Asset Allocation Research for UK Advisers

Gold has defied rising real yields since 2022. Central bank buying, debt sustainability fears, and currency debasement risks continue to drive demand.

Is bitcoin a reliable hedge against currency debasement, or does gold still lead? We explore risks, volatility, and why central banks continue to back gold.

​Some platforms pay decent rates on cash.  Others trouser the "net interest margin" - when the interest they earn on platform cash is more than they pay on platform cash.  This is something the FCA has flagged in a Dear CEO to platform providers when the rates have been unfair to Consumers.
So, advisers: if you like a platform, but don't like their cash rates, then consider smarter cash management solutions.

Basic rate taxpayers: if your client is a basic rate taxpayer then use a money market fund.  This is a way of accessing wholesale sterling money markets, whilst disintermediating the banks who have a regulatory requirement to hold money markets too.

Additional or higher rate taxpayers: if your client is an additional or higher rate taxpayer then use near-term low-coupon direct Gilts.  The capital and interest is guaranteed by HM Treasury, and the amounts are unlimited.  Their low coupon means the bulk of the quoted "Yield To Maturity" is capital gains which are CGT exempt for Gilts, meaning higher overall Gross Comparable Yield relative to money markets and cash for higher rate taxpayers.  By sticking to near-term (<3 year) gilts, there is very low (<3 year) duration risk.

Read Henry Cobbe’s latest interview with Professional Adviser about why adviser-built model portfolios could be the real winners in the MPS market.

​https://www.professionaladviser.com/interview/4519429/adviser-built-portfolios-win-mps-race

‘Income’ as an investment strategy should not be viewed as a catch-all. Drill down, and there are a variety of different strategies, each with their own outcome.

The whole world of retirement advice is undergoing a fundamental shift, and rightly so. The old frameworks simply don’t cut it anymore. Asking a client what their risk profile is and then slotting them into a generic box is meaningless. Retirement isn’t about labels it is about outcomes. And targeting particular outcomes requires proper modelling.

​Find out more about the Elston Smart-Beta UK Dividend Index (ticker: ELSUKI)
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For latest UK Equity Income index factsheet click here

For UK financial advisers only

A lot has changed since Henry Cobbe called for greater Customisation of Model Portfolios by financial advisers back in 2018.  Industry has heeded the call with Custom MPS being the fastest growing sub-set within the rapidly growing MPS market.
Henry also outlined why he thinks Advisers, not DFMs, will win the race in Managed Portfolio Services (MPS) in this podcast with FT Adviser in July 2022.

Over 90% of the approx £2bn in AUM managed by Elston Portfolio Management is in adviser-defined Custom mandates designed by Elston Consulting, who are leaders in this field.  This excludes the approx £4bn in AUM of Elston Consulting's other DFM clients including a national advice firm.

Co-manufacturing is soaring in popularity: in this workshop, Henry Cobbe explores what is it, and what are the risks in this article.

Although the Bank of England cut rates, long-dated Gilts yields are rising (so their values are falling).