From the category archives: Market Views

Market Views

The hidden depth of covered call strategies

Covered call strategies have been around for many years and are particularly well known in the US market. As yields on financial assets have diminished, the popularity of these strategies has surged, by as much as 25 per cent per annum over the past 10 years according to some estimates, and some $45bn is currently invested. The approach is less accepted in the UK, but a handful of equity-focused funds are managed in this way. A covered call position involves taking a long equity position and writing a call option on the same security. In essence, some of the future potential capital growth is sold in exchange for an option premium. During bull markets, share prices may go through the pre-set strike price of the options, and the positions can be called away; such strategies will typically lag the market's advance. In down markets, the strategies are exposed to declines in share prices, but the revenues generated by call writing mitigate the drawdown. 

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The Emerging Picture

As is widely known many emerging countries boast favourable demographics or are experiencing rapid urbanisation. Their markets can provide access to a long-term growth story where well-managed companies with unique assets, such as good distribution networks, are able to meet the demands of surging demographics and economic expansion. Questionable corporate governance, poor transparency, corruption and weakly functioning institutions are some of the risks of investing in the region.

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Client reporting: What fund managers should be telling advisers

The reporting of anything can, of course, mean rather different things to different people. 

According to Oxford Dictionaries (online version, naturally) the word ‘reporting', in its guise as a noun, translates as ‘an account given of a particular matter, especially in the form of an official document, after thorough investigation or consideration by an appointed person or body.' 

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Sector Focus: Strategic Bonds

The strategic bond sector has to be one of the most diverse as defined by the Investment Association. With managers' mandates varying drastically, both in terms of what they are trying to achieve and how they go about doing it, the sector can be a potential minefield for those who are less familiar with its nuances, with the difference in performance between the best and the worst fund often extreme. Of course, the plus side of this is that such diversity provides wonderful choice for investors, with a range of potential outcomes for clients. 

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What to expect from 2015

Square Mile's Managing Director Richard Romer-Lee talks with FE Trustnet about the year ahead. Richard explains how investors can make the most of their portfolios.

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The Great Pension Revolution

See below a link to a short film featuring Keith Richards, chief executive of the Personal Finance Society, John Ventre, head of multi-asset investment at Old Mutual Global Investors and Richard Romer-Lee, managing director of Square Mile Investment Consulting and Research, in which they debate building investor confidence in an environment of change and uncertainty in pension provision.

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Victoria Hasler Writes in Portfolio Adviser

Identifying 5 Funds for when Income Actually Matters...

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Multi Asset Income Investing

Given the focus on income, which has been given a further boost by the recent announcement of freeing up the pension pot, a multi asset approach to income investing will be adopted by many advisers as they seek to help their clients through retirement. Nigel Whittingham, Director of Square Mile, was recently involved in an Asset TV Conference on multi asset income investing. See the link below.


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The Evolving Needs Of Investors

By Nigel Whittingham, Director, Square Mile Investment Consulting & Research

The age old practice of selecting funds based on peer group performance, over time periods which are largely meaningless and which is proven to be of absolutely no use in predicting future performance, is under significant pressure, both from the regulator and investors– and about time.

Added to this, the Regulator in the UK is very exercised about investors investing in funds which provide appropriate outcomes. To understand the drivers of change in the retail investment market, Square Mile Investment Consulting & Research conducted a detailed piece of research.. The insight from the results has provided some very clear conclusions.

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