offer features for corporations and investors looking to navigate demanding situations and maximize opportunities.

The investment budget value of approximately £20 billion has been flagged as consistently underperforming “dogs” through online investment service Bestinvest, writes Andrew Michael.

The firm identified 44 underperforming funds, worth a combined £19.1 billion. This is an 42% increase in the number of funds in the category compared with the company’s last analysis six months ago. 

However, the figure remains below the 150 funds identified at the beginning of 2021.

Bestinvest’s Spot the Dog research defines a “dog” fund as a fund that fails to outperform its investment benchmark for 3 consecutive 12-month periods, and also underperforms its benchmark by 5% or more over a period of 3 years.

A benchmark is a stock market index such as the UK’s FTSE 100 or the S.

Bestinvest said the sectors with the highest number of “dogs” were those investing in UK stocks: “Assets in the dog budget rose to £8. 4 billion, compared to £5. 5 billion for the sector of all UK companies, and to £3. 1 billion. compared to £2. 1 billion for the UK sector, the source of revenue for the UK equity sector.

He stated that this is contradictory given that 2022 has been far from disastrous for the FTSE’s hundred blue-chip corporations that are mining, resources and finance-oriented.

Explaining the discrepancy, Bestinvest said: “Beyond the giant corporate segment of the UK market, it has been a challenging year for small and mid-cap companies, market segments that tend to be more exposed to the UK domestic economy. “

Bestinvest highlighted the poor showing of three large (£1 billion-plus) funds in particular: Halifax UK Growth; Invesco UK Equity High Income; and St James’s Place International Equity, worth a combined £8.2 billion. 

He describes their collective functionality as “representing a giant portion of the budget investors’ savings who are doing better. “

Other budgets criticized include Hargreaves Lansdown’s £1. 8bn Multi-Manager Special Situations Trust, Scottish Widows UK Growth (£1. 8bn) and Halifax UK Equity Income (£1. 7bn).

Bestinvest described those budgets as “repeat offenders,” adding that “if companies don’t act [to achieve results], investors should. “

Bestinvest also highlighted that Schroders is “the leader of the pack” in terms of which fund teams “earned the most nameplates. ”

He said that although he only has three small budgets under his own name, Schroders also acts as the underlying budget manager for the Scottish Widows and HBOS brands: “This adds seven more budgets to his total assets and an additional £7. 3 billion.

“These funds were performing badly long before Schroders got its hands on them, but investors might have reasonably expected a turnaround by now.”

One of its budget organizations that did respond to the research is Abrdn, with 3 budgets listed, and Invesco with two.

Jason Hollands, CEO of Bestinvest, said: “The aim of this consultant is to inspire investors to check the functionality of their investments and assess whether action needs to be taken.

“Every fund manager will have moments of weakness during their careers: they may have a run of bad luck, or their style and process may be temporarily out of fashion.

“It’s critical to identify whether those points are short-term or structural, so it’s important to ask a few key questions when inventorying a specific fund in your portfolio. “

The FTSE 100, the UK’s blue-chip stock market index, hit an all-time high of 7,906. 58 the previous day, writes Andrew Michael.

The Footsie jumped 84 points, or 1. 1%, surpassing the previous high of 7,903. 50 recorded in May 2018. It fell again to close at 7,901.

According to Marcus Brookes, investment director at Quilter Investors, today’s high is due to a combination of points: “One of the key points is that the FTSE hundred index is made up in part of former energy suppliers and mining corporations that have benefited greatly from the increase in prices, inflation and the energy crisis that occurred after the outbreak of the war in Ukraine.

“This has the index a lot more than some of its tech-trending peers, such as the S

Brookes said the main driver of the FTSE 100’s recent performance has been China’s reopening following the easing of its zero-Covid strategy: “This has led to increased demand for a number of component stocks, which has helped drive the index higher. above”.

Danni Hewson, monetary analyst at AJ Bell, said: “The London Frontline Index is home to some of the world’s largest corporations, and those corporations don’t just make money in the UK. They are well-established, well-funded, and well-positioned to deal with any persistent volatility.

“Generally speaking, the global economy looks brighter and with the reopening of China, huge opportunities are expected to be provided for power companies, mining companies, luxury goods manufacturers and just about any company that runs overseas promotions.

“Shell, Reckitt Benckiser, AstraZeneca and Glencore are the names making the biggest gains today. “

Richard Hunter, head of markets at Interactive Investor, said: “Another explanation for why the FTSE hundred’s most recent appeal is the peak of dividends.

“The index’s average recovery is currently 3. 5%, closer to its longer-term point after the ravages of the pandemic have faded. Over time, this has a significant effect on earnings.

It’s not just the UK’s top basket of corporate stocks that posted eye-catching and consistent results this week. The value of gold in the UK in pounds consistent with the troy ounce peaked (Thursday) with a record high of £1,592, more than £10 more consistently. with past spikes induced by the Covid-19 pandemic, last September’s debatable mini-budget, and the war in Ukraine.

This week, the fourth-quarter 2022 effects of U. S. tech company Meta (which owns Facebook), Apple, Amazon, and Google’s parent company Alphabet, writes Andrew Michael.

Its finances unfolded against the backdrop of interest rate announcements from the Bank of England (the bank rate rose by 3. 5% to 4%) and the US Federal Reserve (a 25 basis point increase to 4. 5%-4. 75%). investors to digest.

U. K. markets rose on Thursday as investors bet that the end of the Bank of England’s financial tightening in a bid to curb soaring inflation is in sight.

U. S. markets also rallied strongly on the news, with the Federal Reserve itself indicating that there may only be two more rate hikes in the current cycle. The enthusiasm was short-lived, however, as profits from major tech companies dampened the good news.

Russ Mould, chief investment officer at AJ Bell, said: “Three big tech corporations – Apple, Alphabet and Amazon – have issued troubling news to varying degrees, and the drop in their respective percentage costs appears to be a definite reaction to the severity of the situation. “

Amazon shares fell the highest — 5. 2% — after Thursday’s close, as its effects contained an indication that demand for cloud computing, which has been the driving force behind the company’s profit-expanding business, may simply wane.

Shares of Alphabet, Google’s parent company, fell 4. 6% after the close. The company makes money through virtual advertising and search and is seen as vulnerable to an economic downturn as companies cut back on promotional spending.

Mould said: “While many don’t believe we’re going to see such a severe recession, the weakening in business confidence has already been enough to reduce spending on virtual advertising. “

Gerrit Smit, portfolio manager at the Stonehage Fleming Global Best Ideas Equity Fund, said: “While Alphabet’s sales remain flat in the fourth quarter of 2022, it is reassuring to see that they are holding their own and outperforming Meta, its main rival. 5%.

“One of the key features is Alphabet’s cloud sales expansion of 32%, outpacing [Microsoft’s] Amazon Web Services and Azure expansion degrees, and halving its losses from last year. Overall, the group’s declining profitability is weighing on earnings lately. , however, it is correcting itself and is bottoming out.

Regarding Apple, the world’s largest company by market capitalization, Mr. Mold said: “The fact that Apple has been experiencing production problems for the iPhone is old news, which may be why its percentage value fell the least, down 3. 2 percent from that year. “Period. Trio of generation companies.

Although the earnings are disappointing, the company has many positives. Production issues have been resolved, and Apple will benefit from a potentially significant tailwind in the coming months thanks to China’s economic reopening.

Regarding Meta, Mold said: “It’s a big positive surprise, as not many other people imagine it would bring smart news. Concerns about online advertising demand, regulatory pressures and developing fears of losing a lot of money in Cash in the metaverse has weighed on Meta’s stock value over the past year.

Meta’s percentages soared after reporting better-than-expected sales, cost-cutting measures and a $40 billion percentage buyback.

UK investors withdrew a record £25. 7 billion from their budget in 2022, the first time an annual outflow has been reported, according to figures from the Investment Association (IA), writes Andrew Michael.

This figure includes £282 million that investors withdrew in total in December alone, the tenth consecutive month that cash has flowed out of the fund business rather than into it.

Bucking the trend in December, the budget for the North American, global and UK gold sectors attracted investor money worth £358m, £237m and £127m respectively.

Prior to the overall poor functionality of 2022, the worst year of the past had been 2008, when, despite the global currency crisis, investors funneled a net amount of money into the fund market.

The IA said that total funds under management across all investment sectors stood at £1.4 trillion at the end of December last year, compared with £1.6 trillion in December 2021.

Two of the worst performing areas of last year came from funds in the UK All Companies and European Ex-UK sectors which, between them, witnessed outflows of around £13 billion.

The follow-through and investment sectors controlled to buck the trend, attracting £11 billion and £5. 4 billion respectively.

Interactive Investor’s Dzmitry Lipski said: “Investors had little selling options to hide last year, with bonds falling along with stocks and a generally difficult year that ended in major political and economic turmoil.

“A new year bounce [in stock market returns] has shown how quickly sentiment can change, and some of last year’s outflows may already be working their way back into markets. There are no guarantees, but history shows us that the best years can often follow the worst.”

Chris Cummings, chief executive of IA, said: “With markets recovering in early 2023 and the outlook for bond investing improving, there are glimmers of hope that investor confidence will increase in the first quarter of 2023. »

The burgeoning market for investment platforms and trading apps aimed at amateur investors has become increasingly crowded with two installations introduced in less than a week, writes Andrew Michael.

METER

According to Mr.

The app then matches consumers to one of six portfolios and an investment account, adding an individual savings account (ISA), general investment account, or pension.

Investment features come with a diversity of “classic” or “specific” portfolios that offer a mix of product types, from exchange-traded funds (ETFs) to a variety of so-called active and passive funds.

Passively controlled budgets, such as ETFs and index trackers, are computer-controlled and subsidized through algorithms to mimic an investment benchmark. Active budgets rely on investment professionals composing a basket of securities to outperform an express stock index.

The minimum investment for &me is £500. Management fees are staggered on a sliding scale, from 0.75% on amounts invested up to £10,000 to 0.35% for sums greater than £500,000. In addition, there is also an investment fund fee ranging from 0.19% of the amount invested in the classic range, to 0.42% for targeted.

METER

In terms of cost, the

For the same investment point, figures from Forbes Advisor UK’s recent survey of investment trading platforms show that AJ Bell would rate £112 per year for its controlled portfolio offering, while the payment for a similar service from Hargreaves Lansdown is £288.

David Montgomery, Managing Director of M

Bestinvest’s free mobile app allows its clients to manage their investments on the go, log in or open an account powered by FaceID or TouchID, as well as transfer to a wide range of ISAs, verify their investments and load cash or set up funds. contributions.

The app consolidates accounts into a single position to help clients control the value and functionality of their holdings. Users can also link their account to their circle of family and friends to help them manage and plan their financial future together.

The app is available on the Apple App Store for iOS and Google Play Store for Android.

On the other hand, the interactive investor investment trading platform has an entry-level addition to its subscription service.

Investor Essentials allows customers to invest up to £30,000 for £4. 99 per month, plus a £5. 99 trading fee for UK and US funds, investment trusts and shares. Once consumers reach this limit, they are transferred to the ‘Investor’ price of the service. plan which costs £9. 99 per month.

UK companies paid inventory dividends of £94. 3 billion in 2022, up from £87. 3 billion a year earlier, according to Link Group, the fund management service, writes Andrew Michael.

Link Group says overall dividends, which cover normal bills and those for special or one-time distributions, rose as much as 8% year-on-year. The underlying bills, the special dividends, rose 16. 5% to £84. 8 billion.

With the exception of domestic utilities and customer commodities, dividend payouts have been higher in almost every business sector over the past year. The weakness of the British pound for much of 2022 gave a new impetus to bills declared in dollars and then exchanged for pounds. pounds sterling at favourable exchange rates.

Link says resurgent banking dividends were the year’s most significant driver, accounting for a quarter of the increase in underlying payouts. There were also major contributions from the mining and oil sectors on the back of booming energy prices.

But Link adds that mining stocks reached an “inflection point” in 2022: “In the second half of the year, lower prices of several commodities began to affect dividends, causing them to fall by as much as a fifth. “

Link predicts dividends will grow more slowly this year as emerging interest rates on debt weigh more heavily on corporate earnings.

Total bills are estimated to fall by 2. 8% in 2023, equating to a year-end figure of £91. 7 billion. Taking into account one-time invoices and normal dividend invoices, Link estimates that UK-listed corporations will have a 3. 7% pullback for the next 12 months.

Ian Stokes, of Link Group, said: “The economic sky is decidedly darker in the UK and around the world than it was at this time last year.

“Trade margins in peak sectors are already under pressure due to higher inflation and tight household budgets. Rising interest rates are undermining profits by also raising debt-servicing costs. This will leave less cash for dividends and percentage buybacks in many sectors. “

UK investors invested a record amount in venture capital firms (VAPs) last year, according to government figures, writes Andrew Michael.

VCTs, which invest in private companies, raised £1.122 billion in the tax year 2021-2022, which was 68% more than the previous year.

Introduced in 1995, VDCs are a government-backed program designed to stimulate entrepreneurial activity by encouraging investment in small businesses that need funding for the next stage.

Alex Davies, CEO and founder of broker VCT Wealth Club, said: “PAVs are making their mark in the mainstream. Despite the economic uncertainty, demand for TDC in the current fiscal year is also holding up and we expect it to be something else out of the country.

VCTs raise funds, usually annually, through new and/or top-up share issues. As they invest in early-stage, high-risk companies, investors receive tax breaks to compensate for the increased risk they take on.

Tax benefits include up to 30% early tax relief if the stock is held for five years, no capital gains taxes on growth, and tax-free dividends.

In his autumn speech last November, Chancellor of the Exchequer Jeremy Hunt said he would make good on the promise made by his predecessor, Kwasi Kwarteng, in his September mini-budget to extend the TDC scheme beyond 2025.

Currently, individual investors can invest up to £200,000 per year in a VCT. According to official figures, the average amount invested by Americans for the 2020-2021 financial year (the most recent figure available) is around £33,000.

The government said the amount of budget raised through VDCs has been on an upward trend in recent years and has more than doubled since the 2009-2010 fiscal year. The number of PAVs that increased the budget in the last fiscal year increased from 40 to 46 in the last fiscal year. Period 2020-21.

Bitcoin’s 10-year period to the end of last year is 40 times longer than the next best-performing investment, although the cryptocurrency’s price plummeted nearly two-thirds in 2022, writes Andrew Michael.

AJ Bell’s Investor Strategy League calculated the returns across 27 different types of investment going back over a decade, from stock market indices to property and commodities. See table below.

Despite a 60% price drop last year, the investment platform said that Bitcoin, the world’s most famous cryptocurrency, still managed to increase in value by 162,981% over the past decade to the end of 2022.

In cash terms, a £1,000 investment struck and held on Bitcoin from the beginning of 2012 to the end of last year would have been worth just over £1.6 million.

AJ Bell said the second best performing sector is the global generation budget sector, which returned 466% over the same period.

At the other end of the scale, AJ Bell said investing in UK bonds, which are part of a broader asset class also known as bonds or constant income, has produced a pullback of just 3. 1% over the entire decade. The worst performer over the past 10 years is cash-based individual savings accounts (ISAs), with a 12% return.

In terms of short-term returns, last year the so-called “bargain hunter” methods emerged as the most sensible, with a 16% decline on the year. A bargain hunting strategy invests in the worst-performing sector of the past. 12 months, switching to the new sector at the beginning of the year.

Laith Khalaf, head of investment research at AJ Bell, said: “There is a sharp sell-off in the riskier spaces in the market in 2022, but that hasn’t brought down risk-hungry methods when they look for functionality in the market. “beyond the decade.

“Low-risk safe havens have not served investors particularly well over a 10-year horizon. A typical cash ISA has returned just 12%, and an investment in UK government bonds has returned just 3%, compared with consumer price inflation over the same period of 30%.”

Sportswear retailer JD Sports has been named the market analysts’ best-loved FTSE 100 stock of 2022 based on the number of ‘buy, ‘sell’ and ‘hold’ notes issued to those monitoring its shares, Andrew Michael writes.  

Research from Brewin Dolphin shows that the firm attracted 14 ‘buy’ and 13 ‘hold’ notes from stock market analysts over the course of last year, with just one recommendation that its stock should be sold.

The percentage value of JD Sports fell from 195 pence at the start of 2022 to 90 pence in mid-October before recovering to close the year at 138 pence.

It tops Brewin Dolphin’s study for the second year in a row, ahead of Prudential, the Asia-focused insurance company whose percentage value has risen 50% from its October 2022 low, with corrugated packaging company Smurfit Kappa in third place.

Resources and energy teams Shell, Centrica, Glencore and Endeavor Mining were also in the top 10 thanks to persistent rise in commodity prices.

Brewin Dolphin said the 100 FTSE stocks least favoured by analysts included Rolls-Royce as well as a number of retailers, and added Kingfisher, owner of DIY chain B.

At the bottom of the list is the investment group, which racked up nine ‘sell’ recommendations in 2022 and was temporarily demoted from the UK’s Smartest Companies list before rejoining before the end of the year.

Rob Burgeman, senior investment manager at RBC Brewin Dolphin, said: “The most and least loved FTSE 100 stocks have changed dramatically since the beginning of 2022, when the likes of Hikma Pharmaceuticals, housebuilder Taylor Wimpey, and Vodafone were among the highest rated. 

“In fact, Hikma is the most sensible and has since been relegated to the FTSE 250, highlighting the importance of making pro-monetary recommendations before making vital investment decisions.

“JD Sports’ continued standing among analysts is curious, as customer spending is expected to see a sharp decline. That said, this is already largely priced into share value and there is a much more positive view of the long-term of JD Sports. Forward-term perspectives.

UK investors added £389 million to investment funds in November 2022, the first time since the preceding April that money flowed into collective vehicles such as OEICs and unit trusts, rather than exiting the sector, writes Andrew Michael.

Despite the change in fortune for funds overall, the Investment Association (IA) warned that the outlook remains challenging.

In September last year, investors pulled a record £7. 5 billion out of their budget amid market turmoil and economic uncertainty.

According to the AI, the best-selling fund sectors in November were North America, which posted retail sales of £1. 3 billion, followed by corporate bonds (£720 million), corporate bonds of £238 million and global inflation-linked bonds (£205 million). ) and Managed Volatility (£149 million).

The IA said: “Positive knowledge of inflation in the U. S. it has boosted market expectations that, on the other side of the Atlantic, the green shoots of recovery are emerging. “

The presence of several sectors of steady sources of income on the most recent list of top popular buys also suggests that investors rediscovered the appetite for bonds last fall when interest rate hikes, both at home and abroad, began to take effect and help curb inflation. specifically in the To US.

Rising inflation can hurt bondholders by eroding the purchasing power of the constant bills that investors get from their holdings, and also by reducing the price of bonds. The opposite is true when inflation falls.

The accumulation of money flows in North America’s steady-source income sectors last November contrasts sharply with the budget invested in UK and European equities, which saw a combined net outflow of nearly £2 billion.

Share-exposed budget investors dumped more than £6bn of holdings last year, according to the latest buying and selling insight from the Calastone global budget network, writes Andrew Michael.

The company’s Fund Flow Index showed that, overall, equity funds leaked £6.29 billion during 2022, the worst figure in eight years. Three-quarters of the money that flowed out from the sector did so during the third quarter, a period that coincided with extreme market turbulence.

Calastone reported that investors took particularly evasive action in relation to UK-focused funds. Net sales of holdings – that is, outflows of money – were recorded in the sector during every month of 2022, with the overall amount, including non-equity funds, totalling nearly £8.4 billion for the year.

Elsewhere, investors also sold the European budget to the £2. 6 billion song in 2022, the fourth consecutive year of net sales in this area. Other sectors that posted net losses at the time were North America (£1. 2 billion) and Asia-Pacific (£1 billion).

The Fund Flow Index showed that last year was also a bad one for so-called ‘passive’ index tracker funds, with the sector experiencing net sales of £4.5 billion.

Instead, the global budget – whose portfolios are invested in geographical areas – continued to attract capital.

Calastone said investors added nearly £5 billion to the sector last year, thanks mainly to the appeal of global funds that incorporated an environmental, social and governance – or ESG – investment mandate.

The emerging market budget also benefited from net inflows of £650 million.

Despite a seismic year in bond markets, the steady source of income sector also saw net cash inflows of £2. 9 billion, well below some of the £7 billion of investor liquidity that came into the bond budget in 2021.

Edward Glyn, Head of Global Markets at Calastone, said: “2022 has been a memorable one. Central banks’ shift from an inflow of reasonable liquidity and cash to a series of rate hikes aimed at taming rising inflation has rattled asset markets.

“These gigantic exits from the equity budget in 2022 without corresponding accumulation in other asset classes are a very significant vote of no confidence. Fund control teams have faced a double whammy. The source of capital has declined as bond and stock markets have fallen, and the replacement rate has declined or reversed as investors slowed their purchases or fled for liquidity protection.

Investors have embarked on their quest to make money in 2022, according to data from the most purchased funds from three major investment platforms, writes Jo Groves.

On the most sensible shopping lists were the overall budget, the budget budget, and the valuable metals budget. Conservative budgets were also a popular choice as investors sought a safe haven from falling stock markets.

Below, we’ve compiled a list of the 10 most sensible budgets purchased in 2022 through clients of investment platforms AJ Bell, Bestinvest, and Hargreaves Lansdown:

So where’s investors’ cash amid economic uncertainty and stock market volatility?Let’s take a look at some of the key investment themes of 2022.

First, there are budget budgets that offer out-of-the-box portfolios for investors who need a more hands-on approach. These budgets are allocated based on threat (from cautious to adventurous) and invested in a mix of budgets spread across other asset categories such as stocks, bonds, and commodities.

After delivering some impressive gains over the previous three years, the global fund sector hit the buffers last year, falling by 11% (according to Trustnet). As a result, investors were able to buy global funds at depressed prices in 2022, hoping for longer-term upside when stock markets recover.

Steel prices were also a popular choice. Gold, in particular, is seen as a hedge against high inflation and a possible sanctuary in the event of a stock market crash. Gold investors have enjoyed 15% of its value over the last year. , while the value of silver has n 17%.

The war between the active and passive budget also looks set to continue. Investors: The Recovery in U. S. Stock MarketsU. S. , Budget S tracker

Finally, what budget has been bought to the maximum on the platforms?

Top of the list was Scottish Mortgage Investment Trust, which made the top four on two of the investing platforms. Managed by Baillie Gifford, it focuses on entrepreneurial growth companies and over 50% of the fund is invested in the US.

The fund is likely to appeal to investors willing to tolerate volatility in pursuit of higher returns. 

The fund had a stellar 2020, achieving a 110% return, before losing over 45% of its value in 2022. 

Fundsmith Equity, controlled by veteran manager Terry Smith, was also popular with investors. Invest in a concentrated portfolio of global equities, with a preference for the U. S. and the consumer, healthcare, and generation sectors.

However, its functionality has also been mixed, providing a 62% pullback in the first quartile in five years, but a 14% loss in the third quartile in 2022, according to Trustnet.

Home REIT, the asset investment trust valued at £1. 2 billion, has been forced to suspend its shares after missing a deadline to publish its annual report in accordance with UK monetary rules, writes Andrew Michael.

The investment firm, which budgets for the acquisition and creation of homes to provide housing for homeless people, has been in litigation for two months with the short-term operator Viceroy Research, which last November published a report that included a series of claims against the company.

These included allegations, which Home REIT denies, of inflated real estate values and conflicts of interest with developers. But the report shows a drop in percentage value, from more than 80 pence in November 2022 to almost 37 pence now, which generated confidence in the FTSE. The 250 index plummets.

In addition, those claims led BDO, the auditor of Home REIT, to redo its work on the company’s accounts and delay the publication of its annual report.

This caused the investment to be accepted as true in violation of the Financial Conduct Authority’s disclosure and transparency rules, which require the suspension of trading in its shares.

The rules say that a company has to publish its annual report within four months from the end of its financial year. Home REIT’s financial year ended on 31 August, giving it a deadline of new year’s eve to complete the task, or fall foul of the regulations.

In a communication to the London Stock Exchange, Home REIT said: “The Company intends to apply for the relisting of its ordinary shares following the release of 2022 results, which the Company expects to publish as soon as possible.

“While the company awaits the completion of BDO’s enhanced audit procedures, the company will continue with the previously announced steps to maintain and enhance shareholder confidence, while maintaining its ordinary course operations to provide high-quality housing for some of the most vulnerable people in society.”

Oli Creasey, equity research analyst at Quilter Cheviot, said: “In principle, this is a technical breach of rules, and one that should be able to be remedied fairly quickly. We would expect that the results will be published in January 2023, and trading in the shares to resume promptly after that.

“The reaction to the full year results, when it comes, is going to be highly dependent on the auditor’s statement, as well as the REIT management’s response to the allegations. For once, analysts will not be focusing on the financial data. Home REIT has already offered a rebuttal to the report but will likely need to provide investors with further detail to shore up confidence in the company.”

Twitter users have decreed that Elon Musk, the company’s top executive, deserves to resign from his position after holding a vote on his company’s fate on the social microblogging platform, writes Andrew Michael.

The billionaire entrepreneur, who also runs electric carmaker Tesla and air transport maker SpaceX, bought Twitter for 36 billion pounds ($44 billion) in October, stripping the company of its value.

Yesterday (Sunday), shortly after attending the World Cup final in Qatar, Musk announced a “yes” or “no” ballot on Twitter asking his 122 million fans if he was stepping down as the company’s director.

“I will respect the effects of the election,” he tweeted.

Of the 17. 5 million Twitter accounts that voted, more than a portion (57. 5%) called for Musk’s resignation, while the rest (42. 5%) said he would stay.

It remains unclear whether Mr Musk will honour his decision. An hour after the result of the poll appeared on Twitter, he tweeted: “As the saying goes, be careful what you wish for”. 

Anyway, he would own the company.

Reacting to the poll, Changpeng Zhao, head of cryptocurrency platform Binance (which has 8 million followers on Twitter), tweeted at Mr. Musk to resign, urging him to “stay the course. “

Last month, Musk told a Delaware judge that he plans to reduce his time at Twitter and eventually find someone else to run the company.

Since Musk took the helm of the company in October, many questionable decisions have been made. About some of the company’s staff has been laid off, while an attempt to implement Twitter’s paid verification feature was put on hold before being reactivated last week.

Musk has also been criticized for his company’s content moderation and has been condemned by both the United Nations and the European Union for suspensions the company has imposed on journalists over their coverage of the company.

Tesla’s stock value has fallen dramatically over the course of 2022 (down 60% year-to-date compared to the industry to just over $148 in recent times) and Musk’s critics claim his fear of Twitter is damaging the electric carmaker’s brand.

Russ Mould, investment director at AJ Bell, said: “Given how much of a distraction Mr Musk’s tenure at Twitter has become, shareholders in the electric vehicle manufacturer will be breathing a big sigh of relief if he steps back from Twitter and gets back to the day job at Tesla.

“For someone who values the ethics of painting so much, Mr. Musk spends a lot of time on social media. With Tesla’s stock falling more than a quarter of the year to date, it wants to roll up its sleeves and get its core business back. Back on the road.

Private investors believe that the risk of recession, both at home and abroad, will be the maximum significant risk to stock markets in 2023, according to investment platform Interactive Investor (ii), writes Andrew Michael.

This view is shared by pro-investment company executives, many of whom believe that slowing corporate profits and threats of recession are more of a fear than inflation in the coming year.

The past 12 months have been turbulent for equity investors, with faltering markets amid severe economic headwinds, compounded by skyrocketing inflation, emerging interest rates and growing recession clouds.

The functionality of the stock market was also affected by bottlenecks in the global supply chain and Russia’s invasion of Ukraine.

The majority of personal investors (54%) said the uncertainty surrounding the economic outlook meant they wouldn’t be making investments in the coming months, either because they didn’t know how to reorganize their portfolios more productively or because they didn’t know. I plan to make some changes.

Investors also said they were torn between wanting to achieve an expansion of investments or methods of maintaining existing capital over the next year.

One in ten investors say they are concerned about the fiscal power of investments. One of the most likely reasons is the decision, revealed in last month’s fall publication, to especially reduce capital gains tax and dividend deductions from the new fiscal year in April.

According to ii, of the investors who are taking the plunge lately, a portion (50%) decide to invest in the United Kingdom, followed by the United States (20%). The company claims that domestic stocks are favored by investors thanks to an idea. known as “national bias,” which makes it less difficult to locate and perceive the corporations closest to home.

From the perspective of investment professionals, a survey conducted through the Association of Investment Firms (AIC) found that more than a portion (61%) of managers at member investment firms believed inflation had already peaked. A quarter (25%) told AIC that they still thought it was conceivable that costs would rise further.

Managers told the AIC that their greatest fears going forward involve a slowdown in corporate earnings and the prospect of recession.

More than a quarter (28%) of executives cited energy as the industry to target in 2023, followed by IT (21%) and healthcare (11%).

Lee Wild, ii’s head of equity strategy, said: “While we don’t know exactly what will happen next year, we do know that the UK economy will most likely spend at least some of that money in recession. So far the biggest concern.

“A fifth of investors are investing more in the U. S. , where exposure is mainly focused on growth stocks such as the generation sector. Technology had a torrid era in 2022, but it definitely reacted to any hint that the U. S. rate hike cycle. Slowing down. If rates peak soon or even start falling later in the year, expansion stocks will pick up again. “

Evy Hambro, co-head of the BlackRock World Mining Trust, said: “This year, we have noticed a growing acceptance that the transition to a low-carbon transition will simply take place without mining corporations offering the necessary fabrics for technologies such as wind turbines, solar panels and electric vehicles.

“The desire to scale up these technologies has increased over the past 12 months, as governments, especially in Europe, have pledged to rely on energy imports from Russia. “

Fund managers actively investing in UK stocks had “a dismal year” in 2022, according to a study by AJ Bell, writes Andrew Michael.

This year, the investment platform’s Manager report, unlike Machine, calls “actively managed” funds, i. e. those made up of stocks selected through investment managers based on region, asset class or sector, with the aim of outperforming an express benchmark. such as an inventory index.

Unlike active budgeting, so-called “passive” investments, such as indexed budgeting or exchange-traded budgeting, are only designed to copy the functionality of stock market indices and other benchmarks, in order to outperform them.

AJ Bell said a quarter (27%) of the active budget was controlled to outpace a passive option this year. Nearly a third of the active budget achieved the feat in 2021.

The company added that active budgeting functionality has advanced over the long term, with more than a third of portfolios (39%) outperforming liabilities over a 10-year period, but added: “This is still far less than a portion and this figure will be flattered by a “survival bias,” in the sense that underperforming budgets tend to close or merge with others over time.

The report analysed the active budget in seven equity sectors and their functionality with respect to that of the average passive fund in the same sector. The company said this technique provides a “real-world comparison, reflecting the choice retail investors face between active and passive budgeting. “”

The proportion of active budget that exceeds the average passive fund is as follows:

Laith Khalaf, head of investment research at AJ Bell, said: “2022 has been a terrible year for active equity funds, especially those trading UK shares.

“In a year when equity markets have weakened, active managers were hoping to outperform follow-on budgets that simply passively follow the index. But our most recent report shows that those hopes have been dashed.

“When choosing active managers, investors want to tip the scales in their favor by conducting studies on managers with a proven track record of outperforming. This doesn’t guarantee the future, but if an individual active manager has outperformed over a long period of time, it suggests that they are competent and not just lucky.

From London to Aberdeen and Cardiff to Manchester, electric carmaker Tesla tops the rankings for the largest share buys among UK retail investors, according to the latest figures from Freetrade, writes Jo Groves.

The trading platform’s retail investment map in Britain processed more than six million buy orders worth about £2 billion to see what shares its investors were buying.

Sensible maximum buys of 10 percent by investors founded in 10 U. K. cities showed that the electric car giant, whose boss Elon Musk recently paid $44 billion for the social network Twitter, is the most popular exchange in 8 places and the moment in the other pair.

Freetrade’s analysis showed that Londoners, Mancunians, Liverpudlians and Glaswegians were the most avid investors in technology companies, with Alphabet, Apple, Amazon and Meta accounting for half of their share purchases. 

Elsewhere, the effects showed that other people in Cardiff, Brighton and Northern Ireland were willing to include AMC and Gamestop on their shopping lists.

AMC and Gamestop made headlines in 2021 when, as part of the so-called “meme stock” revolution, personal investors on social trading platforms coordinated their buying activities to increase the percentage costs of corporations that were heavily shorted through institutional investors.

Other effects included:

Despite its national affection for Tesla, investors tend to have a more regional preference for other companies.

Dan Lane, senior analyst at Freetrade, said: “Greggs topped the top 50 in Newcastle, but he didn’t even make the top three hundred in London. » Dispelling the popular football myth that there are more Manchester United fans in London than in Manchester, the club’s moves were 4 times more popular in Manchester than in the capital. The company also accounted for 1% of all money invested in Mancunian stocks in 2022.

The UK regulator has proposed major reforms aimed at reducing the rate of financial advice for millions of people with “basic needs”.

The Financial Conduct Authority (FCA) says its proposals would create a separate and simplified recommendation regime, making it less difficult and less expensive for businesses to advise consumers on investing in shares and individual savings accounts (ISAs).

According to a study by the FCA, 4. 2 million people in the UK have more than £10,000 in cash and say they are willing to invest some of their savings.

Research from Paragon Bank shows that deposits in savings accounts reached £1 trillion for the first time in September, £25 billion more than in the same month in 2021.

Paragon has more than £428 billion in “easily accessible” savings accounts that pay less than 0. 5% interest, and £142 billion is held in accounts that pay 0. 25% or less.

The FCA says: “While holding a reserve of money is a smart way to cope with unforeseen expenses, consumers with gigantic amounts of excess money can damage their monetary position as inflation reduces that of their savings.

“Changing the existing framework could help mass-market consulting clients with simpler needs. “

The FCA recommends that in-person financial advice should be too expensive for potential investors, “as it could prevent them from making an investment when it might be in their interest to do so. “

Their plans involve reducing the qualification point required for corporations wishing to advise on products such as stocks and shares ISAs. It also requires that fees be paid in installments so consumers don’t have to deal with giant bills up front.

Chris Hill, director of investment platform Hargreaves Lansdown, said: “We have the FCA’s resolve to simplify making an investment and it’s wonderful that the FCA recognises that the existing all-or-nothing recommendation technique is rarely suitable for everyone, i. e. those with sufficient savings who are embarking on their investment journey. The proposal deserves help limiting features for those who need to invest but don’t know where to start.

Richard Wilson of Interactive Investor said: “This is a watershed moment in the UK. This will determine whether we can begin to replace the narrative around monetary well-being in the long run.

According to the Alliance Trust, men are much more likely than women to invest in stocks, but they are also more likely to exit their investments more quickly when market turbulence occurs, writes Andrew Michael.

Research carried out for the investment firm showed that around one in three UK men (30%) have an Individual Savings Account (ISA), compared to one in six women (16%).

The trend continues in other investment products: one in six men (17%) report having a general investment account, compared to one in 10 women (10%).

An inventory and inventory ISA is a tax-advantaged savings scheme that allows its holder to invest up to £20,000 in inventories during the tax year, while protecting them from source of income tax, capital gains tax (CGT) and dividend tax.

A general investment account is a product that allows its holder to make investments outdoors from tax envelopes such as ISAs.

According to the study, women are much more likely than men to remain calm in the face of market volatility.

Alliance Trust found that nearly half of male investors (48%) said they had sold investments when they went down in value in a bid to avoid losing more money. This compared with just over a third of women (38%) who were less likely to have ‘crystallised’ a loss during a market dip.

Mark Atkinson, Chief Marketing Officer at Alliance Trust, said: “Although they are less likely to invest, women are proving to be bigger investors. Their behavior implies a sound long-term investment strategy, without knee-jerk reactions or impatience. “Decisions. This will most likely lead to a much higher monetary return.

“The past few weeks have seen even more chaos in the markets, and dramatic headlines could lead to a crisis of confidence among investors. Staying calm is key. Investment is the one that stays quiet for as long as possible. Patience will pay it off. “

The Financial Conduct Authority (FCA) warns providers of percentage trading apps to review “gambling-like” elements in their offerings, lest they mislead investors or inspire them to take risks and lose money, writes Andrew Michael.

These types of apps, available on smartphones and tablets, are becoming increasingly popular, especially among those under the age of 40.

In the first 4 months of 2021, the FCA said 1. 15 million accounts were opened with 4 trading apps, roughly double the number opened with all other retail investments combined.

The regulator says the “gamification” of commercial apps, such as removing common user notifications and removing celebratory messages at the end of an industry, can lead to poor outcomes for consumers.

It states that “consumer apps with those kinds of features were more likely to invest in products beyond their appetite for threats. “

The FCA has produced studies that raise considerations that customers who trade apps are exposed to high-risk investments, with some demonstrating more common behaviour among challenge players.

To ensure consumers are treated fairly, the regulator says all corporations review their products to make sure they are fit for purpose.

Next year will see the introduction by the FCA of the Consumer Duty, which tells firms to design services enabling consumers to make “effective, timely and properly informed decisions about financial products and services”.

Sarah Pritchard, the FCA’s executive director of markets, said: “Some product design features could be contributing to problematic, even gambling-like, investor behaviour. We expect all firms that offer stock trading to consumers to review and, where appropriate, make improvements to their products.

“They should also ensure they are providing support to their customers, particularly those in vulnerable circumstances or those showing signs of problem gambling behaviour.”

Jeremy Hunt, Chancellor of the Exchequer, announced adjustments to Capital Gains Tax (CGT) and Dividend Tax as a component of today’s Autumn StatementArray, writes Andrew Michael.

This measure will most likely aim to generate interest on individual savings accounts, which can be used to protect savings and investments from taxation.

The CGT applies to sales of shares, temporary homes and other assets. For taxpayers with a fundamental rate, the CGT rate is decided through the magnitude of the gain, the taxable source of income levels, and whether the gain comes from residential or other assets. assets.

Taxpayers with higher and higher rates are subject to a CGT at the rate of 28% on capital gains earned on the sale of residential real estate and 20% on capital gains earned on other taxable assets.

Hunt said the CGT’s existing annual tax-free allowance of £12,300 will be reduced to £6,000 from the start of the new financial year in April 2023. The amount will be halved again, to £3,000, in April 2024.

The majority of CGT that is paid to the government comes from a small number of tax payers who make large gains.

However, Chris Springett, tax partner at Evelyn Partners, said: “The halving of the allowance increases the burden on investors and property owners at the other end of the CGT spectrum – those who have made relatively modest gains but are nevertheless drawn across a much-reduced threshold.

“These taxpayers may have to file tax returns for the first time to declare their capital gains, which will be a new administrative headache. “

Today’s announcement through Mr Hunt strengthens the case for holding investments in envelopes, such as individual savings accounts (ISAs), which are exempt from CGT.

Springett said this is also a reminder to use the benefits as successfully as possible: “In terms of reducing exposure to CGT, married couples and those in a civil marriage can transfer assets to each other, which is known as a marital move, to use together. . allowances, in addition to passing on a potential gain to the spouse who would possibly be exposed to a lower tax bracket.

Dividend tax is a tax paid by shareholders on dividends they receive from companies. Dividends are payments made by companies, usually yearly or half-yearly, that come from profits they have generated.

The existing annual dividend allowance, the amount a recipient can get from the year’s dividends before paying tax, is £2,000. Mr Hunt said he would halve it, to £1,000, from the new financial year next April, and then halve it again, to £500. starting April 2024.

The amount a shareholder pays in dividend tax depends on his or her income tax band. Basic rate tax payers are charged at a rate of 8.75%. The figure jumps to 33.75% for higher rate taxpayers and 39.35% for additional rate tax payers.

Chris Springett, of Evelyn Partners, said: “The annual tax-free dividend allowance has been reduced from £5,000 in 2017/18 to just £2,000 lately, and will be reduced from April to a limited amount of £1,000 and then to a very restrictive figure of £1,000,500 in 2023/24. Combined with the 1. 25% increase in the dividend tax rate introduced in April 2022, this constitutes a real crackdown on dividends.

“This is a blow to investors who hold assets outside of ISAs and to retirees who rely on the dividend income source to supplement their pensions. This is yet another reminder to use ISA allocations as a tax-free umbrella to hold investments.

“Business owners will also be affected, many of whom receive partial or mainly dividends instead of salaries. “

Stock trading platform eToro has struck a deal that allows millions of retail investors to have a say in how the corporations they invest in are managed, writes Andrew Michael.

The so-called “social investment network” has partnered with Broadridge Financial Solutions to offer proxy voting to its 30 million consumers worldwide. In the UK, eToro has over 3 million registered users.

Proxy voting shareholders can weigh in at a company’s Annual General Meeting (AGM) on key facets of a company’s strategy or how an organization is run.

eToro says its clients will participate in general meetings by casting flexible proxy votes that are managed and supported through Broadridge, a service provider that specializes in this area.

eToro adds that the option will increase the reach of its investors who own fractional shares, allowing all of its clients to vote “on issues such as mergers, executive redemptions, and environmental, social, and governance [ESG] proposals. “

Rival exchanges, including Hargreaves Lansdown, AJ Bell and Interactive Investor, already offer similar voting to their users.

Once dismissed as a virtuous concept that potentially compromised portfolio returns, ESG investing has moved centre-stage within the global investing arena in recent years.

For younger investors in particular investing with a conscience has become an important consideration, often driven by major issues of the day – from climate change to general corporate behaviour.

eToro says that votes submitted through its investors will be aggregated and shared with the relevant company.

A global survey of 10,000 retail investors carried out by the platform found that nearly three-quarters (73%) wanted to vote in AGMs. According to the research, younger investors were the keenest to have their say with 80% of 18-34-year-olds saying they would vote in AGMs given the chance compared with 65% of over-55s.

When asked what corporate issues they would most like to vote on, dividends (the annual distributions paid through some corporations to shareholders out of their profits) came in first, followed by executive pay and then climate strategy.

Proxy voting for stocks listed on US exchanges will go live on the eToro platform later this month, followed by voting for shares on other global exchanges.

Yoni Assia, CEO and co-founder of eToro, said: “Retail investors haven’t gotten the platform, voice and help they deserve, but this is quickly becoming a reality. Retail investors’ access to proxy voting is a very important step in this journey.

“There is clearly a huge appetite among retail investors to participate in AGMs and we look forward to seeing how clients engage with this new feature.”

According to a study by the Association of Investment Firms (AIC), the vast majority of financial professionals are unwilling to fully invest in the sustainability claims of funds.

Sustainable investing, also known as social investing, is a procedure that integrates environmental, social, and governance (ESG) aspects into investment decisions.

Making ESG investments, once dismissed as a virtuous concept that could jeopardize portfolio returns, has a central component to the global investment scene in recent years. As a theme, it is particularly popular among younger investors.

In theory, corporations that actively replace positively across various ESG metrics – such as how they run their businesses or treat their workers – will rank higher on a fund manager’s “buy” list than their rivals.

The AIC asked wealth control and monetary advisory firms to rate their point of confidence in the sustainability of ESG claims made through the investment budget on a scale of 1 to 5.

Out of a universe of 91 wealth managers and 109 money advisors, 1% responded with a rating of “5”, indicating they had complete confidence in the providers’ claims. The majority (56%) gave them a rating of “3. ” suggesting they had “limited confidence” in the promises made.

The findings coincide with the announcement that the U. K. ‘s monetary watchdog, the Financial Conduct Authority, is proposing a new set of regulations to prevent consumers from being misled by exaggerated claims about supposedly environmentally friendly investments (see Oct. 25 article below).

In an effort to tackle greenwashing – where unsubstantiated claims are made to lie to consumers into believing that a company’s products are more environmentally friendly than they are – the FCA recently proposed a package of measures and restrictions.

These come with sustainability labels for investment products and restrictions on how terms like “ESG,” “sustainable,” and “green” are used.

Despite the skepticism surrounding ESG claims, financial professionals told AIC that they continue to support making ESG investments in general. More than three-quarters of companies surveyed (79%) agree that “investments deserve to have a positive effect to the greatest extent possible. “as well as a monetary return. “

Nick Britton, AIC’s Head of Interim Communications, said: “Advisors and wealth managers are overwhelmingly in agreement with ESG and sustainable investing, but they are also acutely aware of the dangers of greenwashing, with only 1 in 100 people fully trusting AIC’s ESG criteria. claims. funds. “

“ESG investing has faced a real typhoon this year, which has obviously affected functionality and threatened expectations. Market declines, emerging inflation, and the war in Ukraine have made many advisors and wealth managers more reluctant to invest in sustainable budgets in the short term. In the long term, they still expect demand for ESG investments in general to increase over the next 12 months.

Elon Musk’s bitter months-long takeover of Twitter is now over, with the Tesla boss paying more than £38bn ($44bn) to snap up the social media microblogging site, writes Kevin Pratt .

Musk posted a tweet that said “the bird is free,” indicating that he now owns the platform.

Reports indicate that he has dismissed a number of senior executives, including Parag Agrawal, CEO. He is also expected to dismiss a significant proportion of Twitter’s 9,000 staff.

Musk is also expected to replace the way Twitter operates in his pursuit of what he has called “absolute freedom of speech. “This would possibly come with updating the site’s algorithm, reducing moderation activity, allowing users to edit their tweets, and lifting bans on questionable figures such as former U. S. President Donald Trump, who was banned from the site last year.

It’s possible that further advancements will expand Twitter’s success so that the app becomes a flexible life control tool, allowing for a variety of administrative functions.

In a message to Twitter advertisers yesterday, Musk said his pursuit of relaxed discourse would not mean the site would become a “hellscape where anything can be said without consequence. “

Musk analysts will need continued support from advertisers, as the price he paid for Twitter represents a significant premium to its true market value.

At the close of trading on Thursday, Twitter shares were valued at just over £46 ($53). The New York Stock Exchange, where the shares are listed, issued a notice that the suspension of trading in the shares is “pending before the market. “opens later at 9:30 a. m. U. S. Airport(2:30 p. m. in the United Kingdom).

According to monetary commentators, it will most likely be several days (or even weeks) before investors receive the credit once Musk is officially finalized.

What we do know is that percentage holders will get £46. 70 ($54. 20) for the percentage they had up to the time of acquisition.

Susannah Streeter of Hargreaves Lansdown said: “For UK investors, the money proceeds will be exchanged from US dollars to pounds sterling, subject to the then prevailing exchange rate and popular currency conversion fees. We are yet to hear from Twitter that the purchase has been made, so we still do not know what the current exchange rate will be.

Musk’s decision to deprive Twitter of the company will now see it removed from the list, leaving a void for a new company to take its place.

“Insurer Arch Capital Group Ltd is established on Twitter Inc. in the S

This news means that the index’s budget, which in the past held Twitter inventories, will also have to adjust their portfolios to account for this decision. Index budgeting, or trackers, are automatic investments that contain baskets of inventory intended to copy the functionality of a specific inventory index. .

Billionaire business magnate Elon Musk appears to have closed his deal to buy social media giant Twitter, converting his profile on the platform to read “Chief Twit,” ahead of tomorrow’s (Friday 28) acquisition deadline. October), writes Mark Hooson.

Negotiations between Musk and Twitter over the £38 billion acquisition have dragged on since April, stalled by disputes over how many fake user profiles and spam Twitter might have had.

The Tesla boss threatened to pull out of the £46. 72-per-share deal in July and filed a lawsuit via Twitter. The two sides were due to face off in court this month, and Musk could face an £860 million buyout clause in the event of a withdrawal. .

However, earlier this month, the new Chief Twit agreed to continue the deal. It is widely believed that he will prioritize the removal of spam and the sale of loose speeches on the platform.

Yesterday on Twitter, Mr. Musk shared a video of himself visiting Twitter’s headquarters with a kitchen sink. The caption read, “Walk into Twitter HQ, let him in!”

He also spoke in general terms about Twitter’s transformation into a “do-it-all app” in the style of WeChat in China: an app for performing a wide variety of tasks, adding taxi bookings, and scheduling medical appointments.

Musk is expected to reinstate former U. S. President Donald Trump on the platform. Trump was “permanently” banned from Twitter due to the “risk of additional incitement to violence” in January 2021, following an insurrection at the Capitol in Washington DC involving his supporters.

Analysts believe that Twitter’s new owner will most likely eliminate jobs at the company. Musk is expected to face Twitter staff tomorrow, Friday, Oct. 28.

Investors could get an extra £5. 7 billion in dividends from British companies this year due to the pound’s fall against the US dollar, writes Andrew Michael.

The boost is a reminder of how sterling weakness benefits many British companies because they earn a large share of their income in US dollars and gain from the exchange rate when repatriating their profits.

The effects were those of Link Group’s latest Dividend Monitor.

Dividends are payouts made by companies to shareholders from annual profits and are regarded by some investors, especially pension funds, as a vital source of income, especially for those approaching or in retirement.

According to Link, dividends fell 8. 4% year-on-year to £31. 4 billion for the third quarter of 2022.

The company said the figure was “impacted heavily” by the de-listing of mining company BHP from the London Stock Exchange. 

Over the past year, mining and power corporations have rewarded their investors with extraordinary bills after the pandemic ended, forcing corporations to conserve money in the face of unprecedented economic conditions.

Excluding BHP’s exit, dividends increased 1% in the third quarter from a year earlier.

Link said: “Sharply lower special dividends and falling mining payouts, even after adjusting for BHP, were offset by strength among banks and other financials as well as oil companies.”

The company added that “the exceptional weakness of the pound also enormously flattered quarter three figures to the tune of £1.9 billion as many dividends are declared in dollars”. 

Without this boost caused by fluctuations in the exchange-rate, Link said that payouts were slightly weaker than anticipated.

For the full year, Link predicted that “the normal rise in the US dollar will contribute a record £5. 7 billion to UK dividends and prompt an upward revision to our expectations for the fourth quarter of 2022. “

Overall dividends are expected to reach £97. 4 billion for the 2022 total, a year-on-year increase of 5. 5%. But Link said it expected cuts in mining dividends and one-time payments.

Ian Stokes, chief executive of Link Group, said: “For 2023, we expect further relief in mining dividends and likely a decrease in one-off extraordinary dividends, but outside the mining sector there is still room to increase payouts. , even with a weakened economy. “

“Our interim forecast for 2023 suggests a slight decline in total dividends to £96 billion. This is no substitute for our expectations that bills in the UK will only return to pre-pandemic highs in 2025. “

The Financial Conduct Authority (FCA), the UK’s financial regulator, has proposed rules to prevent consumers from being misled by exaggerated claims from supposedly environmentally friendly investments, writes Andrew Michael.

Making an environmental or ethical investment encompasses a variety of issues, from considerations of corporate habits to climate change anxiety.

In this area, the expansion of environmental, social and governance (ESG) investments in recent years means it is a mainstay of the global monetary landscape, with billions of pounds invested internationally in budgets aimed at doing good.

But according to the FCA, “exaggerated, misleading or unsubstantiated claims about ESG credentials damage confidence in these products.”

In a bid to combat greenwashing (where unsubstantiated claims are made to lie to consumers into believing that a company’s products are more environmentally friendly than they are), the FCA proposes a set of measures and restrictions.

These come with sustainability labels for investment products and restrictions on how terms like “ESG,” “green,” or “sustainable” are used.

Sacha Sadan, head of ESG at FCA, said: “Consumers want to be confident when products claim to be more sustainable than they actually are. The regulations we are proposing will help consumers and businesses to accept them in this sector.

Beth Lloyd, Quilter’s director of responsible wealth strategy, said: “This is a step to help provide consumers with the mandatory protections and limits for culpable investments. Lazy labeling of investment products as “ESG” has not been helpful in recent times and has led to growing confusion among consumers and the industry as a whole.

“Having transparent definitions to adhere to and refer to will not only facilitate greater understanding, but will also lead to better outcomes, as expectations and truth are more likely to be aligned. “

Becky O’Connor of Interactive Investor said: “Investors who want their money to make a difference want to be able to accept as true that the investment they are buying actually does what it says on the box.

“With so many other scoring systems and contradictory definitions circulating lately, it can be difficult to know which investments are really helping the planet and it’s easy to lose faith in the very concept of sustainable investing. “

The Financial Conduct Authority (FCA) curbed the activities of twice as many investment firms in the past year compared with the previous 12 months as part of a crackdown on poor financial advice and scams, Andrew Michael writes.

The FCA said that the overall number of restrictions it had placed on firms rose from 31 in the financial year 2020/21 to 61 in 2021/22. 

The regulator added that it had prevented corporations from selling and selling express recommendations such as the final salary (defined benefits) of corporate pension plans.

Ill-informed or ill-advised decisions can prove financially costly to members of such schemes if they are taken close to, or at, retirement.

In addition, the regulator claimed that over the past year it had prevented 17 firms and seven Americans from attempting to offload FCA clearance into the investment market, amid suspicions of “phoenixing” or “bailout boat. “

These situations apply when corporations or Americans try to take on the consequences of offering misplaced recommendations when setting up or establishing a new business.

The FCA said it had also halted UK trading at 16 Contracts for Difference (CFD) providers, which had entered the UK’s transitory authorisation scheme in 2021, where suspicious fraudulent activity had been detected or where consumers were encouraged to make transactions above generating revenue.

CFDs are a financial product used to speculate on the direction of a market’s price. The FCA’s temporary permissions regime is aimed at firms that are looking to operate in the UK long-term and are readying themselves for full UK authorisation.

In recent years, the FCA has come under fire for its handling of several high-profile scandals. These include the collapse of former star fund manager Neil Woodford’s eponymous investment company and the London Capital mini-bond saga.

The latter has been described as “one of the biggest behavioral errors in decades. “

Sarah Pritchard, executive director of markets at the FCA, said: “We need to see a client investment market where clients can invest with confidence, perceive the threat point they are taking, and where strong action is taken when damage is identified.

“Over the past year, we have continued with assertive and cutting-edge actions to address the damage. We have prevented one in five corporations from entering the client investment market and have taken action against unauthorized corporations, with a 40% increase. in the number of customer alerts issued.

Tom Selby, Head of Retirement Policy at AJ Bell, said: “Recent occasions have revealed some pretty basic and damaging misunderstandings about the dangers related to other types of retirement. Problems with a specific type of investment made in pension plans to obtain explained advantages have led to concern and panic in the face of absolutely independent monetary problems.

“Savers and investors are obviously crying out for help, but right now the lack of clarity on the line between recommendation and guidance is holding companies back from communicating with customers. “

Stock investors who amortize their investments in a market downturn could end up paying a high price for their long-term decisions, according to the Alliance Trust, writes Andrew Michael.

The investment company carried out a knowledge model that showed that an “impatience tax” would have charged UK investors £1. 3 billion over the previous year.

Alliance Trust defines an “impatient investor” as one who sells wasted inventory — repairing or “crystallizing” a loss — when the market falls, and then buys back the investment at a higher rate when the market recovers.

According to the company, almost a portion (45%) of British investors admitted to having crystallized a loss in the following year. More than one in ten (12%) said they had done so in the following year.

Among those who have ever suffered an investment loss, only two in five investors (41%) did so because they were convinced it was the right decision.

Just under a quarter (23%) admitted that they had panicked and cut their losses. One in six investors (16%) said they fell foul to peer pressure when they saw other people selling up.

Alliance Trust also found that the majority of investors who exited a stock whose value had fallen (52%) regretted doing so.

“Buying the dip” offers investors the opportunity to gain exposure to an asset they may already like, but at a lower price.

For its conclusions, the company used the example of two hypothetical market investors who invested £10,000 in 1992 and also paid monthly contributions equivalent to 10% of the national average wage for the next 30 years.

The patient investor intended to remain calm despite any market downturn, while the impatient investor would sell a quarter of his shares if the market fell 5% or more in a single day. When the market rallied 10% in a single day, the impatient investor hoped to bail out.

According to the Alliance Trust, through 2022, the impatient investor would have accumulated £217,884, while the patient investor would have fared much better by accumulating £410,757. None of the calculations take into account capital gains or the source of income tax, or prices related to downloading. Investments.

Mark Atkinson, head of investor relations at Alliance Trust, said: “Investing is rarely turbulence free. As the cost-of-living crisis spirals, it is understandable that people want to avoid taking risks with their money.

“But for those in the market, promoting at a loss for liquidity is not without risk. With inflation close to double digits, the real price of liquid savings falls by 7 to 8 percent. Even despite Despite market declines, there is evidence that long-term stock investments outperform money over any 20-year period.

Dividends – the bills companies pay their shareholders for their profits – will reach a record £1. 25 trillion worldwide this year, according to Henderson International Income Trust (HIIT), writes Andrew Michael.

The investment trust found that dividends from UK businesses will be on their most robust footing since 2008 after rising oil prices boosted revenues among certain FTSE 100 companies.

Dividends are a key component of the investing landscape, especially for investors looking to obtain a steady and reliable income stream, such as those in retirement.

HIIT said the U. K. ‘s dividend policy — the ratio of a company’s profits to its dividend payout and a key indicator of the sustainability of its dividends — will be “remarkably” this year, driven primarily through profits generated through corporations in the oil sector.

Companies with strong track records in paying dividends tend to be in fast-inventory sectors, such as energy and commodities, where corporations have benefited from rising oil and fuel prices.

Unlike many of its rival stock indices around the world, the UK’s FTSE 100 is full of inventories from the so-called “old economy”, adding several energy and commodity companies.

HIIT said UK corporations had particularly cut their dividends during the pandemic, bringing its average dividend policy to just 1. 0 for the period between 2015 and 2020, less than a fraction of the global average.

However, the UK’s dividend policy recovered to 2. 0 in 2021. This figure is still lower than the rest of the world, but HIIT predicts it is on track to beat the global average this year thanks to emerging oil earnings.

Ben Lofthouse, portfolio manager at HIIT, said: “During periods of inflation, it’s vital to locate corporations with smart dividend hedging, pricing power, money and modest borrowing.

“If inflation and recession occur at the same time, profits may simply fall, but history shows that the source of dividend income is far less volatile than earnings over time, as corporations adjust the proportion of their profits they pay out to shareholders. Dividend policy At this level of the cycle, we can be confident that by 2023, overall dividend distributions will prove resilient.

In a twist to Elon Musk’s long-running saga over his Twitter deal, legal proceedings between the Tesla boss and the social media giant have been suspended until Oct. 28 to give Musk time to close the deal, writes Jo Groves.

However, Twitter has voiced opposition to the delay, with lingering considerations about the possibility of Musk increasing debt financing given the deterioration in the price of tech stocks and the broader economic situation since the deal announced in April.

While Twitter’s constant value rose from $43 to $52 after Mr. Musk’s announcement last week, it then fell back to around $49 per constant, indicating the point of uncertainty around the deal finally managing to cross the end. line.

The turmoil in global markets was a record outflow of money from the budget that was poured into stocks and equities last month, according to Calastone, writes Andrew Michael.

The global fund said the equity budget lost £2. 4 billion in September, marking the 16th consecutive month that investment portfolios have noticed outflows. The latter figure beats the previous record, set a month earlier, by more than a fifth.

Calastone’s Cash Flow Index showed that a net amount of just over £6. 6 billion has been withdrawn from the share budget since the beginning of 2022. The amount of cash flowing out of the sector in the third quarter of this year, £4. 7 billion, was higher than the total for 2016, past the worst year in terms of capital outflows in Calastone’s eight-year history.

He said: “Investors have to turn to UK equity-focused funds. “

Portfolios that invested in UK equities were hit the hardest, although all other geographies saw significant outflows.

According to the index, the U. S. equity budget lost £497 million net of capital in the month of September. In the same month, Calastone blamed a strong U. S. dollar and an economic slowdown in China for record net outflows from emerging markets and Asia. Pacific budget of £116 million and £223 million respectively.

The company also pointed to a “clear reversal of appetite” for so-called environmental, social and governance (ESG) funds, which lost £126 million in September. This is the first net outflow from this sector in just four years.

Edward Glyn, head of global markets at Calastone said: “The surge in global bond yields is driving a dramatic repricing of assets of all kinds. UK investors are voting with their feet and heading for the exits. The sensitivity to market interest rates of the big growth stocks that characterise the US market explains the record outflows there.

“For emerging markets, the forecast earlier in the year through high steel costs was offset by the prospect of a global recession. The negative effects of a strong dollar in many emerging market economies are now being felt. “

After months of legal battles, Elon Musk has agreed to reinstate his initial $44 billion bid for the social network Twitter, writes Jo Groves.

Yesterday’s filing with the Securities and Exchange Commission (SEC) indicated that Musk had sent a letter to Twitter on Monday night providing it to move forward with the original deal, pending receipt of the debt financing funds.

However, Mr. Musk’s offer is conditional on an early stay of action and the closure of ongoing legal proceedings in the Delaware Court of Chancery.

Both sides were due to appear in court later this month, and Twitter would try to force Musk to honor his initial offer to buy the company. The agreed-upon “breakup fee” of $1 billion would likely have been a contentious factor as well if Musk had pulled out of the deal.

Mr Musk offered $54.20 per share to buy Twitter in April, however, the deal foundered when he raised concerns over the number of fake and spam accounts. He claimed that Twitter had failed to provide sufficient information to prove that these accounts represented less than 5% of users.

The proposal could end months of uncertainty over the deal, with Twitter’s stock rising from $42 to $52 following the news.

However, there may still be a twist in the long-running corporate saga. A handful of Wall Street banks had pledged to offer $12. 5 billion in financing for the deal, with plans to sell the debt to institutional investors.

Rising interest rates and fears of a recession may make this outlook more challenging, as corporate bond yields have soared in recent months.

In a tweet, Twitter confirmed: “We have won the letter from the Musk parties that they filed with the SEC. The company intends to make the transaction at $54. 20 per share.

You can find more information on how to buy Twitter shares here.

The market regulator, the Financial Conduct Authority (FCA), is set to review the rules regarding the provision of advice to investor clients.

In a speech today at the Future of UK Financial Services Regulation Summit in London, Sarah Pritchard, FCA executive director, said: “Because of the costs involved, only the relatively well-off can access advice on what to invest in. Mass market consumers are often left to navigate a bewilderingly large choice with little support.

“As part of the FCA’s client investment strategy, we have stated that we need to identify a simplified advisory regime for classic stocks and ISA stocks where risks to clients are low. “

The distinction between advice and guidance was made as part of the introduction of the Markets in Financial Instruments Directive (MiFID) in 2007. It requires firms to make a full suitability assessment of a customer’s personal financial situation before offering advice.

The FCA will reduce this regulatory burden with the aim of reducing the fees that firms have to qualify for and making classic investment recommendations more accessible. It will review the regulatory boundary between recommendation and guidance, while proceeding to ensure client protection.

Tom Selby, head of pension policy at investment provider AJ Bell, comments: “A culture of concern has been created around the provision of guidance that risks reaching the blurred line between advice and guidance. Willingness with businesses and employers to stay away from the border and the ordinary. As a result, other people get less help making decisions.

“Those who don’t follow the advice need more and more privacy to be able to make financial decisions that are more likely to lead to ‘good outcomes’, in line with the FCA’s duty to the consumer. “

The timing of the review is yet to be decided, but Pritchard said: “Once the FCA has greater regulatory powers as a component of the long-term regulatory framework law next year, we will do more. “

The UK’s smallest index companies paid £574m worth of dividends to investors in the first part of 2022, according to fund management service Link Group, writes Andrew Michael.

Dividends are distributions to shareholders paid in money and paid out of a company’s annual profits.

Link Group said the amount paid in dividends through indexed corporations in the Alternative Investment Market (AIM) segment of the London Stock Exchange increased by 7. 4% compared to the same period last year.

The company’s annual AIM Dividend Monitor report showed that the largest contribution to growth came from the structural fabrics sector, which benefited from a revival of structural activity in the wake of the Covid-19 pandemic.

An example of this is Breedon, the cement, aggregates and asphalt producer, which paid its first dividend in the third quarter of last year. This was followed by a significant final payment in May 2022. Link Group said the food, beverage and tobacco industry sectors also saw strong growth.

AIM companies are less likely to pay dividends than larger, more mature companies operating in London’s main market.

Link Group said that before the pandemic, a third of companies indexed on AIM paid money to their shareholders, and about three-quarters of companies were indexed in London’s main market.

In 2020, the number of AIM corporations that paid dividends plummeted to 22%. Link Group estimates that figure will hover around 29% this year, but also warned of a slowdown in the speed of recovery of AIM’s dividends for the second part of 2022.

Ian Stokes, Link Group’s managing director for UK and European corporate markets, said: “AIM corporations have been inspired by their ability to recover from the pandemic. This is reflected in the strength of its better-than-expected recovery in dividend payments. The simple task is done, which means the expansion will now slow down.

“As we head into 2023, we expect the expansion to slow further. Corporate margins have been under pressure lately and a potential recession is to be expected, which will affect the ability and willingness of AIM corporations to return money to shareholders.

According to the most recent figures from the UK’s Financial Services Complaints Service, an increasing number of investors are falling victim to investment fraud, writes Bethany Garner.

The Financial Mediation Service (FOS) said there had been an increase in the number of investment scams reported through consumers.

Between April and June 2022, the FOS won 570 court cases over “authorized” investment scams, in which a user is tricked into sending money to a scammer posing as a valid user or company.

Investment fraud accounted for 30% of all “authorized” scam court cases recorded in this era, representing a 14% increase compared to the same era in 2021.

Around a fifth of investment fraud complaints related to cryptocurrencies. These schemes usually involve scammers posing as legitimate intermediaries, and persuading consumers to transfer money to purchase cryptocurrencies.

Nausicaa Delfas, Acting Director General of FOS, said: “Complaints about investment scams are the fastest received fraud complaints by FOS lately. “

As scammers take advantage of people’s increased monetary vulnerability amid the cost of living crisis, Delfas warned consumers to be on their guard.

She said: “We are aware that, in the current economic circumstances, other people will be tempted to invest in fake investments. Our recommendation to consumers is to be careful, conduct your own research, check the Financial Conduct Authority’s registration, and contact the company. to the number indicated.

Despite the investment fraud, the FOS added that the total number of court cases over “authorized” scams has decreased since last year.

But the service claims it also won around two hundred new court cases over unregulated mutual budgets (ICUs) between April and June 2022.

ICOs are high-risk collective investment schemes for high-net-worth investors and individuals.

Of the consumers who complained about a mutual fund, 45% said they had gotten irrelevant recommendations on how to use their pension to invest in it.

UK investors withdrew £1.9 billion from equity funds last month, a record amount, according to the latest figures from Calastone, Andrew Michael writes.

The global funds network said that the August outflow of funds easily beat the previous outflow records of June and July 2016, when investors removed £1.54bn and £1.56bn of cash respectively in the wake of the Brexit vote.

Calastone said August’s net outflows were due to a “significant increase in selling activity, rather than a decrease in buy orders, indicating a decisive decision [by investors] to sell their holdings. ” .

Global inventory costs rose sharply in July, rebounding in reaction to a decline earlier in the summer. But Calastone said that, rather than supporting investors, an upward trend in markets had left clients exposed to the UK budget skeptical.

He said: “Investors sold their equity holdings (before) the rally, earning a modest £251 million in the second part of July, up to £2. 08 billion between August 1 and 17. “

According to the data, the UK budget was hit the hardest by last month’s capital outflows, with investors fleeing the sector by £759 million. This is the fifteenth consecutive month in which locally-oriented portfolios experienced a net outflow of money.

Investors threw their North American and Asia-Pacific equity budget at £426 million and £234 million respectively.

Since the beginning of this year, the capital budget has lost a total of £4. 3 billion. Calastone, which publishes data on funds going back eight years, said the period from March to October 2016 saw the largest capital outflows (£5. 2 billion).

Calastone said that the only portfolios experiencing minor inflows during August were those linked to specialist investment sectors, such as infrastructure, renewable energy and environmental, social and governance (ESG) investing.

Edward Glyn, Head of Global Markets at Calastone, said: “Markets are absorbing the likelihood that inflation will be incredibly pernicious and persistent, meaning that interest rates will remain higher than initially expected.

“The combination of a weaker economy and higher rates is very negative for share prices, especially of growth stocks.”

Asset management group abrdn has dropped out of the UK’s stock market index of leading blue chip companies after its share price fell by more than 40% this year, Andrew Michael writes.

With a market capitalisation of less than £3.2 billion, the company has been relegated from the FTSE 100 in a well-signalled move. The business, which rebranded from Standard Life Aberdeen in 2021, was formed when the two fund management firms merged in 2017.

One of those going in the opposite direction is the F investment fund.

The re-shuffle, announced by index compiler FTSE Russell, will come into force when the stock market closes on Friday 16 September. From that point, so-called passive investment funds that are designed to track the performance of the ‘Footsie’ will withdraw their positions in the company’s stock.

Two companies facing a downgrade in the benchmark share index are kitchen maker Howden Joinery Group and pharmaceutical company Hikma Pharmaceuticals.

F

Susannah Streeter, from Hargreaves Lansdown, said: “Huge geopolitical uncertainty, skyrocketing inflation and considerations of economic expansion have been challenging for the asset control industry.

“abrdn’s operating profits came in lower than expected as fund flows reduced further. But this isn’t just a recent problem, assets have been walking out the door for years. Its environmental, social and governance options currently lag peers, and demand for ESG investments is on the rise, which puts it in a tricky position.”

Wealth manager St James’s Place (SJP) will launch an investment app for its clients, writes Andrew Michael.

The company has around 4,600 advisers and 900,000 clients in the UK and Asia. It says the app will enable clients to manage and keep track of their investment performance and financial position.

A number of asset managers have created an app for consumers. Brewin Dolphin unveiled one in 2019, while Evelyn Partners is planning one for later this year.

SJP described the move as part of a broader vision for the “next-generation visitor experience” that will “utilize the virtual generation so that our clients and their advisors can collaborate, administer and manage their financial future in a more convenient way. “”

The company claims that once the app is downloaded and registered, consumers will be able to use biometrics and FaceID to securely log in in less than a second.

Customers will need to determine the pricing and functionality of SJP’s products, adding pensions, investments, individual savings accounts, trusts and bonds, as well as any coverage and loan products they have with the company.

Interactive charts will show the functionality of investments over other time periods and consumers will also be able to see how much cash they have paid out, withdrawn and earned as income.

Ian Mackenzie, SJP’s Chief Operating and Technology Officer, said: “The aim is to ease the burden of paperwork, documentation, storage, reporting and planning, freeing up time for our advisors so they can focus more on making a difference for our clients. . designed using identity generation and security to keep visitor data safe.

UK retail investors are disappointed that wealth managers don’t talk about their clients’ perspectives on culpable investments, according to a study by Oxford Risk, writes Andrew Michael.

The behavioral finance company found that nearly a portion (46%) of adults whose investment portfolios are controlled through wealth managers have never been contacted through wealth managers about their attitudes toward environmental, social and governance (ESG) issues or the broader factor of the at-fault investment. .

Just over a third of consumers (37%) said portfolios reflected their perspectives on sustainable investing, suggesting that the majority of retail investors are not in this area.

Oxford Risk says this scenario comes at a cost to both clients and wealth advisers alike. It found that nearly one-in-three investors (31%) say they would invest more if their portfolio better reflected their views on ESG and responsible investing.

The company said this applies specifically to younger investors, where more than a portion of those under 35 (59%) say they would invest more if their money went to culpable investments.

About one in three clients say their advisor has met their ESG investing aspirations.

Greg Davies, director of behavioural finance at Oxford Risk, said: “Taking into account investors’ personal tastes in sustainability requires a deeper monetary personality and compatibility – matching investors with investments that suit them – is critical to helping people. . their riches forever.

“It’s unexpected that nearly a portion of investors say they’ve never been contacted through their advisors about their attitude towards culpable investing and ESG, and fewer than two in five say their investment portfolio doesn’t represent their views on at-fault investing.

Oxford Risk produces a framework of suitability for wealth managers to an investor’s personal ESG tastes and the amount of cash that deserves to be weighted in the ‘E’, ‘S’ and ‘G’ portions of a portfolio.

Abrdn, the asset management group, faces demotion from the UK’s stock market index of blue chip companies after its share price plummeted by almost 40% this year, Andrew Michael writes.

The company’s market capitalisation (the sum of all its issued percentages multiplied by the percentage value) has fallen below £3. 3 billion, putting it dangerously close to the bottom of the FT-SE 100 (see below), the UK stock market. .

The asset manager has experienced a tough year, with its recent interim results reporting an outflow of funds worth £36 billion during a six-month period.

Global index provider FTSE Russell will announce the latest reshuffle of both the 100 large-cap and 250 mid-cap indices at the end of this month.

In addition to Abdrn, others potentially affected by the quarterly revaluation of the main index include generic drugmaker Hikma Pharmaceuticals and kitchen maker Howden Joinery Group.

Ben Laidler, global market strategist at eToro, the social investment network, said: “Those who have been chosen to move from the FT-SE 250 to the FTSE-100 come from (medtech company) ConvaTec Group, whose percentage value has increased by 20% this year, and the F

Changes in major stock indices, such as London’s FT-SE 100 and the S

Laidlaw said: “The amount invested in ETFs has almost doubled to a staggering £7. 7 trillion since 2018. “

Most retail investors in the UK are bracing for a recession before the end of this year, regardless of the final results of the Conservative Party’s leadership race, according to studies by online currency provider HYCM, writes Andrew Michael.

The final results of the contest, which will be announced on Monday, September 5, will determine whether Foreign Secretary Liz Truss or former Chancellor of the Exchequer Rishi Sunak will become the next Prime Minister of the United Kingdom.

HYCM surveyed around 1,000 retail investors, each with at least £10,000 under management, excluding the cost of their private and occupational pensions. Almost two-thirds (62%) of investors said the UK would plunge into recession through the end of 2022.

Half of respondents (50%) also say they are concerned that the Bank of England’s (BoE) current cycle of interest rate hikes will not be enough to curb rising inflation in the coming months. Investors said the effect on inflation, which currently stands at 10. 1%, poses the biggest risk to the functionality of their currency portfolios.

The Bank of England recently warned that UK inflation could reach 13% before the end of 2022 with levels remaining elevated for the whole of next year.

More than a portion of investors said they themselves were “risk averse” in the current environment of peak inflation and weak economic growth. Just over a third (38%) said “safe haven” assets were their priority given the existing investment landscape.

When asked about their investment strategy for the rest of 2022, a third (33%) of investors said they planned to invest in their crypto holdings, while just over a quarter (27%) told HYCM they were most likely to increase their exposure.

Investors also indicated that they would be reducing their holdings in so-called alternative investments, including classic cars and private equity, while upping their exposure to stocks and shares, social investments and gold.

Giles Coghlan, lead FX analyst at HYCM, said: “As the Conservative Party leadership race heats up, all eyes are on economic policy in the prime minister’s bid. As Rishi Sunak warns that the lights of the economy are flashing red and urgent action will be needed to curb spiralling inflation, Liz Truss and her supporters cast doubt on the Bank of England’s current thinking. Regardless of the solution, our studies show that investors obviously see a recession as inevitable.

“As the cost-of-living crisis continues to take hold, it’s not unexpected to see many investors reduce their holdings in some riskier and more speculative assets in favor of those that are usually a safe haven in uncertain times. “

Mining company BHP has announced that it will return a record amount of money to its shareholders after reporting record profits for the first part of 2022, following the surge in commodity prices earlier this year.

Reporting its results for the year ended June 2022, the Australian-based miner revealed a total final dividend of £7.4 billion ($8.9 billion), increasing payments for the year to £13.7 billion ($16.5 billion), the highest distribution in the company’s near 140-year history.

Dividends are invoices to shareholders paid through corporations from their profits. They are a vital source of income for investors, especially as part of a retirement plan strategy.

Link, the fund management group, recently reported that dividends from mining companies accounted for nearly a quarter of all shareholder payouts in the second quarter of 2022, the highest share of any industry sector.

BHP’s annual profit rose 26% to 17. 7 billion pounds ($21. 3 billion), its highest in 11 years. The company says it continues to pursue acquisitions, having offered to buy OZ Minerals earlier this month. In the morning in London, the company’s percentage value rose 4% to £2,337 on the back of the results.

Mike Henry, BHP chief executive, said: “These strong results were due to safe and reliable operations, project delivery and capital discipline, which allowed us to capture the value of strong commodity prices.”

Against a backdrop of looming recession due to faltering global expansion and the prospect of emerging interest rates, Henry said the company is well prepared to deal with a dodgy environment in the near term, adding a positive note: “We expect China to emerge as a source of stability for commodity demands in the coming year.

Victoria Scholar, chief investment officer at Interactive Investor, said the value of coal reached record levels after Russia invaded Ukraine in late February.

He added: “BHP has been one of the biggest beneficiaries of rising raw material costs this year. Looking ahead, the environment looks challenging with copper costs falling 25% from the March peak and with considerations about emerging global interest rates, the constraints of hard work. and an economic slowdown.

An investment budget of approximately £11 billion is considered “dogs” with consistently underperforming in studies conducted by online investment service Bestinvest, writes Andrew Michael.

The company identifies 31 underperforming funds, worth a combined £10.7 billion, highlighting the poor showing of three in particular: Halifax UK Growth; Halifax UK Equity Income; and Scottish Widows UK Growth, together valued at £6.7 billion.

Bestinvest describes the poor performance of this trio, each largely owned by UK retail investors, as “entrenched”, in the sense that “they want to ask questions about their [investment] approach”.

Both of the Halifax funds are from a stable of investments offered by Halifax Bank of Scotland (HBOS). HBOS’s parent, Lloyds Bank, is ultimately responsible for the Scottish Widows portfolio as well. Fund manager Schroders acts as sub-adviser to all three funds.

Bestinvest’s latest Spot the Dog analysis defines a ‘dog’ fund as one that fails to beat its investment benchmark over three consecutive 12-month periods, and which also underperforms its benchmark by 5% or more over a three-year period.

A benchmark is a popular metric, a specific stock index, against which the functionality of a mutual fund is compared.

Bestinvest said that, despite their underperformance, the 31 funds it had identified will generate management fees of around £115 million this year, based on their size and costs.

The company’s latest report, Spot the Dog, published this year, highlighted the budget of 86 dogs worth £45 billion.

Bestinvest said: “Although there are unfortunately plenty of funds that have undershot the markets they invest in over the last three years, a change in fortune for funds investing in undervalued companies and dividend-paying shares means many of the funds that dominated the list in recent editions have escaped this time due to a much stronger relative performance in the last several months.”  

Jason Hollands, Bestinvest’s managing director, said the report demonstrated a big disparity between the best and worst-performing funds that can’t be explained by cost differences alone: “The exceptional 12-year period of strong equity market performance that came to something of a halt at the end of last year meant that, until recently, most funds investing in equities generated gains irrespective of the skill of their managers. 

“This helped mask poor relative functionality and economic deficiency.

“In a bull market, where the maximum budget price rises with the emerging tide, making an investment may seem too easy, but tougher times are a time to think about your approach. If you want to be a successful DIY investor, you will surely It is essential to periodically review and monitor your investments and you want to be very selective in the budget or trusts you choose.

UK investors withdrew £4. 5 billion from the investment budget in June this year, the largest monthly withdrawal of 2022 and the second-highest figure on record, according to the most recent figures from the Industrial Investment Association (IA), writes Andrew Michael.

The IA said investors were responding to intensifying economic uncertainty following a challenging first half of the year for market performance.

Last month, the U. S. market officially entered market territory when the influential S

The AI said the capital budget saw £2. 3 billion worth of outflows in June. Within this cohort, the sector’s biggest casualty is globally diversified portfolios, with investors pushing the flight budget to the £1. 3 billion song.

By contrast, so-called volatility control funds, which aim to deliver positive returns to investors by making an investment in a mix of assets by adding stocks, bonds and cash, were the best-selling AI sector in June, with retail net inflows worth £248. million. .

Chris Cummings, IA chief executive, said: “Savers are pre-empting slowing economic growth and preparing for further interest rate rises as we enter new territory for markets. Higher rates mean a weaker performance outlook for the high-growth companies that helped to fuel the bull market of the last decade.”

“This month’s capital outflows imply that investors are looking for tactics to better balance their savings,” Cummings added.

[ ] Asset control in the European fund industry fell by £1. 7 trillion (€2 trillion), from £12. 8 trillion (€15. 3 trillion) to £11. 1 trillion (€13. 3 trillion) in the first part of 2022, according to the most recent figures. . Refinitiv Lipper data provider.

Detlef Glow, head of EMEA research at Refinitiv Lipper, said: “It is no surprise that the European fund industry has faced a decline in assets under control over the course of 2022 so far, due to the geopolitical scenario in Europe, COVID-19. The pandemic, disrupted supply chains, rising inflation, and emerging interest rates are putting some pressure on stock markets.

According to the latest figures from fund manager Columbia Threadneedle, only four investment portfolios, a record, generated top-quartile returns over a three-year period to the end of June this year, writes Andrew Michael.

A most sensible quartile fund is one that ranks in the most sensible 25% of its peer organization in terms of return on investment.

Columbia Threadneedle’s quarterly Multi-Manager Fund Watch survey reviewed 1,153 portfolios across 12 major fund sectors – as defined by the Investment Association (IA) universe – assessing performance in each of three 12-month periods up to June this year.

The multi-manager coherence index, the most difficult test of the research, looked for the budget in the sensitive maximum quartile of those periods. Columbia Threadneedle found that, at the end of the second quarter of 2022, only 0. 35% of the budget, 4 in total, were found to be up to the task.

The funds in question were: Quilter Investors Sterling Diversified Bond; Matthews Asia Small Companies; Luxembourg Selection Active Solar; and Fidelity Japan. 

Each fund is located in a different IA sector, making it difficult to determine why these portfolios produced the requisite investment returns, while so many of their rivals languished over the same period.

Columbia Threadneedle said the fund industry is going through a “challenging time,” and that lately macroeconomic and geopolitical aspects are creating an “attractive environment for investment. “

The factors are accompanied by the lingering implications of the war in Ukraine, emerging inflation, and the effect of central banks’ decisions around the world to raise interest rates in the face of severe economic challenges.

Kelly Prior, investment manager at Columbia Threadneedle, said: “The effects of this quarter are unprecedented, demonstrating the excessive rotations markets have noticed over the past two years and how other investments have boosted markets at other times. »

He added: “While the knowledge is hard to read, it indicates that fund managers are keeping their cool and not looking to chase such uncommon markets. “

Total dividends from UK-listed companies hit £37 billion in the second quarter of this year, an increase of more than a third compared with the same period in 2021, according to the latest figures from Link, the fund administration group, writes Andrew Michael.

Dividends are invoices to shareholders paid through corporations from their profits. They are a vital source of income for investors, especially as part of a retirement plan strategy.

Link’s latest UK Dividend Monitor reported that the headline total for dividends rose year-on-year by 38.6% in the second quarter of this year.

This figure, due to one-time special payments, is the second-largest quarterly overall on record, dwarfed by the amount paid through corporations to shareholders between April and June 2019.

Link said corporate mining dividends accounted for about a quarter of all invoices sent to shareholders in the second quarter of this year, the largest proportion of any business sector. Apart from mining, banks and oil corporations are the three most sensible sectors that pay dividends. in the United Kingdom.

Link added that sectors such as real estate construction, commercial goods, media and monetary services generally also had a good quarter, thanks to strong earnings expansion that boosted dividend payments in the wake of the pandemic. .

In light of this, the company said it was upgrading its UK plc dividend forecast for the full year with headline payouts expected to rise by 2.4% to £96.3 billion.

Link warned, however, that next year could prove more of a challenge to companies looking to further  increase their dividend payments as economic conditions increasingly take a turn for the worse and the conflict in Ukraine continues unabated.

Ian Stokes, Managing Director of European and UK Corporate Markets at Link, said: “Mining bills are strongly linked to cyclical fluctuations in mining profits and have a tendency to rise and fall much more during this cycle than mining dividends. other sectors. “

He added: “As we get closer to 2023, headwinds will intensify. The simple effects of post-pandemic recovery will soon disappear completely from the numbers, and an economic downturn will cripple the ability and willingness of many corporations to increase their dividends.

Most investors ignore environmental, social and governance (ESG) investments, despite the shift towards sustainability and growing concerns about the impact of investments on the planet, writes Andrew Michael.

According to a study by financial advisor Foster Denovo, six in ten investors (60%) said they were aware of the offering of specialized investment portfolios, such as ESG funds.

However, Foster Denovo’s report, Investing with the Dynamic Portfolios: The latest research surrounding investors opinions on ESG investing, reveals signs of a growth in investor perception about the environment along with the impact made by their investments.

Once dismissed as a virtuous concept that potentially compromised portfolio returns, ESG investing has moved centre-stage within the global investment arena in recent years. 

According to the Global Sustainability Investment Alliance, around £30 trillion in assets were controlled globally in accordance with ESG principles.

Foster Denovo said just over half (51%) of respondents either felt strongly or very strongly about the impact that climate change could have on their savings and investments.

In addition, nine in 10 (89%) said they were concerned about the impact that corporate practices and some large businesses were having on the environment.

A quarter (25%) of respondents told Foster Denovo that they invested with ESG aspects in mind, but the majority said they were not interested in making an ESG investment due to perceived under-industry returns compared to more classic investment channels.

Foster Denovo described this reaction as “at odds with most recent investment studies that have found that three-quarters of indices selected for ESG have outperformed their peers in the broader market. “

Declan McAndrew, Head of Investment Research at Foster Denovo, said: “It’s clear that many people, including those who have not been investing sustainably lately, are interested and willing to receive more information about ESG and need to invest their money to achieve it. benefits for the planet definitely and for profit.

“However, a lack of awareness about the lifestyles of these products, what ESG means, and a persistent misconception about underperformance are obviously having an impact. “

Twitter has been smart to take the risk of suing Elon Musk after the Tesla boss announced last week (see story below) that he would pull out of his £36. 5 billion bid to buy the social media platform, writes Kevin Pratt.

In what looks set to be a lengthy and acrimonious legal battle – Twitter’s complaint filed with the Delaware Court of Chancery calls Mr Musk’s behaviour “a model of hypocrisy” – the main issues are the number of fake accounts on the platform, and the $1 billion break clause in the original contract.

Musk refuses to pay the sum, arguing that Twitter has provided him with the data he wants to determine the number of authentic accounts.

The original offer for Twitter was at $54.20 per share but the stock is now trading below $35. Recent falls are attributed to Mr Musk’s announcement, but the price was already around the $40 per share mark before last weekend.

Twitter’s legal filing reads: “In April 2022, Elon Musk entered into a binding merger agreement with Twitter, promising to do his part to close the deal. Now, less than 3 months later, Musk refuses to fulfill his obligations to Twitter and its shareholders because the deal he signed no longer serves his private interests.

“After making a public display to put Twitter on the line, and after proposing and then signing a vendor-friendly merger agreement, Musk believes that he, unlike all other parties subject to Delaware contract law, is free to replace his mind, destroy the company, disrupt its operations, destroy shareholder value and walk away.

“This repudiation follows a long list of material contractual breaches by Musk that have cast a pall over Twitter and its business. Twitter brings this action to enjoin Musk from further breaches, to compel Musk to fulfill his legal obligations, and to compel consummation of the merger upon satisfaction of the few outstanding conditions.”

In a tweet last night, Bret Taylor, Twitter chairman said: “Twitter has filed a lawsuit in the Delaware Court of Chancery to hold Elon Musk accountable to his contractual obligations.”

Musk responded with his tweet: “Oh what an irony mdr (laughs out loud). “

Twitter’s filing with the Delaware court accuses Musk of not being able to walk away from the deal due to the stock market crash in general and the value of the company’s stock in particular: “After the merger agreement was signed, the market fell. The Wall Street Journal recently reported that the price of Musk’s stake in Tesla, the pillar of his private wealth, has declined by more than $100 billion from its November 2021 peak.

“So Musk wants out. Rather than bear the cost of the market downturn, as the merger agreement requires, Musk wants to shift it to Twitter’s stockholders. This is in keeping with the tactics Musk has deployed against Twitter and its stockholders since earlier this year, when he started amassing an undisclosed stake in the company and continued to grow his position without required notification. 

“It’s a testament to the contempt he shows for the company that one might have expected Musk, as a long-term steward, to protect. Since the merger agreement was signed, Musk has continuously disparaged Twitter and the deal, creating a business threat to Twitter and downward pressure on its stock price.

The market expects a more complete reaction from Musk’s lawyers in the coming days.

Elon Musk has told Twitter that he is pulling out of the deal reached in the past for 36. 5 billion pounds to buy the social media microblogging platform. Twitter says it is committed to completing the transaction on the original terms, writes Kevin Pratt.

A letter to Twitter, filed with the U. S. Securities and Exchange Commission, said:The U. S. Department of Homeland Security claims that Musk is “terminating the merger agreement because Twitter is violating several provisions of that agreement and appears to have made false and misleading statements that Musk relied on. “in the merger agreement, and will most likely suffer an adverse effect on the company.

Musk froze the deal in May when his team decided on the number of “spam” accounts on Twitter, arguing that he needed accurate data on the number of genuine users to calculate the company’s true price tag.

The latest letter reads: “For approximately two months, Mr. Musk sought the knowledge and data necessary to “conduct an independent assessment of the prevalence of fake or spam accounts on the Twitter platform. “

“This data is essential to Twitter’s commercial and monetary functionality and serves as the finishing touch to the transactions contemplated in the merger agreement, as well as to ensure that Twitter satisfies the final conditions, to facilitate Mr. Simpson’s financial and financial plans. ” Musk for the transaction,” and will interact in the transition by making plans for the company.

“Twitter failed or refused to provide this information. At times, Twitter has ignored Mr. Musk’s requests, rejected them for reasons that seem unwarranted, and claimed to comply with them while providing Mr. Musk with incomplete or unusable information.

Bret Taylor, Twitter’s chairman, said in a tweet that he is determined to complete the takeover on the original terms: “The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement. We are confident we will prevail in the Delaware Court of Chancery.”

The dispute between the two sides will most likely be protracted and acrimonious, at least because the contract includes a £1 billion buyout clause, payable through either party if you withdraw without a clever reason.

Musk will try to prove that the contract is no longer valid due to Twitter’s moves or inaction, while the company will insist that it acted in accordance with the terms of the agreement. As Taylor’s tweet indicates, he will sue Mr. . Musk to enforce the agreement.

Twitter shares fell 5% when news broke that the acquisition was in jeopardy. Outside of opening hours in New York, they amounted to around £35 (£29). Musk’s initial offer was $54. 20 (£45) per share.

The UK’s asset management industry is calling on the government to create a new class of fund that incorporates blockchain technology, the digital process that underpins much of the cryptocurrency industry.

The Investment Association (IA), the professional body representing UK investment screening firms managing around £10 trillion worldwide, has suggested that the government and the city’s regulator, the Financial Conduct Authority (FCA), work together “at pace”. A negotiated budget that would factor virtual tokens to investors in a position of classic stocks or budget sets.

AI claims that the increasing adoption of so-called “tokenization” would ultimately lower prices for consumers and the potency of fund delivery, thanks to faster settlement and greater transparency of transactions.

He added that tokenization can also expand the assets held within a fund by expanding into personal markets and illiquid assets such as real estate, which cannot be temporarily or fluidly converted into cash.

According to the IA, the landscape it envisages for funds of the future would offer consumers “more engagement and customisation, while maintaining important consumer protections”.

Greater variety

It added that this could include the provision of a greater variety of portfolios tailored to the specific needs of individual investors and a wider range of financial advice services to address the UK’s current advice gap.

Earlier this year, the Treasury, led through former Chancellor of the Exchequer Rishi Sunak, announced a series of measures aimed at turning the UK into a hub for crypto asset generation and investment.

The FCA issues warnings to consumers regarding the cryptocurrency sector, reminding them that crypto assets are unregulated and pose a high risk.

The regulator’s current stance on cryptocurrencies as an investment is that “investors are highly unlikely to get coverage if things go wrong, so other people are willing to lose all their money if they decide to invest in them. “

Chris Cummings, IA chief executive, said: “With the ever-quickening pace of technological change, the investment management industry, regulator and policymakers must work together to drive forward innovation without delay.

“Further innovation will not only improve the overall competitiveness of the fund industry in the UK, but will also improve the cost, power and quality of the investment experience. “

The UK’s currency watchdog has hired a specialist economic crime and illicit finance director from the National Crime Agency (NCA) for a new role overseeing the cryptoasset, e-money and bills markets.

The appointment is one of six new directorships revealed by the Financial Conduct Authority (FCA), as the regulator looks to beef up its top personnel covering traditional areas of investment, while burnishing its credentials amid calls for tougher oversight of the crypto sector.

Matthew Long will join the Financial Conduct Authority in October as Head of Payments and Digital Assets. Currently, Long serves as the director of the National Economic Crimes Command, which is part of the NCA.

He also headed the UK’s Financial Intelligence Unit, which has a national duty to receive, analyse and disseminate monetary intelligence under the Suspicious Activity Reporting (SAR) regime.

SARs are pieces of information that alert law enforcers that client or customer activity is suspicious and might indicate money laundering or terrorist financing.

Camille Blackburn will join Long in October in the new role of Director of Wholesale Purchasing.

Ms Blackburn will be responsible for policy progress and oversight of asset management, select investments, custodian banks and investment research.

She is currently the Global Head of Compliance at Legal

Four new administrators were also appointed in the FCA’s most recent recruitment round, adding former City of London Economic Crime Coordinator Karen Baxter, who joins the executive as Director of Strategy, Policy, International and Intelligence.

Three internal promotions: Roma Pearson, director of consumer finance; Anthony Monaghan, Director of Commercial and Regulatory Research; and Simon Walls, Director of Wholesale, Sell-Side, all appointments.

Dividends paid through investment trusts hit a record £5. 5bn in the year to March 2022, boosted by payments from unlisted companies.

An investment trust is a public limited company, traded on the stock market, whose aim is to make money by investing in other companies. The investment trust sector has become increasingly popular with retail investors in recent years.

According to fund administration group Link, two-thirds of investment trust dividends paid over the 12 months to March focused on so-called ‘alternatives’. These include investments in venture capital, renewable energy infrastructure and property.

Link says those figures equate to an overall dividend that increases 15% year-over-year.

It adds, however, that invoices to shareholders from the investment budget investing in corporate shares remained strong during the period, accounting for £1. 85 billion of the total payout. These equity investment budgets have historically played a key role in the London-listed investment fund. industry.

While dividends from alternative trusts have increased nine-fold over the past decade, Link forecasts that shareholder payments from equity trusts will grow more slowly than the market average over the coming year.

Ian Stokes, Link’s managing director for corporate markets in the UK and Europe, said: “A decade ago, opportunities represented a much smaller segment of investment accepted as true in the market, but they have grown rapidly as new investment opportunities have opened up in reaction to investor demand.

Richard Stone, executive leader of the Association of Investment Companies, the industry framework representing investment trusts, said: “This report demonstrates that investment companies are offering many benefits to income-generating investors and have continued to do so despite difficult market conditions.

Competition has intensified among e-commerce platforms as they struggle to maintain their customers’ budgets now that the boom in “parlor” inventory trading has slowed during the pandemic.

The growing popularity of commission-free trading platforms had already prompted larger platforms to overhaul their payment structures, with AJ Bell cutting back on its platform and currency payments starting in July.

Now, Interactive Investor(ii) has announced that it will begin paying interest on sterling and US dollar monetary balances held in its Individual Savings Accounts (ISA) and Self-Investment Personal Superannuation Accounts (SIPP) from 1 July .

Historically, platforms have not paid interest on those balances, and in the past, investors may have even been charged the privilege of holding money.

However, the stock market downturn has encouraged some investors to leave their ISA contributions uninvested as cash in their account. Others have sold their equity investments to hold the proceeds as cash in their ISAs and SIPPs, enabling them to keep the money within its tax-free wrapper.

Moving to ii will result in interest of 0. 25% being paid on the price of any balance over £10,000, and each account (e. g. ISA and SIPP) will be treated separately, rather than combined for the purposes of calculating interest.

Richard Wilson, CEO of ii, commented: “Interest rates remain low, but following recent increases, ii will start paying interest on its accounts from 1 July. “

Wilson also highlighted the advantages for regular foreign stock traders, who will now earn interest on the U. S. dollar balances they hold in their accounts.

This announcement brings ii closer to major trading platforms as follows:

Hargreaves Lansdown (HL) also announced the introduction of a ‘pay by bank’ service today, allowing clients to transfer funds directly from their bank accounts to their HL accounts, without the use of cards.

George Rodgers, Senior Product Manager at Hargreaves Lansdown, commented: “Our consumers can expect a simpler payment experience as well as instant deposit and withdrawal arrangements compared to the days of the existing system. Our adoption of Open Banking is a key step in our virtual transformation strategy.

New insights from the Financial Ombudsman Service show that so-called “authorised” scams, in which consumers are tricked into transferring cash to accounts they deem valid, increased by more than 20% to 9,370 in 2021/22.

The Ombudsman says fraudsters are increasingly using social media to lure their victims, with many of the total 17,500 fraud and scam cases recorded for the year relating to fake investments.

The Ombudsman says that last year he confirmed 75% of fraud court cases.

As far as insurance is concerned, the Ombudsman recorded 38,496 complaints (including Payment Protection Insurance) in the last financial year, compared to 44,487 the year before. 

The number of insurance claims decreased by 75%, from 8,175 in the 2020/21 financial year to 2,116 in the 2021/22 financial year.

The decrease coincides with an increase in the number of insurers that have added policies for Covid-related issues to their policies.

The Financial Mediation Service has faced a backlog of court cases due to the pandemic. Last month, it announced that the number of notable court cases had fallen to 34,000 from 90,000 in April last year.

It claims to have settled more than 58,000 insurance court cases (including PPI) in total over the last monetary year. However, it favors the whistleblower in less than 30% (28%) of cases.

Nausicaa Delfas, interim head of the Financial Ombudsman Service, said: “Over the past year, the Service continued to help over 200,000 customers who had problems with financial businesses on issues across banking, lending, insurance and investments. 

“In this period of economic uncertainty it is more important than ever that where problems do arise, they are addressed quickly.  We are here to help to resolve financial disputes fairly and impartially.”

The Financial Ombudsman Service advises consumers to first complain to their product or service provider. If you are not satisfied with the way your provider has handled your case, you deserve to register your complaint with the Financial Mediation Service.

One of the UK’s largest online investment platforms, Interactive Investor, has removed two budgets from its moral portfolio shopping list.

It also revealed that two of the 40 budgets on its ACE 40 list of environmental, social and governance (ESG) investments (VT Gravis Clean Energy Income Fund and iShares Global Clean Energy ETF USD Dist GBP INRG) have generated positive returns since their inception. 2022 until the end of May.

Sustainable sector budgets are popular with investors, with strong functionality backed by their preference for so-called growth-oriented sectors (growth as an investment focuses on corporations with above-average profits and which are expected to achieve maximum profit levels ).

However, since the beginning of 2022, expansion actions have faltered in the face of inflationary headwinds and emerging interest rates, as evidenced by the overall functionality of the ACE 40 list.

In contrast, value investing – focusing on companies perceived to be underappreciated and undervalued – has gained increased backing from investors this year.

On the advice of Morningstar, which advises on the composition of the ACE 40, ii announced the removal of two funds: abrdn Europe ex UK Ethical Equity, and Syncona Investment Trust. In their place, the company will add M&G’s European Sustain Paris Aligned fund.

Dzmitry Lipski, head of funds research at ii, said: “We continuously review the list to ensure it meets customer needs and, in this instance, given the significant shift in the market environment this year we agreed with Morningstar to make these changes.”

Commenting on the removal of Syncona, Morningstar said, “We accept that the threat point shown through the truth is superior relative to the benefits. “

Commenting on the abrdn fund, he said: “Compared to its peers, the team’s experience in fund monitoring remains limited. In general, there are more powerful fund characteristics in this sector and we have therefore advised that “This fund is removed from the ACE 40 list. “

U. S. stocks closed in bear territory (June 13) after the S

Stock market professionals define a bear market as one that has fallen at least 20% from its peak.

The sell-off in equities was prompted by nervous investors taking fright at a higher-than-expected May inflation figure of 8.6% as reported last Friday (10 June) by the US Bureau of Labor Statistics.

The announcement stoked expectations that the US Federal Reserve could implement an interest rate rise of 0.75 percentage points at its next monetary policy meeting, which concludes tomorrow (Wednesday).

A rate hike of this magnitude would signal a more competitive stance in the Federal Reserve’s strategy to fight rising customer prices.

Later this week, the Bank of England’s Monetary Policy Committee is expected to announce a 0.25% hike in the Bank Rate in its own bid to stave off steepling inflationary pressures in the UK.

Stock analysts have warned that the selloff in U. S. stocks could continue.

Ben Laidler, market strategist at social investment network eToro, said: “The S

Laidler added that while S&P 500 bear markets were a relatively infrequent event, when they did happen, they tended on average to last around 19 months and result in a 38% drop in prices: “This one has only lasted five months and is down 21%.” 

Russ Mould, chief investment officer at online broker AJ Bell, said: “A lot depends on the Fed’s policy update tomorrow. Investors seem to be concerned that the central bank will be more competitive on interest rates in a bid to curb inflation, given that living expenses figures released in May came in higher than expected.

“The Fed is focused on inflation and the economy, not the markets, yet its actions have significant influence on the direction of stocks and bonds. A decision to raise rates by more than half a percentage point could cause chaos on the markets and put a bigger dent into investors’ portfolios than they’ve already seen this year.”

According to investment app Dodl, nearly two-thirds of UK adults have cash to invest but say they can’t because they don’t know where to start.

Research conducted by Dodl found that 65% of people do not have an investment account such as an individual savings account (ISA) in stocks. But the company said that most people in this organization (95%) weren’t discouraged just because they didn’t have enough cash on hand.

Instead, Dodl said they blame a range of issues such as not knowing where to start, the investment process being too complicated and not knowing what to invest in.

When asked how much money they potentially had set aside for investing, the average amount among respondents was £3,016.

Dodl said leaving a sum of this amount in an easily accessible savings account paying 1. 5% over 20 years would yield a return of £4,062. The company estimated that if the same amount were invested for 20 years with an annual return of 5%, the total would be £8,002 after taking costs into account.

The company added that respondents were divided when asked what would inspire them to start investing. Just under a share (48%) said they preferred a narrow list of investments, while just over a third advocated for a wide diversity of investment options.

Dodl said nearly a portion of responses (40%) favored investment in common issues such as generation and health care.

Dodl’s Emma Keywood said: “With the burden of life emerging, it’s unexpected that so many other people say they have coins stored in coins and think they can simply invest. The challenge is that they don’t know where to start or locate them. Too complicated.

“However, once other people do some studies and dive into the water, they realize that making an investment is rarely as scary as they thought. “

The UK returned to the stock market in April after multi-billion pound withdrawals in the first quarter of 2022.

Figures from the Investment Association (IA) trade body showed that investors put £553 million into funds in April. Over £7 billion was pulled from the funds market between January and March this year.

In April, the total amount of budgetary control stood at £1. 5 trillion.

The AI said this year’s Individual Savings Account (ISA) season drove the change. ISAs are annual schemes that allow UK investors to protect up to £20,000 per year from source income tax, inventory dividend tax, and capital gains tax.

The plans focus on the fiscal year, so historically there is a surge of interest in the weeks leading up to the end of the fiscal year on April 5.

AI said global revenue source inventories were, for the first time, its best-selling investment sector in April. With a weaker outlook for inventory value expansion, due to issues such as the war in Ukraine, higher global inflation, and emerging interest rates. Interest rates: Corporate dividends are becoming increasingly important in the overall returns investors can earn from stocks.

The volatility, special bonds, and North American sectors were also popular. The sector with the worst sales is the United Kingdom, all companies.

In April, UK investing platforms were responsible for half of all gross retail fund sales, while UK intermediaries, including independent financial advisers, accounted for just over a quarter (28%). Discretionary fund managers (20%) and direct sales from investment provider to consumer (3%) made up the balance.

Miranda Seath, IA’s head of market insight, said: “Although inflows to ISA wrappers were half those of 2021, they were still the third strongest in the last five years. This is significant as April’s positive sales come after one of the most challenging quarters for retail fund flows on record.”

Hedge funds led by women outperform those led by men over the long term, according to a study by brokerage IG Prime.

Hedge funds are pooled investment vehicles for primary and high-net-worth investors.

In their pursuit of oversized returns, investment methods related to the hedging budget are more eclectic and involve greater risk-taking than those found in the normal maximum retail budget.

IG Prime’s studies focused on the United Kingdom, Australia, Singapore, Switzerland, and the United Arab Emirates. The study tested the extent to which a higher proportion of women in high-level positions in the coverage budget correlated with higher fund performance.

The company said that when looking at all investment periods, from one month to five years, the results suggest that there is no consistent correlation between female leadership and the fund’s positive or negative performance.

But IG Prime added that over five-year periods, in the U. K. and Australia, the study found that female-led hedge funds outperformed male-controlled investment portfolios.

According to the company, the decision to appoint women to lead the coverage budget may be “somewhat beneficial. . . from a monetary point of view. “

Despite this, the study also found that women held only 15% of management positions in foreign hedge funds, compared to men.

IG Prime also found that male and female investors in hedge funds followed other investment strategies. Nearly two-thirds (60%) of women said they rely on equity-focused investment approaches, compared to just over a quarter (26%) of men.

In contrast, nearly twice as many men (33%) said they focused on macro-investing strategies compared with women (18%). A macro strategy bases its approach on the overall economic and political views of various countries, or their macroeconomic principles.

When it comes to crypto, around a third (31%) of male investors said they were more likely to incorporate crypto assets into their portfolios, compared to 20% of female investors.

IG Prime said: “When investing in funds, focus on the functionality of the individuals and the intended strategy for the funds. Due to the exclusive nature of the funds, it makes sense to tailor each investment resolution to each fund.

Most non-professional investors believe that making an investment with a life purpose in mind produces greater effects than looking to make money in the abstract, according to a study by Bestinvest.

The investment department’s life goals study found that 80% of investors with a monetary goal on the horizon believe it would help them achieve a more satisfying outcome.

Bestinvest also said that nearly nine in ten investors (89%) had a set goal in mind that they are trying to achieve by making their money work harder for them via an investment strategy.

Three-quarters (77%) of investors referred to a retirement-related investment incentive, either a measure that would help them leave their previous job or fund a strong source of income with the bulk of their state pension.

Other primary goals underpinning investment methods include wealth under construction to ensure financial security, improving quality of life as retirement approaches, paying for long-term family expenses such as weddings or school fees, and wealth under construction to transfer over the long term. Generations.

Although men and women shared the confidence that having an investment target would lead to better results, Bestinvest said women “were less likely than men to check whether they were on track for their goals”. ends. “

Alice Haine of Bestinvest said: “It is worrying that female investors are choosing to pay less attention to their investments. Women are more vulnerable to pension poverty because they have less cash than men, either because of the gender pay gap or because they have taken time off from their careers to care for their children or those they enjoyed.

The fund manager also found that, on average, UK investors spend around 16% of their cash on an investment. Most investors cited a lack of liquidity as an explanation for why they didn’t start making an investment sooner.

Well-heeled older investors say inflation is their number one worry when it comes to the state of the UK economy and the prospects for their own finances, according to research from a wealth manager.

The Saltus Wealth Index also found that older HNWIs (those with investable assets of more than £250,000) have a much bleaker view of their finances than affluent young people.

According to the results, the majority of high-net-worth young people said they felt confident over the next six months about the long-term of the UK economy, as well as their own finances.

But when asked the same questions, older HNWIs expressed great concern. According to Saltus, one-third (34%) of HNWIs aged 55 to 64 say they are confident about their long-term prospects. This proportion fell further to 23% among HNWIs aged 65 and older.

When asked what the biggest threat to their finances is, older HNWIs cited inflation (33%), Covid-19 (30%), exchange rates (25%), cybersecurity (25%) and geopolitical threat (22%).

Saltus said this marked a shift from 2021, when Covid-19 was the main threat, followed by inflation, backsliding investment, Brexit and climate change.

Inflation in the UK rose to 9% in April 2022, its highest point in 40 years, as prices were hit by rising energy costs and the effect of the ongoing conflict in Ukraine.

The increase exacerbated a cost-of-living crisis that is already devastating the finances of millions of British households.

Michael Stimpson, partner at Saltus, said: “There are a number of issues causing concern, with the effect of emerging inflation being the main concern, especially among older people whose fears about how they will affect their retirement plans are more focused than ever on the importance of having a sound monetary plan in place.

Shareholder payments made through companies from profits rose 11% to a record £242 billion ($302. 5 billion) globally in the first quarter of 2022, according to the latest dividend data by Janus Henderson.

Dividends are a source of income for investors, especially as part of a retirement plan strategy.

The investment manager’s Global Dividend Index said the dividend expansion may simply be the result of the “continued normalization” of bills following the disruption caused by the Covid-19 pandemic.

During 2020, companies worldwide cut back sharply on dividend payments to shareholders, opting instead to retain cash as a defence against the worst effects of the pandemic.

Janus Henderson said the region saw a double-digit expansion in dividend payments in the first quarter of this year, driven by a stronger economic backdrop and the ongoing recovery in payouts after cuts in 2020 and early 2021.

However, it warns that the global economy will face challenging situations for the rest of 2022 and predicts that the resulting downward pressure on the economic expansion will affect corporate profits in several sectors.

In the UK, oil corporations in particular helped boost shareholder payouts by as much as 14. 2% in the first quarter of 2022, to £11. 2 billion ($14. 7 billion).

Distributions in the healthcare sector also increased, after pharmaceutical giant AstraZeneca raised its dividend for the first time in nearly 10 years. Janus Henderson said telecoms operator BT also contributed to the growth.

The US, Canada and Denmark each set all-time quarterly records paying out £114 billion ($142 billion), £10.7 billion ($13.4 billion) and £7.8 billion ($9.8billion), respectively.

Jane Shoemake, Janus Henderson, said: “Global dividends were awarded for a smart start to 2022, helped by the specific strength of the oil and mining sectors.

“However, the global economy is facing a number of challenges: the war in Ukraine, emerging geopolitical tensions, high energy and commodity prices, immediate inflation, and emerging interest rates. The resulting downward pressure on economic expansion will have an effect on corporate earnings in a number of sectors. “

FundCalibre, the online fund research centre, has launched what it says is a “simple” set of definitions it will use to scrutinise investment portfolios structured along environmental, social and (corporate) governance (ESG) lines.

ESG investing is as much about its impact on people and the environment as it is about potential financial concerns.

The concept is central to investing, to the point that trillions of pounds of assets are controlled globally in accordance with ESG principles.

FundCalibre says it now includes an ESG score in the scores of all 228 “Elite Rated” and “Radar” budgets listed on its website. Evaluations are divided into three categories: explicit, integrated and limited.

“Explicit” assumptions are those that place ESG or sustainability at the heart of your investment philosophy. Funds positioned in this category will most likely have an independent panel or rely on a client survey on their ESG criteria.

“Integrated” budgets are those that integrate ESG research into the investment procedure as a complementary input to decision-making.

“Limited” budgets involve an ESG detail in their process, but the portfolio is influenced by the ideal of moral investing.

Each assessment is publicly available and free to view.

Professional fund managers often create investment portfolios based on ESG criteria and themes. But because ESG is a broad concept, there is no set of absolute principles that the budget must adhere to.

Ryan Lightfoot-Aminoff, senior research analyst at FundCalibre, said: “As every fund manager does something different, it has become very difficult for investors to know precisely how guilty a fund really is. In addition, the lack of acceptance of asset managers’ ESG claims as true remains a barrier to investment.

“We introduced a Responsible Investment Sector in 2015 highlighting budgeting in this category, which our research team considers to be among the best. Now we’ve gone a step further and included an ESG assessment.

Almost a fraction of Britain’s young investors are making investment possible while conducting business, according to the city’s regulator and the country’s official monetary lifeline.

In a survey exploring attitudes towards investing, 42% of respondents aged 18 to 24 said they made their latest investment while sitting in bed, watching TV or on their way home from a pub or out at night.

The study, conducted in collaboration with the Financial Conduct Authority (FCA) and the Financial Services Compensation System (FSCS), also found that around a fraction of investors (44%) conducted studies of their investments because they felt the procedure was “time-consuming”. and “too complicated. “

The FSCS has warned that if consumers don’t perceive where they’re investing their money, they’re more likely to fall victim to investment scams.

Earlier this year, a group of MPs warned of an alarming rise in financial frauds being perpetrated in the UK. The Treasury Select Committee suggested social media giants should pay compensation to people duped by criminals who use their websites.

According to the FSCS/FCA survey, around a quarter of investors (27%) said they were more likely to invest in an investment opportunity with a “limited timeframe” – such as one that was only available for the next 24 hours.

The FCA says time pressure is a common tactic used by fraudsters. It advises consumers to check their list of precautions to see if an investment firm is operating without permission.

About one in five respondents said they had not checked or did not know if their investment had been made through FSCS. The FCA says this puts consumers in danger of opting for investments with no repayment option if their provider goes bankrupt.

FSCS cover means consumers can claim reimbursement of up to £85,000 unlike an FCA-authorised company that has gone bankrupt.

Consumers can check if their investment is financially registered through FSCS, their Investment Protection Checker.

Mark Steward, director of enforcement at the FCA, said: “Fraudsters will find new tactics to target consumers, so make sure you do your homework and take the time to investigate. Just a few minutes can make a big difference.

Investor sentiment is sharply split along age lines when it comes to environmental, social and governance (ESG) issues, according to a study conducted on behalf of wealth managers and money advisors.

ESG, one of the approaches within the broader concept of “ethical” investing, is as much about its impact on people and the environment as it is to potential financial returns.

A made through Personal Investment Management

PIMFA found that a large majority (81%) of people across all generations rate ESG factors as either ‘very important’ or ‘important’ drivers of their investment decisions.

But while around three-quarters (72%) of older investors aged 18-25 feel that some, if not all, of their investments deserve to be for the greater good, less than a third (29%) of seniors aged 56 to 75 feel the same. . . Among investors over the age of 75, this proportion drops further to one in five (21%).

PIMFA also found that ESG investment issues were more important to women than men, with 86% of women across all generations saying it is a factor in their investment strategy. 

However, while female investors need their money to contribute to smarter people than men, a higher proportion of women (37%) say they lack confidence and wisdom when it comes to making ESG investments compared to men ( 26%).

Liz Field, Chief Executive of PIMFA, said: “One of the most pronounced effects of the Covid-19 pandemic has been the increased interest in all things ESG. It’s appealing to see how the five pivotal generational teams differ in their responses to the GSS.

“The wealth control industry has a wonderful opportunity to leverage ESG by making an investment as a catalyst to inspire more women to invest and secondly to use ESG as an educational and practical tool to drive a much broader savings and investment culture in the world. market. . “

The investment functionality of the UK’s largest wealth managers has undergone a dramatic change this year, according to a leading investment advisory firm.

Asset Risk Consultants’ (ARC) research of 300,000 portfolios controlled through more than a hundred wealth control firms found that growth-oriented methods struggled given the prevailing economic situations in 2022, while value-oriented portfolios experienced a resurgence in fortune.

Growth-based methods are the process of making an investment in developing corporations and sectors that are expected to continue to expand over time.

Value investing concerns itself with buying companies that are under-appreciated both by investors and the market at large.

The CRA says the situation is completely different from the end of last year. Many portfolios that were in excellent shape at the end of 2021 are now languishing in the bottom quartile in terms of performance, having been replaced by former laggards from the same period. .

The bottom quartile accounts for the bottom 25% of portfolios.

The CRA says its findings show that the changing economic landscape has had a significant impact on managers whose investment strategies were based on an environment of low inflation and low interest rates.

The company says that strategies favouring growth stocks, smaller companies and long-dated bonds had suffered the most. At the same time, around a third (30%) of managers with a value bias jumped from the fourth quartile at the end of 2021 to the top quartile in the first quarter of this year.

Graham Harrison, executive director of ARC, said: “The reason for this is Russia’s invasion of Ukraine, which has far-reaching and long-term geopolitical implications. “

Harrison pointed to other contributing factors, adding “a populist trend toward greater protectionism, supply chain shortages due to Covid-19, and a decade of lack of genuine wage growth. “

He added: “Easy money has been made. We are at an inflection point for money markets and investment strategies. The next decade will be very different for investors than it has been in the last three years. “

UK retail investors withdrew more than £7 billion from funds in the early months of the year, with March 2022 alone responsible for nearly half of that figure, according to the latest figures from the Investment Association (IA).

The AI reports that capital outflows rose from £2. 5 billion in February this year to £3. 4 billion in March. Investors pulled a budget amounting to £1. 2 billion in January 2022.

The speed of investor withdrawal accelerated dramatically in the first quarter of 2022, exacerbated by tighter financial policy in primary markets and exacerbated by Russia’s invasion of Ukraine.

Rising inflation, emerging interest rates, and the Ukraine crisis have combined to cause risk flight from investors, bond budgets, and, to a lesser extent, investment portfolios. behaviour.

Laith Khalaf, head of investment analysis at brokers AJ Bell, said: “The outflows from equities look modest compared with the withdrawals registered by bond funds. Over the course of the first quarter, investors withdrew £1.9 billion from equity funds, but £6 billon from bond funds.”

Chris Cummings, IA chief executive, said not all fund sectors witnessed outflows over the period: “March was a story in two parts, and outflows were balanced by many investors using their Individual Savings Accounts and seeking potentially safer havens in diversified funds, with multi-asset strategies benefiting in particular.“Inflows to responsible investment funds continued to be a bright spot and demonstrate investors’ commitment to sustainable investing.”

Less than 1% of the budget (out of a total of more than 1000) has managed to generate solid and sustained returns over time, according to the latest from BMO Global Asset Management.

The investment firm’s latest Multi-Manager FundWatch survey found that just five (0.45%) of the 1,115 funds it covers achieved top quartile returns over three consecutive 12-month periods running to the end of the first quarter of 2022.

It indicates that this is the lowest budget number it has recorded in this band since the beginning of its investigation in 2008. He describes this figure as “well below” the old consistent and best-performing budget average of around 3% mark.

The agency highlights market events that have harmed the functionality of funds over the past three years, Covid, inflation, climate change, and similar environmental, social, and governance (ESG) concerns.

It also highlights the war in Ukraine and its geopolitical effect on the supply of resources for the dramatic drop in the number of consistent high-performing portfolios.

Rob Burdett, head of BMO’s multi-manager team, said: “The war in Ukraine is the latest surprise for markets, and the resulting sanctions have a significant impact on commodities, inflation and interest rates, as well as on the economy.

“These crises produce significant shifts in money markets and underlying asset classes, resulting in the lowest consistency numbers we’ve ever noticed in the survey. “

According to Fundscape, assets held on direct-to-consumer (D2C) investment platforms have fallen below £300 billion in what may be a challenging year for providers.

The fund’s analysts say rising inflation, increases in emerging fuel national insurance and the cost-of-living crisis weighed on investor and market sentiment in the first quarter of this year, even before factoring in the effect of the crisis. Ukraine.

Fundscape says the overall result led to a 6% relief in the control of combined assets held on D2C platforms, from around £315 billion to £297 billion at the end of March 2022.

D2C providers tend to convert most of their revenue stream in the season from individual savings accounts, between January and March each year, adding to the damage caused by a sluggish first quarter.

Fundscape’s Martin Barnett said: “The first quarter of the year is the bellwether of investor sentiment and sets the tone and pace of investments for the rest of the year. 2022 could be a tougher year for many D2C houses, especially the robos.”

Bots, or robo-advisors, offer an automated broker option for investors who have the option of making an investment on their own or delegating full control of their investments to a professional advisor.

A new Chartered Financial Analyst (CFA) Institute study shows that 51% of UK retail investors now trust the financial services sector, compared with just 33% in 2020. 

The CFA Institute is a global framework of investment professionals that administers CFA accreditation and publishes investment research, in addition to its biennial Investor Confidence Report.

According to the latest report, the majority of UK retail investors (59%) are now “very likely” to achieve their lifetime maximum monetary target. For 58 percent, it’s about saving for retirement, while for 12 percent, Cent prioritizes saving for a major purchase, like a space or a car.

The CFA surveyed over 3,500 retail investors across 15 global markets, and found that trust levels have risen in almost every location. On average, 60% of global retail investors say they trust their financial services sector.

The CFA study sees last year’s strong market functionality as a key driver of investor confidence. In 2021, the S

Another thing is the adoption of technologies such as investment methods and trading applications based on artificial intelligence, which can improve the accessibility and transparency of the markets. Half of retail investors say the increased use of generation has led to greater acceptance in their monetary policies. tutor.

They also revealed investors’ preference for customized portfolios that align with their values. Two-thirds say they need customized products and are willing to pay additional fees to get them.

Investment methods that prioritize ESG (environmental, social, and governance) criteria are a key target area for this personalization, with 77% of retail investors saying they are interested in ESG investment methods or already.

Rebecca Fender, Head of Strategy and Governance for Research, Advocacy and Standards at the CFA Institute, says: “The high degrees we’re seeing lately in investor confidence are certainly cause for optimism, but the challenge is to maintain confidence even in periods of volatility.

“Technology, the alignment of values, and personal connections are all coming through as key determinants in a resilient trust dynamic.”

Investment platform AJ Bell has unveiled what it claims is a “pragmatic” mobile app aimed at investors with large sums of money to invest but who are intimidated by the prospect of stock market trading.

AJ Bell hopes its Dodl app will appeal to investors who are disappointed by low returns on money and are looking for an undeniable way to access the stock market and manage their investments.

City watchdog the Financial Conduct Authority recently learned that 8. 6 million adults in the UK have more than £10,000 in cash to invest.

A study conducted by AJ Bell before launch found that around a third of those who aren’t currently making an investment (37%) are discouraged from doing so because they don’t know where to start. About a portion (48%) said that being able to choose from a short list of investments would inspire them to start making an investment.

Dodl will restrict investors to a selection of just 80 budgets and inventories that can be bought and sold via your smartphone. On the contrary, competing trading apps will offer thousands of investments in the stock market.

The app will offer several products that people need to save tax efficiently, including an Individual Savings Account (ISA), Lifetime ISA and pension. Dodl will also feature “friendly monster” characters that aim to break down traditional stock market barriers and make it easier for customers unfamiliar with the investing process.

AJ Bell claims that you can open a Dodl account through the app in “just a few minutes. “Customers can deposit cash into Apple and Google Pay accounts, as well as debit cards and direct debits.

Dodl imposes a single, fixed annual payment of 0. 15% of the portfolio price for open-ended investment accounts, such as ISAs or pensions. There is also a minimum payment of £1 per month. The annual charge for maintaining an ISA of £20,000 through Dodl would be £30.

Buying or selling investments is commission-free, and no tax wrapper charges apply. AJ Bell says customers investing in funds will also be required to pay the underlying fund’s annual charge as they would if they were investing on the company’s main platform.

Andy Bell, CEO of AJ Bell, said: “Investing doesn’t have to be scary. When creating Dodl, we focused on cutting out the jargon, making opening an account quick and easy, and reducing the diversity of investment consumers. can of.

Millionaire investors in the UK have suffered greater losses than their less prosperous counterparts since the start of 2022, and market volatility has caused more damage to riskier portfolios, favoured by those with larger sums to invest.

Interactive Investor’s index of private investor performance shows that those of its customers with £1 million portfolios experienced losses of 4.2% in the first quarter of this year.

By comparison, average account holders declined by 3. 6% over the same period, while professional fund managers lost 3. 7% of their money.

Figures for longer periods of time show an improvement in overall performance. Typical consumers suffered losses of 1% in six months, but increased by 5. 4% in the last year.

Professional managers fared worse, with a 1% drop in six months and a 5. 3% increase over the next 12 months.

Stock markets around the world had a tough time in the first quarter of this year. According to investment firm Schroders: “Russia’s invasion of Ukraine at the end of February was a global shock. The serious human implications spilled over into the markets, with stocks falling. “

Richard Wilson, head of Interactive Investor, said: “The horror unfolding in Ukraine has framed what was already a torrid time for markets. So, it’s no surprise to see the first quarter of the year chart the first negative average returns since we first started publishing this index.

“Markets don’t go up in a straight line, and this index is a sobering reminder of that. It’s also a reminder of the importance of taking a long-term view, and not putting all your eggs in any one regional basket.”

[] In recent months, those with cash saved have become more cautious about making investments in the markets.

Hargreaves Lansdown (HL), the investment platform, said that about one-third of investors who have invested coins in an inventory and ISA inventory this year have held their coins in coins rather than investing them.

Over the past two years, HL said about a quarter of investors had prioritized money over market-based investments.

Most investors with individual savings accounts (ISAs) are concerned about the short-term effect of inflation on their portfolios, according to a study by online investment platform Freetrade.

ISAs are a set of government-backed savings plans that, depending on the product chosen, allow you to earn interest or grow your investments tax-free.

In a poll of 1,000 ISA holders, commissioned by the company in association with the Investing Reviews website, two-thirds (67%) said they were worried about the effect of inflation on their investment gains over the next three years.

Freetrade found that the average investor expects to earn a return of 5. 8% per year over this consistent period. But with customer value inflation in the UK recently hitting a 30-year high of 6. 2%, most investors hope it will have time to make genuine gains in the near future.

Despite rising interest rates and increased stock market volatility because of the conflict in Ukraine, Freetrade said a significant proportion of investors – one-in-five (19%) – still expect to make double-digit gains in the immediate years ahead.

Another finding is that less than a third (31%) of investors believe that the strategy of owning shares in a single company promises the most productive returns in the long run. Conversely, almost a portion (49%) of the cheap budget is likely to be disbursed. offering the most productive returns.

The vote also revealed more optimism about the outlook for UK stocks, following record £5. 3 billion outflows from the sector in 2021. One in five investors intend to increase their exposure to domestic assets, while 4% are likely to sell their domestic assets. . British holdings.

Freetrade’s Dan Lane said: “Maybe the UK market’s relatively cheap valuation is proving too hard to resist, or maybe the allure of US tech is waning slightly. Whatever the reason, the UK seems to be back on the menu in 2022.”

* For savers and investors who have not yet done so, time is running out to use this fiscal year’s ISA allocation. All UK adults are entitled to an ISA allowance worth £20,000 for the tax year. The 2021-22 fiscal year ends on April 5. and the 2022-23 equivalent starts the next day.

Shareholder payments made through corporations out of their profits hit a record high in 2021, but global dividend expansion is expected to slow sharply this year.

According to investment manager Janus Henderson, this trend was already observed before Russia’s invasion of Ukraine.

The company’s global dividend index indicated that corporations paid out $1. 47 trillion to shareholders in 2021, an increase of about 17% from last year.

This represents a major rebound from the steep dividend cuts imposed on companies in 2020, in order to save money due to the effects of the Covid-19 pandemic.

Dividends are a common source of income for investors, especially as part of a retirement plan strategy.

Henderson said bills hit new records in several countries last year: the United States ($523 billion), China ($45 billion) and Australia ($63 billion).

In the UK, dividends reached $94 billion, an increase of 44% between 2021 and last year. The recovery is the result of a base of significant cuts in 2020, meaning bills remain below pre-pandemic levels.

Janus Henderson said that 90% of companies globally increased or held their dividend steady during 2021. Banks and mining stocks alone were responsible for around 60% of the $212 billion increase in last year’s payouts. Last year, BHP paid the world’s largest-ever mining dividend worth $12.5 billion.

For next year, before Russia’s attack on Ukraine, Janus Henderson forecast a more moderate dividend expansion of 3. 1%. This figure should perhaps be reduced further.

Jane Shoemake, of Janus Henderson, said: “Much of the dividend recovery in 2021 came from a narrow diversity of corporations and sectors in some parts of the world. But in those headline figures there was widespread growth, both geographically and sectorally.

According to a study by Boring Money, the number of senior investors aged forty-five and over who own crypto assets has doubled in a year.

The consultancy’s Online Investment Report 2022, based on a survey of more than 6,300 UK adults, also shows that mobile communications is becoming the dominant medium for younger investors buying budget and shares.

Boring Money said that the proportion of adults under the age of forty-five who own crypto assets has increased from 6% in 2021 to 12% in the last 12 months. The proportion of homeowners among those over the age of forty-five is particularly lower, at 3% this year. , up from 2% in 2021.

The Financial Conduct Authority, the U. K. ‘s monetary watchdog, warned last year about the number of new investors attracted by high-risk investments such as cryptocurrencies, as well as the threat of “low-friction” trading on mobile devices.

Investors in low-friction trading will be able to start trading with just a few clicks from their smartphone or tablet. The FCA says adding a small amount of “friction” to an online investment process, through the use of disclosures, warnings and checkboxes, is helping investors. Increased perception of risk.

According to Boring Money, 43% of investors say they have used their mobile in the past 12 months as a means of checking the balance on an investment account. This compares with 36% of investors in 2021. 

About one in five investors (19%) also said they bought or sold a mobile app, up from 16% last year.

Boring Money said one in five UK retail investors (19%) are made up of people with less than three years of investment experience, while 7% have been making an investment for less than a year.

Holly Mackay of Boring Money said: “There is a close-out effect in the DIY investment market today. On the one hand, we have millions of people in cash, with gigantic balances and no investments. On the other hand, across the spectrum, we have inexperienced, usually younger, investors who own incredibly volatile assets.

“There’s a more herbaceous middle ground for millions of people, and providers want answers on how to move more consumers into that more comfortable zone. “

The Financial Stability Board (FSB) has warned that policymakers want to temporarily move forward to expand regulations covering the virtual asset market, given its intertwined ties to the classical monetary system.

According to the FSB, parts of the crypto market (around $2 trillion globally) are difficult to assess due to “significant knowledge gaps. “

A total investment budget of £45 billion has been flagged and rated as consistently underperforming through studies by online investment service Bestinvest.

The firm’s latest research, Spot the Dog, shows fund teams abrdn and Jupiter and wealth manager St James’s Place were all guilty of six underperforming budgets out of 86 so-called “dogs” known in the half-yearly report .

It defines a “dog” fund as a fund that fails to outperform its benchmark for 3 consecutive 12-month periods and also underperforms its benchmark by 5% or more over a 3-year period.

A benchmark is a popular metric, a specific stock index, against which the functionality of a mutual fund is compared.

Bestinvest said the funds, despite their poor performance, will generate £463 million in screening fees this year, even if stock markets remain stable.

The analysis highlighted 12 funds that were each worth over £1 billion. These included JP Morgan’s US Equity Income fund worth £3.93 billion, Halifax UK Growth (£3.79 billion) and BNY Mellon Global Income (£3.47 billion).

The research also included Invesco’s UK Equity Income and UK Equity High Income portfolios, described through Bestinvest as “perpetual habit funds”.

Bestinvest’s previous Spot the Dog report last summer identified 77 funds worth just under £30 billion. The company says the reason for an increase in the number of poor performers is because of additions from the Global and Global Equity Income investment sectors.

Jason Hollands, CEO of Bestinvest, said: “Spot the Dog has helped shine a light on the challenge of consistently disappointing returns generated through many investment funds. In doing so, it has only encouraged thousands of investors to stay closer to their investments, but it has also led fund teams to deal with poor performance.

“More than £45 billion is a huge saving that could allow investors to work harder than rewarding fund corporations with juicy fees. At a time when investors are already battling inflation, tax hikes, and choppy stock markets, it’s imperative to make sure you’re making the most of your wealth.

Almost a portion of people who make investment decisions on their own are unaware that wasting cash is a potential investment risk, according to new studies from the UK’s monetary watchdog.

Understanding Self-Directed Investors, produced through BritainThinks for the Financial Conduct Authority (FCA), found that 45% of self-directed investors do not consider “losing money” to be a potential investment risk.

Self-employed investors are explained as those who make investment decisions on their own behalf, setting up investments and making trades without the help of a monetary advisor.

In recent years, proprietary trading has become increasingly popular among retail investors.

According to the FCA, more than one million UK adults increased their holdings in high-risk investments, such as cryptocurrencies or crowdfunding, in the first seven months of the Covid-19 pandemic in 2020.

According to the study, “there are fears that some investors will be tempted – through misleading online advertisements or high-pressure sales tactics – to purchase complex, higher-risk products that are hardly suitable for them and do not reflect their risk tolerances or, in some cases, are fraudulent.

He adds that the investment journeys of self-directed investors are complex and highly personalized, but investors can be classified into three main types: “the essay,” “the thinking,” and “the player. “

The FCA used behavioural science to test various methods of intervention to help investors pause and take stock of their decisions before committing in “just a few clicks”.

They found that adding small “frictions” to the online investment process, such as posting “frequently asked questions” about key investment perils, warnings, and checkboxes, helped investors perceive the dangers involved.

Susannah Streeter, senior investment and markets analyst at investment platform Hargreaves Lansdown, said: “The boom in subprime investments is causing massive nervousness among regulators, with the FCA implicated in vulnerable consumers being dragged into a frenzy of speculation.

“The ‘fear of missing out’ effect that occurred in the pandemic has attracted more and more people to the murky world of cryptocurrency investments and almost a portion still do not understand the dangers involved.

M&G Wealth is teaming up with financial app Moneyfarm to provide a direct digital investment service aimed at meeting a range of customer risk appetites and profiles.

It will offer a collection of multi-asset model portfolios, backed by a range of actively managed and passive funds. 

Multi-asset investing provides a greater degree of diversification compared with investing in a single asset class, such as shares or bonds. Passive funds typically track or mimic the performance of a particular stock market index, such as the UK’s FT-SE 100.

Moneyfarm will supply the operating models, adding committed ‘teams’ to the visitor appointment generation and management platform, as well as custody and trading services.

Direct investing in the UK has witnessed rapid growth in the past five years, with an annual average increase in assets under management of 18% to £351 billion at the end of June last year, according to researchers Boring Money.

David Montgomery, Managing Director of M

Moneyfarm was introduced in Milan in 2012 and has 80,000 active investors and £2 billion invested through its platform.

Bestinvest, by Tilney Smith

The company says it’s revamping its existing platform into a “hybrid virtual service that combines online goal planning plans and analytics teams with a human touch. “Clients can search for qualified professionals through free investment training.

If desired, clients can also receive a fixed-price advice package that includes a review of their existing investments or a portfolio recommendation. Bestinvest said a one-off payment of between £295 and £495 would apply depending on the package selected.

The novelty will be released at the end of the fiscal year on April 5.

The launch will be accompanied by ready-to-use “smart” wallets that will provide investment features tailored to other threat profiles.

The portfolios will be invested in passive investment funds, while being actively monitored through TS’s investment team.

Bestinvest said that the annual investment charge will be between 0. 54% and 0. 57% of the portfolio price.

From February 1, the company added that it will reduce its consistent online percentage trading fees to £4. 95 per transaction, regardless of the length of the transaction.

Bestinvest prepares a semi-annual report on the poor performance of investment budgets or “dogs”. The company says it needs to bridge the gap between the existing network aimed at amateur investors and classic monetary recommendations aimed at a more affluent audience.