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Insights.

can we trust the yield curve?

28/7/2023

 
Picture
[3 min read, open as pdf]
  • What is the yield curve?
  • Why might it invert?
  • What does this mean in our current circumstances?

US DEBT CEILING CRISIS

19/5/2023

 
Picture
[1 min read, open as pdf]
  • Small, but concerning, chance that the US defaults on its debts
  • Debt ceiling is a cap on government borrowing
  • A US default would create a severe financial shock, so politicians on both sides should ensure its resolved in time
The full version of this article is available to our Clients.

putting cash to work with money market funds

17/4/2023

 
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Higher interest rates following increases in the Bank of England “Bank Rate” means yieldson cash are attractive once again.  There are different ways to access cash yields: bank deposits, platform cash and moneymarket funds each have advantages and disadvantages.  Minimising frictional costs, and maximising flexibility is key when developing a cashmanagement strategy, in our view.
In this research note for our clients, we explore the role of money market funds in providing a low risk platform-based Investment with a yield similar to Bank of England rates.
Further reading:
Read our October 2021 comparison of money market funds and fixed time deposits


Swiss miss: how should cocos be viewed now?

24/3/2023

 
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  • Holders of Credit Suisse AT1 bonds have been wiped out
  • Retail fund managers have emerged as significant AT1 holders
  • Are these instruments appropriate retail investments?

Read the full article here [3 min read]

CoCO BONDS: ARE YOU EXPOSED?

23/3/2023

 
Read the Citywire article

SVB and US REGIONAL BANKS

14/3/2023

 
Picture
[5 min read, open as pdf]
  • SVB collapse triggers memories of the 2008 financial crisis
  • US Fed and government acts to restore faith in the banking system
  • Markets remain volatile but no indications of contagion 

Citywire: Headache for multi-asset investors as gilt fund risk ratings rise

13/2/2023

 
Read the article

Bonds are getting interesting

3/2/2023

 
Picture
[5 min read, open as pdf]
  • 2022 was a year of dislocation for Bonds
  • Rates are peaking and inflation is past-the-peak
  • This means Bonds are getting interesting once again
 We explore this further in our CPD webinar: "Investing for Income".

Citywire PODCAST: IS YIELD BACK?

18/1/2023

 
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Wealth Manager's Ross Miller chats to Elston Consulting's Henry Cobbe. They discuss the return of yield and how it plays out across equities, bonds and alternatives.
Listen to the podcast

NMA PODCAST: INFLATION IS HERE TO STAY...

9/1/2023

 
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NMA speaks to investment consultant Henry Cobbe about positioning equities for higher inflation using sector and factor equity investing.
Listen to the podcast

Yield is back!

6/1/2023

 
Picture
[5min read, open as pdf]

  • After a decade of suppression, yield is back
  • Return of nominal (and real) yields forces asset repricing
  • Yield can help underpin returns in uncertain times

2023 OUTLOOK: LOOKING FOR LIGHT

16/12/2022

 
Picture
[5 min read]
  • Yield is back
  • Selectivity matters more
  • Inflation’s getting stickier
2022 proved to be a challenging year with pressure on equities and bonds a like in face of rising rates and soaring inflation.  In our 2023 Outlook: Looking for Light, we explore three key themes
1. Yield is back: for equities, bonds and alternatives - the yield drought is over
2. Selectivity matters more: within and across asset classes
3. Inflation is getting stickier: getting past the peak, but still a problem

Read the summary article

Find out more:
  • The full version of our 2023 Outlook report is available to our clients.  For UK advisers requesting further information, please contact us.
  • Watch the recent 2023 Outlook webinar discussion with Henry Cobbe, Hoshang Daroga (Elston) and Natasha Sarkaria, CAIA (BlackRock)

TIme to look at (short-dated) bonds again?

14/10/2022

 
Picture
[3 min read, open as pdf]
  • Bonds have been hammered by increases in policy rates
  • Unlikely that inflationary pressure will abate any time soon
  • Less sensitive short-dated bonds are just starting to catch the eye

weakening pound: portfolio positioning

16/9/2022

 
Picture
 [5 min read, open as pdf]
  • Pound Sterling hits lowest level since 1995
  • Driven by stronger dollar, and deteriorating UK economic outlook
  • Currency outlook affects decision-making across each asset class
 The pound takes a pounding
The thirty-year anniversary of Black Wednesday was marked by the Sterling reaching its lowest levels against the dollar since 1985.
Part of this is a function of dollar strength against global currencies, another part about rising concerns on the UK economic outlook and future policy-making.  Sterling’s weakness and outlook is forcing investors to consider how to manage currency risk in their portfolio across each asset class.
Full article available as pdf

UK inflation over 20%? Time to rethink investment risk

2/9/2022

 
Picture
[5 min read, open as pdf]

  • UK could soar above 20% at current energy prices
  • Triggered by sanctions blowback and policy errors
  • Inflation inverts investment risks

With low growth, soaring inflation and spiking interest rates, advisers need to rethink the definition of risk.  Focus on volatility is focus on the “wrong problem”.  Instead, advisers should focus on preserving purchasing power (mitigate inflation risk) to protect client outcomes.  That requires a fundamental rethink around traditional definitions of risk, asset allocation and diversification.

For full article including charts, open as pdf

UK INFLATION AT 10.1% FOR JUL-22

17/8/2022

 
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[3 min read, open as pdf]
  • This is higher than 9.3%yy survey estimate…
  • … and an increase from 9.4%yy last month
  • Represents a move to double-digits and a new 40-year high
 
Latest UK inflation figure
The latest UK inflation came in at 10.1%yy for June 2022, compared to 9.3%yy survey estimate.  This is up from 9.4%yy last month and is above expectations.
This is the highest UK inflation rate in 40 years, and now in double digits.  Food prices rose meaningfully, especially bakery products, dairy, meat and vegetables, and this was also reflected in higher takeaway-food prices.  Inflation pressure has not yet peaked with Bank of England expecting 13% in 4q22 (from 11%) and a further step-up in the retail energy price cap.  The BoE remains behind the curve, in our view.
See full article including all charts

US inflation at 8.5%yy for Jul-22

12/8/2022

 
Picture
[3 min read, open as pdf]
​
  • This is lower than the survey estimate…
  • … and a decrease from 9.1%yy last month
  • Represents the lower energy prices
 
Latest US inflation figures
The latest US inflation came in at 8.5%yy for July 2022, lower than survey estimate. This is down from 40-year high of 9.1%yy last month and is lower than expectations of 8.7%.
Gasoline prices fell by 7.7% in July, compared to an increase of 11.2%yy in June 2022. Food prices continued rising at a fast rate of 10.9%yy. Shelter cost moved higher by 0.5% from last month and went up by 5.7% from the same time last year. 

Read in full including charts

which defensive etfs for a rising rate regime?

8/8/2022

 
Picture
​[3 min read, open as pdf]
  • Central Banks continue to raise rates
  • This may choke off growth without impacting inflation
  • We look at which defensive ETFs make sense in a rising rate regime

On 4th August, the Bank of England raised rates by 0.5%, the largest single increase since 1995. This followed the US Federal Reserve raising rates by 0.75% at the end of July. While these rate rises may or may not bring inflation under control, the risk they pose to growth is considerable.

We consider the ways in which investors can use ETFs to build defensive resilience as an alternative to low-yielding cash or bonds. 

Yield Curve inversion and the 'r' word

5/8/2022

 
Picture
[3 min read, open as pdf]
  • The US has entered a technical recession
  • US yield curve inversion is a reliable recession predictor
  • Policymakers can support growth or fight inflation, not both

What is the yield curve and how does it illustrate future expectations for the economy?

In this article, we explain how to read the yield curve and discuss what the current version is suggesting in terms of inflation, interest rates and recession.

INFLATION IS THE ENEMY

19/5/2022

 
Picture
[5 min read, open as pdf]
  • How did we get here?
  • What is the impact?
  • Where do we go from here?
Markets and major economies are in a state of uncertainty in the context of rising inflation, rising interest rates and a risk to economic growth.  How did we get here? What is the impact?  Where do we go from here?
Read full article with charts
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  • WHO WE ARE
    • About
    • Contact
    • Events
    • Press
  • WHAT WE DO
    • Portfolio Solutions >
      • Our Portfolios
      • Custom Portfolios
    • Fund Solutions >
      • Our Funds
      • Custom Funds
    • Index Solutions >
      • Our indices
      • Custom Indices
    • SPECIALIST STRATEGIES >
      • Money Market Funds
      • Retirement Income Solutions
      • Retirement Portfolios
      • Adaptive Portfolios
      • UK Equity Income
      • Multi-Asset Income
      • Liquid Real Assets
      • Dynamic Risk Parity
      • Gold and Precious Metals
      • Enabling Net Zero
    • Supporting Advisers >
      • Investment Committee Support
      • Regulatory Support
    • CPD
  • WHO WE HELP
    • Financial Advisers
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  • Insights