Escolar Documentos
Profissional Documentos
Cultura Documentos
INVESTMENT MANAGERS:
Patrick Toes
Investment Director with over 20 years experience in fund management. Previously a member of Rensburg Sheppards Asset Allocation and Fund Selection Committees for over 9 years.
OCTOBER 2012
We are particularly circumspect about growth in Europe being better than the States over the next couple of years so we are disinclined to believe EZ valuations based on this premise. We expect that EZ corporates will be mired in weaker growth for a substantial time and our preference is towards the UK on valuation and lower macro risk. OBAMAS SECOND TERM Despite Abraham Lincolns famous comment A house divided against itself cannot stand, we expect more conflict with Republicans in Congress thus weak government and reliance on QE as a policy tool. The fiscal cliff should be avoided but we arent categorical in that view. We dont feel a grand solution for US deficits is likely and those deficits will remain high fertile ground for gold. However, the post election environment may encourage the corporate sector to put their cash hoard (circa $1,700 billion) to work through M&A or through capital spend (IT). This may be the salvation for CEOs to combat the dilemma of elevated margins which cannot go on forever. Currently corporate profits are at a record high as a percentage of GDP while wages are at a record low. Our contention is that companies capable of growing revenue and/or maintaining profit margins will become very sought-after assets and likely to be valued well in excess of market valuations. We consider our portfolio is correctly weighted in this area. POST PRANDIAL Dr. Pippa Malmgren, a financial market advisor to the White House and member of the National Economic Council 2001-2, recently observed that one of the most interesting trends in the world currently is that manufacturing is rapidly leaving China and moving back to the middle of the US. This is known as onshoring. A recent report from PWC showed that it is now less expensive to produce steel in the US than in China and that an array of industries have relocated and will relocate manufacturing back to the US .The wage differential between the US and China is narrowing so fast and quality control in the US is so good. You can build excellent facilities cheaply as American construction companies have been waiting for something to do and so will do it practically for free. An acceleration of onshoring could be a big boon for the US economy. We confidently expect that our clients will benefit.
"Despicable trickery at elections; under-handed tampering with public officers, and cowardly attacks upon opponents, with scurrilous newspapers for shields, and hired pens for daggers"
Charles Dickens (American Notes) commenting on Washington DC in 1842.
David Cowell
Chief Executive, possessing over 40 years experience in financial services, with over 25 years being investment management focussed.
The US presidential election campaign is over and whilst Obama may have thought Dickens comments were behind him, unfortunately he may well have another four years to come; more of that later. This months commentary is focussed on the US investment outlook and to a lesser degree Europe & UK. We plan to look at Asia and Emerging Markets in our next edition. We will start with a briefing on their 3rd quarter reporting season, which at an aggregate level saw S&P 500 earnings fall 1.2% yoy. S&P 500 earnings growth for the 3rd quarter as recent as July & April expected a rise of 3.1% and 5.3% respectively. As you may recall we have been saying that US corporate earnings were too high and would have to fall. We continue to believe that and that earnings for both Q4 and 2013 look too high. The US media likes to concentrate on earnings beats as an indication of improvement. However, we see these figures for what they are: management guiding analysts forecasts low so they can beat them. Far more interesting is the percentage of companies beating expectations compared to the previous quarter. That is falling. Moreover, in the current reporting season, only 36% of companies beat revenue expectations; much worse than the long-run average of 62%. In addition, an unusually high percentage of companies (48 of the 64) that have issued EPS guidance for Q4 2012, have guided lower. VALUATION AND GROWTH Below are two charts which look at MSCI indices for various regions as at the end of October, highlighting valuation (PE ratio) and earnings growth. The US looks more expensive than UK & European markets, bearing in mind our earlier comments about growth expectation. However, whilst we are cautious about growth and margins in the States, we have to acknowledge that the economic backdrop is far better there than Europe or the UK.
IMPORTANT INFORMATION This information has been approved for distribution to professional investors only. The information in this document is believed to be correct but cannot be guaranteed. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. This material is not intended as an offer or solicitation for the purchase or sale of any security or any other action, without first seeking advice as to the suitability of it for your needs.
Myddleton Croft Investment Managers, 1 Woodside Mews, Clayton Wood Close, Leeds, LS16 6QE T: 0113 274 7700 F: 0113 274 7711 E-mail: info@mcim.co.uk Website: www.myddletoncroft.co.uk Myddleton Croft Ltd is authorised and regulated by the Financial Services Authority. Registered in England & Wales number 05782909. VAT number UK 889 241088. Registered office: 11 Clifford Avenue, Ilkley, LS29 0AS.
OCTOBER 2012
David Cowell
Chief Executive, possessing over 40 years experience in financial services, with over 25 years being investment management focussed.
2012 PERFORMANCE
Model portfolios include cost of underlying investments and Myddleton Crofts annual management fees, but not the charges for custodian, dealing and settlement (equivalent to platform charges)
ASSET ALLOCATION
9% 19%
16% Alternatives Commodities 7% 25% 5% Global Fixed Interest 19% Cash UK Fixed Interest
Myddleton Croft Investment Managers, 1 Woodside Mews, Clayton Wood Close, Leeds, LS16 6QE T: 0113 274 7700 F: 0113 274 7711 E-mail: info@mcim.co.uk Website: www.myddletoncroft.co.uk Myddleton Croft Ltd is authorised and regulated by the Financial Services Authority. Registered in England & Wales number 05782909. VAT number UK 889 241088. Registered office: 11 Clifford Avenue, Ilkley, LS29 0AS.
OCTOBER 2012
David Cowell
Chief Executive, possessing over 40 years experience in financial services, with over 25 years being investment management focussed.
2012 PERFORMANCE
Model portfolios include cost of underlying investments and Myddleton Crofts annual management fees, but not the charges for custodian, dealing and settlement (equivalent to platform charges)
ASSET ALLOCATION
7% 21% 16%
6% 4% 28%
Myddleton Croft Investment Managers, 1 Woodside Mews, Clayton Wood Close, Leeds, LS16 6QE T: 0113 274 7700 F: 0113 274 7711 E-mail: info@mcim.co.uk Website: www.myddletoncroft.co.uk Myddleton Croft Ltd is authorised and regulated by the Financial Services Authority. Registered in England & Wales number 05782909. VAT number UK 889 241088. Registered office: 11 Clifford Avenue, Ilkley, LS29 0AS.
OCTOBER 2012
David Cowell
Chief Executive, possessing over 40 years experience in financial services, with over 25 years being investment management focussed.
2012 PERFORMANCE
Model portfolios include cost of underlying investments and Myddleton Crofts annual management fees, but not the charges for custodian, dealing and settlement (equivalent to platform charges)
ASSET ALLOCATION
UK Equities 5% 15% 5% 4% 17% 32% Global Fixed Interest Cash 23% Alternatives Commodities UK Fixed Interest International Equities
Myddleton Croft Investment Managers, 1 Woodside Mews, Clayton Wood Close, Leeds, LS16 6QE T: 0113 274 7700 F: 0113 274 7711 E-mail: info@mcim.co.uk Website: www.myddletoncroft.co.uk Myddleton Croft Ltd is authorised and regulated by the Financial Services Authority. Registered in England & Wales number 05782909. VAT number UK 889 241088. Registered office: 11 Clifford Avenue, Ilkley, LS29 0AS.
***IMPORTANT NOTE : THE ADVENTUROUS PORTFOLIO HAS BEEN RENAMED THE PROGRESSIVE PORTFOLIO*** MCIM Balanced Progressive Portfolio
INVESTMENT MANAGERS
Patrick Toes
Investment Director with over 20 years experience in fund management. Previously a member of Rensburg Sheppards Asset Allocation and Fund Selection Committees for over 9 years.
OCTOBER 2012
David Cowell
Chief Executive, possessing over 40 years experience in financial services, with over 25 years being investment management focussed.
2012 PERFORMANCE
Model portfolios include cost of underlying investments and Myddleton Crofts annual management fees, but not the charges for custodian, dealing and settlement (equivalent to platform charges)
ASSET ALLOCATION
4% 14% 25%
UK Equities International Equities Alternatives Commodities UK Fixed Interest Global Fixed Interest 34% Cash
4% 4%
15%
Myddleton Croft Investment Managers, 1 Woodside Mews, Clayton Wood Close, Leeds, LS16 6QE T: 0113 274 7700 F: 0113 274 7711 E-mail: info@mcim.co.uk Website: www.myddletoncroft.co.uk Myddleton Croft Ltd is authorised and regulated by the Financial Services Authority. Registered in England & Wales number 05782909. VAT number UK 889 241088. Registered office: 11 Clifford Avenue, Ilkley, LS29 0AS.
***IMPORTANT NOTE: THE HIGHLY ADVENTUROUS PORTFOLIO HAS BEEN RENAMED THE ADVENTUROUS PORTFOLIO***
OCTOBER 2012
David Cowell
Chief Executive, possessing over 40 years experience in financial services, with over 25 years being investment management focussed.
2012 PERFORMANCE
Model portfolios include cost of underlying investments and Myddleton Crofts annual management fees, but not the charges for custodian, dealing and settlement (equivalent to platform charges)
ASSET ALLOCATION
2% 13% 28% 4% 3%
Myddleton Croft Investment Managers, 1 Woodside Mews, Clayton Wood Close, Leeds, LS16 6QE T: 0113 274 7700 F: 0113 274 7711 E-mail: info@mcim.co.uk Website: www.myddletoncroft.co.uk Myddleton Croft Ltd is authorised and regulated by the Financial Services Authority. Registered in England & Wales number 05782909. VAT number UK 889 241088. Registered office: 11 Clifford Avenue, Ilkley, LS29 0AS.
OCTOBER 2012
David Cowell
Chief Executive, possessing over 40 years experience in financial services, with over 25 years being investment management focussed.
2012 PERFORMANCE
Model portfolios include cost of underlying investments and Myddleton Crofts annual management fees, but not the charges for custodian, dealing and settlement (equivalent to platform charges)
ASSET ALLOCATION
1% 4% 4% 2% 7% 35%
47%
Myddleton Croft Investment Managers, 1 Woodside Mews, Clayton Wood Close, Leeds, LS16 6QE T: 0113 274 7700 F: 0113 274 7711 E-mail: info@mcim.co.uk Website: www.myddletoncroft.co.uk Myddleton Croft Ltd is authorised and regulated by the Financial Services Authority. Registered in England & Wales number 05782909. VAT number UK 889 241088. Registered office: 11 Clifford Avenue, Ilkley, LS29 0AS.
OCTOBER 2012
Chief Executive, possessing over 40 years experience in financial services, with over SALES: 25 years being investment management focussed. David formulates the macro economic position and leads the investment process Julie Jones across the portfolio range. He also has over 10 years Julie business 20 years to small and experience of has over consultancy experience of medium working in investment sales and sized enterprises.
experience in financial services, with over 25 years being investment management David Cowell focussed.
marketing, previously as Head of UK Retail Sales for BNY Mellon (Newton Investment Management).
Model portfolios include cost of underlying investments and Myddleton Crofts annual management fees, but not the charges for custodian, Model portfolios include cost of underlying dealing and settlement (equivalent to platform investments and Myddleton Crofts annual charges)
12 MONTH PERFORMANCE
management fees, but not the charges for custodian, dealing and settlement (equivalent to platform charges)
The Enhanced Income Portfolio was launched at the beginning of 2011. It should be noted that the performance before that date (presented above) is from the back-tested portfolio and is provided for illustration purposes only.
ASSET ALLOCATION
5% 5% 5% 13%
46%
21%
Myddleton Croft Investment Managers, 1 Woodside Mews, Clayton Wood Close, Leeds, LS16 6QE T: 0113 274 7700 F: 0113 274 7711 E-mail: info@mcim.co.uk Website: www.myddletoncroft.co.uk Myddleton Croft Ltd is authorised and regulated by the Financial Services Authority. Registered in England & Wales number 05782909. VAT number UK 889 241088. Registered office: 11 Clifford Avenue, Ilkley, LS29 0AS.
OCTOBER 2012
David Cowell
Chief Executive, possessing over 40 years experience in financial services, with over 25 years being investment management focussed.
2012 PERFORMANCE*
Model portfolios include cost of underlying investments and Myddleton Crofts annual management fees, but not the charges for custodian, dealing and settlement (equivalent to platform charges)
ASSET ALLOCATION
UK Equities 10% 10% 20% 35% 11% 14% Commodities Global Fixed Interest Cash International Equities Alternatives
Myddleton Croft Investment Managers, 1 Woodside Mews, Clayton Wood Close, Leeds, LS16 6QE T: 0113 274 7700 F: 0113 274 7711 E-mail: info@mcim.co.uk Website: www.myddletoncroft.co.uk Myddleton Croft Ltd is authorised and regulated by the Financial Services Authority. Registered in England & Wales number 05782909. VAT number UK 889 241088. Registered office: 11 Clifford Avenue, Ilkley, LS29 0AS.