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Gold’s Yin to the Stock Markets Yang

Do we have a Gold bubble?

Many people believe in the idea of a Gold bubble. A bubble occurs when the price of an asset quickly increases without any obvious reason or cause to suggest a higher value. The price of gold mainly rises simply just because people think it will. It is very hard to place the real value of Gold as it doesn’t directly yield income, which is why speculators increase the price of gold beyond its intrinsic value, resulting in the gold bubble. 

The price of gold can fall, however it is very unlikely that it will fall below the amount it costs to dig it out the ground and to bring it to the market. If in the unlikely event it does fall below these costs, the extraction of gold will rapidly slow down, increasing demand, which will push the prices back up again. This is why most financial advisors would use gold in their clients’ portfolios as it is seen as a safe asset and a good hedge against inflation, however there is no fundamental reason that it’s value should increase when the pound falls.

The effects of a stock market crash on gold

There are many questions from investors on when the best time to buy gold is, and if it can be used to weather the storm in a stock market crash. 

The below table shows the performance of gold during the past stock market crashes.

Out of the 9 stocks market crash scenarios shown in the table, there was only one occurrence of gold falling more than the S&P, and more importantly 6 out of the 9 scenarios shows the value of gold increasing when the S&P is falling. The 2 yellow columns show that gold fell when the S&P fell, but at a lower rate, showing that is would’ve still been more beneficial for investors to be invested in gold.

The reason for this negative correlation between the performance of the S&P and gold is because when there is high levels of fear due to the stock market falling, investors tend to invest in gold as it is seen as a ‘safe haven’. Similarly, if the stock markets are performing exceptionally well, investors are more likely to take advantage of this opportunity and deflect their attention from investing in gold.

Should I invest in gold?

In the current climate with confidence in politics and the worldwide climate at an all-time low, gold can act as an important part of investments portfolios to help preserve wealth and possibly make a positive return in times when markets are falling. The gold market has the advantage of a high liquidity that allows investors to easily sell their gold for cash. 

However, just like any other investment, it is important to consider the time frame you are looking to invest for, and the likelihood of you needing to access that money. It is essential to make sure your portfolio is diversified. Investing in gold can help to diversify a portfolio as when a market declines, the price of gold has historically increased.

Please note that these types of products are not suitable for all clients and that this should not be taken as personal advice. All investments can go up and down in value and therefore you could get back less than you invest. Past performance is not a guide to the future.

Written by: Jemma Long

12 July 2022

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Ascot Wealth Management Limited is authorised and regulated by the Financial Conduct Authority reference 551744. Our registered office: Scotch Corner, London Road, Sunningdale, Ascot, Berkshire, SL5 0ER. Registered in England No. 7428363. www.old.ascotwm.com Unless otherwise stated, the information in this document was valid on 3rd February 2017. Not all the services and investments described are regulated by the Financial Conduct Authority (FCA). Tax, trust and company administration services are not authorised and regulated by the Financial Conduct Authority. The services described may not be suitable for all and you should seek appropriate advice. This document is not intended as an offer or solicitation for the purpose or sale of any financial instrument by Ascot Wealth Management Limited. The information and opinions expressed herein are considered valid at publication, but are subject to change without notice and their accuracy and completeness cannot be guaranteed. No part of this document may be reproduced in any manner without prior permission. © 2017 Ascot Wealth Management Ltd. Please note: This website uses cookies. To continue to use this website, you are giving consent to cookies being used. 

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UK Inflation Rate at Levels Last Seen in 1992.
What this means for you.

The news of late has not made pretty reading. Prices are up, adjusted wages for inflation are down and the economy has not been moving in the right direction. We, as consumers, are feeling the pinch. We are used to the rising cost of fuel as a direct reflection of rising prices and inflation but household budgets will pick up the increase in prices for further products as the post pandemic worldwide landscape settles the supply chains in an ever changing and dynamic global geopolitical environment. 

So, this begs the question, when in history were inflation rates this high and what can we learn from it?

UK Inflation rates hit highs of 27% in 1975, 20% in the early 1980’s and just over 11% in the early 1990’s. This has been a distant memory over the past 30 years only for a high inflationary environment to rear its head once more. The world is a different place since the early 1990’s with access to cheap goods from China and other Asian countries and the access to Russian energy and commodities for European imports an integral part in the Euro zone’s economic growth. Globalisation has taken over since then with the interconnected nature of worldwide economies prospering from shared growth across the board.

Fast forward to the present and we see the CPI index at just over 6%. What happened? It would have taken something big to jolt the global economies back into this high inflation environment. Up steps the Covid-19 pandemic. As restrictions have eased, consumers are spending more which has driven up prices. This has shifted Government planning to more self-sufficiency and generating economic stimulus packages in order to assist consumers who were locked down over the past 2 years.

This self-sufficiency has begun with moves by the Government to ease the squeeze on household budgets already taking effect. The fuel duty has been cut by 5p per litre until March 2023, National Insurance thresholds have been raised, the Employment Allowance increased from £4k to £5k and a promised basic rate tax cut to 19% from 20% is in the works before 2024. The self-sufficiency has begun.   

The tools to combat high inflation rates would be for the Bank of England to raise interest rates. Back in 1992, the interest rates were above 10%. They have been steadily decreasing to 0.1% recently. These rates have already begun to rise to 1% since December 2021 with more increases expected in light of many analysts seeing the inflation rate peak over 10% by the end of the year. So it will be likely that we will see more interest rate rises by the end of the year.

So what does this all mean for you, the consumer?

As a result of interest rates rising, three things will happen to you.

So what does this all mean for you, the consumer?

As a result of interest rates rising, three things will happen to you:

1. Mortgage payments will increase (if you are not on a fixed rate mortgage)
2. Your credit card and loan repayments may increase in the light of higher interest rates
3. The Savings rate will increase – but be warned as the interest rates are not rising in line with the rising inflation rate.

The actions you can take are as follows:

• Streamline your household budget, cut wasteful expenditure in light of rising prices
• Confirm your mortgage position as to whether you are in a fixed or variable rate period
• Focus on building and maintaining your emergency savings (recommended to have at least 3 month’s worth of living  expenses)
• Focus on paying down short term debt over the next few months

The main takeaway at present for you as you attempt to travail the rest of 2022 is that your household budget will get tighter from now until the end of the year. Thankfully, we are heading into our summer which may put a pause on household energy prices rising. But this will likely be a stay of execution as we head into the winter later this year.

So batten down the hatches, sit on your cash for the next few months to call on for those inevitably rainy days and look to outlast this period of high inflation to come out the other side in a strong and healthy financial position.

Written by: Greg Armstrong

19 May 2022

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Ascot Wealth Management Limited is authorised and regulated by the Financial Conduct Authority reference 551744. Our registered office: Scotch Corner, London Road, Sunningdale, Ascot, Berkshire, SL5 0ER. Registered in England No. 7428363. www.old.ascotwm.com Unless otherwise stated, the information in this document was valid on 3rd February 2017. Not all the services and investments described are regulated by the Financial Conduct Authority (FCA). Tax, trust and company administration services are not authorised and regulated by the Financial Conduct Authority. The services described may not be suitable for all and you should seek appropriate advice. This document is not intended as an offer or solicitation for the purpose or sale of any financial instrument by Ascot Wealth Management Limited. The information and opinions expressed herein are considered valid at publication, but are subject to change without notice and their accuracy and completeness cannot be guaranteed. No part of this document may be reproduced in any manner without prior permission. © 2017 Ascot Wealth Management Ltd. Please note: This website uses cookies. To continue to use this website, you are giving consent to cookies being used. 

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Director, Mark Insley, nominated for Adviser of the Year!

Ascot Wealth Management had the honour of ending off a very unprecedented year by our managing director, Mark Insley, being nominated for the highly acclaimed Growth Investor’s Adviser of the Year Award. This award follows last year’s victory in the Professional Adviser Firm of the Year category. 

Just because we were working from home, does not mean that it was not a busy year, on the contrary, we were also nominated for the Money Marketing Awards 2020 in the Best Financial Education Initiative (Advice Firm) category and for Retirement Adviser of the year by Moneyfacts.

Commenting on the announcement, Mark said: “This is the perfect way to start our 10 year anniversary year.  The Company is going from strength to strength and I am delighted that we are being recognised as Industry leaders, particularly against a backdrop of so much uncertainty. This award is testament to the hard work of all our staff and we are incredibly proud of what we have achieved.”

We look forward to the results that will be made public during a virtual event in December. 

 

Ascot Wealth Management Limited is authorised and regulated by the Financial Conduct Authority reference 551744. Our registered office: Scotch Corner, London Road, Sunningdale, Ascot, Berkshire, SL5 0ER. Registered in England No. 7428363. www.old.ascotwm.com Unless otherwise stated, the information in this document was valid on 3rd February 2017. Not all the services and investments described are regulated by the Financial Conduct Authority (FCA). Tax, trust and company administration services are not authorised and regulated by the Financial Conduct Authority. The services described may not be suitable for all and you should seek appropriate advice. This document is not intended as an offer or solicitation for the purpose or sale of any financial instrument by Ascot Wealth Management Limited. The information and opinions expressed herein are considered valid at publication, but are subject to change without notice and their accuracy and completeness cannot be guaranteed. No part of this document may be reproduced in any manner without prior permission. © 2017 Ascot Wealth Management Ltd. Please note: This website uses cookies. To continue to use this website, you are giving consent to cookies being used. 

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AWM Performance Monitor – August 2020

Note From The Managing Director.

The advisory portfolios had a strong August, all posting positive numbers in what was a muddling month for asset classes overall. Mid-month there was a lot to digest for investors with I would say the first signs of volatility coming back into the various markets for bonds, equities and commodities. This has split into September but comments will stay focused on this month’s overview.

The biggest battle we see currently is in the direction of inflation with mid-month deferrals of the second US stimulus bill looking like being the end of September at the earliest. This meant sell-offs in asset classes such as gold and inflation-protected bonds, Gold had reached a peak close to 2100 but has dropped and seems to be trading in a range of around 1950. We have held our overweight position as we still sit on the inflation risk fence that low long term inflation. I think this theme was somewhat reflected at month-end and I have a deeper view that as much as some sales chains, such as our own with video meetings have been officiated I see short to medium term issues with the supply of goods and this will likely lead to inflationary pressure. Just this week in the FT (Financial Times) there was a good example of this applied to a rabbit purchase. The journalist’s pet rabbit had died during the lockdown and she set out to replace it but could not find one due to the sudden demand for small pets. She ended up paying triple the standard amount to replace her furry friend. This theme resonated with me and this is why we will keep our gold overweight for the time being.  There was continued out-performance in many sectors for actively managed funds and this is something adopted into thinking in the Cape Berkshire equivalents. Early October will see the realignment of these AWM portfolios to their Cape Berkshire led equivalents, performance-wise there has not been too much difference Q3 to this point.

Positives on the month were the small and midcap UK positions we hold as part of our UK allocation. The FTSE had a torrid month finishing sub 6000, at a time the Nasdaq the US tech index was running away higher. The service-based nature of the UK economy has hurt our domestic recovery but there must come a point where there are some attractive fund or investment trust-based value plays. Either way, the Merion UK Smaller Companies fund up 6.68% was a real star performer on the month. Of other note was the resignation after a long period of governance of Prime Minister Abe in Japan which we will see the fallout in the coming months. We remain underweight Japan vs benchmark, not with mass negativity but as I always remind clients the overweight’s must be funded from somewhere. Of note, we again saw a good recovery of the Indian Alquity fund where like the UK mid and small caps outperformed.

Our next note will be our quarterly update where we will look further to BREXIT and the pending US election in quarter 4. Enjoy the month.

AWM Portfolio Performance

These tables simply indicate AWM’s portfolio’s over the stated time periods up to 31/08/2020.

Market Update

Yet another very encouraging month all portfolios showing a solid performance (on average +1.43% over the month). This is greater than both the FTSE100 (returning +1.12%) and the UK Government Gilt sector (returning -3.60%). As these two benchmarks are seen as opposite ends of the risk spectrum, this gives evidence that the AWM portfolios have generated considerable risk-adjusted returns for the month. 

Over a 3 month period, the advisory portfolios have returned between 5.58% and 7.77% (mean of 3.64%), largely outperforming their FTSE UK Private Investor benchmark counterparts. As I author this note, since the COVID-related portfolio lows of 23rd March, the portfolios have returned between 12.15% (AWM1) and 31.29%. This strong continuing performance beyond the initial recovery maintains our confidence in the management of the portfolios.

Click through to the performance graphs for longer-term overviews and versus world indices.

Performance Graphs

Best and Worst Performing Funds 

This table simply indicates a portion of the AWM’s chosen invested funds, which are either the best performing or worst performing, over the stated time periods up to 31/08/2020.

This information is correct and up to date as of 10/09/2020.

This Performance Monitor has been created from multiple sources as well as our own views and this should not be taken as investment advice. If you require financial advice then please contact us by email or phone so that you can speak to a qualified financial adviser. Any information provided/gathered will be subject to the General Data Protection Regulation (GDPR). You may be assured that we and any company associated with Ascot Wealth Management will treat all personal data and sensitive personal data and will not process it other than for a legitimate purpose.

Ascot Wealth Management Limited is authorised and regulated by the Financial Conduct Authority reference 551744. Our registered office: Scotch Corner, London Road, Sunningdale, Ascot, Berkshire, SL5 0ER. Registered in England No. 7428363. www.old.ascotwm.com Unless otherwise stated, the information in this document was valid on 3rd February 2017. Not all the services and investments described are regulated by the Financial Conduct Authority (FCA). Tax, trust and company administration services are not authorised and regulated by the Financial Conduct Authority. The services described may not be suitable for all and you should seek appropriate advice. This document is not intended as an offer or solicitation for the purpose or sale of any financial instrument by Ascot Wealth Management Limited. The information and opinions expressed herein are considered valid at publication, but are subject to change without notice and their accuracy and completeness cannot be guaranteed. No part of this document may be reproduced in any manner without prior permission. © 2017 Ascot Wealth Management Ltd. Please note: This website uses cookies. To continue to use this website, you are giving consent to cookies being used. 

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Tax Year- End Planning

We hope everyone is keeping well in these uncertain times.

With the speed of recent developments, we want to ensure communications are kept up this week. Many of you have been in touch with us during this period and hopefully, those calls have been useful.

Firstly I would just like to stress and credit just how well the whole Ascot Wealth Management team has handled the constantly evolving situation over the past few weeks. Especially with myself being the one self-isolating from last Sunday.

As we get deeper into this COVID-19 period it’s key we keep rationalising the situation. As per our note earlier in the week we have gone into remote working and are fully functional remotely. We sent out an updated contact list, please let us know if you have not received this.

The current levels of volatility are unprecedented, and we are at a stage of ‘fear’ in the attitudes of investors. Yesterday saw large moves in the dollar; partly due to business increasing their cash reserves to meet future liabilities, but just as in any point of market crisis the dollar is the preferred choice of many. We saw this in 2008. While it puts further strain on asset classes such as the £ it will be the cash that comes back into markets when a correction materialises.  The extent of the liquidity squeeze yesterday was deeper than I thought and whether this is short-lived or longer term will prove a pivotal point of this pullback.

Focusing on the UK, yesterday we saw the suspension of several UK property funds, which; on one hand, create flash negative headlines, however, on the other, it does protect long term investors in these funds with their physical assets. It does, however, mean we now don’t have the same ability to sell down these particular funds and return investors capital. We will keep you posted on the replacement allocation for any new contributions into the portfolios. I know the investment team have prepared a separate note on this so I will allow that to further explain the implications.

Oil adds further challenges to the market, with continued actions of increasing supply (from the Saudi’s) in a time of lack of demand, this has meant we have seen prices drop to mid-1980’s levels of $25 on Brent Crude and Sub $20 briefly today on US Crude. This will have long-lasting impacts on oil business and the worrying start of downgrades of oil firms to ‘junk’ status today has given all credit markets a violent shock.

See a picture (below) of the oil forward curve which has a short-term pricing to current levels but not a flattening by any means. In Cape Berkshire, we added a small position on Monday and despite further drops yesterday we will, as with all asset classes, keep an eye on this for the opportunity to add if we see fit. We have a call with an excellent natural resources fund manager today, so will inform you further after that, if necessary. Ideally, we would have waited 2 more days to invest, but we simply are not trying to call a bottom to something with truly record-breaking levels of volatility.

So, that’s three pieces of negative press, but I feel two of these will be challenged in the coming weeks by investors who see a buy opportunity. Every day there are more promises of fiscal stimulus from Governments and Central Banks, despite the Fed cut on Sunday being seen by many as ‘throwing all their monetary tools at the issue’, I personally think it showed the lengths they are willing to go in order to support the economy. This has been followed by a more unified ECB package that will again be huge in size at some €50 billion in support. This will be a liquidity tool that will buy all Government, including Greek, debt as well as buying corporate bonds. This is something not even the US has decided to do yet. Governments know, that to avoid a long deep recession, these are the steps they must take.
 
Global reports on the COVID-19 show China suggesting that new domestic cases are flatlining, with two consecutive days of no domestic cases, which is positive for China, but it foreshadows some of the lengths we are potentially going to have to go through in the UK to mitigate the spread. South Korea also seems to have their spread now under control and the US seem to be leading the race for some form of a vaccine. Although, perhaps Mr Trump went too far with the mention of a Malaria related vaccine being effective ahead of the health departments approval!
 
Our advice to clients during this time is to keep in contact with your advisers and the investment management team, we will continue to send out regular updates. The decision of whether to increase or decrease risk by moving up or down a portfolio has really been driven at an individual level. If you wish to take an increased cash position for a short period we see this as a better option to large liquidation.
 
Now is the time to look at reducing unnecessary expenditure in order to avoid depleting assets at an already depressed level. Perhaps more easily done with more and more borders closing restricting travel and holidays planned, but other projects, like extensions, can be deferred in order to mitigate drawing down on an asset and realising a loss.
 
As touched on in my last note, we would stress again the efficiencies in our investment process in the Cape Berkshire Discretionary proposition – If you require more information on our discretionary proposition, please contact your adviser.
 
We do currently have some cash in the Cape Berkshire portfolios and we will look to get this invested on days I feel are most stretched. We do this knowing it could well drop lower the next day but with the volatile 10 days we have had with the stock market, circuit breakers on 5 of those in a row, shows an exact entry point is impossible to predict. We are increasing our planned fund manager meetings for the next 3 weeks, all by video/telephone, and these will pivot where we focus on any changes.
 
On the subject of the forced working practices, I believe this will be looked back upon as a turning point in the full adoption of technology within many industries. I also think it will show that business can operate more efficiently by adopting these practices and as such a lean model will evolve. At AWM we were well on the way to implementing this but for this to be more widely adopted will aid the next stage of the economic cycle. As with the 2008 crash, we had the Amazons and Apples go on to dominate US market share and if we can remain, long term investors, I truly believe we will again look back at this as a major pullback but one I am confident we will get through economically, returning to and superseding previous portfolio levels.
 
As ever, please get in contact if you wish to discuss anything further.
 
We wish all our clients and families the best during this time.

CONTACT US

Ascot Wealth Management Limited is authorised and regulated by the Financial Conduct Authority reference 551744. Our registered office: Scotch Corner, London Road, Sunningdale, Ascot, Berkshire, SL5 0ER. Registered in England No. 7428363. www.old.ascotwm.com Unless otherwise stated, the information in this document was valid on 3rd February 2017. Not all the services and investments described are regulated by the Financial Conduct Authority (FCA). Tax, trust and company administration services are not authorised and regulated by the Financial Conduct Authority. The services described may not be suitable for all and you should seek appropriate advice. This document is not intended as an offer or solicitation for the purpose or sale of any financial instrument by Ascot Wealth Management Limited. The information and opinions expressed herein are considered valid at publication, but are subject to change without notice and their accuracy and completeness cannot be guaranteed. No part of this document may be reproduced in any manner without prior permission. © 2017 Ascot Wealth Management Ltd. Please note: This website uses cookies. To continue to use this website, you are giving consent to cookies being used. 

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Statement on Liquidity of Risk-adjusted portfolios

The recent suspension of the Woodford Equity Income Fund (WEIF) amidst a torrent of investor withdrawals (most notably Kent County Council £263m (Financial Times, 2019)) brought to light that the fund was not as liquid as the “open-ended” term in the title of the universe in which it exists would infer.

As folklore will one day tell, it turned out that the fund had been investing in less frequently traded unquoted private stocks which ultimately have less liquidity than their listed peers but offer potentially higher returns to reward the additional investment risk. To invest in a private company an investor often has to overcome a multitude of difficulties such as increased due diligence, selecting an appropriate valuation method for pricing company stocks, less ease of access to company financial statements and it is also not uncommon for there to be liquidity clauses for investors in private companies looking to offload their investment be it to another investor or a secondary market at listing. The final point is compounded in loss-making companies where an investor looking to offload the stock may find themselves in competition with the company itself which might be looking to raise capital by issuing new shares  (Jourdan, 2019). However, the WEIF had c. £3.5billion assets under management (AUM) (Financial Times, 2019) bringing in more than adequate fund manager fees to absorb any additional costs associated with unquoted investments. The problems only started after a period of rocky performance persisted long enough to trigger a mass investor exodus from the fund.  

When a fund is inundated with more withdrawal requests than available funds the manager is forced into what is termed a “fire sale” which is effectively selling off stocks as quickly as possible without concern for timing or pricing (liquidity at any cost). In thinly traded stocks a large selloff by exiting investors can have the effect of exerting downwards pressure on the stock price leaving the remaining investors worse off. As such the fund manager can effectively “block” investors from withdrawing whilst they build up liquidity by orderly selling which is essentially where the Woodford Fund is now (Jolly & Jones, 2019). The fund is required to review the decision to suspend trading every 28 days and WEIF’s authorised corporate director has recently informed the Financial Conduct Authority that the fund is not yet ready to be re-opened effectively starting another 28 day cycle ( (Financial Times, 2019).

We recently underwent a liquidity assessment exercise for the funds we hold to assess the current turnaround time for sell down out of a fund’s underlying assets in a fire sale scenario:

The method we used to measure liquidity was to separate net asset value (NAV) into four time buckets based on proportion of assets the fund manager would reasonably expect to be able to sell in that time period given normal market conditions (as per method used by the FCA Chief Executive in his letter to the Chief of the Treasury Committee (Bailey, 2019)). We sent this breakdown to each of our mutual fund providers and collated the results to assess the impact on our portfolios.

*Property Feeder Funds could not reliably supply data due to the naturally illiquid nature of direct investments in real estate, for the purposes of this exercise we designated these as 25% Bucket 3 and 75% Bucket 4. Vanguard with whom we hold a index tracker funds was inundated by requests for this data from several investors and financial advisors alike and are at the time of this writing working on a uniform response to go out to all their investors in the near future. We therefore excluded Vanguard funds in the AWM Fund Liquidity Profile above. Inclusion of these index trackers funds would most likely increase the weighting of Buckets 1 and 2 as holdings normally have to satisfy strict set of criteria which may include market cap, trading volume, credit rating etc before they become eligible for edition to the index which increases liquidity.

** Source: (Bailey, 2019)

On average, the current AWM Fund universe has an average 79.33% weighting in Bucket 1 (1-7days) which is 58.33% higher than the WEIF did at its higher Bucket 1 assessment date 30th June 2018. In Figure 1 above, there is an observable 13% reduction of Bucket 1 weighting for the WEIF across the timescale described by the FCA which has been distributed across less liquid Buckets 2 to 4. As at 30 April 2019 observation the WEIF fund Bucket 1 weighting is only 2% higher than current AWM average Bucket 4 weighting of 6%.

Whilst the WEIF decision to hold unquoted securities in its portfolio was within the regulator’s mandate, our research has not indicated any evidence to suggest similar trends developing in any of the mutual funds we currently hold. More so, we anticipate that development of such a trend is especially less likely given an environment of concurrently peaked investor and regulatory liquidity vigilance. The key takeaways from this is that even fund managers who have performed well in the past may (and are likely to) run into unfavourable periods of performance in the future which may result in loss of investor confidence. We maintain our stance that a diversified portfolio is the most appropriate solution as this will often act to limit downside exposure specific to any one mutual fund in times such as these.

We continue to closely monitor these and other developments that influence the performance of the portfolios on an ongoing basis.

Prepared by: Shingirai Makuwaza, Investment Analyst, July 5, 2019

Bibliography

Bailey, A. (2019, June 18). Letter from FCA Chief Executive to Chair re Woodford 180619. Letter from FCA Chief Executive to Chair re Woodford 180619 . London, London, United Kingdom: Financial Conduct Authority.

Financial Times. (2019, July 2). Financial Times. Retrieved July 4, 2019, from Financial Times: https://www.ft.com/content/7cba76c4-9c1f-11e9-b8ce-8b459ed04726

Jolly, J., & Jones, R. (2019, July 1). The Guardian. Retrieved July 4, 2019, from The Guardian: https://www.theguardian.com/business/2019/jul/01/block-on-withdrawals-from-neil-woodford-fund-extended

Jourdan, P. (2019, June 20). Amati Global Investors. Retrieved July 4, 2019, from Amati Global Investors: http://amatiglobal.com/press.php?date=20190620

Ascot Wealth Management Limited is authorised and regulated by the Financial Conduct Authority reference 551744. Our registered office: Scotch Corner, London Road, Sunningdale, Ascot, Berkshire, SL5 0ER. Registered in England No. 7428363. www.old.ascotwm.com Unless otherwise stated, the information in this document was valid on 3rd February 2017. Not all the services and investments described are regulated by the Financial Conduct Authority (FCA). Tax, trust and company administration services are not authorised and regulated by the Financial Conduct Authority. The services described may not be suitable for all and you should seek appropriate advice. This document is not intended as an offer or solicitation for the purpose or sale of any financial instrument by Ascot Wealth Management Limited. The information and opinions expressed herein are considered valid at publication, but are subject to change without notice and their accuracy and completeness cannot be guaranteed. No part of this document may be reproduced in any manner without prior permission. © 2017 Ascot Wealth Management Ltd. Please note: This website uses cookies. To continue to use this website, you are giving consent to cookies being used. 

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Time For An Indian Take Away?

With India’s share of the world population now standing at a staggering 17.74% (1.354 Billion) , it’s hot on the heels of overtaking the most populated country in the world China, 1.415 Billion (18.54%). In recent weeks the International Monetary Fund (IMF) has re-affirmed that India will be the fastest-growing major economy in 2018 with 7.4%. By contrast, China’s growth is seen slowing to 6.5%.

Some have described India as a sanctuary in the emerging market mayhem. While many emerging-market central banks have sacrificed their growth to protect their currencies, India has enjoyed relative protection from the external shocks. The South Asian nation also provides a better risk-reward compared to other more globally linked emerging markets such as China.

To back up these views, look at the panel below from the funds in our AWM portfolios you can see China and Indian funds are number 2 and 3 respectively in terms of growth over the last year.

In 2008 India was quicker than most to rebound from the global financial crisis, handing investors 70% greater returns than the rest of the developing world. With such an excellent history, it is no wonder investors are flocking to this South Asian country. If you need any more convincing that India is the place to be, keep reading.

One of the main reasons behind their success is the fact that they are currently in a tech start-up boom, attracting over $20 billion in the past three years. Their start-up eco-system is now the world’s third largest and is maturing swiftly.

China’s economic expansion rate has stayed stagnant at 6.8% for the last few quarters, India’s, on the other hand, grew from 5.6% to 7.0% from July 2017 to January 2018 and is still on the rise. With India’s economy still in an early growth stage, there is still plenty of excess resources and opportunity for growth. Other economies, such as China’s, are in an advanced stage and operating close to full capacity.

The outlook on investment opportunities in India remains positive, with the median age still only 27 and the growing middle classes having more spending power. Investment wise India looks very promising.

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