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News and Views

The strange thing about history is how it seems to repeat itself again and again, with just the names and places changing.  New technologies disrupting cosy old world businesses, heightened geo-political tension, the rise and fall of Nations and opportunity is Asia and even China would be instantly recognisable to any Victorian investor.  

But how we invest in those today would come as a big surprise, with Britain no longer building the ships or manufacturing the goods on which so many countries depended then, nor the economic powerhouse it once was. Today economic powerhouses are found globally and investment opportunities accessed via tech-enabled companies like Amazon, Apple and Samsung and in US, Chinese and emerging market based companies.

Britain has many world leading companies and we have every intention of investing in them but we also have many, for example our large oil and gas companies, that are old world and had a question mark hanging over them long before the arrival of Covid-19.  The pandemic has accelerated trends in society that were already well-established, for example the move to online shopping.  It has also thrust others upon us that might never have become widespread, for example working from home. And those changes have been reflected in how global stock markets have performed.

Rapidly changing times make it all the more important that we keep our investment proposition in tune with where the opportunities and investment returns are – and will be in future.  Over the past year or so we have been refocusing our proposition to make sure we stay up to speed with the changing world and are not left behind.  Under head of research Robert Merrifield’s guidance we’ve pooled the knowledge, experience and skills of our investment managers around the country and our central research team to adopt a more cohesive approach to how we invest clients’ money in each of our offices.  

Our long-established philosophy that investment managers should be actively involved at all levels of the investment process, responsible for implementing it in portfolios and also look after each client personally remains central to everything we do.  So working as a team we’ve put together a set of portfolios we can all use as a guide, each slightly different and designed to match the risk profiles and risk descriptions in suitability letters.  To focus more attention on fewer investments we’ve expanded the number of collective funds and shares monitored by the research team to a total of over 280, roughly ten times the number found in an average portfolio.   The list includes our most widely held investments and many of those we expect to need in the short term.  True to our philosophy, investment managers are also encouraged to add their own ideas to portfolios, based on their own research.  All within guidelines that apply to both the central research team and investment managers.  In January we relaunched the Navigator Portfolio Service, a service investing in a range of collective funds that reflects this combined effort. 

With a long history investing in UK smaller companies and shares listed on the AIM market, London’s junior stock market, we’ve also looked at the best way to reduce the risk of holding just a few of either in a portfolio.  Investing in a sufficiently large number of small companies would reduce that risk, but this is out of reach of all but the largest clients.  So we now use specialist funds to access the smallest companies.

We’ve also decided to build on our expertise in AIM investments by establishing the AIM Inheritance Tax service, led by Paul Sheehan – an investment manager with specialist skills in this area of the market.  Managing diversified portfolios of AIM shares, the service is aimed at mitigating liability for Inheritance Tax.  Investment in this service won’t be suitable for everyone so the service is only available on the recommendation of a financial adviser. We would be happy to provide you with financial advice if you do not have an existing adviser.

Finally, one could hardly have missed the rising concern over environment and climate last year, which adds to the public’s growing awareness of corporate governance, social responsibility and even the purpose or reason for existence of some businesses.  While our focus is always on generating the best risk-adjusted returns we can for you, these factors are playing an increasing part in how we evaluate investments. Although more difficult to implement when investing in collective funds the ability to incorporate personal preferences, for example avoiding armaments or tobacco, has long been a feature of our Discretionary Investment Management service.

If you have any questions about any of our services please contact your investment manager.