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F&C On GEM, Et Al
The latest News in Brief bulletin from F&C Investments is now available. Topics include:
- Felix Martin, Economist, Thames River Global Credit Team, discussing the team’s view on the latest developments in the Eurozone debt crisis and the US debt ceiling debate.
- Rob Burdett and Gary Potter, co-heads of the Thames River Multi-Capital Team, explain the rationale behind their purchase of the Jupiter Growth & Income Fund within their lifestyle range.
- F&C launches online TV channel.
GEM credits cash in on Eurozone debt crisis, whilst US unlikely to avoid a downgrade
The market's positive reaction to last Thursday’s announcement on the new bail-out package for Greece was short-lived, with longer term concerns over growth and creditworthiness in Spain and Italy continuing to nag away.
The Thames River Global Credit Team judged the outcome on two axes: (i) Who pays for the new bail-out - bondholders vs official sector (the contribution of the Greeks themselves having already been decided)? (ii) What else is put in place to avoid contagion to Ireland/Portugal/Spain/Italy?
The continued slowdown in the core Eurozone economies played a part in this lack of confidence. Martin’s view is that Core Europe is still far away from the deep-rooted balance sheet malaise of the US or the UK, let alone from the sufferings of the Eurozone periphery - but these signs of cyclical weakness are important as another limiting factor both for EUR strength and the political appetite for continued bail-outs as the year goes on.
Against this backdrop, emerging market credits have proved to be exceptionally resilient; investment grade issuance has been enjoying healthy demand, partly as a flight-to-quality trade, and especially in quasi-sovereign high quality EM names. The Team took the opportunity to participate in some new issues from Pemex (a Mexican state-owned oil and gas company), Afreximbank (a supra-sovereign African trade development bank), and MCC (a Chinese state-owned engineering company mandated by the Chinese government to carry out many of the infrastructure projects) within their Credit Select Fund, in addition to a re-opening of Pemex 21$ within their Global Credit Fund.
Meanwhile, in the US, the debt ceiling dispute is approaching a climax, with no agreement yet in sight. Another round of talks, mediated by the White House, ended in recriminations and rival press conferences from the President and Congressman Boehner, the Republican House Speaker.
“The only bright spot on the horizon is that Federal tax take has been unexpectedly buoyant so far this year - meaning that the Treasury may have some modest leeway on its deadline of August 2. In our view whilst the political ‘point scoring’ will likely continue, adding to an already fractious situation, it is still very likely that the US will raise the debt ceiling next week. This is very unlikely to avoid a downgrade; but it will be better than nothing,” Martin concluded.
Burdett & Potter add Jupiter G&I
Rob Burdett and Gary Potter, co-heads of Thames River Multi-Capital, have recently added Jupiter Growth & Income to three of their four lifestyle range of funds as part of their current strategy to increase their UK equity allocations.
Burdett commented: “The fund, managed by Philip Matthews since April 2006, has delivered the goods more often than not within the IMA UK All Companies sector; despite its successful track record it remains relatively small at £200m and has a surprisingly low profile.”
When assessing the fund for inclusion in the portfolios, Burdett and Potter were particularly impressed by the way Matthews positioned his portfolio defensively going into the downturn before adjusting its composition to profit in the rebound markets enjoyed from spring 2009.
“One characteristic that differentiates Philip’s approach from that of other growth orientated funds in the IMA UK All Companies sector is the value he seeks in his investments. He is prudent in the price he is willing to pay for a share and actively shuns high valuations, preferring to build positions in companies when their shares offer real value. We therefore have a high degree of conviction in this Fund and believe it will play an important role in the Lifestyle Cautious, Lifestyle Balanced and Lifestyle Growth funds within which it is currently held,” Burdett concluded.
F&C’s online TV channel – www.fandc.tv
While it will not feature viral videos or pets doing amusing things, F&C’s new online TV channel, www.fandc.tv, aims to become a useful resource for financial intermediaries and private investors alike.
The private investor section has fund manager video updates, as well as the Moneyspinner series of investment tutorial videos. The project is a natural progression of F&C’s long-standing commitment to demystifying investment by cutting through jargon and presenting the facts in plain English. Using video allows us to present information in a more engaging way, building on our suite of printed investment Guides and all the features we offer via our investment trust website.
Topics covered initially in the Moneyspinner series include an introduction to assets and asset allocation, reasons to invest in an environment of low interest rates and high inflation, an introduction to investment trusts, and how to invest to achieve the right balance of risk and returns.
There is also a Financial Adviser section featuring regularly updated market views and information on funds from across the F&C and Thames River fund ranges. Initial content includes videos from UK fund managers Peter Lees and Phil Doel, content on emerging markets from the F&C Thames River team, European Growth & Income fund manager Paras Anand and manager updates on the Thames River Distribution Fund and the F&C Strategic Bond Fund.
The service is live now, and the current online content is just the start of what we hope will become a really valuable port of call for investors and advisers.
Posted at 01:34 PM in News & Comment | Permalink