Adviser Insights

Providing you with the latest insights and independent opinion from Square Mile.

A Spotlight On: IA Targeted Absolute Return

A Spotlight On: IA Targeted Absolute Return

In the first quarter of 2020, broad measures of UK equity performance were down by about 25%. The manager of a UK equity fund which has that benchmark, and which was down by ‘only’ 20% over the same period therefore achieved very good performance, even though investors in that fund lost a lot of money. Managers of absolute return funds have no such place to hide. Their benchmark is cash which, unless you are in the eurozone or Switzerland but not so far in the UK, cannot deliver a negative return. Managers of absolute return funds are therefore aim to deliver positive returns in absolute terms over reasonable timeframes, irrespective of what is happening in stock or bond markets.

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A Spotlight On: IA Europe

A Spotlight On: IA Europe

Despite significant uncertainties in terms of the outlook, for investors with a long-term horizon who are looking at European equities, such unprecedented times can bring opportunities. Europe is home to thousands of listed companies. These include global businesses and more domestically focused companies, some more sensitive to the economic cycle, others less so. For investors focusing on companies with market capitalisations of more than 500 million euros, there are circa 1400 stocks at the present moment.

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ESG integration & Responsible investment

ESG integration & Responsible investment

It is without question that 2019 was the coming of age for ESG and Responsible investment; new terms for many in the market, and ones that are having a significant impact. In this report, we seek to establish how Square Mile define these two terms, how they have evolved and what the embrace of the integration of ESG analysis and Responsible investment within the industry means for you and your clients.

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A Spotlight On: IA Global

A Spotlight On: IA Global

As at the end of February 2020, the Investment Association (IA) Global sector comprised of 339 funds with a combined level of assets totalling in excess of £250bn. To meet the IA’s requirements, funds in the sector must invest at least 80% of their assets in global equities, and not qualify for a UK or other regional sector. Global equity funds that yield a premium to the MSCI AC World Index fall into the IA Global Equity Income sector. Investors should also be mindful that although a separate IA Specialist sector exists, some non-traditional global equity funds, such as infrastructure and commodity related funds, do find their way into the peer group.

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A Spotlight On: Gilts and Index Linked Gilts

A Spotlight On: Gilts and Index Linked Gilts

These two sub asset classes, investing solely in the debt of the UK government, have traditionally delivered steady income to investors, with investors able to receive either a fixed rate of income in the gilt market or an inflation adjusted income in the index linked market. Combine these income streams with the negatively correlated capital returns both sub asset classes have provided when equity markets have fallen and it is easy to see why the sectors have traditionally been a key component of diversified portfolios for UK investors.

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A Spotlight On: IA Asia Pacific excluding Japan

A Spotlight On: IA Asia Pacific excluding Japan

There are the obvious attractions to the Asian region, such as favourable demographics, growth in urbanisation and economic expansion. The region is home to a varied selection of countries with a broad range of economic and political characteristics. This includes wealthier, highly developed nations such as Japan and Korea as well as those which are in the early stages of their development such as Pakistan and Vietnam. The region also includes countries with strong demographics and a consumption hungry middle class such as China and India.

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Prufund range report

Prufund range report

Savers have long sought the holy grail of investment; that is a return which is ahead of cash but with little or no risk to capital. Of course, no such investment exists, however the PruFund range go some way to this ideal by providing products that are designed to generate attractive long-term returns but where price movements are smoother than many other strategies investing in a similar mix of assets. Indeed, this range of multiasset funds from Prudential Assurance Company (Prudential), which helps manage expectations around growth rates, is home to a significant body of assets.

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Q4 2019 Market Update

Q4 2019 Market Update

2019 turned out to be a very profitable year for most investors. The prospect of interest rates remaining at very low levels has lifted valuations of all financial assets, despite the disappointing progress of the global economy. The growth in the global economy is still weak but has at least shown signs of stabilisation following several quarters of deterioration. 

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A Spotlight On: Corporate Bonds

A Spotlight On: Corporate Bonds

The IA Sterling Corporate Bond sector is possibly one of the more straightforward sectors which the IA have put together. Funds must invest at least 80% of their assets in investment grade corporate bonds denominated in, or hedged back to, sterling. Nonetheless there is a range of funds in the sector, with more or less flexibility around duration and credit quality. This is a relatively large sector, encompassing close to 100 funds and some £85bn of assets, and therefore gives investors plenty of choice whether they wish to invest in a tracker fund or something more active.

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A Spotlight On: UK Smaller Companies

A Spotlight On: UK Smaller Companies

At the end of June 2019, the IA UK Smaller Companies sector comprised of 52 funds with a combined level of assets totalling over £16bn. To meet the IA's sector requirements, funds must invest at least 80% of their assets in the bottom 10% of the UK equity market, by market capitalisation. Owing to the very nature of investing in smaller sized UK companies, funds within the sector tend to have a larger bias to domestic earnings and therefore the UK economy, versus those residing in the IA UK All Companies sector.

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Latest Insights

A Spotlight On: IA Targeted Absolute Return

In the first quarter of 2020, broad measures of UK equity performance were down by about 25%. The manager of a UK equity fund which has that benchmark...

A Spotlight On: IA Europe

Despite significant uncertainties in terms of the outlook, for investors with a long-term horizon who are looking at European equities, such unprecedented...

ESG integration & Responsible investment

It is without question that 2019 was the coming of age for ESG and Responsible investment; new terms for many in the market, and ones that are having a...