The British government has a scheme whereby every year you can set aside and invest a small amount of money on behalf of a child, tax-free. The child receives the money from this Junior ISA (Individual Savings Account) when they turn 18. Introduced in 2011, Junior ISAs were designed to encourage the concept of saving and had an annual limit of £3,600, which increased more or less in line with inflation until 2020 when it rose to £9,000.
Getting the balance correct between short-term relief checks and long-term infrastructure spending is critical.
As we reach the mid-point of Q2 2021 it seems a good time to sum up fixed income markets year-to-date.
Investing in the UK has felt a little like the football experience we have endured over the past year: without the crowds it’s been a lonely game. However, at long last the crowds are coming back.
Artificial intelligence (AI) and related computing techniques have been spreading beyond their heartland in tech and internet companies to other industrial sectors for years. The Covid-19 crisis, however, has prompted a “massive acceleration” of the trend towards intelligent automation. All industries are now adopting AI – it is just a question of how quickly.
At the end of last year, Columbia Threadneedle Portfolio Manager, Maya Bhandari reflected that you “gotta have faith in low discount rates” for risk assets, such as equities, to continue to perform well in 2021.
To mark International Women’s Day on 8 March, some of our leading female fund managers discuss the prospects for their asset class as well as their thoughts on the wider backdrop for women in asset management and progress towards gender diversity
As one of the world’s largest economies the US is a key focus for investors. With every country attempting to return to normality following the coronavirus pandemic, we are monitoring when US economic activity might get back on track, as well as other measures of “normality” such as entertainment and leisure, high street shopping, and schools reopening. The result is an index that measures progress toward a post-pandemic world.
2020 altered the high yield universe, but fears of high levels of corporate defaults proved unjustified. The resulting landscape should be set for steady returns in 2021.
There are reasons for optimism in 2021. Forget a U-shaped recovery; the letter we look for in 2021 is V, which stands for vaccine. Our baseline scenario is that vaccines roll out across Europe in early 2021, allowing business and consumer activity to start to return to normal. But even if there are delays and further lockdowns, the economic impact of Covid-19 should ease markedly in 2021.
Coronavirus cases are rising at an alarming rate in the US and Europe, so why are equities reaching new highs?
We now have a two-speed economy, and much talk about a disconnect between stock market and economy. But this won’t change our research and stock picking focus
The election cycle will increase short-term volatility, but we don’t believe it will have much influence on market averages over the long term.
The UK market might be the land that time forgot, but the best time to invest can be when it feels most uncomfortable. We would argue it is poised to recover strongly
Most asset market returns can be distilled down to two basic elements: movements in cash flows and discount rates. In the past month or so, for risky assets such as equities, each has moved in a broadly friendly direction. Expectations around earnings, which are the dominant source of cash flows for equity investors, bottomed for global stocks in mid-May, and as the earnings season progressed, so did analyst optimism on the path of future earnings. Notwithstanding the savage fall in delivered earnings in the second quarter, future expected earnings for the MSCI All Country World Index have moved such that by the end of next year, earnings are now expected to be a whisker above where they were last December.
Markets reacted violently as global economies adopted shelter-in-place policies to combat the spread of Covid-19 earlier this year. Corporate bond credit spreads (or risk premiums), driven by heightened uncertainty and revenue pressure, widened dramatically to reflect the increased risk of downgrade and default. While the magnitude of the sell-off was significant, the direction seemed quite logical given the sudden halt of global commerce.
Asset prices contain enormous amounts of information. This information is typically characterised as being both forward-looking and related to the economy – money-weighted investor expectations about future company earnings, defaults, inflation, monetary and fiscal policy. And, in our opinion, this is almost right. Asset prices consist largely of forward-looking expectations, but they also contain information about the current state of the financial system itself.
We all know – or rather, have heard of – Warren Buffet. One of his more famous mantras is: to get rich you need to be fearful when others are greedy, and greedy when others are fearful. Of course, this is much harder than it sounds, particularly over the long term. But it captures well how we have traversed asset markets in the short but tumultuous recent months, raising our appetite for risk near the March nadir, and then reversing back down to neutral at the end of June.
How the 2020s could be similar to the last decade with low growth, inflation and interest rates; and how quality should outperform value in this environment
Global economic activity has suffered a “sudden stop” as authorities have sought to contain the spread of the Covid-19 virus by shutting down economies.