October's Agenda
October’s Agenda
Instead of providing another example of Investment Bubbles this week, we would like to look forward to October and make you aware of our plans –
- Office Hours – we will continue to maintain our normal Office Hours despite the local lockdown in Newport and the proposed lockdown in Cardiff. To ensure we maintain social distancing, Andrew and Jon will alternate working from home and the office. Should you wish to contact either Andrew or Jon, please use the Office telephone number or email where possible.
- Valuations – we shall send our Q3 Valuation Statements the week beginning the 5th October in the previously agreed formats.
- Rebalancing – we shall send our Q3 Rebalancing Recommendations the week beginning 12th October in the previously agreed formats. There are a number of recommended changes to our Asset Allocation in this quarters rebalancing and we will provide all the necessary documentation in conjunction with our Recommendation Summary. This quarters rebalancing will make some modest changes to holdings; whilst further details will be sent to you all individually here is a summary of our plans.
- We feel that nominal bonds such as US Treasury’s now have a limit as to amount that they can deliver in terms of capital gains with interest rates now hitting all-time lows; the risk now is that slightly higher rates and/or the risk of inflation would be detrimental to values so we will be recommending selling these at reasonable profit. The proceeds in the main will be used to bolster cash holdings but with some allocated to inflation linked bonds and commodities.
- Index Linked Gilts and US Treasury Inflation Protected Securities do not face the same risks when interest rates turn negative; if we see low growth and high inflation – which is a strong possibility – we would expect these assets to perform well and have increased our holding to Index Linked Gilts slightly as the benefit of holding their US counterpart is reducing.
- Currently Commodities are at their lowest value relative to the US Stock Market since 1937 and we feel that this is an opportunity to start to hold a small proportion of assets in a long-term theme; this may of course take some time to come to fruition and is in part dependent on economic recovery but we feel that this is one of the few areas where we could be proportionally rewarded for taking on risk.
- For those portfolios that hold Scottish Oriental Smaller Companies and Utilico Emerging Markets we will be replacing these with Schroder Asian Total Return and JPM Emerging Markets Trust; whilst both funds have been excellent long term performers in the last few years they have been underperforming and we feel that the two Investment Trusts we have selected to replace them have greater potential at the moment.
- Annual Reviews – we will continue to contact clients to conduct Annual Reviews. The Annual Review includes updating the financial information held on file, revisiting previously agreed objectives to assess their success and to discuss how we can measure attitude to risk in a way that reflects the objectives agreed upon.
Should you have any queries regarding the above or any other matter please do not hesitate to contact us.