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Nov 6, 2024 | 
investmentweek.co.uk | Jean-Baptiste Andrieux
US small-cap companies have largely been overshadowed by their mega-cap peers over the past decade, but the US Federal Reserve's recent interest rate cut — and the possibility of further cuts — could provide a tailwind for US smaller companies, as they tend to benefit from lower borrowing costs and increased investor risk appetite.
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Jul 30, 2024 | 
trustnet.com | Jean-Baptiste Andrieux
Emerging markets have undergone tremendous changes in recent years, as their largest constituent – China – experienced a severe crash and remains plagued by a range of troubles such as government interventions, issues in the property sector and geopolitical tension with the West. As a result, research from Trustnet shows that several funds with little exposure to the world’s second-largest economy may have struggled over the past decade but fared better over three years.
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Jul 29, 2024 | 
trustnet.com | Jean-Baptiste Andrieux
An ageing population is poised to be one of the main investment megatrends of the coming decades. By 2050, 22% of the world’s population will be over 60 years old and the number of people aged 80 or older will triple, according to the World Health Organization. This demographic shift presents challenges but also offers a range of investment opportunities in companies well-positioned to address those problems.
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Jul 24, 2024 | 
trustnet.com | Jean-Baptiste Andrieux
Dramatic changes in the macroeconomic environment have reversed the fortunes of several funds. Although these funds have been laggards for most of the past decade, higher inflation and rising interest rates propelled them from zero to hero. Below, Trustnet examines the funds in the IA UK All Companies sector with bottom-quartile performance over the past decade but which sit in the top quartile over the past three years, highlighting a significant turnaround in performance.
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Jul 24, 2024 | 
trustnet.com | Jean-Baptiste Andrieux
Retail investors face a disadvantage when selecting funds because they lack direct access to fund groups and managers to discuss underlying strategies before purchasing units. Often, the information on fund factsheets is crucial, as it is the only up-to-date information available to them, meaning their decisions can be dependent on what they find in these monthly updates.
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Jul 23, 2024 | 
trustnet.com | Jean-Baptiste Andrieux
Investors often allocate to emerging markets to benefit from the higher economic growth prospects in those regions. However, moving into emerging markets based on top-down views often misleads investors, according to FE fundinfo Alpha Manager Douglas Ledingham, portfolio manager of Pacific Assets Trust. He said: “Many investors confuse top-down trends with the potential for long-term returns.
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Jul 23, 2024 | 
trustnet.com | Jean-Baptiste Andrieux
Fund selectors recommend strategies with broad, diversified portfolios to invest in the US, emerging markets and UK small-caps. While concentrated, high-conviction portfolios have their merits, holding a larger number of stocks can enable equity managers to spread their bets more widely and gain exposure to different themes. Diversification increases the odds of finding winners while reducing the impact of misses.
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Jul 22, 2024 | 
trustnet.com | Jean-Baptiste Andrieux
Chancellor Rachel Reeves has launched a pensions review to increase defined contribution (DC) schemes’ investments in the UK economy, grow pension pots and tackle waste in the pensions system. This new Pensions Bill, confirmed in the King’s Speech, aims to encourage defined contribution (DC) schemes to raise their domestic exposure by £8bn collectively.
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Jul 22, 2024 | 
trustnet.com | Jean-Baptiste Andrieux
Small funds face fewer liquidity constraints than larger strategies, enabling them to explore less liquid opportunities. Emerging market equities typically have a lower liquidity profile than developed markets, so a case can be made for choosing smaller funds. However, higher fees are a common feature of smaller funds because they lack the scale to spread costs across a large pool of investors.
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Jul 19, 2024 | 
trustnet.com | Jean-Baptiste Andrieux
Private equity firms have capitalised on low valuations in the UK stock market to acquire a spate of small- and mid-cap companies, prompting concerns about the ‘smid’-cap sector shrinking. However, FE fundinfo Alpha Manager Ken Wotton disagrees, believing M&A to be a cyclical phenomenon unlikely to persist at the current pace. Besides, mergers and acquisitions constitute one of the strategies he uses to create value for Strategic Equity Capital, the investment trust Wotton has managed since 2020.
