16 June 2026

“We need to remember now that fiscal discipline actually pays off in the medium and long term,” he said.

By: Jonathan Jones

Editor, Trustnet

Governments “don’t seem interested in raising taxes or reining in spending”, which is “going to cause problems at some point in the future”, James Bullard has warned, noting that the world could be “inching” towards the sour policy mix experienced in the 1970s.

The ex-president of the Federal Reserve Bank of St Louis and former member of the rate-setting Federal Open Market Committee cited “undisciplined governments” and central banks that do not have a “good, coherent plan” for dampening inflation as reasons why the world could be returning to the unpleasant conditions of five decades ago.

Back then, high inflation, oil shocks and interest rate policy mistakes provided a potent cocktail for the global economy. There was also exchange-rate manipulation, Bullard noted, following US president Richard Nixon’s decision to cut the link between the dollar and gold, leaving most major currencies unanchored.

Speaking at the Amundi World Investment Forum, he said: “There were no inflation targets in the 1970s and lots of exchange rate manipulation. That led to a lot of volatility. It led to a lot of recessions in many different countries over time.

“You’re inching closer to that poor policy mix that we have seen in the past — one that was in place in the global order in the 1970s. I’m not saying we’re seeing the 1970s yet, but we’re inching in that direction.

“We need to remember now that fiscal discipline actually pays off in the medium and long term, and central bank independence also pays off in the medium and long term.”

One way Bullard fears we could return to the past is if central banks abandon their 2% inflation targets. The Federal Reserve has used the 2% target since 2012 and in August 2020 adopted a ‘flexible average inflation targeting’ framework, which states if inflation runs below 2% the central bank will tolerate a higher figure to balance this out over the long term.

But there are “forces in the US and elsewhere” that want to go to higher inflation targets, said Bullard. These “prominent voices” can be compelling but the result would be “an absolute disaster” for major currencies and would be a surefire way to ensure a return to the 1970s.

“You’d get other countries saying inflation didn’t need to be kept low and stable. You’d have higher and more variable inflation around the world, volatile exchange rates around the world and a lot of volatility that we simply do not need,” he said.

Regardless of whether the global economy returns to the same conditions as the 1970s, he warned that there will be more volatility ahead than there has been in the recent past as the world embarks on an increasing competition for power.

“The good news is we’ve seen this in the past. The bad news is it’s going to be more volatile than what we’re used to,” he said.

He pointed to several countries around the world that are at odds with one another, including China, Europe, the US, Japan and India, which he noted is the fastest-growing country in the world and the largest by population.

“[You have] many countries competing,” said Bullard, making the world “much more fractured than it was after the end of the Cold War in 1989”.

“This is the reality. We have to get used to it and price everything accordingly. I think that means building more resilience into our systems – including our regulatory systems – than we would otherwise.

“If you felt all your partners were super trustworthy, you might go with just-in-time inventory and similar ideas. But if relations are a little more tentative, you want to build something more resilient. I think that will be a theme going forward.”

It’s not all doom and gloom

While there are dark clouds surrounding the world right now, particularly when it comes to central bank policy, there are also signs of positivity in the world.

For one, the AI boom is “very real”, said Bullard, with the amount of money being spent in the US dwarfing what was spent on railroads, the automobile highway build-out and the space programme.

“The only thing bigger in history is the Louisiana Purchase of territory west of the Mississippi from Napoleon, so it’s quite the spectacle,” he said.

There will be winners and losers in this next wave of technology and investors need to be wary, particularly of companies pretending to have AI in their business models. But the technology is real and it is going to improve productivity going forward, said Bullard.

“The positive hope is that we would get something like the second half of the 1990s in the US – rapid productivity growth and rapid economic growth – which would also help with the fiscal problem,” he said.

“You want to do as much as you can to encourage technological improvement and rising standards of living – and not allow political drift to send us back into a situation that did not work in the past.”

Please Note:

This article is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or asset, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. Tax treatment depends of your individual circumstances and may be subject to change in the future. If you are unsure about the suitability of any investment you should seek professional advice. 

The above article was published by Trustnet. 

Please speak to Ethical Offshore Investors or your personal adviser BEFORE you make any investment decision based on the information contained within this article.

Clients can access a very wide range of managed funds, low cost index Exchange Traded Funds (ETF’s), direct shares, bonds, commodities, specialist Structured note investments as well as Crypto based assets via the various Investment Platforms, and will not be subject to additional entry fees or commissions, when doing so with Ethical Offshore Investments.

Lower costs resulting in more of the investment growth staying in your pocket.

Speak with Ethical Offshore Investments to learn how you can save on your investment costs.

Socially Responsible Investing – Ethical Business Standards 

The post We’re inching back to the 1970s, warns former Fed president James Bullard first appeared on Ethical Offshore Investments.

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Emerging Market companies now offer critical and often irreplaceable technology.

By Ladislav Sabo – J O Hambro Capital Management

15 June 2026

For decades, investing in emerging markets (EMs) followed a predictable playbook: track local politics and economies, commodity cycles and identify companies with the potential to succeed either in global export markets or fast-growing domestic markets.

But over the past three years, that playbook has been fundamentally reshaped by the explosive growth in AI semiconductors and the surge in AI-related infrastructure spending.

The US dominates the market of top-performance chip design through companies like Nvidia and AMD, as well as increasingly through in-house chip design by major semiconductor buyers like Google or Amazon, which are developing their own in-house AI accelerators.

On the other hand, emerging markets are home to the vast supply chain that these companies rely on. Regardless of which US company designs the leading-edge chip, it is, with few exceptions, manufactured by TSMC in Taiwan.

One exception is Samsung, whose smaller semiconductor foundry business is also based in an emerging market. Another is Intel, which still maintains its own manufacturing capabilities but has increasingly shifted some production orders to TSMC in recent years to remain competitive.

Emerging Asia’s presence is not limited just to chip manufacturing, however; it only starts there. Taiwan, Korea and China offer an ecosystem of companies with leadership in the majority of components found in AI servers, from memory, printed circuit boards, cooling, power supply units and other components to final design and assembly of AI servers.

This reliance on AI infrastructure from emerging Asia has transformed sectoral weightings and EM’s growth profile and subsequently return profile.

The tech weighting in MSCI Emerging Market Index is 36.8%, which is larger than the tech weighting of the S&P500 at 35%. EMs are now seeing an earnings boom they haven’t seen in the past 20 years (with the exception of rapid earnings recovery in 2010 after the 2009 shock so not a fair comparison) and this earnings growth is translating into returns.

EMs are finally outperforming developed markets after a very long time of lagging returns. Last year, the MSCI Emerging Markets index cumulatively returned 52.9%, beating both the MSCI AC World at 30.4% and the Nasdaq at 29.9%. The same patterns continue year-to-date.

This outperformance is not simply the result of slightly higher technology weightings, but also of a fundamentally different type of exposure within the technology sector itself.

While both the US market and emerging markets provide exposure to AI, a large share of US technology is concentrated in companies spending heavily on AI, such as Alphabet, Amazon, Meta, and Microsoft, where investors have increasingly questioned the returns on these massive investments.

Another large portion of US tech footprint is in software companies, but these face the risk that rapidly advancing AI capabilities could disrupt their existing business models.

On the other hand, tech companies in EMs rather present ‘picks and shovels’ of the AI revolution. While fierce competition to develop leading AI models has weighed on investor enthusiasm for US hyper-scalers, the resulting surge in capital expenditure has been a major tailwind for the ‘picks and shovels’ companies in emerging markets that supply the underlying AI infrastructure.

This divergence in AI exposure is likely to become even more pronounced following the eventual IPOs of companies such as OpenAI and Anthropic. Increasingly, the question of whether emerging markets can outperform the US market may come down to where the greater economic returns from the AI boom ultimately accrue: to the companies spending on AI infrastructure, or to those enabling it.

Despite the exceptional performance of emerging markets so far this year, returns have been heavily concentrated. Around 60% of the gains in the MSCI Emerging Markets index have been driven by just three stocks, TSMC, Samsung Electronics and SK Hynix.

That said, it would be a mistake to view the EM technology opportunity as being limited to these mega-cap names alone. Active portfolio managers continue to have access to a broad and diverse opportunity set across the EM tech ecosystem.

Emerging Asia is home to numerous global leaders supplying critical components for AI servers. Many of these companies are well positioned to benefit from rising dollar content as future AI accelerator platforms have (and will) drive increasingly demanding technology upgrades to support ever-higher computing power requirements.

AI has reshaped how asset allocators should think about emerging markets. Beyond their traditional cyclical characteristics, emerging markets now offer critical and often irreplaceable technology exposure through a deep ecosystem of companies underpinning the AI infrastructure value chain.

While market performance this year has been heavily concentrated in a handful of mega-cap names, it would be a mistake to view EM technology solely through that lens.

The large pool of EM companies in the AI supply chain creates a broad and evolving opportunity set for active investment managers, whose ability to identify these structural winners early may leave them better positioned to capitalise on this regime change than passive investment strategies.

Ladislav Sabo is a fund manager at JO Hambro Capital Markets. The views expressed above should not be taken as investment advice.

Please Note:

This article is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or asset, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. Tax treatment depends of your individual circumstances and may be subject to change in the future. If you are unsure about the suitability of any investment you should seek professional advice. 

The above article was published by Trustnet. 

Please speak to Ethical Offshore Investors or your personal adviser BEFORE you make any investment decision based on the information contained within this article.

Clients can access a very wide range of managed funds, low cost index Exchange Traded Funds (ETF’s), direct shares, bonds, commodities, specialist Structured note investments as well as Crypto based assets via the various Investment Platforms, and will not be subject to additional entry fees or commissions, when doing so with Ethical Offshore Investments.

Lower costs resulting in more of the investment growth staying in your pocket.

Speak with Ethical Offshore Investments to learn how you can save on your investment costs.

Socially Responsible Investing – Ethical Business Standards 

The post Emerging markets are not what they used to be – and neither should their allocation first appeared on Ethical Offshore Investments.

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The following news article was published by CNBC.

Gold fell to a fresh six-month low on Thursday as investors dump the once-hot trade on growing concern that higher inflation will force the Federal Reserve into possibly raising rates later this year, or at least keep them steady.

But there are also other factors at play.

August gold future  touched $4,046.20 an ounce on Thursday, their lowest level since November. Gold is down 6.3% this week alone, putting it on pace for a second straight weekly loss and its worst week since mid-March, when gold fell 9.62%.

It was last down 0.5% to $4,111.10 an ounce.

Fed reversal

As a safe-haven asset, investors gravitate toward the yellow metal during times of market uncertainty and in hopes that it will act as a hedge against inflation. But because gold doesn’t yield anything, the metal is also especially sensitive to expectations for long-term, real interest rates.

The Iran war, now in its fourth month, has fuelled inflation by pushing energy and other prices higher.

U.S. consumer inflation in May increased at its fastest pace in three years, mainly from the surging prices of energy-related products. Together with a stronger-than-expected May jobs reports, expectations have grown that the Fed may need to raise interest rates by the end of the year to slow down price increases. 

Next week, the Federal Reserve is expected to hold its benchmark lending rate steady at 3.50% to 3.75% during Kevin Warsh’s first meeting as Fed chair. A majority of ⁠economists in a Reuters poll expect interest rates to remain unchanged ⁠this year after many were pencilling in multiple rate cuts to start the year.

Traders are less sanguine, and are currently pricing in a 67% chance of a Fed rate hike by December, according to the CME Group’s FedWatch tool.

Higher rates, if they help stamp out inflation, can make dollar-denominated assets such as Treasury securities more attractive. 

The technical breakdown

Based on price chart analysis, the overall technical picture for gold remains weak.

Gold recently broke below its 200-day moving average for the first time since September 2023, which Citigroup flagged as a major negative signal. The bank has been cautious near term on gold ever since the war escalated in March, partly due to higher energy costs springing from the closure of the Strait of Hormuz.

In the long term, Citi remains bullish.

“While market participants struggle with the short-term outlook, which relies heavily on the Strait of Hormuz outcome, the consensus view remains constructive over the medium to long term on robust non-cyclical demand from increasing global geopolitical fragmentation, lingering sovereign debt and debasement concerns and sustaining central bank reserve diversification trend,” Citi analysts said.

Retreat from the ‘debasement trade’

JPMorgan sees a broad-based retreat of the “debasement trade” by retail and institutional investors.

The withdrawal from that trade that started to emerge a couple of weeks ago has continued in recent weeks.

The bank cited outflows from gold exchange-traded funds and weaker futures positioning due to growing concerns around the size of the government deficit, longer-term inflation backdrop, higher geopolitical uncertainty since 2022.

“Our momentum signal framework also points to a continued retreat from the debasement trade. The pattern since the start of the Iran conflict has been similar to ETF flows and the futures positioning proxy,” the bank noted.

JPMorgan’s analysis shows gold ETF outflows of around $20 billion in the week to June 5 after modest inflows in the prior week while bitcoin ETFs recorded gradual increasing outflows over the previous four weeks.

In the futures space, investors continued to unwind exposures to the debasement trade. The bank noted that reduction to gold had started from end-February and has remained steady since mid-April

How to get exposure to the Gold price movement 

At Ethical Offshore Investments, our clients can get access to Gold (as well as other precious metals) through a range of different Exchange Traded Commodity (ETC’s) available on the various investment platforms. This is a very cost effective & secure way of holding physical Gold in your portfolio, without the need to worry about storage and insurance.

For example, the iShares Physical Gold ETC which is listed on the London Stock Exchange (as well as the Frankfurt, Italian and Mexican exchanges) holds the physical gold bars in secured and allocated storage in J.P. Morgan Chase, London branch vaults. The price movement of the ETC is based on the movement of the spot price of gold, less their management cost to cover storage and insurance of the Physical Gold, which is 0.12%pa.

We can also provide specialist investment products that can leverage on the gold price movement. If an investor is confident that the price of Gold will rise, we can offer a leveraged Exchange Traded Product on the spot price movement of Gold, where investors can get 2x up to 10x the price movement. Obviously this increases the risk as if the price goes down, it will also leverage the losses.

We can also provide specialist investment products that benefit from a falling asset price. So if an investor is confident that the price of Gold will fall, an investment in an ‘Inverse Gold ETC’ will provide a positive return if the Gold price was to fall. Same as above, this can also be leveraged to 2x – 10x the price movement to enhance returns (both positive and negative). Speak with Ethical Offshore to see how easy it is to get this type of exposure, with no additional entry and/or exit fees (apart from standard stock broker costs & stamp duty when applicable).     

Please Note:

This article is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. 

Please note the above article was first published by CNBC Business and should not be regarded as individual investment advice on whether to buy, sell or hold any of the investments mentioned. Please speak to Ethical Offshore Investors or your personal adviser BEFORE you make any investment decision based on the information contained within this article.

Lower costs resulting in more of the investment growth staying in your pocket.

Speak with Ethical Offshore Investments to learn how you can save on your investment costs.

Socially Responsible Investing – Ethical Business Standards 

The post Gold slumps to 6-month low even as inflation fears rise. Here’s why bullion is out of favour first appeared on Ethical Offshore Investments.

The post Gold slumps to 6-month low even as inflation fears rise. Here’s why bullion is out of favour appeared first on Ethical Offshore Investments.

Today’s AI-driven market looks less like the dot-com bubble of the late 1990s and more like a market increasingly dependent on a small number of dominant technology companies

At the turn of the millennium, investors allocated substantial capital to internet companies that often had no revenues or profits. In many cases, simply having ‘.com’ in the company name was enough to lift share prices.

When the bubble burst in 2000, the Nasdaq index declined by more than 75%, thousands of companies disappeared and investors lost significant amounts of capital.

Today, artificial intelligence raises similar questions. Shares of companies linked to AI grew strongly between 2023 and 2025, leading to comparisons with past speculative episodes.

At Amundi, we analysed this through data and found the picture appears more balanced than during the dot-com period.

Which companies are part of the AI ecosystem

Artificial intelligence is not a standalone sector. It extends across manufacturing, healthcare, financial services and technology. We assessed how closely individual stocks are linked to the broader AI ecosystem, from chip manufacturers and data centre operators to software developers.

The performance of this AI-related portfolio has been volatile. In 2022, while non-AI stocks declined by around 12%, the AI portfolio dropped by close to 50%.

This was followed by a strong rebound: AI-related stocks increased by nearly 88% in 2023 and a further 55% in 2024. Overall, AI-related equities gained approximately 115%, compared to 72% for the broader market and 83% for the S&P 500.

Bubble then and now: What is the key difference

There are clear similarities. As in 2000, a relatively small group of technology companies plays a major role in driving index performance. Expectations around technological transformation also remain strong. However, important differences emerge on closer inspection.

The most significant difference relates to profitability. In 1999, investors were paying for future expectations rather than existing earnings, with valuation multiples frequently exceeding a price-to-earnings ratio of 50x. By contrast, today’s leading AI-related companies – including Nvidia, Microsoft and Alphabet – generate substantial revenues and profits.

Earnings growth has also been strong. As a result, even though share prices increased, valuation multiples declined. The price-to-earnings ratio for the AI portfolio decreased from around 40x in 2023 to approximately 34x in 2025. This suggests the market is paying less for each unit of earnings than before.

Data analysis further supports this distinction. During the dot-com era, prices became increasingly detached from fundamentals. By contrast, current developments suggest AI-related stock prices remain more closely linked to company performance.

A more concentrated market than in the past

The overall weight of technology in the S&P 500 is lower today than at the peak of the dot-com era, when it exceeded 44%. Today, AI-related companies account for approximately 38% of the index. However, this exposure is now concentrated in a smaller number of firms – around 44 companies compared to nearly one hundred in 2000.

In practice, this means US equity market performance is increasingly influenced by a limited number of companies. Many investors gain exposure through index strategies without fully recognising the level of concentration embedded in their portfolios.

The key risk: Large investments that need to deliver

Another important factor is the scale of current investment. Companies such as Microsoft, Google and Amazon are investing hundreds of billions of dollars into AI infrastructure, including data centres and specialised hardware. These investments have accelerated significantly and are now more than double, relative to assets, compared to the rest of the market.

The risk would arise if these expenditures do not translate into corresponding earnings over time. If the ability of AI to generate profits were to slow, or if infrastructure proved excessive, market reactions could be significant.

At the same time, balance sheets provide a more reassuring signal. The ratio of debt to total capital for AI-related companies has declined from around 35% to below 25% over the past four years. This suggests companies are financing investments largely through internal cashflows rather than external borrowing.

A system built on a limited number of players

Speculative bubbles often follow a pattern of rapid price increases, detachment from fundamentals and subsequent correction. The current AI-driven market environment does not fully replicate this pattern, although some elements – such as concentration and strong expectations – remain.

Rising earnings, lower leverage and price dynamics that remain linked to fundamentals suggest markets are reflecting real technological and economic developments. At the same time, concentration in a limited number of companies represents a structural risk.

Whether significant investment in AI infrastructure will translate into sustained profitability remains an open question. Changes in the macroeconomic environment, including interest rates, could also affect valuations more broadly.

Thierry Roncalli is Head of Quant Portfolio Strategy at the Amundi Investment Institute. The views expressed above should not be taken as investment advice.

Please Note:

This article is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. Tax treatment depends of your individual circumstances and may be subject to change in the future. If you are unsure about the suitability of any investment you should seek professional advice. 

The above article was first published by Trust Net and should not be regarded as individual investment advice on whether to buy, sell or hold any of the investments mentioned. Please speak to Ethical Offshore Investors or your personal adviser BEFORE you make any investment decision based on the information contained within this article.

Clients can invest in a very wide range of managed funds, direct shares, bonds, commodities and Crypto based assets and will not be subject to additional entry fees or commissions, when doing so with Ethical Offshore Investments.

Lower costs resulting in more of the investment growth staying in your pocket.

Speak with Ethical Offshore Investments to learn how you can save on your investment costs.

Socially Responsible Investing – Ethical Business Standards 

The post The AI boom isn’t the dot-com bubble – market concentration is the primary risk first appeared on Ethical Offshore Investments.

The post The AI boom isn’t the dot-com bubble – market concentration is the primary risk appeared first on Ethical Offshore Investments.

From valuation concerns to Musk’s near-total boardroom control, the world’s biggest IPO comes with questions investors should be asking.

SpaceX shares are set to start trading on 12 June, and whether you want them or not, they may end up in your portfolio. Here’s what you need to know before that happens.

What is SpaceX?

SpaceX is Elon Musk’s space company. Its business runs across three areas: launch services, with Falcon rockets carrying cargo and people into orbit; satellite internet via Starlink, which provides internet access to remote and underserved locations; and artificial intelligence, through the xAI division that owns the Grok chatbot and X, formerly known as Twitter.

Starlink is the part currently generating most of the revenue, but the whole of SpaceX recorded $18.7bn in sales in 2025 and a $4.9bn loss. At its target valuation of $1.8trn, it would be priced at 95x last year’s revenue, around 4 times Nvidia’s equivalent rating.

What is an IPO?

An initial public offering (IPO) is the first time a company sells shares to the public. Before an IPO, ownership is held by founders, early employees and private investors such as venture capital funds. Going public allows a company to raise money from a broader pool of investors and gives existing shareholders a route to sell.

SpaceX’s offer period is open now. Shares are expected to be admitted to trading at 2.30pm UK time on 12 June, though actual trading may not begin until several hours later while a price discovery process plays out – a period in which buy and sell orders are submitted and the market settles on a value before continuous trading begins. Investors applying during the offer period are getting in ahead of that process, but at no guaranteed price. If demand is high, they may end up paying more than the indicated range.

Why does this impact nearly all investors?

The IPO is consequential not just for those who want to gain direct exposure to SpaceX or who invest in funds that already hold the name, but to everyone who has a broad-based passive investment in global markets.

Upon becoming public, the company will become one of the biggest worldwide and hence be part of most major indices.

Index providers have changed their rules to allow SpaceX into the Nasdaq 100 and FTSE Russell indices without the usual seasoning period – typically a year or more on the market before index inclusion. These tracker funds will therefore be forced buyers in the first weeks of trading. The S&P 500 has not followed suit, so S&P index funds will not be compelled to buy on day one.

The anticipated passive demand is so great that active managers who would otherwise avoid SpaceX are considering buying at IPO and selling to passive funds once they are forced in at whatever price the market sets, as Downing’s multi-manager Simon Evan-Cook noted in his Substack column last week.

What are the growth opportunities?

According to AJ Bell head of markets Dan Coatsworth, two stand out. The first is Starship, SpaceX’s next-generation reusable rocket, currently in test flights.

SpaceX calls it the most powerful launch vehicle ever developed. If it becomes fully operational, it would extend the company’s capability to carry larger satellites and to reach the Moon and Mars.

The second is US government defence work. SpaceX has won a $2bn contract to build a satellite constellation as part of early-stage work on the Golden Dome, Donald Trump’s proposed missile defence system. That contract puts SpaceX alongside established defence contractors should the project progress.

What are the main risks?

Coatsworth listed launch failures, regulatory changes and competition as operational risks. On xAI specifically, he said it is a second-tier player compared with Anthropic and OpenAI, with a risk of falling further behind. Building orbital data centres brings its own difficulties: space weather, debris and the near-impossibility of repairing equipment remotely.

There is also dilution risk. SpaceX’s ambitions require sustained capital and further fundraising rounds would reduce existing shareholders’ stakes.

And then there is the Musk factor. His involvement in Donald Trump’s department of government efficiency earlier this year hit Tesla’s share price and European sales. SpaceX has the same person at the top, with more concentrated control, at a considerably higher valuation.

“Investing in individual companies is higher risk than investing in funds or trusts comprised of a collection of companies, bonds and other instruments,” Coatsworth said. “While there is a lot of buzz around the IPO, it is important to understand that shares can fall in value as well as go up.”

Who is the competition?

AJ Bell identified four companies are worth watching. Blue Origin, owned by Amazon founder Jeff Bezos, has reusable rockets and is building its own satellite communications network. Amazon is separately buying Globalstar and developing its Amazon Leo satellite venture. ArianeGroup, the joint venture between Airbus and Safran, is already carrying Amazon’s satellites into orbit. And Rocket Lab operates across launch services and spacecraft – a smaller operation in the same space. Its shares have risen 365% over one year and 2,759% over two years, according to Google Finance data to 1 June 2026.

Why is the IPO controversial?

The valuation is the first question. At $1.8trn and 95x sales, SpaceX would sit among the six most valuable companies on the Nasdaq 100 before it has turned a profit.

“Bulls might argue SpaceX’s earnings growth potential is so great that valuing it using 2027 or 2028 forecast earnings could make the equity rating look less rich,” Coatsworth said. “Bears could respond by saying that SpaceX is too immature or too high-risk a business to warrant a sky-high valuation.”

A related concern for Evan-Cook is who is selling the IPO. Goldman Sachs is the lead underwriter, standing to earn a share of what Wall Street will collect in fees from the listing. Evan-Cook argued that gives Goldman a direct financial interest in the IPO succeeding.

“If you’re buying SpaceX’s shares at IPO, you are relying on Goldman’s recommendation that $1.8tn is what the company is worth.”

Morningstar analysts valued the company at $780bn, less than half the asking price.

The second controversy is about governance. Musk will be chief executive, chief technical officer and chair simultaneously, as well as controlling the election of directors. He holds class B stock with 10 votes per share against the 1 vote per share available to public investors, giving him roughly 85% of voting power while owning around 41% of the stock, as recently covered on Trustnet. Public investors would be buying into a company where the founder’s judgment cannot formally be challenged and his continuity is built into the legal structure. This isn’t new: an increasing number of US IPOs follow a version of this structure.

A third concern is the lock-up. SpaceX is not following the standard 180-day restriction that prevents pre-IPO investors from selling immediately. Instead, it has a staggered arrangement allowing sales at set points across the first 180 days, including after its first quarterly results as a listed company. Early backers sitting on large gains will have multiple windows to exit.

What should investors do?

Those who want to buy should only buy an amount that – if it went up in smoke – would feel somewhere between ‘I hardly noticed’ and ‘ouch! that smarted’, said Evan-Cook.

“If you’re thinking of putting in an amount that would sit anywhere beyond, say, between ‘I feel sick’ and ‘I’m ruined!’, then you might want to reconsider. Because no matter what you hear – for or against – nobody knows what SpaceX is worth, or what the future has in store for it,” he said.

According to Joakim Agerback, manager of the Finserve Global Security fund, the bigger opportunity for long-term investors “may not be the IPO itself but the broader space economy”. He said a broader approach “may be preferable”, pointing to companies such as Rocket Lab, AST SpaceMobile, Planet Labs, Leonardo, OHB, SES, Eutelsat, Hanwha Aerospace, SKY Perfect JSAT and iQPS, which “offer exposure to the same trend of the expansion of the global space economy.”

“The most compelling aspect of this IPO may ultimately be what it signals for the sector as a whole. The scale of capital attracted to space infrastructure, connectivity, launch services and adjacent technologies reinforces the industry’s long-term growth potential,” he concluded.

Please Note:

This article is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. Tax treatment depends of your individual circumstances and may be subject to change in the future. If you are unsure about the suitability of any investment you should seek professional advice. 

The above article was first published by Trust Net and should not be regarded as individual investment advice on whether to buy, sell or hold any of the investments mentioned. Please speak to Ethical Offshore Investors or your personal adviser BEFORE you make any investment decision based on the information contained within this article.

Clients can invest in a very wide range of managed funds, direct shares, bonds, commodities and Crypto based assets and will not be subject to additional entry fees or commissions, when doing so with Ethical Offshore Investments.

Lower costs resulting in more of the investment growth staying in your pocket.

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While many investors are still debating whether NVIDIA’s meteoric rise can continue, the real question might be why they are trying to access a market worth $6trn instead of one worth $44trn. This is the annual global wage bill for knowledge workers – and the true addressable market for AI, dwarfing the $6trn IT budget that most analysis stops at.

According to Morgan Stanley in November 2025, by Q3 last year around 15% of S&P 500 companies were reporting tangible AI benefits – a figure we expect to continue to rise sharply. One development that exceeded our expectations was agentic AI. Leading agentic models – as measured by research institute METR (Model Evaluation and Threat Research) – can now handle the equivalent of 14 to 16 hours of human work without any oversight. This represents a step-change in what kinds of work AI can viably replace.

Going after the bottlenecks

We invest in both the enablers and the beneficiaries of AI. Looking at the enablers, our strategy is to identify bottlenecks in the AI supply chain and own the companies’ providing solutions in these areas. Networking, high-bandwidth memory, advanced printed circuit board (PCB) components, thermal management and power infrastructure have all been conviction positions – which is why the Polar Capital Artificial Intelligence Fund is a global equity fund, investing beyond a conventional technology fund.

For example, Mitsui Mining & Smelting is a supplier of advanced materials for high-end PCBs and Comfort Systems USA builds data centres. Both companies are benefiting from data centre construction demand.

We do not see the estimated $750bn in AI infrastructure spend by the enablers as a reckless arms race. Instead, we see it is a reallocation of capital from inefficient human-led processes to scalable, automated intelligence. Our bias on capex forecasts remains firmly towards the upside.

Rerating the beneficiaries

To assess opportunity and risk, we look at every company through an AI lens. We apply our investment framework – identifying a lack of mean reversion, ‘winner-takes-most’ dynamics and permanent business model change – to sectors not historically analysed through that lens.

For example, Delta Air Lines illustrates the thesis: around 20% of its ticket inventory is now priced by AI algorithmically, allowing it to reduce discounting rather than overcharge customers. Tesco is another example – we see it following Walmart’s playbook to build out a capable ‘second P&L,’ leveraging retail media and a growing online marketplace to generate a new, high-margin profit pool. When Walmart’s transformation became visible to investors, the stock rerated from below 16x earnings to over 45x. We owned it throughout.

Investors have not yet fully realised or repriced the improvement in long-run earnings power for companies demonstrating permanent AI-driven change and that is where we see the most interesting opportunity today.

Avoiding losers matters as much as finding winners

The rapid pace of AI development demands as much discipline on portfolio exits as on entries. Turnover ran at roughly 120% last year – well above our typical 70-80% – largely because we exited our entire exposure to business analytics and application software, around 17% of the book.

When hallucination rates fell, enterprises found they could replicate much of the functionality of established packaged software at radically lower cost, stripping pricing power from businesses whose growth had depended almost entirely on it. Software sits between humans and data – it is designed for human interaction. In a world where compute increasingly initiates transactions, that position is structurally challenged. We retain exposure through names such as Cloudflare, where consumption-based models and a more complex threat environment are durable tailwinds.

The Fund’s positioning

The Polar Capital Artificial Intelligence Fund is a global equity product – rated by Morningstar as such – with $3.5bn in assets under management. Slightly over 40% of the portfolio is in AI enabling technology; the remaining 60% is in sectors like industrials, consumer, materials and energy where AI is driving measurable earnings change. Every holding must generate more than half of its incremental earnings growth from AI, a hurdle that rules out casual thematic exposure.

According to BNP Paribas, since ChatGPT launched more than 80% of Nasdaq returns to the end of 2025 were earnings-driven not multiple-driven. We see the more interesting rerating opportunity lying outside technology, in companies permanently changing their business models. Agentic AI annual recurring revenues at Anthropic and OpenAI combined already exceed those of SAP.

We are still in the early stages of a general-purpose technology reshaping the global economy and disciplined exposure to its enablers and durable beneficiaries remains one of the most compelling long-term opportunities in global equities today.

Please Note:

This article is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or asset, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. Tax treatment depends of your individual circumstances and may be subject to change in the future. If you are unsure about the suitability of any investment you should seek professional advice. 

The above article was published by Polar Capital LLP, a specialist research-driven investment management company. It operates as an active fund manager for individual and institutional investors worldwide, overseeing global equity portfolios, sector-specific funds, and thematic investment strategies.

Please speak to Ethical Offshore Investors or your personal adviser BEFORE you make any investment decision based on the information contained within this article.

A. Polar Capital – Artificial Intelligence I Acc – GBP – performance since inception

At Ethical Offshore Investments, we hold a very high opinion on Polar Capital and their range of specialist sector investment funds. 

Clients can access the Polar Capital funds mentioned in this article via the various Investment Platforms, and not be subject to additional entry fees or commissions, when doing so with Ethical Offshore Investments.

Lower costs resulting in more of the investment growth staying in your pocket.

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Christoph Burgstedt /science Photo Library | Science Photo Library | Getty Images

The following news article was published by CNBC.

Gold’s pullback is exposing a rare shift in the market: after years of relentless accumulation, some central banks are now selling bullion as Iran war-driven pressures force a scramble for cash.

Spot gold, which is currently trading at around $4,838 per ounce, has fallen about 10% from its late-January peak, slipping into correction territory even as geopolitical risks intensify. The move marks a stark reversal from last year’s rally, when central bank buying helped underpin prices despite rising interest rates. 

“There has been notable selling of gold by central banks from a few market participants,” Nicky Shiels, head of metals strategy at MKS Pamp, told CNBC.

The drivers are increasingly tied to wartime realities. Higher oil prices are straining import-dependent economies, while currency volatility is forcing some central banks to intervene more actively in foreign exchange markets, said market watchers.

Spending requirements are also a pressing consideration for central banks. “Many were sitting on a lucrative piggy bank with prices around $5,000 an ounce,” Shiels said. Some are now using gold reserves to “pay for increased energy and defense expenditure or to defend weakening currencies,” said Shiels.

Emerging market central banks appear to be at the forefront of this shift. A stronger U.S. dollar and higher borrowing costs are amplifying pressure on currencies, increasing the need for intervention.

“As far as gold is concerned, emerging market currency weakness has led some central banks to sell gold to stabilize currencies,” said Steve Brice, chief investment officer at Standard Chartered.

Concrete data on central bank sales tend to lag or remain discreet, but signs have been emerging.

Turkey has been the most notable seller so far this year. Its official gold holdings dropped by 131 tons in March through swaps and outright sales as authorities sought to stabilize the lira, according to a report published by Metals Focus last Thursday.

The Turkish lira has weakened further to breach new records since the Iran war began, falling about 1.7% against the U.S. dollar since conflict first broke out.

Similar patterns are visible elsewhere. Russia has reduced gold holdings in recent months, likely to help finance budget shortfalls, while Ghana has also sold reserves to boost foreign currency liquidity, data from Metals Focus showed.

Poland’s central bank governor also briefly explored selling part of its gold reserves to fund defense spending. The central European nation was the largest central bank buyer of gold in 2024 and 2025.

A strong demand pillar

The shift matters because central banks have been one of the strongest pillars of the gold market in recent years. Their steady buying helped offset outflows from Western investors and underpinned bullion’s surge to record highs. Now, both of those drivers appear to be reversing at the same time.

Central banks have been a dominant force in the gold market in recent years, buying more than 1,000 tons annually from 2022 — which marked the highest level of annual gold demand by central banks on record — through 2024, according to the World Gold Council. In 2025, central bank purchases declined to 863 tons as market participants navigated record-high price volatility.

“Our take behind the drop is that it is likely that some central banks are selling gold to defend their currency and/or to fund energy purchases,” Natixis said in a note, pointing to rising oil prices and a stronger U.S. dollar as key stressors.

While emerging markets appear to be driving recent sales, major reserve holders such as the Reserve Bank of India, People’s Bank of China and Bundesbank have remained largely opaque on their gold activity, underscoring the limited visibility into official sector flows.

The combination of retail investors exiting their gold positions and some central banks turning into net sellers has been among a key reason behind the recent drop, Natixis added.

Natixis also pointed to rising U.S. Treasury yields as another driver of outflows, with higher returns on fixed-income assets reducing the appeal of non-yielding bullion.

Similarly, Adrian Ash, director of research at BullionVault, said the logic is straightforward: gold bought as insurance ahead of a crisis can become a source of funding once that crisis hits.

“You bought gold in case of a crisis. Now crisis has struck,” he said.

“The rise in oil and gas, as well as the U.S. dollar and borrowing costs worldwide, will mean many central banks need to increase their FX reserves… and potentially defend their currency,” said Ash.

Still, industry veterans cautioned that these moves are often tactical rather than structural.

For one, the sales highlight gold’s role as a reserve asset in times of stress, said Shaokai Fan, global head of central banks at the World Gold Council.

“It really emphasizes why central banks hold gold… it’s a liquid asset that typically performs well during periods of uncertainty, and therefore they can deploy it if needed,” he told CNBC.

Additionally, major consumers like China have historically stepped in during price dips, and Natixis’ senior commodities analyst Bernard Dahdah said he expects opportunistic buying to re-emerge if prices fall further, potentially providing a floor.

How to get exposure to the Gold price movement 

At Ethical Offshore Investments, our clients can get access to Gold (as well as other precious metals) through a range of different Exchange Traded Commodity (ETC’s) available on the various investment platforms. This is a very cost effective & secure way of holding physical Gold in your portfolio, without the need to worry about storage and insurance.

For example, the iShares Physical Gold ETC which is listed on the London Stock Exchange (as well as the Frankfurt, Italian and Mexican exchanges) holds the physical gold bars in secured and allocated storage in J.P. Morgan Chase, London branch vaults. The price movement of the ETC is based on the movement of the spot price of gold, less their management cost to cover storage and insurance of the Physical Gold, which is 0.12%pa.

We can also provide specialist investment products that can leverage on the gold price movement. If an investor is confident that the price of Gold will rise, we can offer a leveraged Exchange Traded Product on the spot price movement of Gold, where investors can get 2x up to 10x the price movement. Obviously this increases the risk as if the price goes down, it will also leverage the losses.

We can also provide specialist investment products that benefit from a falling asset price. So if an investor is confident that the price of Gold will fall, an investment in an ‘Inverse Gold ETC’ will provide a positive return if the Gold price was to fall. Same as above, this can also be leveraged to 2x – 10x the price movement to enhance returns (both positive and negative). Speak with Ethical Offshore to see how easy it is to get this type of exposure, with no additional entry and/or exit fees (apart from standard stock broker costs & stamp duty when applicable).     

Please Note:

This article is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. 

Please note the above article was first published by CNBC Business and should not be regarded as individual investment advice on whether to buy, sell or hold any of the investments mentioned. Please speak to Ethical Offshore Investors or your personal adviser BEFORE you make any investment decision based on the information contained within this article.

Lower costs resulting in more of the investment growth staying in your pocket.

Speak with Ethical Offshore Investments to learn how you can save on your investment costs.

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25 March 2026

While volatility can feel unsettling, it is a normal part of investing.

Jonathon Jones,

Editor, TrustNet

Patience beats prediction when markets are volatile, according to experts at Vanguard, who have reminded investors that staying invested brings better results than trying to time the market.

The firm highlighted volatility last year surrounding US president Donald Trump’s ‘Liberation Day’ tariffs as an example. Had investors sold out of their investments on 8 April 2025 and returned to markets one month later, their returns would have been 10 percentage points lower today than if they had remained invested throughout (14.4% versus 4.8%).

James Norton, head of retirement & investments at Vanguard Europe, said: “Investing is a marathon not a sprint.

“While volatility can feel unsettling, it is a normal part of investing. Successful investing isn’t about trying to time when to buy or sell, but about having a clear plan, staying invested and contributing regularly. By doing so and maintaining a balanced, diversified portfolio investors give themselves the best chance of investment success and meeting their long-term goals.”

The research noted that the MSCI World index has experienced eight bear markets since 1972, each time recovering and then pushing to new heights, as the below chart shows.

Diversification also matters, however. US tech stocks have dominated returns in recent years but in 2025 a globally diversified portfolio would have made better returns. The report noted that the UK and emerging markets were up 23% versus 11% for the S&P 500.

Lastly, the firm said investors should not fear market highs, noting they are often followed by new records.

“You may feel uneasy when markets are rallying but history shows that markets often go on to reach more highs,” the report found.

Please Note:

This article is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. Tax treatment depends of your individual circumstances and may be subject to change in the future. If you are unsure about the suitability of any investment you should seek professional advice. 

Please note the above article was first published by Trust Net and should not be regarded as individual investment advice on whether to buy, sell or hold any of the investments mentioned. Please speak to Ethical Offshore Investors or your personal adviser BEFORE you make any investment decision based on the information contained within this article.

At Ethical Offshore Investments, we hold a very high opinion on Vanguard and their range of low cost investment options. 

Clients can access the Vanguard funds / ETF’s mentioned in this article via the various Investment Platforms, and not be subject to additional entry fees or commissions, when doing so with Ethical Offshore Investments.

Lower costs resulting in more of the investment growth staying in your pocket.

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24 March 2026

Traditional safe havens have been tested in recent months, with diversification proving the strongest defence for portfolios.

Emmy Hawker,

Senior Reporter, TrustNet

Volatility from geopolitical shocks, inflation swings and sharp market reversals was common in 2025 but have arguably ramped up even further to start 2026.

Such an environment typically sends investors towards long-established shelters, such as gold, government bonds and risk-off currencies – yet many of these stalwarts have struggled to behave as expected.

Below, managers set out how they currently view the traditional pillars of safety – from gold and bonds to commodities and cash – and why many believe portfolios need a wide range of defensive tools.

Gold and other commodities

Michael Walsh, solutions strategist and portfolio manager at T. Rowe Price, said gold continues to feature as a strategic diversifier in investor portfolios but “perceptions have matured”.

“Gold’s move through previous record highs can be seen as confirmation that the macro conditions under which gold has historically added value – policy uncertainty, institutional strain and geopolitical risk – are very much in place,” he said.

“Importantly, gold has demonstrated greater resilience than government bonds when real yields rise, reflecting sustained, largely price‑insensitive demand from central banks seeking to diversify reserves.”

For investors concerned about the credibility of fiat currencies and policy uncertainty, this structural support reinforces gold’s role as a hedge against systemic risk rather than a simple cyclical trade, Walsh said.

Paul O’Neill, chief investment officer at Bentley Reid, also said gold is the “truest” safe-haven asset. However, he has elected to trim back to target weight as the price has continued to rise.

Daniel Lockyer, senior fund manager at Hawksmoor Fund Managers, pointed out that gold is the only asset that stands out as preserving spending power over centuries.

He nonetheless acknowledged it has become a very popular trade in recent months. “Gold’s volatility has increased lately, which does worry us a bit.”

In recent weeks, the price of gold has dropped again as the Middle East conflict continues, shedding 11% to close at shy of $4,500 an ounce on 20 March 2026.

Meanwhile, George Cotton, manager of JSS Commodity Transition Enhanced, argued there is safety to be found in other commodities, which contribute to the 10% of his portfolio allocated to safe-haven assets, alongside gold and bonds.

Bonds

When considering fixed income, Will McIntosh-Whyte, co-manager of the Rathbone multi-asset portfolio funds, said government bonds have shown they can still perform their role in broad risk-off markets.

“There is no doubt there are some concerns over government bonds from countries with significant debt burdens and high budget deficits – however, this is reflected in higher yields,” he said.

“It is important to have diversification so a basket of bonds can provide the risk-off role of a portfolio, while reducing the risk one of those countries makes a fiscal misstep.”

McIntosh-Whyte said he reduced his funds’ 10-year gilts position in late February, “having sold all our 30-years the week before due to our concerns over potential volatility in gilts over the next few months”.

Meanwhile, Rebekah McMillan, associate portfolio manager at Neuberger Berman, said US treasuries can still help hedge growth shocks but noted the firm is ultimately neutral on US government bonds.

She noted they have proved to be less dependable versus inflation or political tail risks and have at times offered deteriorating returns during risk-off scenarios due to deficit, debt-issuance and term-premium pressures.

Tony Gibb, head of investments at Artemis, added: “The fiscal trajectory in the US is difficult to ignore, with deficits running at levels more typically associated with recession or wartime, the supply of government bonds is structurally elevated.

“While treasuries will likely still rally in a growth shock, the magnitude of that rally and the reliability of the hedge is more uncertain than it once was. Investors are being asked to take on meaningful duration risk for a return that may not keep pace with inflation.”

In contrast, short-dated corporate bonds are a “genuinely attractive defensive option”, according to Gibb, “with investors being paid meaningfully to wait, with limited duration risk – the asymmetry is compelling as you clip a reasonable coupon with limited sensitivity to rate moves”.  

Meanwhile, Cotton said catastrophe bonds may also offer a compelling alternative for investors seeking safety, providing returns that are largely uncorrelated with traditional financial markets as they depend primarily on natural disaster triggers rather than economic cycles.

Currencies, cash and cash-like instruments

Although the US dollar is pegged as the most dominant reserve currency of the world, fund managers are wary of its volatility in recent months.

McMillan said: “The dollar has shown episodic weakness in risk-off episodes. We expect further downward pressure from prospective Fed rate-cuts and, longer-term, diminishing foreign inflows as investors may reallocate capital away from the US and/or increase hedge ratios on existing US assets.

“We are similarly selective on use of other foreign exchange (FX) havens such as the Swiss franc and Japanese yen given the number of structural and technical factors in play.”

In contrast, McIntosh-Whyte said that, as a sterling investor, the US dollar remains an “excellent” safe haven.

“Whilst the current US administration has perhaps dampened its appeal, in the vast majority of risk-off environments I still expect the dollar to help UK investors – from UK economic weakness and political uncertainty to geopolitical risk and global growth scares,” he said.

Cash also continues to have an important role to play in defensive allocations, offering capital stability and liquidity.

“Although cash rates are now falling in the US, UK and the eurozone, yields remain above inflation and are attractive by recent historical standards – in 2026, liquidity itself has become an increasingly valuable defensive characteristic,” Walsh said.

For pure capital preservation in acute risk-off events, McMillan said she sees the most reliable defence in major sovereign bills, short-dated notes plus agency/supranational paper and high-quality money-market exposure – “where depth and nominal stability matter most”.  

Diversification is key

Ultimately, fund managers agreed that there is no one safe-haven asset that will protect investors from all possible risks. As such, diversification is the preferred formula.

Walsh said: “There is need for a broader toolkit rather than reliance on any single defensive asset, so we look globally across a range of different asset types in search of such protection.”

Artemis’ Gibb added he has shifted his mindset from asset labels to the underlying characteristics that drive resilience, such as valuation discipline, income generation and real (rather than nominal) returns.

“In short, we think about defence in terms of what an asset is worth today, not what it has historically been called,” he said

Please Note:

This article is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. Tax treatment depends of your individual circumstances and may be subject to change in the future. If you are unsure about the suitability of any investment you should seek professional advice. 

Please note the above article was first published by Trust Net and should not be regarded as individual investment advice on whether to buy, sell or hold any of the investments mentioned. Please speak to Ethical Offshore Investors or your personal adviser BEFORE you make any investment decision based on the information contained within this article.

Clients can access the funds / indices / equities mentioned in this article via the various Investment Platforms, and not be subject to additional entry fees or commissions, when doing so with Ethical Offshore Investments.

Lower costs resulting in more of the investment growth staying in your pocket.

Speak with Ethical Offshore Investments to learn how you can save on your investment costs.

Socially Responsible Investing – Ethical Business Standards 

The post Gold, bonds and currencies: The fund managers’ guide to safe havens first appeared on Ethical Offshore Investments.

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2 March 2026

Joint US-Israeli strikes on Iran have sent oil prices surging and triggered a global flight to safety, but how should investors react?

By Gary Jackson,

Head of editorial, FE fundinfo

Joint US-Israeli strikes that killed Iran’s supreme leader over the weekend have triggered a global flight to safety, sending oil prices sharply higher, gold to near record highs and equity markets into a broad sell-off, with analysts warning the economic consequences could rival those of Russia’s invasion of Ukraine if the conflict proves prolonged.

In the early hours of Saturday 28 February 2026, the US and Israel launched coordinated strikes on Iran, codenamed Operation Epic Fury and Operation Roaring Lion respectively, targeted Iranian leadership, military infrastructure and nuclear facilities with the stated objective of regime change.

The Israeli Air Force deployed 200 jets in its largest ever sortie, striking around 500 targets. The US carried out dozens of strikes by planes from one or more aircraft carriers based around the Middle East.

Iran’s supreme leader, Ayatollah Ali Khamenei, was killed alongside several senior officials, including  army chief of staff, general Abdol Rahim Mousavi and defence minister General Aziz Nasirzadeh. Iranian media also said Khamenei’s daughter, grandchild, son-in-law and daughter-in-law were killed.

Iran retaliated swiftly, striking Tel Aviv, Haifa and US military bases across the Gulf. The Yemen-based Houthis said they will resume Red Sea attacks and there are concerns Lebanon-based proxies will activate. By 2 March, the combined strike total had reached approximately 2,000 targets, with conflict spreading to Lebanon, Cyprus and Bahrain. Three US troops have been killed.

US president Donald Trump has warned the campaign could run four to five weeks but the endpoint is seemingly defined by outcome rather than time: regime change is the objective, making the conflict’s duration unpredictable.

The central market story – oil

Following the weekend’s strikes, Brent crude opened this week at $82 a barrel, up $10 on Friday’s close.

Concerns revolve around the Strait of Hormuz rather than Iran’s own production (which is roughly 3% to 4% of global supply). Approximately 20 million barrels per day of oil and nearly a fifth of global liquefied natural gas (LNG) transit the strait daily. Tanker movement has effectively halted following Iranian strikes and attacks on at least three vessels.

Hakan Kaya, senior commodities portfolio manager at Neuberger Berman, said: “A full or near full closure lasting a month or more would require demand destruction at levels that could push crude well into triple digits and European natural gas prices toward or above the crisis levels seen in 2022.

“The relationship between disruption length and price is not proportional – it accelerates. Every additional week of closure compounds the problem because storage buffers deplete, refiner production cuts cascade and replacement cargoes from outside the region take time to mobilise.”

Adam Hetts, global head of multi-asset at Janus Henderson Investors, provided a useful oil price comparison for context: $80 is consistent with June 2025’s Twelve-Day War between Iran and Israel, $90 with the clash between the two nations in April 2024 and sustained prices above $100 with Russia’s invasion of Ukraine in 2022.

Chris Beauchamp, chief market analyst at IG, noted that “oil and gas infrastructure in the region has not yet been extensively targeted, keeping oil well south of the $100 barrel range that many expected”.

Neil Wilson, investor strategist at Saxo UK, added that while a $10 rise in oil would not materially affect inflation and growth, “$100 oil would really hit the growth outlook”.

Strategic stockpiles in the US (over 400 million barrels) and China (approximately 465 million barrels) provide some buffer, alongside OPEC spare capacity of roughly 3 to 4 million barrels per day. Kaya said: “These are finite resources and they buy time, not resolution.”

Wider market reaction

Emma Wall, chief investment strategist at Hargreaves Lansdown, said the strikes had added “uncertainty and volatility to an already choppy market”. Global equities are “now digesting the likelihood of significantly higher oil prices, supply chain concerns and the potential for subsequent higher inflation”.

Gold surged above $5,400 per ounce, extending a near 20% gain year to date, while the VIX jumped to 25 from below 20 at Friday’s close. European equities fell 2.3% but the FTSE 100 held up better at -1%, supported by its commodity and defensive weighting.

Shell and BP each gained 5%, BAE Systems 7%. IAG slumped 10% as airports in Dubai, Doha and Abu Dhabi closed.

Wall noted that a rally in the dollar reflects US military and energy independence but added: “The world’s reserve currency has waned in popularity over the past year as gold has seemed to surpass it as investors’ preferred store of wealth.”

Bond markets are expected to benefit initially from safe-haven demand. Wall cautioned, however, that a protracted conflict bringing inflation and higher military spending could reverse this dynamic, pushing yields higher and the dollar lower.

Four scenarios that could follow

Neuberger’s Kaya outlined four paths for how the conflict could proceed. The first is rapid de-escalation: Hormuz normalises within days, oil spikes then retraces. This is what current consensus favours, though Kaya noted it “requires assumptions about rational actors operating under extraordinary stress”.

The second is a prolonged standoff of four to five weeks, with oil staying elevated and volatile as Hormuz remains partially impaired. Beauchamp noted that “with Trump saying the campaign could run for four weeks, there is plenty of scope for more downside should the conflict widen to encompass oil and gas infrastructure”.

The third path is the one Kaya argued deserves more attention: regime change followed by fragmentation. Libya’s output collapsed from 1.7 million barrels per day after 2011 and never fully recovered. Iraq took six years and a full military occupation to return to pre-war levels. A power vacuum in Iran could mean a structural loss of barrels for years, not weeks.

The fourth is an extended regional war in which Hormuz becomes uninsurable for commercial shipping and demand rationing becomes necessary globally. Saxo’s Wilson added: “The longer this goes on with the Iranian regime remaining in place, the higher we go up the risk ramp.”

What investors should do

The clearest point of agreement is this: do not react. Wall’s advice was simply to do nothing.

“Heightened market volatility was a feature of 2025 and our house view was that unpredictable markets were likely to continue this year,” she said.

“In our 2026 outlook, we called out ongoing tension in the Middle East, the Russia-Ukraine war and the US mid-term elections as potential inflection points for asset prices. The events of the weekend are deeply troubling from a humanitarian point of view and present global leaders with difficult choices to make. But they are sadly not isolated incidents – global markets continue to trade through wars, pandemics and natural disasters.”

Janus Henderson’s Hetts echoed this, arguing that investors should recognise they are likely at or near peak uncertainty and that “large shifts in market dynamics would require a long-running escalation of the conflict. At this stage, this is not our base case”.

For those seeking to act constructively, Wall highlighted fixed income funds, emerging markets and quality-style equities, particularly stocks with “stable and predictable cashflows and little to no debt”.

Kaya argued that commodities are “doing exactly what they are supposed to do in moments like this”, which is acting as a source of diversification when traditional assets are buffeted by geopolitical risk.

Hetts finished: “As always, we advocate for taking a long-term view to investing rather than reacting to near- term volatility. This means maintaining well-diversified portfolios including high-quality safe-haven assets able to weather short-term uncertainty.

“It also means staying invested, rather than trying to market-time geopolitical realignment and the associated risk. Instead, we believe in maintaining exposure to the long-term secular growth trends that will continue to shape markets globally.”

Please Note:

This article is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. Tax treatment depends of your individual circumstances and may be subject to change in the future. If you are unsure about the suitability of any investment you should seek professional advice. 

Please note the above article was first published by Trust Net and should not be regarded as individual investment advice on whether to buy, sell or hold any of the investments mentioned. Please speak to Ethical Offshore Investors or your personal adviser BEFORE you make any investment decision based on the information contained within this article.

Clients can access the funds / indices / equities mentioned in this article via the various Investment Platforms, and not be subject to additional entry fees or commissions, when doing so with Ethical Offshore Investments.

Lower costs resulting in more of the investment growth staying in your pocket.

Speak with Ethical Offshore Investments to learn how you can save on your investment costs.

Socially Responsible Investing – Ethical Business Standards 

The post What the Iran conflict means for oil, markets and portfolios first appeared on Ethical Offshore Investments.

The post What the Iran conflict means for oil, markets and portfolios appeared first on Ethical Offshore Investments.

By James Yardley on 12 February 2026 – FundCalibre

The year of the wood snake has been a good one for China. Its economy has recovered, and investors have rediscovered their enthusiasm for its stock market. Western leaders have started to wonder if it may be a more reliable ally than the increasingly wayward US and have sought to forge closer ties.

Can the year of the fire horse bring similar good fortune?

The fire horse symbolises energy, independence, and ambition. These characteristics are increasingly evident across China, as it branches out into new technology and moves up the valuation chain. The launch of Deep Seek early in 2025 showed that China was capable of real innovation, and the country is now moving from simply imitating Western technology to making its own.

Sharukh Malik, portfolio manager on the Guinness Asian Equity Income fund, says the Chinese government recognises that China cannot achieve the next phase of economic growth – moving from c.$12,000 to $30,000 per capita – from property market growth alone. This needs to come from building expertise in key industries, including electric vehicles, industrial automation, or developing drugs rather than copying European or American drugs. He adds: “The country is now creating its own technology from scratch in key industries.”

On a recent trip to China, he saw evidence of technological progress everywhere. He points to drone deliveries, new car brands such as Geely and Chery, and widespread electrification*. The country is also a pioneer in advanced manufacturing, with advanced robotics helping its factories to run more efficiently.

China is also keeping pace on AI. Chinese technology companies may offer a cheaper and diversifying alternative to the US hyper-scalers. Shao Ping Guan, manager of the Allianz China A-Shares fund says: “While semiconductor stocks have been notably strong this year, benefiting from China’s ongoing push for greater self-sufficiency, the rally has also extended to a range of areas linked to AI.

Strategic foresight

China has also shown itself capable of better forward-planning. In the tussle between the two great super-powers, China recognised the necessity of shoring up supply of critical minerals and metals some way ahead of the US, which is now scrambling to keep up. This has given it ‘cards’ in its negotiations with the US over tariffs, and a competitive advantage in key industries.

Guinness says there is a sense that the US is looking backwards. Its recent military interventions appear to be intended to shore up oil supply. President Trump has made it clear that he is no fan of ‘windmills’ – read: renewable energy sources. Ultimately, this will leave the US dependent on dwindling fossil fuel supplies. China, by contrast, is investing in renewables to the tune of around $350 billion per year – 3x that of the US*.

This paints a picture of an economy firing on all cylinders and a government with a clear vision. It continues to grow at around 4.5-5% a year**, and that growth is spread across a range of sectors, making it more durable and robust. The Chinese stock market has started to catch up. The Shanghai Composite is up 24.8% over the past 12 months, and 3.9% for the year to date***, after a long period of weakness. Nevertheless, says Sharukh, global investors remain under-allocated. It is worth noting that China represents around 17.7% of global GDP and just 3% of the MSCI ACWI index^.

Why investors remain on the sidelines

There are still imbalances in the Chinese economy. Supporting strategic industries with lots of investment has the inevitable side effect of over-supply. Excess capacity has been seen in a range of sectors, including electric vehicles and solar panels.

Dale Nichols, manager of the Fidelity China Special Situations fund, says this is being addressed through the country’s “anti-involution” campaign. “This aims to address deflationary pressures arising from excessive and inefficient competition, including fast-growing sectors such as electric vehicles and solar energy, and in some traditional industries such as paper and cement. The intent is to reduce excess capacity and destructive competition, while preserving confidence among private enterprises.

The property sector remains a potential source of weakness. The Chinese government has worked hard to deflate the property sector gently, and transition towards new pillar industries. It has recognised the vulnerability of growth built on property market strength alone. However, Sharukh says that while these new industries have been growing, they have not been able to offset the drag from a deflating property market, but this should start to happen later this year. “It will underpin economic progress,” he says. Shao Ping Guan points out that after four years of contraction, the share of the property sector has fallen from about 18% of GDP to 9% in 2025.

The property market is also tied into the strength of the consumer. Dale Nichols says: “A more stable property sector also remains critical to restoring consumer confidence. Recent trends have been mixed, with both new and existing house prices falling further in September as policy support waned during what is typically a strong season, although Tier 1 cities, such as Beijing, Shanghai and Hangzhou, continued to show modest gains. Stabilisation in the housing market is important for a broader recovery in household sentiment, which in turn is key to reviving domestic consumption.”

However, despite these challenges, says Dale, China’s structural strengths remain clear.

These creates a fertile environment for investors. China is still an area that requires some discernment. The government still exerts excessive control in parts of the economy, and investors need to be wary of interference. Nevertheless, its markets are increasingly offering a range of opportunities. The energy, independence and ambition of the fire horse is apt for the state of China today.

*Source: Guinness, January 2026

**Source: IMF, World Economic Outlook Update, January 2026

***Source: MarketWatch, as of 9 February 2026

^Source: State Street Investment Management, 17 July 2025

Please Note:

This article was first published by Fund Calibre and is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. 

Please speak to Ethical Offshore Investors or your personal adviser BEFORE you make any investment decision based on the information contained within this article.

At Ethical Offshore Investments, we can access the funds mentioned in this article on the various offshore investment platforms we offer. We do NOT CHARGE any additional entry and/or exit fees to purchase these funds for our clients.

As we aim not to use commission paying funds, we will access the lowest charging version of the managed fund that is available on the relevant platform…… resulting in more of the investment growth staying in your pocket.

Speak with Ethical Offshore Investments to learn how you can save on your investments costs

Socially Responsible Investing – Ethical Business Standards 

The post Can China’s momentum last in the year of the horse? first appeared on Ethical Offshore Investments.

The post Can China’s momentum last in the year of the horse? appeared first on Ethical Offshore Investments.

By Darius McDermott on 2 February 2026 – FundCalibre

Artificial intelligence (AI) continued to be the driving force behind global markets in 2025. AI-related enterprises accounted for roughly 80% of the gains in the US stock market last year, while the five largest tech companies, heavily invested in AI, held a concentration of the S&P 500 not seen in half a century*.

Please Note:

This article was first published by Fund Calibre and is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. 

Please speak to Ethical Offshore Investors or your personal adviser BEFORE you make any investment decision based on the information contained within this article.

At Ethical Offshore Investments, we can access the funds mentioned in this article on the various offshore investment platforms we offer. We do NOT CHARGE any additional entry and/or exit fees to purchase these funds for our clients.

As we aim not to use commission paying funds, we will access the lowest charging version of the managed fund that is available on the relevant platform…… resulting in more of the investment growth staying in your pocket.

Speak with Ethical Offshore Investments to learn how you can save on your investments costs

Socially Responsible Investing – Ethical Business Standards 

The post The AI alternative staring us all in the face first appeared on Ethical Offshore Investments.

The post The AI alternative staring us all in the face appeared first on Ethical Offshore Investments.

originally published 2 December 2025

Pictet explains why the most overvalued companies in the US aren’t in AI.. 

By Patrick Sanders,

Reporter, TrustNet

Concerns about the valuations of US mega-caps have skyrocketed this year, but this is the wrong part of the market to worry about, according to Arun Sai, senior multi-asset specialist at Pictet Asset Management.

The artificial intelligence (AI) story has dominated markets this year, to the point that investors are increasingly worried about whether the US’ largest companies can continue to match high expectations.

The circular financing deals that make AI companies dependent upon each other have also spooked some, with major players such as Nvidia, Intel and OpenAI partnering together, as shown in the chart below.

While these are “red flags”, the bull case for AI is being underestimated, Sai said.

Circular deals between AI companies

Source: Pictet Asset Management. Bloomberg News Reporting

The ongoing case for AI

Some experts have compared the AI boom to previous market bubbles, but the comparison is not entirely appropriate, the Pictet strategist said, and valuations are not as extreme as most think.

The AI cohort currently trades at an average of 30x price-to-earnings (P/E) ratio – lower than the Nasdaq at the height of the dot-com bubble, which traded at 100x.

Peak bubble valuations

Source: Pictet Asset Management.

“Looking at markers of when bubbles burst, I’d say we’re only above a third of the way in,” the Pictet strategist said.

This means that there is still significant room for deregulation and sentiment to improve, which will lead to a continued rally in these stocks.

“AI stocks are not cheap, but equally, they’re not frothy either. I’m happy to pay an average of 30x for AI.”

Current valuations are also broadly supported by strong fundamentals, he said. The bulk of the AI capex boom has been supported by operating cash flows, which further distinguishes it from the dot-com bubble, where “equity investments were financing the capex”.

On top of this, the earnings picture for these companies is broadly “comforting”, as they are growing their earnings per share well above the average US stock, as shown in the chart below.

“These stocks are market leaders and have been for years. That’s a comforting backdrop,” he said. “Markets are expensive, but I don’t think AI is the reason for that and that should change your risk-reward perspective”.

12m forward earnings of AI Stocks vs S&P 500

Source: Pictet Asset Management.

The ‘Terrific 20’

The biggest risk in the US market isn’t in the tech stocks, it’s in the rest of the US mega-caps, particularly a cohort that Sai called the “Terrific 20”. This is a broader set of large-cap American stocks, which are more closely tied to the “real economy” such as Walmart, JPMorgan and Berkshire Hathaway.

These stocks have surged to an average of 25x forward earnings, above the average US stock and not far behind the Magnificent Seven, as seen in the chart below. In total, they have surged almost 60% in the past two to three years.

Valuations of Magnificent Seven, Terrific 20 and Median US stock

Source: Pictet Asset Management. The Terrific 20 include Broadcom, JPMorgan, IBM, Berkshire Hathaway, Visa, Netflix, ExxonMobil, Mastercard, Costco, Walmart, Oracle, AT&T, GE Aerospace, Home Depot, Wells Fargo, Bank of America, Palantir Technologies, Chevron, Philip Morris International and Goldman Sachs

The problem with this is that the rally in these mega-cap stocks has been founded on “hopes” rather than fundamentals, which will backfire on investors, Sai said.

Unlike the Magnificent Seven, these stocks are not posting exceptional performances, but they’re being rewarded with much greater chunks of market share regardless, he said.

While some of these stocks have performed well, they have rallied because investors who were concerned about the Magnificent Seven valuations saw these as the next best thing.

“Investors who told themselves that they’ve missed the bus on AI looked at the US market and started searching for stocks that could attempt to replicate the success of the Magnificent Seven. That’s why the Terrific 20 have surged”.

As a result, it is these stocks that are “most vulnerable to a correction” within the US, because they have run up significantly but “lack the earnings leadership to justify it. Investors who poured into these businesses are taking on risks that “may not seem obvious at first glance”.

“I’m not worried about 30x on the Magnificent Seven. I think you should be worried about 25x on something like JP Morgan or Walmart,” Sai concluded.

Arun Sai – senior multi-asset specialist – Pictet Asset Management Ltd

Please Note:

This article is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. Tax treatment depends of your individual circumstances and may be subject to change in the future. If you are unsure about the suitability of any investment you should seek professional advice. 

Please note the above article was first published by Trust Net and should not be regarded as individual investment advice on whether to buy, sell or hold any of the investments mentioned. Please speak to Ethical Offshore Investors or your personal adviser BEFORE you make any investment decision based on the information contained within this article.

Clients can access the funds / indices / equities mentioned in this article via the various Investment Platforms, and not be subject to additional entry fees or commissions, when doing so with Ethical Offshore Investments.

Lower costs resulting in more of the investment growth staying in your pocket.

Speak with Ethical Offshore Investments to learn how you can save on your investment costs.

Socially Responsible Investing – Ethical Business Standards 

The post The Magnificent Seven aren’t at risk of a rerating: Here’s what is first appeared on Ethical Offshore Investments.

The post The Magnificent Seven aren’t at risk of a rerating: Here’s what is appeared first on Ethical Offshore Investments.

Have you suffered a financial loss due to mismanagement of your Offshore portfolio or policy?

Our Complaints Resolution Service may be able to assist you in gaining financial compensation

No win = No cost

Our Complaints Resolution Service has been successful in obtaining financial compensation for clients that have suffered financial losses due to the actions of Offshore Life Companies, Investment Platform providers, Pension Trustees, Discretionary Fund Managers and regulated Financial Adviser firms.

I would like to think that the majority of people involved in the financial and wealth management industry are honest, trustworthy people that are trying to help their individual clients reach their financial goals and objectives.

However, I am not that naïve to dismiss the fact that, be it just a small percentage of industry participants, that there are some with different motives for being in the industry, such as having the sole purpose of making as much money as they can, as quickly as the can, with no care or responsibilities of their actions on their clients financial situation…….. Unfortunately, I have witnessed this first hand and this was one of the driving forces for me in setting up Ethical Offshore Investments.

While a lot of the negative issues experienced by investors in the offshore industry is the result of those so called ‘Commission Cowboys’, there will be occasions where a client has been financially disadvantaged due to negligence or incompetence from the actions of a corporate entity, such as a Life Company, Pension Trustee, Discretionary Fund Manager or a financial advising firm.

This could be for example:

• Incorrect or lack of disclosure of fees, charges and potential exit penalties
• Inappropriate investments (too risky, lack of liquidity, lock in periods, lack of diversification)
• Processing errors resulting in delays for payments
• Unauthorised transactions

A lot of clients that have invested in Offshore type investment structures and investment schemes are not aware of their rights to lodge an official complaint and depending on the complaint (& the participants), lodging an application with a regulator for financial compensation.

So how does Ethical Offshore Investments assist with this…?

First off, we obviously listen to the complainant about what has occurred & how they believe that the actions that were taken resulted in a financial loss.

We will then request relevant information from the product provider(s) involved (with clients consent of course) and will review the actions or transactions that took place. Taking into consideration the location (where the advice/service was provided as well as country of residence of the client) as well as the location of where the responsible entity is located, we can then provide guidance on what course of action the client can take.

Just because a client may be living in Thailand for example and received advice/services from an unregulated firm, doesn’t mean that there isn’t anything that can be done…….. if the product that the complaint is referring to is from a recognised offshore Life Company (without naming names, but they generally are the ones based in the Isle of Man, Guernsey, Jersey, Mauritius or the Cayman Islands) then there is an official complaints procedure that these companies must all adhere to, as directed by the local regulatory body to maintain their relevant licensing and registrations.

First step is to approach the relevant company with full details of the complaint & documented proof of how the actions caused the client to be financially disadvantaged. In many situations, where it is a clear-cut case of where the actions of the Life Company / Product Provider did result in a financial loss, the Life Company will deal with it internally & offer a compensation pay out directly to the client.

If the Life Company / Product Provider disputes the allegations made and does not agree to compensation, the next step is approaching the relevant Financial Regulator for that particular provider.

• United Kingdom – Financial Conduct Authority (FCA) UK
• Isle of Man – Isle of Man Financial Services Authority
• Guernsey – Guernsey Financial Services Commission
• Cayman Islands – Cayman Islands Monetary Authority
• Mauritius – The Financial Services Commission Mauritius
• Labuan – Labuan Financial Services Authority

We then provide the regulator all of the relevant information for them to asses and determine an appropriate financial outcome for the client. As part of our service, we continue to liaise with the Regulator & the client on the progress, as well as providing additional information as requested by the regulator.

Recent Compensation Success

During 2025, we successfully arranged for the combined refund of GBP 1,818 back to 4 different clients, where a Discretionary Fund Manager located in the UK, along with an Isle of Man Life Company, overcharged fees for their services. A further GBP 855 has been refunded to another client so far in 2026.

2025 also saw us negotiate for a client the full surrender of a Savings Plan policy, without incurring the early surrender fee. We took this action for the client as we strongly believed that the Isle of Man Life Company that issued the policy, was not meeting their obligations as part of the plans Terms & Conditions.

This saved the client $ 6,689 in penalty costs. The client transferred the proceeds to an Offshore Platform and not only did this result in more flexibility with investment choices, it is also saving the client a further +2%pa in other charges…… so now, more of the investment growth stays in his pockets. 

The final successful compensation in 2025 was a $370 compensation payment made for incorrect processing of contributions to an Isle of Man Life Company savings plan policy.      

Previous years, we have been able to achieve the following compensation results for clients:

• GBP 15,000 – incorrect processing of a withdrawal by an Isle of Man Life Company for a savings plan
• GBP 12,000 – incorrect processing of an asset transfer by an Isle of Man Life Company for an offshore portfolio bond
• GBP 10,031 – inappropriate investments allowed to be made by a Malta Pension Trustee Company
• GBP   3,871 – incorrect processing of a surrender request by a Guernsey Life Company savings plan
• USD   8,000 – incorrect processing of an asset transfer by a UK regulated Discretionary Fund Manager

There have been many other successful smaller claims where fees have been waived and or reimbursed to clients.

How much does this service cost..?

First off, this is a No Win = No Pay service. If after we have reviewed your complaint situation and agree that there is a case to be made, we will prepare all of the documentation required and lodge it with the relevant Life Company and following that, with the regulator. At this stage, the client pays Ethical Offshore Investments nothing..!!

If the complaint comes back unsuccessful (after appeals made to the regulator or tribunal), there is no cost to the client. So in other words, if we take on the case, we must strongly believe that there is a good chance of success…….

The cost to the client for when a compensation case is successful is dependent on a few different factors. The absolute maximum cost would be 20% of the net compensation amount received. And this is only payable once the compensation amount has been received.

However, this cost may in fact be lower depending on the actual amount of work we provided for the compensation as well as what business relationship that we have with the client. In some cases, the complaints resolution service can be part of the on-going client management service we are already providing  and as such, there is no further costs to pay…… irrespective of the compensation amount awarded.

If you feel that due to the actions of a previous advising firm, product provider or investment manager has resulted in you being financially disadvantaged, please click on the Request Information button below and provide some details, including how we can contact you, and we can confidentially discuss what is an appropriate course of action for you take.

Socially Responsible Investing using Ethical Business Standards.

The post Complaint Resolution Service first appeared on Ethical Offshore Investments.

The post Complaint Resolution Service appeared first on Ethical Offshore Investments.

Have you suffered a financial loss due to mismanagement of your Offshore portfolio or policy?

Our Complaints Resolution Service may be able to assist you in gaining financial compensation

No win = No cost

Our Complaints Resolution Service has been successful in obtaining financial compensation for clients that have suffered financial losses due to the actions of Offshore Life Companies, Investment Platform providers, Pension Trustees, Discretionary Fund Managers and regulated Financial Adviser firms.

I would like to think that the majority of people involved in the financial and wealth management industry are honest, trustworthy people that are trying to help their individual clients reach their financial goals and objectives.

However, I am not that naïve to dismiss the fact that, be it just a small percentage of industry participants, that there are some with different motives for being in the industry, such as having the sole purpose of making as much money as they can, as quickly as the can, with no care or responsibilities of their actions on their clients financial situation…….. Unfortunately, I have witnessed this first hand and this was one of the driving forces for me in setting up Ethical Offshore Investments.

While a lot of the negative issues experienced by investors in the offshore industry is the result of those so called ‘Commission Cowboys’, there will be occasions where a client has been financially disadvantaged due to negligence or incompetence from the actions of a corporate entity, such as a Life Company, Pension Trustee, Discretionary Fund Manager or a financial advising firm.

This could be for example:

• Incorrect or lack of disclosure of fees, charges and potential exit penalties
• Inappropriate investments (too risky, lack of liquidity, lock in periods, lack of diversification)
• Processing errors resulting in delays for payments
• Unauthorised transactions

A lot of clients that have invested in Offshore type investment structures and investment schemes are not aware of their rights to lodge an official complaint and depending on the complaint (& the participants), lodging an application with a regulator for financial compensation.

So how does Ethical Offshore Investments assist with this…?

First off, we obviously listen to the complainant about what has occurred & how they believe that the actions that were taken resulted in a financial loss.

We will then request relevant information from the product provider(s) involved (with clients consent of course) and will review the actions or transactions that took place. Taking into consideration the location (where the advice/service was provided as well as country of residence of the client) as well as the location of where the responsible entity is located, we can then provide guidance on what course of action the client can take.

Just because a client may be living in Thailand for example and received advice/services from an unregulated firm, doesn’t mean that there isn’t anything that can be done…….. if the product that the complaint is referring to is from a recognised offshore Life Company (without naming names, but they generally are the ones based in the Isle of Man, Guernsey, Jersey, Mauritius or the Cayman Islands) then there is an official complaints procedure that these companies must all adhere to, as directed by the local regulatory body to maintain their relevant licensing and registrations.

First step is to approach the relevant company with full details of the complaint & documented proof of how the actions caused the client to be financially disadvantaged. In many situations, where it is a clear-cut case of where the actions of the Life Company / Product Provider did result in a financial loss, the Life Company will deal with it internally & offer a compensation pay out directly to the client.

If the Life Company / Product Provider disputes the allegations made and does not agree to compensation, the next step is approaching the relevant Financial Regulator for that particular provider.

• United Kingdom – Financial Conduct Authority (FCA) UK
• Isle of Man – Isle of Man Financial Services Authority
• Guernsey – Guernsey Financial Services Commission
• Cayman Islands – Cayman Islands Monetary Authority
• Mauritius – The Financial Services Commission Mauritius
• Labuan – Labuan Financial Services Authority

We then provide the regulator all of the relevant information for them to asses and determine an appropriate financial outcome for the client. As part of our service, we continue to liaise with the Regulator & the client on the progress, as well as providing additional information as requested by the regulator.

Recent Compensation Success

During 2025, we successfully arranged for the combined refund of GBP 1,818 back to 4 different clients, where a Discretionary Fund Manager located in the UK, along with an Isle of Man Life Company, overcharged fees for their services. A further GBP 855 has been refunded to another client so far in 2026.

2025 also saw us negotiate for a client the full surrender of a Savings Plan policy, without incurring the early surrender fee. We took this action for the client as we strongly believed that the Isle of Man Life Company that issued the policy, was not meeting their obligations as part of the plans Terms & Conditions.

This saved the client $ 6,689 in penalty costs. The client transferred the proceeds to an Offshore Platform and not only did this result in more flexibility with investment choices, it is also saving the client a further +2%pa in other charges…… so now, more of the investment growth stays in his pockets. 

The final successful compensation in 2025 was a $370 compensation payment made for incorrect processing of contributions to an Isle of Man Life Company savings plan policy.      

Previous years, we have been able to achieve the following compensation results for clients:

• GBP 15,000 – incorrect processing of a withdrawal by an Isle of Man Life Company for a savings plan
• GBP 12,000 – incorrect processing of an asset transfer by an Isle of Man Life Company for an offshore portfolio bond
• GBP 10,031 – inappropriate investments allowed to be made by a Malta Pension Trustee Company
• GBP   3,871 – incorrect processing of a surrender request by a Guernsey Life Company savings plan
• USD   8,000 – incorrect processing of an asset transfer by a UK regulated Discretionary Fund Manager

There have been many other successful smaller claims where fees have been waived and or reimbursed to clients.

How much does this service cost..?

First off, this is a No Win = No Pay service. If after we have reviewed your complaint situation and agree that there is a case to be made, we will prepare all of the documentation required and lodge it with the relevant Life Company and following that, with the regulator. At this stage, the client pays Ethical Offshore Investments nothing..!!

If the complaint comes back unsuccessful (after appeals made to the regulator or tribunal), there is no cost to the client. So in other words, if we take on the case, we must strongly believe that there is a good chance of success…….

The cost to the client for when a compensation case is successful is dependent on a few different factors. The absolute maximum cost would be 20% of the net compensation amount received. And this is only payable once the compensation amount has been received.

However, this cost may in fact be lower depending on the actual amount of work we provided for the compensation as well as what business relationship that we have with the client. In some cases, the complaints resolution service can be part of the on-going client management service we are already providing  and as such, there is no further costs to pay…… irrespective of the compensation amount awarded.

If you feel that due to the actions of a previous advising firm, product provider or investment manager has resulted in you being financially disadvantaged, please click on the Request Information button below and provide some details, including how we can contact you, and we can confidentially discuss what is an appropriate course of action for you take.

Socially Responsible Investing using Ethical Business Standards.

The post Complaint Resolution Service first appeared on Ethical Offshore Investments.

The post Complaint Resolution Service appeared first on Ethical Offshore Investments.

Markets expect fresh tax hikes in the November Budget as the chancellor grapples with debt and weak growth.

Key Takeaways

• Rachel Reeves’ second Budget next month will likely include more tax rises.

• After a period of uncertainty over the health of the government’s finances, bond yields remain at elevated levels.

• Inflation is rising and economic growth remains weak, limiting the chancellor’s options.

Further tax rises are a near certainty when Chancellor Rachel Reeves delivers her delayed Autumn Budget on Nov. 26, experts say, with a potential VAT increase now in the spotlight after a volatile month of political scandal and growing market disquiet over the achievability of the government’s own fiscal rules.

This event occurs against a more anxious backdrop than in 2024 when the chancellor delivered her first Budget in on Oct. 30.

In the buildup to her second Budget, there has been more speculation than usual about what the government has planned to fill the multi-billion pound gap in the public finances.

The UK’s restless government bond markets are keen to see evidence that the state has debt under control and jittery about any hint of the opposite. The yield on the 30-year gilt is still elevated at 5.63%, below 2025’s high of 5.72% in September, but still above levels in the autumn 2022 crisis. In this financial year, the UK government is expected to spend more than £100 billion servicing debt interest.

Reeves’ options include cutting public spending, raising direct or indirect taxation or increasing government borrowing, or a combination of all three levers.

Cutting public spending is unlikely to be popular with core voters keen to see improvements in public services.

Raising taxes is always politically dangerous: Taxpayers already face the highest tax burden since the Second World War, and the imperative to achieve a balanced or in-surplus government budget by 2029/30 is unlikely to cheer households struggling with rising food inflation.

Bond markets would prefer to see lower public spending and lower government borrowing, and would likely support tax increases as a way of balancing the books.

But higher taxation will likely worry business leaders, who argue more levies will choke growth at an already-precarious moment for the global economy. And after increases to employer National Insurance contributions kicked in this April.

Rachel Reeves Under Pressure as UK Economy Stalls

UK GDP growth in July was zero, down from 0.4% in June. Inflation has risen to 3.8% and is expected to rise to double the Bank of England’s target. The labor market is weakening. What’s more, formerly fringe party Reform UK would win a general election if called now, polls suggest. A summer of protests has put Downing Street on the back foot.

Though Reeves has hung on, speculation over her future has not dampened. Idle talk of an International Monetary Fund bailout has affected her credibility, even if it is at this stage unlikely. Speculation over her future reached a crescendo in early September, when gilt yields spiked around the time that the deputy prime minister, Angela Rayner, resigned.

“Whether the Autumn Budget is ‘do or die’ for the government remains to be seen, but it’s definitely do or die for Rachel Reeves,” says Morningstar’s chief European market strategist, Michael Field.

“We are at a crucial juncture. Labour has a great opportunity to make strides in fixing the UK’s financial black hole—a precarious, but eminently fixable, problem.

What Tax Changes Have Been Rumored?

• Changes to property taxation, including stamp duty and council tax or imposing CGT on primary residences.

• Lowering of tax-free sums for those accessing private pensions.

• Changes to private pension tax relief.

• Widening the scope of the VAT regime.

• Income tax and/or National Insurance increases, breaking the manifesto pledge.

• Making landlords pay National Insurance contributions on rental income.

• Changes to Cash ISA limits.

• Scrapping certain “gifting” exemptions under inheritance tax.

Will Reeves Raise VAT or Income Tax?

In its 2024 general election manifesto, the Labour Party pledged it would not increase the main rates of income tax, National Insurance and VAT. At the October Budget last year, it got around this constraint by increasing employer contributions on National Insurance rather than employee contributions. The government could now repeat this playbook.

In her speech to the Labour Party’s Annual Conference in Liverpool in late September, Reeves declined to outline how taxes might be increased, but it was clear to onlookers that the chancellor felt the cost of maintaining the government’s debt was unsustainable.

“There is nothing progressive, nothing Labour, about government using one in every £10 of public money it spends on financing debt interest,” Reeves claimed.

“Our economic renewal will rest on stability, to keep taxes, inflation, and interest rates as low as possible.”

The statement has been widely interpreted as a strong indication that the government will once more increase the tax burden.

Gilt Markets Expect Higher Taxes

When Reeves made this statement, there was little reaction from the UK gilt markets, indicating investors still wish to see the government’s plans before projecting any material implications.

“[Gilt] yields will likely remain elevated until we get a clear plan at the Autumn Budget, though given the UK government’s promises not to increase austerity and to keep its fiscal maths in order, the Autumn budget will inevitably bring higher taxes,” says Oliver Faizallah, head of fixed income research at Charles Stanley.

“This isn’t a quick fix, though. Higher taxes may create a fiscal doom loop, where tax increases hurt demand and growth, further lowering tax receipts.”

How Will the Government Raise More Tax?

Several means of increasing government revenue are reportedly under consideration. They include taxes on Cash ISA investments, changes to the capital gains tax treatment of property sales, and a major amendment to inheritance tax to restrict the so-called “gifting” rules.

It’s possible there will be more significant changes to the rules around VAT, a form of indirect taxation. Though Labour has pledged not to increase the headline rate of VAT beyond 20%, Reeves could lower the threshold at which businesses pay the tax.

She could also put VAT on private taxi and ride-sharing platforms online, and even remove the VAT exemption on private healthcare. The last of these policies would echo an earlier decision to remove a VAT exemption on private schools, which came into effect on Jan. 1 this year.

This might seem like an easy target, but VAT increases are typically passed on to consumers in the form of higher prices.

“If the government does increase VAT this could lead to a one-off increase in inflation, at a time when price pressures are already elevated,” says Kathleen Brooks, research director at trading platform XTB.

If tax increases are inevitable, then so too are other difficult decisions.

“Reeves has so far shied away from bold action, but bold action is what is required,” says Morningstar’s Field.

“Failure to do so could certainly result in a reshuffling of her job.”

What Tax Changes Were Announced in the 2024 Budget?

• The rate of National Insurance employer contributions was increased to 15% from April 2025.

• Pensions were brought into the scope of inheritance tax regime from 2027.

• Changes were made to the treatment of family business, including farms.

• Capital gains tax for shares was increased as well as stamp duty on second homes.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

Please Note:

This article was first published by Morningstar and is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. 

Please speak to Ethical Offshore Investors or your personal adviser BEFORE you make any investment decision based on the information contained within this article.

At Ethical Offshore Investments, we focus on reducing investment costs so that more of your investment growth, stays in your pocket.

Speak with Ethical Offshore Investments to learn how you can save on your investments costs

Socially Responsible Investing – Ethical Business Standards 

The post Which Taxes Will Rise in Rachel Reeves’ Autumn Budget? first appeared on Ethical Offshore Investments.

The post Which Taxes Will Rise in Rachel Reeves’ Autumn Budget? appeared first on Ethical Offshore Investments.

22 October 2025

Price down to around $4,000

The price of an ounce of gold has stabilised at just above the $4,000 mark after crashing down from all-time highs of over $4,400.

Longtime gold-bugs and new investors drawn in by its spectacular price rise will all be trying to gauge whether the tide has turned for the precious metal and a protracted price fall is coming, or just a short-term correction.

The precious metal has seen a stellar run over the past three years, climbing from around $1,600 at the end of 2022 to the lofty figure of $4,400 plus.

The rise has been fuelled by concerns over the dollar, inflation, geopolitical trouble and pure speculative momentum.

Some form of correction was inevitable, but whether it resumes its rise after a cooldown or carries on lower to retrace much of the recent gain is yet to be seen.

Eamonn Prendergast, chartered financial adviser at Bromley-based Palantir Financial Planning, said: “Gold’s sharp fall is a reminder that hype often comes before a hangover. Markets move in cycles and fear of missing out can tempt investors to chase momentum at the wrong time.

 “The lesson isn’t whether to buy the dip, but how to avoid being gold-hungry and overexposed to any single asset. A balanced, diversified approach remains the antidote to both panic and euphoria because lasting wealth is built on patience, not FOMO.”

Anita Wright, chartered financial planner at Ribble Wealth Management, added: “This week’s gold price plummet does not look like a bubble bursting. It looks like a shake-out within an ongoing bull market, driven less by hype and more by strain between paper contracts and the supply of real metal.

“Prices have jumped without a big build-up in speculators’ positions, which points to short squeezes and tight physical supply. In that world, sharp pullbacks are normal.

“The big picture is that gold has done this before. Previous bull phases have run much further before topping. On that basis, we are likely only part-way through. If policy makers ease again when risk assets wobble, weaker currencies tend to support gold.

“The forces that took gold to records—high debt, recurring market stress, and a bias to easier money—are still with us. That points to a volatile climb rather than a straight line. In short: this is a correction within a gold bull market, not the end of it.”

Please Note:

This article was first published by Portfolio Adviser Newsletter and is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. 

Please speak to Ethical Offshore Investors or your personal adviser BEFORE you make any investment decision based on the information contained within this article.

At Ethical Offshore Investments, we can access financial instruments to invest in physical Gold (without the cost of storage & insurance) via strictly regulated Exchange Traded Products (ETP’s) listed on the major stock exchanges such as the London Stock Exchange, NYSE, France, Germany & Australia. For those that believe the Gold price will fall, we can access regulated inverse ETP’s that will generate positive returns on negative Gold price movement.

For higher risk opportunities, we can also access leveraged ETP’s which can provide enhanced returns on the price movement.

We do NOT CHARGE any additional entry and/or exit fees to purchase these investments for our clients.

Speak with Ethical Offshore Investments to learn how you can save on your investments costs

Socially Responsible Investing – Ethical Business Standards 

The post Does the gold price crash signal full reversal or short-term correction? first appeared on Ethical Offshore Investments.

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Structured Note Portfolio

With the increase in demand from investors for Structured Note type investments, we have decided to promote a Structured Note holding portfolio, with NO entry or establishment charges, and NO ongoing financial adviser charges.

Plus, investors through Ethical Offshore will continue to receive a minimum of 1% of the invested amount, rebated back to them.

So what is a Structured Note..??

A structured note is a hybrid investment product, issued by a financial institution, that combines a debt security (like a bond) with a derivative component to offer a return linked to an underlying asset, index, or commodity. It aims to provide investors with market-linked growth potential and varying levels of downside protection or principal safety, though this often involves capping potential upside returns.

Key Features of Structured Notes

• Hybrid Structure: They merge a bond component, which can offer principal protection, with a derivative component, such as options, to provide exposure to various asset classes. 

• Underlying Assets: The note’s performance is tied to a reference asset, which could be a single stock, a basket of equities, an equity index (like the S&P 500), a commodity, or even interest rates. 

• Principal Protection: Many structured notes are designed to protect the investor’s principal, either fully or partially, by incorporating a debt component with a safety buffer or “barrier”. 

• Issuer Risk: As they are debt securities, the creditworthiness of the issuing financial institution is a critical risk factor for investors. 

• Complexity and Customization: Structured notes are complex products with features and payoffs that can be tailored to specific investment objectives. 

How They Work (Simplified)

• Issuer’s Promise: A bank or financial institution issues the note, promising a return that is determined by a formula based on the performance of an underlying asset. 

• The Bond Component: A portion of the investment is used to purchase a bond, which provides safety and potentially principal protection at maturity. 

• The Derivative Component: The rest of the investment is used to buy a derivative, such as options, to provide the upside potential linked to the underlying asset. 

• The Payoff: At maturity, the investor receives their principal and interest payments based on the performance of the underlying asset and the terms of the structured note. 

The above is the result of an AI Google Search on What is a Structured Note, and in all honesty, I don’t think I could have worded it any better……….

How does this all come together…??

Investors will establish a Platform holding account with the Ardan International Platform that is domiciled and regulated in the Isle of Man (in some situations due to the investors nationality, residence country & tax situation, an Offshore Life Portfolio Bond policy may be used). This will be the holding structure for the various Structured Note investments that the investor chooses to invest in.

There will be NO entry or establishment fee applicable for deposits made into the Ardan International Platform that will be used to invest in Structured Notes, and in fact, investors that use Ethical Offshore will get a minimum of 1% commission rebate added to their Structured Note investments.

Click for Information on the Ardan International Platform

In addition to this, we will not be charging an ongoing portfolio client management fee for the Structured Note holding portfolios. 

So, if we are not charging, how do we as a firm make money on this…..?

Structured Note issuers generally will pay a commission (or sometimes called a marketing allowance) to firms for the placing of their Structured Notes. We as a firm have an internal policy where we will share this commission we receive with the investor, and at least 1% of the invested amount is rebated back to the investor.

Example, a client invests $10,000 in a Structured Note, we will instruct the Note issuer to issue 10,000 units of the note at 0.99 (instead of the standard $1.00 issue price) which will result in the client investing a net amount of $9,900 for a $10,000 holding.

What type of Structured Notes are available

We have a wide range of Notes available, with the option of receiving a regular income (monthly, quarterly or semi-annually) or capital growth style notes. The underlying investments of the Notes will be either a mix of major indices, such as the Euro Stoxx 50, or the S&P 500…. or it will be a mix of (generally) blue chip global companies.

All of the Notes that we have available will have some form of capital protection feature, which can provide peace of mind during downward market periods. There are Notes available that have a full 100% Capital Protection feature, so even in the situation where an underlying asset was to considerably drop in value, or even fully collapse to zero, the Note would still preserve the investors capital and 100% of the invested amount would be returned.  

Click here to see what Notes are currently available

We believe that this is a great, cost effective opportunity to invest in the diverse world of Structured Note products, where you can select the type of Structured Note(s) that meet your investment objectives, risk category and timeframe.

Speak with Ethical Offshore to see how easy it is to establish the holding Platform for your Structured Note investments……. And remember, there will be no set up or establishment costs for our Structured Note platform portfolios.

Risks to Consider

• Issuer Credit Risk: The note’s repayment depends on the financial health of the issuer. For this reason, we will only use financial institutions that carry a financial rating of at least Investment Grade from Standard & Poors (S&P), Fitch or Moodys. Examples of the Institutions that we use include Barclays, BBVA Global Markets, BNP Paribas, Canadian Imperial Ban of Commerce, Goldman Sachs, Morgan Stanley, Societe Generale and UBS.

• Complexity: The terms and features can be difficult to understand. 

• Potential for Lower Returns: To provide principal protection, the potential upside on the underlying asset is often capped. 

• Lack of Liquidity: Structured notes are not typically traded on public exchanges and may not be easily sold before maturity. However, the issuers of the Notes that we get exposure to, do have the flexibility to sell the Note holding prior to the maturity date, at the current market price (this may be lower or higher than the issue price).

At Ethical Offshore Investments, we are determined to show how clients can invest in a range of different investment structures and opportunities, but in a cost effective manner. The Structured Note portfolio is an example of that with there be no entry or establishment charges, as well as no ongoing client portfolio management charge (there will be an Ardan platform admin fee which is currently 0.40%pa (current max fee).

Our policy is that we will also rebate a minimum of 1% of the invested amount back to client, from the commission payment that we would receive from the Note providers

If you would like to learn more on how you can invest in a portfolio of Structured Note assets, please click on the More Information button below and our senior consultant will contact you personally.

Ethical Offshore Investments also provides guidance on portfolios that have an ESG (Environmental & Social Governance) bias and an SRI (Socially Responsible Investing) focus. By avoiding high charging, commission paying funds, this results in lower portfolio costs, so more of the growth staying in the pockets of our clients.

The post The Structured Note Portfolio….. no set up costs – wide range of Note options first appeared on Ethical Offshore Investments.

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Investment Charges – How much is it really costing you & your future

Our solution keeps more of the investment growth in your pockets

At Ethical Offshore Investments, we have been strong advocates of helping clients reduce their ongoing costs. And we believe that our Global Index Investing option will not only provide clients access to investing in the world’s greatest companies, but doing so at a fraction of the costs.

Before we show you how low the total charges are if you become a client of Ethical Offshore, below is an illustration of why reducing your costs is so important.   

Don’t let high costs eat away your returns

There is the common saying that you have to spend money to make money…. But the money you spend to invest has a big effect on what you have left in your own pocket.

Points to know

• All investments have costs

• Money you pay for costs compounds (rises exponentially) over time

• Because some investments with higher costs have to overcome these expenses, their performance tends to suffer vs. lower-cost investments.

Understand what you are paying

At Ethical Offshore Investments, we have always strongly suggested that you ask your adviser or investment consultant, for a breakdown of all of the costs associated with holding an investment portfolio (don’t stop there….. ask your financial consultant what service or benefit is being provided for that specific fee / charge).

Every investment has a cost, even if you don’t realise that you are paying it

There are many different kinds of costs, but they all have one thing in common: if the money is going somewhere else, it is not going to you.

Why do costs matter  

Investment costs might not seem like a big deal, but they add up, compounding along with your investment returns. In other words, you don’t just lose the tiny amounts of fees you pay – you also lose the growth that money might have had for years into the future.

For example: you invest $ 100,000 and the underlying investments generated a gross 6% each year for the next 25 years and had NO costs or fees, you would end up with an investment value of $ 429,190.

If on the other hand you had paid a combined 2% a year in investment costs & charges, after 25 years, you would have an investment value of only $ 266,580

That’s correct: the 2% of total charges you paid every year would reduce your investment value by nearly 38%……. that 2% doesn’t sound so small anymore, does it..??

Costs can eat away at your investments

The above example & image is provided by Vanguard Ltd

What can you do to control your costs..??

Because all investments have some form of costs, it might seem like a waste of time to worry about them. Or maybe you assume that a high cost means that you are getting higher quality investments & better total returns.

Unfortunately, nothing could be further from the truth. Research on mutual / managed funds has shown that in most cases that the higher-cost funds generally underperform lower-cost funds. That is because the fund managers charging these higher costs may struggle to add enough value to overcome the additional expense (in addition to this, they may have to take a slightly higher risk, more volatile approach to achieve the higher returns).

A Diversified Global Exposure for less than 1%pa

Actually, our global equity allocation total costs is 0.80%pa – that includes the fund manager charges, the offshore holding platform charges and the costs for having your dedicated, Private Manager at Ethical Offshore Investments who will continue to provide guidance and is your direct contact if you have any queries or concerns.

For clients that would like to invest in a dedicated US equity or a UK equity portfolio, the total cost is even lower at 0.75%pa

This is done through a selection of high quality Exchange Traded Funds (ETF’s) from the likes of Legal & General (L&G), iShares (Blackrock) and Vanguard.

Our Global Allocation will result in exposure to over 1,600 of the worlds biggest and most successful companies, which includes Apple, Microsoft, Amazon, Nvidia, Alphabet (Google) and Tesla. This can be invested in a range of different currencies.

Clients can also choose to have dedicated Ethical and Socially Responsible Investment index ETF which will only include the highest quality, screened ESG companies….. and all still for less than a total all up cost of 1%pa. 

Finally, we can also offer a risk adjusted, diversified approach (using the expertise of Vanguard Ltd) where you can select a diversified asset portfolio of Bonds and Equities in-line with your preferred risk tolerance and investment objectives.

For our GBP investors, an example of this would be the LifeStrategy range of funds managed by Vanguard.

• Vanguard LifeStrategy 100% Equity
• Vanguard LifeStrategy 80% Equity (20% Fixed Interest / bonds)
• Vanguard LifeStrategy 60% Equity (40% Fixed Interest / bonds)
• Vanguard LifeStrategy 40% Equity (60% Fixed Interest / bonds)
• Vanguard LifeStrategy 20% Equity (80% Fixed Interest / bonds)

The above funds are invested across a range of 10 different Vanguard index funds or ETF’s, which will result in portfolios having allocations across the different geographical locations, economies (both developed and emerging) and business sectors.

The total maximum cost with utilising the Vanguard LifeStrategy range of funds, along with the platform and client servicing costs would be 0.92%pa.

We have a range of risk managed, diversified Vanguard options for other major currencies….. and all for less than a 1%pa in total ongoing fees (including access to your own personal Private Client Manager at Ethical Offshore Investments). 

What is the benefit to you…… the investor.

Well let’s go back to the previously mentioned $ 100,000 being invested, but instead of 2%pa ongoing charges, it is the 0.80%pa of total charges being deducted (& don’t forget, you still will have your own dedicated Ethical Offshore consultant to assist you with queries & guidance).

That cost saving would result in a portfolio value after 25 years of $ 355,140…….. that is $ 88,560 more in YOUR POCKET…!!!

For clients that have a personal offshore pension (QROPS or a UK SIPP), the investment cost savings are even more important. In addition to the platform, fund management and client management costs, Pension portfolios are also subject to Trustee fees as well as their own administration costs. While we will always try and use the more cost effective pension schemes and trustees, there will unfortunately continue to be trustee costs associated with offshore pensions….. so the more you can save on the portfolio costs, this will help negate the additional trustee charges.  

Reducing your total investment costs, even by 0.5%pa could result in you not just retiring….. but retiring comfortably…!!

At Ethical Offshore Investments, we are determined to show how clients can invest in a global portfolio of quality companies, but ethically through low cost, flexible investment structures. 

If you would like to learn more on how you can invest in a quality global portfolio with minimal costs, please click on the More Information button below and our senior consultant will contact you personally.

Ethical Offshore Investments also provides guidance on portfolios that have an ESG (Environmental & Social Governance) bias and an SRI (Socially Responsible Investing) focus. By avoiding high charging, commission paying funds, this results in lower portfolio costs, so more of the growth staying in the pockets of our clients.

If you would like to get more information on the Sustainable Ethical Allocation portfolios, or enquire on the vast array of Sustainable and Ethical style funds available, please click on More Information.

The post A Global Investment Exposure for a Fraction of the Cost….. first appeared on Ethical Offshore Investments.

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2 July 2025

The pause on reciprocal tariffs ends on 8^th July. While it may be the case that Donald Trump pulls a couple of trade deals out of the hat just in time to avoid triggering significant market volatility, it is equally plausible that he could decide to double-down. Investors would be forgiven for gravitating to safer options in the months ahead.

But what are those safer options? 

The problem is that a lot of previously safe options no longer look quite so benign. US treasuries, for example, have been a reliable portfolio ballast at times of significant economic stress, but with a high and growing debt burden and a weaker dollar, it’s become more difficult to make the case. The passing of the ‘big beautiful bill’ this week is likely to add to the fiscal woes of the US, and shows that Donald Trump has no real intention of tackling the deficit. 

The other reliable safe haven has been gold. However, its price has risen around 27% for the year to date*. It is notable that it hasn’t protected investor capital during the recent tensions in the Middle East. Instead, it has been steadily dropping since the start of June. This may suggest its protective qualities are outweighed by its high price. 

Within equities, safe havens are also more difficult to find. However, certain strategies can still offer some degree of protection for a portfolio. For example, funds with a lower beta (a measure of how sensitive a fund or stock is to movements in the broader market), such as Polar Capital Global Insurance, can help reduce volatility and downside risk, which can help cushion a portfolio during periods of market downturns. In addition, funds that focus on high-quality companies or defensive sectors like consumer staples tend to be more resilient during periods of economic stress. 

A. Polar Capital Global Insurance

B. FTSE All Share Index 

Another effective option is absolute return funds, such as BlackRock European Absolute Alpha or Janus Henderson Absolute Return. These funds can generate positive returns even when markets are falling, using strategies like short selling (where they profit from declining prices) offering an added layer of protection in uncertain environments.

Bond market tactics

For the most part, strategic bond fund managers are not avoiding US treasuries completely, but are sticking to shorter-dated bonds, which hold less interest rate risk. Stuart Chilvers, co-manager on the Rathbone Greenbank Global Sustainable Bond, says longer-dated bonds are where investors tend to focus most on the longer-term outlook for inflation and economic growth: “The 30-year US Treasury yield was just above 4% at the start of 2024, but it’s been well above 5% for much of this year and it soared to 5.50% ahead of the lower house vote.”

The fund doesn’t buy US treasuries anyway, which don’t meet its ethical screening criteria. However, their alternative is to buy supranational bonds, such as those issued by the InterAmerican Development Bank (IADB). It has also added to its long-duration Green Gilts. 

Ariel Bezalel, manager of the Jupiter Strategic Bond fund, says: “It’s not just about picking the right government bond markets, but where you are on the curve. Having large exposure to the short-end in the US, and having decent exposure to gilts, bunds, Australian and New Zealand bonds has helped drive returns.” This is helping to shore up the defensiveness of the fund. 

Gold as a diversifier 

On gold, Ned Naylor-Leyland, manager of the Jupiter Gold & Silver fund, says the price has been buoyed by the weakness in the treasury market and the dollar. He believes it can retain its position as a safe haven at times of market stress: “It can serve as both a store of value and a powerful portfolio diversifier, especially when combined with silver and mining equities.”

However, investors need to bear in mind that they are paying more for the protection it provides. As with all insurance, it tends to cost more after your house is on fire, and this may be the case for gold today. Buying a diversified fund, which invests in both gold equities, silver equities and other precious metals, may be a way to get the same protection, but at a lower price.

A multi-pronged approach

Ninety One Diversified Income is another defensive option for investors. It has capital preservation as a key part of its mandate. Its managers recognise the problems inherent in US treasuries and are taking a three-pronged approach to building safety into the current portfolio: identifying individual credits that have their own micro return drivers, ensuring sufficient geographic diversification and not relying on US treasuries for safety, but diversifying into European corporate or high-quality asset-backed bonds**.

Within equities, rather than a pure value approach, investors could look to the stabilising power of income in this environment. BNY Mellon Multi-Asset Income is a good choice for diversified income. It has a yield of 4.35%, with 53% in equities and 22% in alternatives***. It has a high weighting in the UK (44%)***, so avoids many of the risks associated with US dollar weakness.

Investors may not be able to rely on the easy defensive options any more. US treasuries and gold still have a place as safe havens, but need to be approached in a different way. Elsewhere, investors can find safety in funds that are thinking creatively about preserving capital, or those that pay a reliable income. All of these options should provide some portfolio protection should the next round of tariffs prove tumultuous for financial markets.

*Source: Goldprice.org, price performance in USD, at 2 July 2025

**Source: Ninety One, 6 May 2025

***Source: fund factsheet, 31 May 2025

Please Note:

This article was first published by Fund Calibre and is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. 

Please speak to Ethical Offshore Investors or your personal adviser BEFORE you make any investment decision based on the information contained within this article.

At Ethical Offshore Investments, we can access the funds mentioned in this article on the various offshore investment platforms we offer. We do NOT CHARGE any additional entry and/or exit fees to purchase these funds for our clients.

As we aim not to use commission paying funds, we will access the lowest charging version of the managed fund that is available on the relevant platform…… resulting in more of the investment growth staying in your pocket.

Speak with Ethical Offshore Investments to learn how you can save on your investments costs

Socially Responsible Investing – Ethical Business Standards 

The post The safest of safe havens first appeared on Ethical Offshore Investments.

The post The safest of safe havens appeared first on Ethical Offshore Investments.

4 July 2025

No-one can deny that the United States is a global powerhouse and home to many of the world’s largest and most instantly recognisable companies.

Eight out of the 10 biggest – by market capitalisation – are headquartered in the country*. In fact, only six of the top 30 are based elsewhere*. Many of these are household names with popular brands and huge international customer bases, including Apple, Amazon, Visa, Tesla and Netflix.

Here we look in detail at these firms, the investment funds providing access to them and what their futures may hold under Donald Trump’s presidency.

Backdrop

The US totally dominates when it comes to the largest quoted businesses, boasting numerous multi-billion dollar corporate names. They include 17 of the biggest 20, with only oil giant Saudi Aramco, Taiwanese semiconductor maker TSMC and Chinese conglomerate Tencent preventing a clean sweep*.

A skilled workforce, established culture of innovation and business-friendly approach to regulation are among the reasons why so many of its companies have flourished. The country also has a very large and wealthy domestic market that helps drive demand for a wide variety of products and services.

Outlook for the US

Of course, there are issues. Fears remain that the global fallout of US President Donald Trump’s trade tariffs could be significant. Joseph Lupton, a global economist at JPMorgan, says: “The impact of the trade war will be focused on the US, where it is being waged against all economies…however, the rest of the world will not be immune to the damage.”

JPMorgan research suggests that a 10% universal tariff and a 110% tariff on China could reduce global GDP by 1%**. In addition, business sentiment is likely to be affected by tariff uncertainty.

Who are the biggest US companies?

Let’s first analyse the US from a sector standpoint. Technology is clearly the stand-out. 11 out of the 30 largest US companies by market cap operate in this area*. There are also five banks/financial services firms, three pharmaceutical businesses and three retailers, including Walmart. The remaining areas, which are each represented by one company, are oil & gas, entertainment, beverages, tobacco, automakers, consumer goods, healthcare & insurance, and aerospace.

Given our obsession with all things tech, it’s unsurprising that businesses involved in this sector have enjoyed the strongest demand from would-be shareholders. Share prices have soared in recent years due to phenomenal demand for products and rapid developments in areas such as artificial intelligence. This has helped create an exclusive club of nine US companies with market capitalisations of more than a trillion dollars – and a trio with valuations of more than $3 trillion.

Here are some of the major players and the funds providing exposure:

NVIDIA is the world’s largest company, as of 3 July 2025, with a valuation of $3.83 trillion (£2.81 trillion)**. The chip maker announced in late May 2025 that total revenue for the first quarter came in at $44.1 billion, up 69% on the previous year***.

The company is one of the largest holdings in the Allianz Technology Trust, which is managed by Michael Seidenberg, who focuses on themes addressing major growth trends. This trust, which has a high-conviction portfolio of 40-70 names, has been an exceptional long-term performer thanks to bottom-up stock selection and a macroeconomic overview.

Virtually everyone that’s ever turned on a computer will have used software developed by Microsoft, with Word, Excel and PowerPoint among the most popular programs. Despite fierce competition, the company founded by Bill Gates is still delivering. Revenue for the third quarter came in at $70.1 billion, 13% higher than the previous year****.

It’s currently the largest individual stock holding in the Comgest Growth America fund, which has a concentrated portfolio of 25-35 high-quality stocks. Holdings are expected to offer predictable and sustainable earnings growth, while also meeting the company’s strict ESG criteria.

Apple Inc, the iPhone maker is constantly duelling with NVIDIA and Microsoft for top spot in the valuation stakes and currently comes in at number three, with a market cap of $3.1 trillion*. The company, whose share price has risen 125% over the past five years, revealed revenue of $95.4 billion for the second quarter^.

Apple is the largest individual holding in the Mid Wynd International Investment Trust, which looks for businesses with substantial growth potential. It favours those with strong barriers to entry and the ability to reinvest cash flow back into their businesses. This long-term focus has proven successful.

Other sectors

How about the other sectors? Technology clearly dominates, but the top 30 largest US companies also include financial services firms, retailers, oil majors and pharmaceutical names.

The Brown Advisory US Flexible Equity fund, which is managed by Maneesh Bajaj, has exposure to some of these areas. Its holdings include Berkshire Hathaway^^, the investment vehicle that has operated for decades under the watchful eye of legendary investor, Warren Buffett. As of 3 July 2025, the company is the world’s 10^th most valuable – and eighth in the US*. Maneesh also has significant holdings in Visa and Mastercard^^, both payment providers that play instrumental roles in global e-commerce.

*Source: Largest Companies by Marketcap, at 3 July 2025

**Source: JPMorgan, 9 June 2025

***Source: NVIDIA, Press Release, 28 May 2025

****Source: Microsoft, Press Release, 30 April 2025

^Source: Apple, Press Release, 1 May 2025

^^Source: fund factsheet, 31 May 2025

Please Note:

This article was first published by Fund Calibre and is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. 

Please speak to Ethical Offshore Investors or your personal adviser BEFORE you make any investment decision based on the information contained within this article.

At Ethical Offshore Investments, we can access the funds mentioned in this article on the various offshore investment platforms we offer. We do NOT CHARGE any additional entry and/or exit fees to purchase these funds for our clients.

As we aim not to use commission paying funds, we will access the lowest charging version of the managed fund that is available on the relevant platform…… resulting in more of the investment growth staying in your pocket.

Speak with Ethical Offshore Investments to learn how you can save on your investments costs

Socially Responsible Investing – Ethical Business Standards 

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23 June 2025

In a time when fresh risks to the global economy dominate headlines almost daily, there has rarely been a more critical moment to ensure your investment portfolio is properly diversified. 

Following the recent US airstrikes on three Iranian nuclear sites, markets are bracing for potential repercussions—particularly disruptions to oil flows and commercial shipping through key global routes. Crude oil prices responded with only modest gains; however, should prices rise further, we could see renewed inflationary pressure across the globe threatening to derail central banks’ efforts to begin cutting interest rates.

This type of geopolitical event highlights why diversification isn’t just a suggested investment strategy, it’s a necessity. Spreading risk across asset classes, sectors, and geographies can help insulate long-term portfolios from shocks in any one area of the market. 

Strategies for effective diversification 

At the heart of diversification lies asset allocation – the distribution of investments across different asset classes such as stocks, bonds, and real estate. While stocks offer growth potential, bonds provide stability, and commodities (the likes of oil and energy stocks) can act as a hedge against inflation.

1. Geographic diversification

2. Sector diversification

Sectors within the economy don’t move uniformly. By diversifying across industries, investors can navigate the cyclical nature of different sectors. For instance, if technology stocks face a downturn, investments in healthcare or energy may counterbalance the losses.

The VT Gravis UK Infrastructure Income fund is a concentrated portfolio offering exposure to income-generating UK infrastructure assets, a relatively defensive area that often moves independently of broader equity markets.

Polar Capital Global Healthcare Trust is a unique offering investing in a very specialist part of the market. Holdings in the trust will predominantly come from four sub-sectors: pharmaceuticals, biotechnology, medical technology and healthcare services.

3. Size and style diversification

Investors can further diversify by considering the size and style of companies. Large-cap stocks, mid-cap stocks, and small-cap stocks may perform differently under various market conditions. Similarly, value and growth investing styles have distinct characteristics, allowing investors to balance risk and reward based on their preferences.

The mid-cap space is a growing segment, but with few funds directly investing in it. One option is AXA Framlington UK Mid Cap; this fund offers a blend of growth and resilience often overlooked in favour of large caps. While it naturally focuses on medium-sized companies, its manager will be pragmatic about including select opportunities from the smaller companies space, as well as letting winning mid-cap holdings grow into larger-sized companies.

4. Alternative investments

5. A multi-asset approach

You can diversify your own portfolio by combining various asset classes, sectors and geographical exposures, depending on your aims and objectives. This will give you the freedom to have a hand-picked portfolio. However, it’s also a lot of work and will require plenty of research.

An alternative is opting for one of the many multi-asset portfolios. These products combine different asset classes into one fund. One or more managers will then make the allocation calls required. For those who prefer to lean on the side of caution in today’s uncertain climate, here are two funds with capital preservation at their core.

The first one is Orbis Global Cautious. A globally diversified, conservative strategy built for capital preservation with measured equity exposure.  The fund seeks to apply a cautious balance between investment returns and risk of loss using a global diversified portfolio and targets growth on a three-year rolling basis.

Our next pick is SVS RM Defensive Capital. Long-term capital growth and protection is the name of the game for this defensive, multi-asset fund. It aims to deliver positive absolute returns over rolling three-year periods, in a range of market conditions, with less volatility than equity funds.

Conclusion

In volatile times, diversification isn’t about trying to predict the future, it’s about preparing for the unexpected. By incorporating a mix of defensive and growth-oriented strategies across different regions and sectors, investors can help steady their portfolios and stay focused on long-term goals.

While no strategy can eliminate risk entirely, a well-diversified portfolio can provide resilience when markets are shaken by geopolitical tension, economic shocks, or inflationary pressures. It allows investors to remain invested through periods of uncertainty without being overly exposed to any single area of weakness.

Remember, diversification is not just a one-time decision, it’s an ongoing process. Markets evolve, opportunities shift, and risks emerge in new forms. The key is to remain proactive, regularly reviewing your portfolio to ensure it aligns with your objectives, risk tolerance, and the changing global landscape

Please Note:

This article was first published by Fund Calibre and is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. 

Please speak to Ethical Offshore Investors or your personal adviser BEFORE you make any investment decision based on the information contained within this article.

At Ethical Offshore Investments, we can access the funds mentioned in this article on the various offshore investment platforms we offer. We do NOT CHARGE any additional entry and/or exit fees to purchase these funds for our clients.

As we aim not to use commission paying funds, we will access the lowest charging version of the managed fund that is available on the relevant platform…… resulting in more of the investment growth staying in your pocket.

Speak with Ethical Offshore Investments to learn how you can save on your investments costs

Socially Responsible Investing – Ethical Business Standards 

The post The importance of diversification in times of uncertainty first appeared on Ethical Offshore Investments.

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8 July 2025

Investor unease as US extends deadline for reciprocal import tariffs, giving nations more time to reach trade deals.

By Gary Jackson,

Head of editorial, FE fundinfo

US president Donald Trump has delayed the implementation of reciprocal tariffs tied to his ‘Liberation Day’ trade framework until 1 August, giving trading partners additional time to make deals but adding more uncertainty to the market.

The tariffs, originally announced on 2 April, included a 10% blanket duty on all imports and a second tier of ‘reciprocal’ tariffs targeting specific countries. The second tier was suspended for 90 days, set to expire 9 July but the White House confirmed the pause has now been extended by three weeks.

Letters from the US administration were sent in recent days to countries including Japan, South Korea, Malaysia, South Africa and Kazakhstan. The letters warned that tariffs could take effect on 1 August if trade negotiations fail to deliver deals.

Some proposed rates exceed 25%, with certain sectors reportedly facing potential levies as high as 70%.

The revised timeline does not change the tariff structure or targets. Instead, it provides governments more time to negotiate exemptions. While deals have been reached with China, Vietnam and the UK, talks with European Union members and several Asian economies remain unresolved.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: “Trump lit the fuse on tariff fears again last night, leaving investors bracing for fresh volatility.

“Wall Street was the first to react last night, with major indexes sliding over 1% as the tariff news hit the reels. After recent all-time highs for the S&P 500 and Nasdaq, the new 1 August tariff deadline and fears of skipped negotiations have markets on edge, especially with the US-China trade deal still hanging in the balance.”

European markets showed a more restrained response compared to Wall Street. The FTSE 100 edged higher and remained near record levels seen the previous month, as investors weighed whether the deadline extension would ease immediate trade pressures.

“There’s clearly a desire from the White House to get deals done, reflected in the latest extension of the tariff deadline,” Britzman said. “Investors are still digesting the latest developments, with US futures suggesting a claw back of some of yesterday’s losses.”

Market volatility, as measured by the VIX index, briefly rose following the tariff announcement but stayed well below peaks reached in April. The relatively moderate reaction suggests investors may be becoming more accustomed to shifts in US trade policy.

Please Note:

This article is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. Tax treatment depends of your individual circumstances and may be subject to change in the future. If you are unsure about the suitability of any investment you should seek professional advice. 

Please note the above article was first published by Trust Net and should not be regarded as individual investment advice on whether to buy, sell or hold any of the investments mentioned. Please speak to Ethical Offshore Investors or your personal adviser BEFORE you make any investment decision based on the information contained within this article.

Clients can access the funds / indices mentioned in this article via the various Investment Platforms, and not be subject to additional entry fees or commissions, when doing so with Ethical Offshore Investments.

Lower costs resulting in more of the investment growth staying in your pocket.

Speak with Ethical Offshore Investments to learn how you can save on your investment costs.

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Warren Buffett’s routine is a testament to the power of discipline, patience and lifelong learning. By incorporating these principles into daily life, investors can develop a more thoughtful, strategic and ultimately successful approach to investing.

The following article, published by TrustNet provides a simple explanation as to how Warren Buffett, arguably the best investor we have seen, has created wealth for not only himself, but the many shareholders of his conglomerate Berkshire Hathaway Inc.

30 June 2025

Warren Buffett’s extraordinary success as an investor is not just the result of intelligence or luck – it is built on discipline, continuous learning and an unwavering focus on long-term value. While many investors spend their days analysing charts, watching financial news and making rapid trades, Buffett follows a much simpler and more deliberate routine. His daily habits revolves around reading, independent thinking, avoiding distractions and maintaining a structured approach to decision-making.

Buffett believes that successful investing is more about temperament than intelligence. His disciplined lifestyle and structured habits reinforce the patience and rationality that underpin his investment philosophy. Unlike many traders who react emotionally to short-term market movements, Buffett cultivates an environment that helps him think clearly, filter out noise and make informed decisions.

By studying Buffett’s routine, investors can learn valuable lessons about how to develop patience, improve financial knowledge and make better long-term investment decisions. Understanding how he structures his day, prioritises information over action and focuses on what truly matters provides practical guidance for anyone looking to strengthen their investment approach.

BUFFETT’S DAILY HABITS

Reading for hours each day: Why he prioritises information over action

One of the most defining aspects of Warren Buffett’s daily routine is his commitment to reading for several hours each day. He has stated that he spends 80% of his working hours reading and thinking, rather than actively making investment decisions.

Buffett’s reading list is extensive, covering financial reports, business news, books and academic research. Some of the key materials he reads daily include:

• Company financial statements and annual reports – These help him analyse businesses and assess long-term value.
• Newspapers such as The Wall Street Journal and The Financial Times – To stay informed on economic trends and market developments.
• Books on business, history and psychology – To deepen his understanding of human behaviour, business cycles and investment strategies.

Buffett has often argued that knowledge compounds over time, much like financial investments. He believes that reading broadly and consistently helps investors develop better judgment, recognise patterns and make well-informed decisions.

For individual investors, this lesson is critical. Instead of relying on social media tips, stock market hype or hot stock recommendations, investors should focus on deep research and fundamental analysis. Buffett’s habit of reading extensively allows him to think independently and filter out short-term market noise.

Avoiding distractions: How he stays focused on core priorities

Unlike many investors who constantly check stock prices and react to every market fluctuation, Buffett deliberately avoids unnecessary distractions. He does not sit in front of multiple monitors watching price movements, nor does he make knee-jerk decisions based on breaking news.

Buffett’s office in Omaha, Nebraska, is far removed from the financial centres of New York and London, allowing him to focus on investment research without the pressure of market speculation. He does not let news cycles, media speculation or short-term stock movements influence his decisions.

This approach reinforces his belief that the stock market is there to serve you, not instruct you. He views stocks as ownership in real businesses, rather than mere trading instruments. By avoiding distractions, he ensures that his decisions are based on deep analysis rather than short-term speculation.

For investors, the key takeaway is to reduce noise and focus on long-term value. This means avoiding:

• Checking stock prices too frequently.
• Making impulsive trades based on headlines.
• Following investment fads without conducting due diligence.

Instead, investors should create an environment where they can think clearly and make rational decisions based on fundamentals.

Thinking independently: The importance of avoiding market noise

Buffett is known for his ability to think independently and resist herd mentality. He does not follow the latest investment trends or invest in companies simply because everyone else is doing so. His investment decisions are based on fundamentals, not speculation.

One of his most famous quotes is: “Be fearful when others are greedy and greedy when others are fearful”

This mindset has helped him make some of his most profitable investments. For example, during the 2008 financial crisis, when many investors were panic-selling, Buffett invested billions into struggling companies like Bank of America and Goldman Sachs. He saw that these companies had strong long-term fundamentals despite short-term troubles.

Investors can learn from this by:

• Developing independent thinking and questioning market trends.
• Avoiding emotional reactions to stock price movements.
• Focusing on company fundamentals rather than short-term price changes.

Thinking independently requires confidence, patience and a willingness to be contrarian when necessary.

Simple living: Why Buffett avoids excess

Despite being one of the richest individuals in the world, Warren Buffett leads a remarkably simple and frugal lifestyle. He still lives in the same modest house in Omaha that he bought in 1958 for $31,500, drives a regular car and avoids extravagant spending.

Buffett believes that material excess does not equate to happiness or success. Instead, he focuses on things that truly matter – financial independence, meaningful work and intellectual growth. This philosophy aligns with his approach to investing: he avoids speculative risks and focuses on building sustainable wealth over time.

Buffett’s simple lifestyle provides an important lesson for investors: financial success is not about extravagant spending but about making smart, long-term financial decisions.

The value of relationships: Why Buffett surrounds himself with smart, trustworthy people

Buffett has always emphasized the importance of relationships in business and investing. He has long credited his success to surrounding himself with intelligent, ethical and trustworthy individuals. His partnership with Charlie Munger has been a key part of his investment success, as Munger’s wisdom has helped shape Buffett’s approach.

Buffett also values integrity in the people he works with, famously saying:
“You’re looking for three things, generally, in a person: intelligence, energy and integrity. And if they don’t have the last one, don’t even bother.”

For investors, this highlights the importance of:

• Seeking out mentors and advisers who have valuable experience.
• Avoiding short-term thinking and working with people who prioritize long-term success.
• Being ethical and disciplined in financial decisions.

Surrounding oneself with knowledgeable and ethical individuals leads to better decision-making and long-term success.

Routine and discipline: The key to consistent success

Buffett’s daily routine reflects his overall investment philosophy – consistency, patience and discipline. He does not chase quick gains or change his strategy based on trends. Instead, he follows a structured approach to decision-making that has stood the test of time.

Having a strong routine and discipline in investing means:

• Developing a set of rules and sticking to them.
• Avoiding impulsive decisions based on fear or greed.
• Consistently applying fundamental analysis rather than speculating.

Investors who establish and maintain structured investment habits are more likely to achieve sustainable financial success.

HOW INVESTORS CAN APPLY THESE LESSONS

Buffett’s daily habits provide a blueprint for how investors can improve their own decision-making processes. By adopting these habits, investors can:

• Develop a strong reading habit to enhance their financial knowledge.
• Avoid unnecessary trading and market distractions that lead to emotional investing.
• Think long-term and make independent decisions based on company fundamentals.
• Simplify their financial lives by focusing on sustainable wealth-building rather than speculation.
• Surround themselves with ethical and intelligent people who help them make better choices.

Warren Buffett’s routine is a testament to the power of discipline, patience and lifelong learning. By incorporating these principles into daily life, investors can develop a more thoughtful, strategic and ultimately successful approach to investing.

This Trustnet Learn article was written with assistance from artificial intelligence (AI).

This article is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy, sell or hold any investment, or to adopt a particular investment strategy.

Please speak to Ethical Offshore Investors or your personal adviser BEFORE you make any investment decision based on the information contained within this article.

Socially Responsible Investing – Ethical Business Standards 

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Please speak to Ethical Offshore Investors or your personal adviser BEFORE you make any investment decision based on the information contained within this article.

The Polar Capital Global Technology Team offer analysis and opinion on Artificial Intelligence (AI), the huge potential it offers and how it is becoming a powerful force for productivity and innovation.

Developing large-scale AI systems has increasingly centred on the ability to match the capabilities of OpenAI’s GPT-4. The common themes among those trying to bridge this performance gap revolve around both computational efficiency and quality output – two fundamentals to advances in AI technology.

A significant milestone in 2024 was the breakthrough performance of OpenAI’s o1 model which fundamentally reimagines how models adapt to novel tasks during inference. Central to this evolution is ‘chain-of-thought’ (CoT) prompting where large language models (LLMs) simulate human-like reasoning by breaking down complex tasks into a sequence of logical steps, a technique pioneered by Google Research in 2022 and subsequently refined in early 2023 to enhance LLMs’ deductive capabilities. As a result, LLMs can not only tackle more demanding and nuanced problems but also significantly enhance the transparency and interpretability of their output.

This has led to numerous efforts to replicate it, with DeepSeek gaining most attention for its cost efficiency while maintaining high performance. It achieves performance comparable to OpenAI’s o1 model, despite being trained on previous-generation infrastructure.

For the full report – click here

The following is the net performance (in GBP) for the Polar Capital Technology Fund over the past 10 years (v’s the technology investment benchmark) and the Polar Capital Artificial Intelligence Fund since its inception   

A. IA Technology & Technology Innovation

B. Polar Capital Global Technology I Acc (GBP) ** 20.8%pa over the past 10 years

A. Polar Capital Artificial Intelligence I Acc (GBP) ** 12.8%pa since inception 6/10/2017 

At Ethical Offshore Investments, we provide ongoing guidance to our clients to ensure that their current & future financial goals and objectives are met. The above article is from Polar Capital LLP and they provide quality managed funds that provide exposure to the companies that their management team believe will benefit from the continuing development of Artificial Intelligence. These funds can generally be accessed on the major offshore platforms that we provide.

We specialise in cost effective solutions to ensure more of the investment returns stay in your pocket…… when we place an investment trade into one of the Polar Capital managed funds, we do not request an entry fee to be deducted and we do not receive any commission. We do invest in the lowest charging version of the fund available on the platform.

Socially Responsible Investing – Ethical Business Standards 

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Please speak to Ethical Offshore Investors or your personal adviser BEFORE you make any investment decision based on the information contained within this article.

Past performance does not predict future returns. You may get back less than you originally invested. Reference to specific securities is not intended as a recommendation to purchase or sell any investment.

We are now two and a half years into the AI infrastructure buildout, catalysed by the launch of ChatGPT. We have a good degree of conviction over who we believe the winners are in the AI infrastructure layer of the new technology stack. However, as the cost of AI systems comes down and we move from enterprises experimenting with AI to deploying AI inference at scale, value moves up the stack. The key question for investors at the moment is who the winners will be in the application layer. These are the companies building on top of accelerated compute and delivering AI-infused productivity to us as users. The battle to become the user interface for AI is fierce and disruption is a certainty, not a likelihood.

Companies that are well positioned have a handful of critical features in common. Firstly, distribution advantage matters. We are seeing this play out in a number of B2C platforms like Meta, Spotify, Netflix and Shopify. These companies already own the consumer, they live in our pockets, and they sit on a body of unique, proprietary, real-time data – essentially a goldmine for AI use cases.

This cohort of companies moved quickly to adopt AI internally, leading to shrinking cost bases, and they are now focused on infusing AI across their platforms to create new revenue streams, leading to enhanced user engagement which turbocharges the network effects they enjoy.

Take Spotify as an example: in the past two years, operating expenses as a percentage of revenue has declined from c.30% to c.20%. The company has reduced headcount in favour of automation and is now printing cash. On top of this leaner architecture, AI features are being layered to draw in new customers: AI-fueled daylist and playlists are increasing customer searches by 2000%, for example, which in turn deepens user engagement and stickiness – Spotify’s AI DJ customers return on average 25% more. This feeds better data on 640 million users, which further improves recommendations and the platform experience.

Crucially, these companies are innovating on a unified software platform. How a platform is architected really matters for AI in order to be able to ingest, store and utilise data at massive scale at speed. This cannot be said for many legacy enterprise software companies.

We view Spotify as an earlier-stage Netflix, but who are the earlier-stage Spotifys of this world we are backing? Mercado Libre, Doximity, Affirm, Lemonade and Upstart to name a few. These platforms span sectors, from healthcare to financial services to ecommerce, but they, like Netflix and Spotify et al, possess a unique distribution footprint, unique proprietary real-time datasets, and a unified software platform.

Mercado Libre – Latam’s digital ecosystem

Mercado Libre has transformed its dominant Latin American e-commerce platform into a multifaceted digital ecosystem – integrating marketplace, payments, logistics and lending.

Picture Amazon ten years ago, but on a larger scale and with a uniquely expansive logistics footprint. With more than 100 million unique buyers on its platform, Mercado Libre’s expansive distribution network generates a vast, real-time data stream on consumer purchasing behaviour and merchant inventory – far surpassing that of its fragmented rivals and giving the company a lasting competitive edge.

The company leverages this proprietary data to personalise the shopping experience and inform financial offerings: AI-driven features now automate product review summaries, tailor notifications for abandoned carts, and equip sellers with dynamic pricing and instant answers to customer questions. These AI enhancements have measurably improved the customer journey, driving conversion and retention: unique active users on the company’s marketplace grew 25% year-on-year (yoy) last quarter, with Fintech active users growing 21% yoy.

Such growth demonstrates the power of a unified platform in which marketplace transactions flow seamlessly into fintech services – most notably Mercado Pago digital wallets and credit programmes – creating a self-reinforcing flywheel. In effect, Mercado Libre follows Amazon’s playbook yet supercharges it with AI: its extensive reach and integrated services generate data-network effects that allow machine-learning models to refine product recommendations, optimise logistics and sharpen credit underwriting in real time, pushing value creation ever further up the stack towards the application layer.

Affirm – Real-time finance at the point of sale

For a growing swathe of Americans, revolving credit-card debt has become the default way to make ends meet – stacking households with punitive interest charges and paving the way for alternatives like Affirm. Almost 37% of US adults carry a credit-card balance – an astonishing share given today’s punitive interest rates. Affirm offers a remedy: shoppers receive their goods immediately and repay the cost over three to 18 months, interest-free.

While the service began with big-ticket purchases, it is now increasingly used for smaller items as well. Tackling this widespread consumer pain-point has fueled Affirm’s rapid growth over the past decade, bringing the company to scale. Today it operates one of the largest “buy now, pay later” (BNPL) networks, embedded in 300,000-plus merchants – from Shopify to Amazon – and serving more than 21 million active customers. Affirm exemplifies the power of AI-driven fintech, delivering intelligent credit decisions at the precise moment of purchase.

This widespread distribution gives Affirm two key assets: a trusted brand at checkout and a constant flow of transaction-level data. Every time a shopper opts to split a payment, Affirm’s platform performs an instant, AI-driven credit decision – assessing the individual’s risk based on thousands of data points beyond a static FICO score. In fact, Affirm’s approach “underwrites every extension of credit” in real time using not only the consumer’s Affirm history but also their up-to-the-moment indebtedness elsewhere. This dynamic use of proprietary, real-time data differentiates Affirm from legacy credit card models and shifts value to the application layer (where the lending decision happens) rather than the credit infrastructure beneath.

Critically, Affirm has invested in AI and machine learning to sharpen its edge. The company’s fraud detection and loan underwriting now employ transformer-based AI models, boosting accuracy and reducing losses. Internally, AI automation parses contracts and streamlines merchant onboarding, allowing Affirm to scale operations without proportional headcount. These AI-driven productivity gains translate into better economics and customer experience – fewer manual reviews, faster approvals, and more personalized financing terms. As a result, Affirm can offer many 0% APR promotions (subsidised by merchants to drive sales) while still expanding its user base (active customers grew 23% yoy last quarter) with disciplined risk management.

Lemonade – the insurance platform built for AI from day one

Few consumer experiences are as universally frustrating as filing an insurance claim, a fact reflected in the industry’s dismal net-promoter scores. Lemonade sets out to reverse that reputation by offering first-rate service at a fair price and, in the process, completely re-imagining what insurance can be. Born in the cloud, the company treats insurance as a digital, AI-native consumer product: tightly integrated data and machine-learning models replace brokers and paperwork, while chatbots do the heavy lifting.

Its unified software platform spans renters, homeowners, pet, life and now motor policies – avoiding the siloed systems that hobble legacy insurers – and every touchpoint, from sign-up to claim, runs through proprietary bots (“AI Maya” for sales, “AI Jim” for claims). Lemonade thus shows how application-layer disruptors can out-manoeuvre infrastructure-heavy incumbents by delivering a faster, friendlier and markedly cheaper customer journey.

The AI-driven productivity gains are striking: c.98% of claims now begin with AI Jim handling the first notice of loss, and c.40% of claims are resolved end-to-end with no human intervention at all. Lemonade’s AI swiftly verifies coverage, analyses the claim via computer vision and natural language processing (e.g. scanning videos of damage), and instantly approves and pays out legitimate claims – once even in three seconds, setting a world record. This level of automation slashes overhead costs and delightfully speeds up service – the company’s use of AI has cut claims processing time by a whopping 90%.

Deep data integration is key: companies that haven’t architected themselves for AI, with data entwined across functions, will be hard to glean the type of deep insights Lemonade has built its business upon. In Lemonade’s case, every new customer (now nearly 1.8 million, skewing young and digital-native) provides behavioural data that continuously trains its AI models. This growing data trove creates a flywheel: more users and claims improve the algorithms, which in turn enable better underwriting and user experience. As the pool of data increases, Lemonade’s risk pricing is becoming more accurate and profitable, evidenced by a 30% increase in premium per customer as the company expands into higher- value policies.

Upstart – AI lending platform building the foundation model for credit

First introduced in 1989, the FICO score gave American lenders a standardised yardstick for judging creditworthiness. It was a breakthrough in its day, yet the lending industry has since fallen behind the data and AI revolution, leaving millions of would-be borrowers underserved and unable to obtain affordable credit. Upstart set out 15 years ago to solve that problem. Its AI-powered lending platform provides granular credit insight to institutions ranging from banks to motor dealerships, enabling them to write better loans at sharper prices.

Rather than build its own branch network, Upstart sells a lending-as-a-service model to more than 500 banks and credit unions – a distribution strategy that has delivered nationwide reach. Through these partners and a direct-to-consumer funnel, Upstart ingests a torrent of proprietary data: application details, repayment histories and macro-economic signals far richer than any single FICO score. The impact is striking. Upstart’s personal-loan model evaluates over 2,500 variables per applicant and is trained on 86 million repayment events, updating itself daily as new data arrive. Independent studies show the system can approve 43% more borrowers at the same loss rate, or cut APRs by a third while holding approvals steady – a step-change in both efficiency and financial inclusion, achieved through superior application-layer intelligence.

Upstart’s unified platform automates the entire lending workflow – marketing, application, identity check, risk assessment, and even compliance – demonstrating huge AI-driven productivity gains. Over 92% of Upstart-powered loans are fully automated, with no human intervention in the decision. Customers get an instant, all-digital experience (often receiving funds the next day), while bank partners benefit from lower operating costs and faster loan growth. Upstart’s AI also adapts in real time to macroeconomic changes via a proprietary index and adjusts lending criteria accordingly, something static credit models can’t do. By moving the brains of lending into the cloud, Upstart has shifted where value accrues: instead of banks gaining advantage from owning branch networks or securitization pipelines, they now seek out Upstart’s application-layer solution to stay competitive.

Doximity – The “LinkedIn for Doctors” making practitioners more efficient

Often described as “LinkedIn for doctors,” Doximity already reaches more than 80 % of all US physicians – a distribution beach-head that is almost impossible to replicate. On top of that trusted network, the company has stitched together a single, HIPAA[i]-compliant workflow suite (newsfeed, tele-health video, secure fax, scheduling) so every click feeds one unified data lake. The result is a platform-level moat: users stay because their colleagues, patients and day-to-day tools are all in the same place, while life-science marketers and hospital systems keep spending because that’s where clinicians actually engage.

Over the past year, Doximity has pushed value even further up the stack by embedding generative AI directly into those workflows. Its ChatGPT-powered Doximity GPT drafts referral letters, insurance appeals and patient education in seconds, and is offered free to every verified clinician – driving rapid adoption. Usage numbers tell the story: in Q1 2025, over 620 000 unique prescribers used the company’s workflow (AI, tele-health, fax, scheduling), up five-fold year-on-year.

That deeper engagement is translating into economics: trailing-12-month net revenue retention sits at 114 % (rising to 121 % for the top 20 pharma customers), showing that the more AI features clinicians tap, the more advertisers and hospitals expand their spend. By combining unrivalled reach, proprietary real-time data and tightly integrated generative-AI tooling, Doximity is shifting healthcare value from legacy IT rails to the intelligent application layer – exactly the pattern we expect to define the winners as AI matures.

_{[i] HIPAA =  Health Insurance Portability and Accountability Act}

At Ethical Offshore Investments, we provide ongoing guidance to our clients to ensure that their current & future financial goals and objectives are met. The above article is from Liontrust Investment Partners LLP and they provide quality managed funds that provide exposure to the companies mentioned in the article. These funds can generally be accessed on the major offshore platforms that we provide.

We specialise in cost effective solutions to ensure more of the investment returns stay in your pocket…… when we place an investment trade into one of the Liontrust managed funds, we do not request an entry fee to be deducted and we do not receive any commission. We do invest in the lowest charging version of the fund available on the platform.

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Please speak to Ethical Offshore Investors or your personal adviser BEFORE you make any investment decision based on the information contained within this article.

The need to manage investment risks in retirement is more acute now than ever before. Recent stock market volatility and upside inflation risks from tariffs are once again focusing minds on the phenomenon known as sequencing risk.

Large withdrawals from a pension pot when fund values are depressed can significantly reduce the sustainability of income.

In the UK, flexible drawdown was introduced with pensions freedoms in 2015, and the extended 2022 bear market in both global stocks and bonds was its first real test. Meanwhile, today’s higher bond yields mean annuities are a more competitive investment solution than they used to be, albeit with significantly less flexibility.

Trevor Greetham, Head of Multi Asset, analyses the importance of managing downside risk over the recessions and bear markets the average person is likely to encounter in retirement.

Read Full Article

For professional investors only. This material is not suitable for a retail audience. Capital at risk. This is a financial promotion and is not investment advice. Past performance is not a guide to future performance. The value of investments and any income from them may go down as well as up and is not guaranteed. Investors may not get back the amount invested. Portfolio characteristics and holdings are subject to change without notice. The views expressed are those of the author at the date of publication unless otherwise indicated, which are subject to change, and is not investment advice.

At Ethical Offshore Investments, we provide ongoing guidance to our clients to ensure that their current & future financial goals and objectives are met.  We specialise in cost effective solutions to ensure more of the investment returns stay in your pocket…… This could be the difference between retirement and a comfortable retirement. 

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The following article, published by TrustNet provides a simple explanation as to how Warren Buffett, arguably the best investor we have seen, has created wealth for not only himself, but the many shareholders of his conglomerate Berkshire Hathaway Inc.

Sure….. follow the steps and principals that Buffett has employed for many, many decades and create an investment portfolio along the same lines as him.

Or…… why not just invest in the listed shares of Berkshire Hathaway Inc (BRK:B) and let the following of principals and investment decisions to be done by Warren Buffett and his very experienced team.

This stock can be held via the Ardan International Platform as well as most of the ‘open architecture’ Offshore Portfolio Bonds (such as RL360 PIMS, Utmost Executive Investment/Redemption Bonds, Investors Trust Access Portfolio, Friends Provident Reserve).

If you would like to learn more about Berkshire Hathaway Inc & how holding this stock as part of your portfolio can improve your financial situation, please press the More Information button.

25 November 2024

Warren Buffett, often referred to as the ‘Sage of Omaha’, is synonymous with success and longevity in the stock market. Buffett’s investment approach, characterised by simplicity and discipline, has not only yielded extraordinary returns for his company, Berkshire Hathaway, but also offered a model for individual investors worldwide.

FROM HUMBLE BEGINNINGS TO BILLIONAIRE INVESTOR

Buffett’s journey began in Omaha, Nebraska, where he was born in 1930. His foray into finance started early; he purchased his first stock at age 11. From running a paper route to buying a pinball machine and placing it in a local barbershop, his entrepreneurial spirit was evident. Buffett’s early life was not one of privilege but of keen interest and self-driven education in the world of finance. He honed his craft under the tutelage of Benjamin Graham at Columbia Business School, the man who would become his mentor and the father of value investing. Graham’s influence on Buffett was profound, shaping his investment philosophy fundamentally.

CORE INVESTMENT PRINCIPLES

Buffett’s investment style can be distilled into a few core principles that have consistently guided his strategy.

Value investing: Buffett invests in companies whose shares trade for less than their intrinsic values. He is known for his thorough analysis of company fundamentals and not overpaying for stocks, no matter how promising they may seem.

Long-term holding: “Our favourite holding period is forever,” he famously said. Buffett’s approach is the antithesis of the short-term trading that characterises much of today’s market movements. He believes in investing in companies that he understands and expects to continue growing and succeeding in the future.

Margin of safety: Emphasising the principle taught by Graham, Buffett always seeks a margin of safety in his investments. This means buying at a significant discount to intrinsic value to cushion against errors in judgment or unforeseen market downturns.

Circle of competence: Buffett restricts his investments to businesses he thoroughly understands, a practice that has kept him from making investments that don’t align with his expertise, regardless of popular trends.

Management quality: Buffett places significant emphasis on the quality of a company’s management. He prefers to invest in companies with honest and competent leaders.

INVESTING LESSONS FROM WARREN BUFFETT

Understanding a company’s value: Buffett suggests investors should only invest in companies they understand and which have intrinsic value — value that does not depend on external factors such as currency fluctuations or commodity prices.

The compounding advantage: Buffett showcases the power of compounding interest, often stressing the importance of holding stocks for the long term to maximise returns.

Staying within your circle: He cautions investors to invest within their ‘circle of competence’ and to resist the temptation to follow the crowd. This discipline helps avoid missteps in unfamiliar territories.

Rationality over emotion: Buffett has remained stoic through market fluctuations, emphasising the need for investors to be rational and not be driven by emotions. His investment decisions are based on facts and analysis, not on market speculation or investor sentiment.

Investment vs speculation: Buffett draws a clear line between investing and speculating. He advocates for investment based on solid research and long-term potential, not on the speculation of quick profits.

Warren Buffett’s success demonstrates the power of simple principles applied with discipline and patience. His approach demystifies the stock market, making it accessible and rational. As markets evolve, the core tenets of Buffett’s philosophy continue to influence countless investors, encouraging a thoughtful, principled approach to the art and science of investing.

This Trustnet Learn article was written with assistance from artificial intelligence (AI).

This article is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy, sell or hold any investment, or to adopt a particular investment strategy.

Please speak to Ethical Offshore Investors or your personal adviser BEFORE you make any investment decision based on the information contained within this article.

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In her first Budget, UK Chancellor Rachael Reeves confirmed the abolition of the remittance basis of taxation for non-domiciled UK residents (non-doms) from 6 April 2025, as well as substantially curtailing the current protections for non-UK assets held by non-doms from UK inheritance tax (IHT)

Join Sovereign for a three part update Webinar covering the following:

To view the Webinar, please click View Video

Link to Presentation Slides can be downloaded HERE

This is a presentation from Sovereign and is for information purposes only.

Please speak to Ethical Offshore Investors or your personal adviser BEFORE you make any investment decision based on the information contained within this article.

For further information on how the changes announced in the latest budget may affect you & your family situation, contact Stephen Strowger at OIBME Asia Ltd at stephen.strowger@oibme.com 

Along with the resources and technical knowledge of Sovereign, we can then assess how these changes may affect your financial future, and provide guidance and solutions on how to minimise the negative impacts, and provide a more secure future for you and your family assets. 

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Chris Salih – FundCalibre (equities, specialist investing) 

26 November 2024

Many of you would’ve seen the 2015 film The Big Short, which tells the story of the financial professionals who predicted and profited from the 2007-08 global financial crisis.

Essentially, short selling, or shorting, is a way of taking an investment position aimed around profiting from a falling share price. Investors profit when their chosen investment falls in value and lose out when it rises. It is the opposite of taking a ‘long’ position – where you expect the price of a stock to increase.

But it is a risky and complicated strategy. The Big Short highlights the sub-prime mortgage meltdown which ultimately led to the global financial crisis. It also highlights the complex financial terminology in the industry, using vivid and humorous ways to highlight complex tools (such as Collateralized Debt Obligations (CDOs) and mortgage-backed securities).

Unfortunately, FundCalibre was unable to repeat the trick by getting the likes of Ryan Gosling and Margot Robbie to “break the fourth wall” to explain certain financial jargon. So here is a quick guide to shorting and why you should only trust a skilled active manager in this challenging market.

A brief example:

As mentioned, it is possible to make money when the price of an asset falls by short selling it. You do this by entering into a contract to sell an asset that you view as overvalued, buying it back for less on a specific date. If you are right, you will make a profit.

For example, a fund manager has done the work and identified a share (a company) they feel is going to fall in value. They then borrow this share from a broker and sell them on the market when they are trading at £1.

One month later, the share price has now dropped to 70p – meaning they can benefit from the lower share price. A manager can then buy the share back for 70p, return the share to the broker and make money on the difference (30p minus trading costs).

It allows the investor to make money should they feel a share, sector, style or region is set to fall out of favour.

Don’t try this at home!

But there are plenty of dangers; your upside is really capped at two times your investment, but the downside loss is unlimited from a mathematical perspective. You also lack control and are dependent on the market, as short positions can be squeezed. A good example of this was when the share price of the American chain of bricks-and-mortar video game stores GameStop rose dramatically in 2021.

Governments can also give you a headache – they can often ban shorting or make it illegal in times of distress, potentially ruining a hedged portfolio. There is also the reality that a lot of companies do make money over the longer term, making them tough to short for a prolonged period.

When has shorting historically been used?

Timing really is everything in short selling, which is why a fund manager should be your first port of call with this type of strategy. Stocks typically fall in value much faster than they grow – remember, shorting too early can be extremely painful.

Here are a few periods which Capital Group has highlighted as being a potentially attractive environments for short selling*:

• When the market is bearish – Short selling is most fruitful when the market declines precipitously and sharply. The global financial crisis was quite the time, with short sellers making fat profits on big financial landslides. Downward trends reign supreme in a bear market.

• When the market isn’t dull – Capital Group says a common trading rule is to never short in a market that is dull, flat or has a low trading volume. It is believed that an inert market is accumulating energy before a dramatic rise.

• When fundamentals are worsening – Macro- and microeconomic fundamentals can go weak. For the overall economy and its smaller segments, deteriorating data can indicate a potential economic slowdown, bearish market sentiments or new volume lows, etc. Stock fundamentals can weaken as well. The reasons are multiple, from dropping revenue, to growing input costs, to bigger challenges a company faces. However, seasoned short sellers will never hurry up to take action. Before going short, they will wait until the bearish trend consolidates.

• When the investment is priced for perfection – Efficient market theory implies that the price immediately reflects positive predictions, including innovations, strong earnings, product launches, etc. Stocks whose value already includes positive developments are called ‘priced for perfection’. The thing is that such stocks may not grow when good news is actually released, as the improvements have already been predicted.

Once investors realise they’ve been over-optimistic, the downward phase begins. This is the best time for a short seller to kick start their investment strategy.

Timing, insight and experience are all crucial elements in short selling – done right it can offer both diversification and excess returns, but there are plenty of risks. That is why we believe it is the realm of the experienced fund manager. 

Here are a few to consider:

Janus Henderson Absolute Return

The Janus Henderson Absolute Return fund is a global long/short equity portfolio with a UK bias that aims to deliver absolute positive returns over rolling 12 month periods. Its target is to outperform the UK base interest rate, after charges, over any three-year period. Broadly, two thirds of the portfolio is in shorter-term tactical ideas, with the remainder in core holdings.

In a recent catch-up, fund manager Luke Newman said the higher interest rate environment was a benefit to the fund as it offered greater dispersion on the long and short-side of the portfolio. Speaking in July, Newman said the fund’s short book currently has around 50 names.

BlackRock European Absolute Alpha

A long/short approach is also employed by Stefan Gries and Stephanie Bothwell, the co-managers of the BlackRock European Absolute Alpha fund. Their objective is to achieve positive absolute returns over periods of 12 months, regardless of the prevailing market conditions.

The managers look for a mix of characteristics. For short ideas, they look at structurally challenged businesses, with limited pricing power, high leverage, and the potential to be disrupted. For long positions, they favour good management teams, an historically high return on invested capital, good free cash flow, and an ability to preserve capital through difficult cycles.

CT Global Extended Alpha

This is a 130/30 fund – this means the fund can employ leverage to invest more than 100% of its capital. So the manager might invest 130% long and 30% short. This would leave net long exposure of 100% (i.e. still around the same net exposure as the market).

Manager Neil Robson says this structure is a fund manager’s dream. He describes it as lining up on the starting grid for a motor race with an engine 50% bigger than everyone else’s.

The ability to short some stocks means valuable research is not wasted when the team realises a company is in trouble and it gives it another opportunity to add alpha.

Man GLG High Yield Opportunities

Man GLG High Yield Opportunities is an unconstrained, concentrated global high yield bond fund, driven by individual bond selection, but guided by top-down thematic ideas. Manager Mike Scott has an exceptional track record and has widened his investment flexibility by taking short positions in this portfolio.

*Source: Capital Group

Please Note:

This article was first published by Fund Calibre and is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. 

Please speak to Ethical Offshore Investors or your personal adviser BEFORE you make any investment decision based on the information contained within this article.

At Ethical Offshore Investments, we can access the funds mentioned in this article on the various offshore investment platforms we offer. We do NOT CHARGE any additional entry and/or exit fees to purchase these funds for our clients.

As we aim not to use commission paying funds, we will access the lowest charging version of the managed fund that is available on the relevant platform…… resulting in more of the investment growth staying in your pocket.

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19 November 2024

Being selective when investing in Europe is a necessity, according to Fidelity’s Marcel Stotzel

By Matteo Anelli,

Senior reporter, Trustnet

Investors with £15,000 to spare would probably be inclined to stick the sum into the stock market, but let’s imagine they decided to buy a Hermes Birkin bag instead.

Usually, that privilege is reserved for recurring customers who have already spent at least the same amount on other Hermes products and made it onto the waiting list.

Assuming this is the case, let’s say the visit to the shop establishes that instead of £15,000, the much-dreamed bag now costs £16,000.

“Do you walk out of the shop?” asked Marcel Stotzel, deputy manager of the £4.3bn Fidelity European fund. Probably not – and this speaks volumes about the unsurmountable pricing power that the top European companies have, he said. “It’s incomparable to any other market in the world”.

The same goes for Nespresso coffee drinkers, who are unlikely to give up on their caffeine intake just because their cup has become 10p more expensive.

But for each of these Dr Jekyll companies, a Mr Hyde is lurking somewhere in the market – “crap, quasi-government-owned companies with really bad governance at the low end”, as Stotzel described them.

“The spread between the good and the bad in Europe is higher than any other market in the world,” he said. This means Europe is “a much more fertile stock-picking ground than for example the US”.

Even within luxury goods, it’s worth choosing your horses wisely. Western consumers are done spending their post-pandemic furlough money and stimulus cheques and sales in China – a key market for European brands – have slowed, as the Chinese wealth creation engine is not growing as strongly as it was.

For all these reasons, Stotzel likes to focus more on “safer luxury” – not the likes of Burberry, whose share price plummeted 39% over the year to date, but more the likes of Hermes, which has two-year backlogs that it can eat into.

Performance of stock over the year to date

Source: Google Finance

“We like the ultra-high-net-worth space, where the Chinese consumer still has the ability and the willingness to purchase,” the manager said.

Europe also looks particularly attractive in those areas where companies “just happen to be at a big discount for the only reason they are trading in Europe”.

An example of that from the Fidelity European portfolio would be Swedish mining equipment company Epiroc. Together with Sandvik, they are the only two players in the world whose machines can go deep into the ground to find gold ores, which are becoming more and more elusive and difficult to extract.

“They have no US competitors, no Chinese knockoffs, nothing,” the manager said. “Epiroc sells into Chinese mines, for example, which makes me pretty confident that its business model is sustainable.”

Fidelity European is a 45-strong portfolio, whose top-10 companies include the usual European suspects Novo Nordisk (6.3%), SAP (5.1%) and ASML (5%), among others.

The fund has been struggling in the past year, when it only achieved fourth-quartile returns, but it maintained a maximum FE fundinfo Crown Rating of five given its strong long-term performance, reaching first quartile over the past 10 and five years and second quartile over three.

Performance of fund against index and sector over 1yr 

Source: FE Analytics

Stotzel isn’t blind to the challenges Europe faces, especially economically. But his main lesson was that “the economy isn’t a proxy for the stock market”.

Benjamin Melman, global chief investment officer at Edmond de Rothschild, agreed that European pessimism might be overdone.

While there is no doubt that Donald Trump’s election and the threat of tariffs have exacerbated investor scepticism towards Europe, Melman said investors should not forget that European companies with a cost base in the US will benefit from the lower corporate tax rate.

According to Morgan Stanley’s estimates, while 26% of the sales generated by MSCI Europe companies are exposed to the US, the percentage of exports – threatened by the tariffs – is only 6.2%.

“European equities are now trading at a record discount relative to their US counterparts, yet Europe is not in crisis. We have also observed that the economic surprise index has tended to recover a little over the past few weeks,” he said.

“In Germany, the likely change of government could bring more favourable news on the fiscal front. Germany has all the fiscal levers it needs to rebound and while the political will has not been clearly expressed so far, the lines are shifting.”

Please Note:

This article is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. Tax treatment depends of your individual circumstances and may be subject to change in the future. If you are unsure about the suitability of any investment you should seek professional advice. 

Please note the above article was first published by Trust Net and should not be regarded as individual investment advice on whether to buy, sell or hold any of the investments mentioned. Please speak to Ethical Offshore Investors or your personal adviser BEFORE you make any investment decision based on the information contained within this article.

Clients can access the fund mentioned in this article via the various Investment Platforms, and not be subject to additional entry fees or commissions, when doing so with Ethical Offshore Investments.

Lower costs resulting in more of the investment growth staying in your pocket.

Speak with Ethical Offshore Investments to learn how you can save on your investment costs.

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20 November 2024

Fund pickers highlight 3 underappreciated funds across global markets

By Patrick Sanders,

Reporter, Trustnet

Fund management is home to several big names, such as BlackRock or Fundsmith, with well-earned reputations for quality. However, there are strategies that despite enjoying good performance, have remained relatively underappreciated.

While these ‘hidden gems’ may pass under the radar for many investors, they are well-liked among professional fund pickers, who are always keen to find undervalued strategies that can keep up with the industry’s giants.

Below, fund selectors reveal their best-kept secrets, covering everything from US and global equities to European small-caps.

For Jason Hollands, managing director at Bestinvest, the £1.5bn GQG Partners US Equity fund is a standout example of a hidden gem.

Despite only being launched in March 2021, the fund has enjoyed the third-best three-year performance in the sector at 52.2%. This result surpassed both the wider S&P 500 index and the highly competitive IA North America peer group.

Performance of the fund vs the sector and benchmark

Source: FE Analytics

Despite these strong results, Hollands noted that the portfolio has yet to make a splash with UK retail investors, as it lacks the large sales and marketing teams that larger fund houses take for granted.  

Nevertheless, Hollands was a fan of the strategy’s high conviction, concentrated approach with just 33 stocks. “While this may seem risky, there is a very stringent focus on downside protection and historically, the fund has proven defensive during difficult periods,” he said.

Moreover, investigative analysis plays a crucial role in the team’s approach. Each stock is monitored by two team members, allowing them to make changes quickly to keep up with market developments.

Analysts at FE Investments are similarly positive about the fund, awarding it with an FE Fundinfo Crown Rating of five. “The macro ‘switch off’, whereby entire sectors can be exited quickly in the event of new risks emerging, has been highly successful at limiting damage in falling markets,” they said.

Alex Paget at VT Downing Fox suggested an underappreciated global fund, the £10.5m Palm Harbour Global Value fund, led by senior manager Peter Smith.

“It sits in the global sector but looks nothing like the ‘average’ global fund. It’s value, it’s small-cap, and (thanks to Peter’s experience) will likely be biased towards European stocks,” he explained.

This offshore “minnow” has risen by 61.3% in five years compared to a sector average of 51.2%, a second-quartile performance. This track record is particularly impressive given the fund’s bias towards Europe and away from the US, Paget argued.

Performance of fund vs sector and benchmark over 5yrs

Source: FE Analytics

“This is a real hidden gem that will deliver strong long-term returns, especially when the current era of mega-cap domination eventually subsides,” he added.

Moreover, he explained that the strategy benefits from an emphasis on stock picking, with the team constantly searching for discounted opportunities. This has positioned the fund well to endure market downturns and shifts in sentiment.

As a result, the fund has enjoyed strong downside protection, with a first-quartile downside risk of 12.4% over the past three years.

Paget said: “We want to invest in the next GOATs (greatest of all time) and we think this fund has very GOAT-y credentials.”

Finally, Ben Yearsley, director at Fairview investing, identified the £2.5bn Polar Global Insurance fund as a favourite.

“It feels odd suggesting a fund that has a 20-year track record and is more than £2bn in size, but that is precisely what I’m going to do. There isn’t a find like it available to UK investors,” he said.

With a sector-leading 10-year performance of 273.4%, this strategy has outpaced the IA Financials and Financial Innovation peer group and the MSCI World/Insurance benchmark. While the fund slid into the second quartile over half a decade, it was the best-performing strategy in the past three years.

Performance of the fund vs sector and benchmark over 10yrs

Source: FE Analytics

Yearsley rates the fund highly due to its stock composition. It is an insurance-focused fund which forgoes well-known names such as Aviva and instead targets smaller reinsurance businesses such as Arch Capital Group.

“These companies benefit from good insurance underwriting, basically setting the correct levels of premium as well as earning a return on premiums as they are invested,” he explained.

“This latter return is linked to treasury yields and the fund is a beneficiary of the higher rate environment we are now in.”

Analysts at Square Mile Investment Consulting & Research also favoured this fund, crediting it for its sensible and proven management style, which allowed it to navigate this “sleepy sub-sector of markets” that many investors often deem too complex.

Please Note:

This article is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. Tax treatment depends of your individual circumstances and may be subject to change in the future. If you are unsure about the suitability of any investment you should seek professional advice. 

Please note the above article was first published by Trust Net and should not be regarded as individual investment advice on whether to buy, sell or hold any of the investments mentioned. Please speak to Ethical Offshore Investors or your personal adviser BEFORE you make any investment decision based on the information contained within this article.

Clients can access the funds mentioned in this article via the various Investment Platforms, and not be subject to additional entry fees or commissions, when doing so with Ethical Offshore Investments.

Lower costs resulting in more of the investment growth staying in your pocket.

Speak with Ethical Offshore Investments to learn how you can save on your investment costs.

Socially Responsible Investing – Ethical Business Standards 

The post The ‘Hidden Gem’ funds that you may not know yet first appeared on Ethical Offshore Investments.

The post The ‘Hidden Gem’ funds that you may not know yet appeared first on Ethical Offshore Investments.

25 July 2024

In recent years, the adage that politics doesn’t significantly influence financial markets has been a common refrain among fund managers. Many view political events as mere “noise” with minimal long-term impact on market performance.

However, recent developments, such as the French elections causing financial market instability, have challenged this notion. With the US election looming in November, investors might feel apprehensive. Yet, the key takeaway is to avoid getting overly entangled in political fluctuations and maintain a steady investment strategy.

Looking back at UK and Indian elections earlier this year

Traditionally, elections and political events have caused short-term volatility but have not substantially altered market trajectories. For example, James Thomson, manager of the Rathbone Global Opportunities fund, emphasises “we are relatively agnostic of the political backdrop as long as we avoid the extreme ends of the political spectrum.” This perspective was evident during the recent UK election, where a decisive Labour party victory brought stability without significantly impacting market fundamentals.

Emerging markets, often perceived as more susceptible to political disruptions, have shown resilience in recent elections. The Indian election, for instance, caused a temporary market dip but soon stabilised as investors recognised the continuity of Prime Minister Modi’s economic agenda. The M&G Emerging Markets team noted that despite initial concerns about election-induced volatility, markets have remained relatively calm. They believe that subtle political shifts could potentially open new investment opportunities in these regions.

When politics and economics collide

While political events generally have a limited long-term impact, there are exceptions, especially in countries with high government debt. France is a prime example, where a debt-to-GDP ratio of 112%* has raised concerns. The financial markets’ primary worry isn’t the rise of a far-right government but rather political paralysis that could hinder efforts to address the deficit.

John Chatfeild-Roberts, investment manager on the Jupiter Merlin Portfolio range, explains the problem: “Bond market investors breathed a sigh of relief about the National Rally losing (its intended fiscal plans set alarm bells clanging in Brussels). However, depending on the outcome of the political horse trading in Paris to form a government and its ability then to push through policies, the outlook remains uncertain.

“The far left’s economic policies are just as alarming to Brussels and the bond markets as those of the far right; if executed they would most likely cause investors to seek a ‘risk premium’ for lending to the French government. On the other hand, if France’s governing system becomes paralysed, little will be done to help overcome economic stagnation or reduce France’s very overstretched government finances.”

This situation illustrates how political uncertainty can impact specific sectors, such as banking, which in France is particularly vulnerable due to reliance on wholesale funding.

The US Election

The upcoming US election also poses potential risks, with the US debt at 122% of GDP* and no clear plans from either political party to address it. While stock markets might be less directly affected, bond markets and the dollar could experience volatility. The imposition of tariffs and trade restrictions, particularly under a potential Trump presidency, could disrupt various sectors, including technology, autos, electronics, and retail, and contribute to inflationary pressures.

Despite these risks, some analysts predict stronger economic growth under a Trump administration. George Brown, Senior US Economist at Schroders, says “if Trump were to win the election, our expectation is that US growth would be stronger and inflation firmer. However, the Trump campaign has been light on detail and so it is difficult to make assumptions about economic policy.

“One thing that we are confident about is that most of the macroeconomic impact won’t be felt until 2026 onwards. In terms of growth, our analysis suggests the US economy would expand by 2.2% in 2025 under a second Trump presidency. It would then accelerate to 2.7% in 2026 as the administration’s growth-promoting policies kick in, before easing back to 2.3% in 2027 as higher inflation weighs on consumer spending.”

Investment strategies in turbulent times

Given the potential for political events to create market turbulence, some investors adopt a defensive stance. Steve Kelly, manager of the AXA Framlington American Growth fund, remains cautious about cyclical sectors and believes that the current bullish sentiment may be tested in the coming year. However, he also anticipates that interest rate peaks could ease valuation pressures, benefiting less cyclical growth companies.

The recent French election underscores the fact that high debt and political instability can significantly influence markets. However, for most investors, the best strategy remains to stay the course and not overreact to political events. Active management can play a crucial role in navigating these uncertainties by adjusting portfolios to mitigate risks and seize opportunities as they arise.

Political events and elections undoubtedly introduce a layer of complexity to financial markets. However, history shows that the long-term impact of politics on investments is generally limited. Investors should focus on the fundamentals of their investments rather than getting swayed by political headlines.

For those particularly concerned about political instability, considering global or multi-asset funds can provide additional diversification and risk management. These funds can spread investments across various regions and asset classes, potentially cushioning against political shocks in any single country.

Three funds to consider

Mid Wynd International Investment Trust

Mid Wynd International Investment Trust is a core option for any investor looking for a conservatively-managed offering that taps into a number of global trends. The trust uses a thematic approach to portfolio construction with a strong sustainability focus running through the investment process. The portfolio has been a consistently strong performer, whilst demonstrating lower volatility when compared with many of its peers.

M&G Episode Income

M&G Episode Income is a multi-asset fund that invests directly in individual stocks and bonds. The name “Episode” refers to those periods of time when investors’ emotions cause them to act irrationally. The manager uses behavioural finance to find pockets of value and invest against the herd, rather than following it.

WS Montanaro Global Select

WS Montanaro Global Select is an unconstrained quality growth strategy that scours the globe in search of the best small and mid-cap companies. This high-conviction fund looks for businesses that are profitable, have a long runway of growth and offer sustainable competitive advantages.

*Source: Trading Economics, government debt to GDP, December 2023

Please Note:

This article was first published by Fund Calibre and is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. 

Please speak to Ethical Offshore Investors or your personal adviser BEFORE you make any investment decision based on the information contained within this article.

At Ethical Offshore Investments, we can access the funds mentioned in this article on the various offshore investment platforms we offer. We do NOT CHARGE any additional entry and/or exit fees to purchase these funds for our clients.

As we aim not to use commission paying funds, we will access the lowest charging version of the managed fund that is available on the relevant platform…… resulting in more of the investment growth staying in your pocket.

Speak with Ethical Offshore Investments to learn how you can save on your investments costs

Socially Responsible Investing – Ethical Business Standards 

The post A guide to staying the course during global elections first appeared on Ethical Offshore Investments.

The post A guide to staying the course during global elections appeared first on Ethical Offshore Investments.

A 1% allocation to bitcoin in a 60/40 portfolio could have added an annualised 0.67% to returns over the last 11 years

Photo by Art Rachen on Unsplash     

15 August 2024 – Christian Mayes

Digital assets continue to work their way into the professional investment space despite caution from regulators and misconceptions around the asset class, according to industry commentators.

While the Securities and Exchange Commission (SEC) and the Financial Conduct Authority (FCA) have both taken a cautious approach to crypto, regulation introduced over the course of the year so far has seen spot bitcoin ETFs approved in the US while UK asset managers are now able to offer physically backed products to professional investors.

Despite increased interest from asset managers, however, we are still in the very early phases of adoption of the asset class. According to Syz Capital’s head of liquid alternatives Richard Byworth, less than 4% of the global population have any exposure, while far less understand the “core value” of a “highly portable, and absolutely scarce, asset”.

What should a bitcoin allocation look like?

The positive correlation between equities and bonds in recent years has left investors considering alternatives to further diversify their portfolios.

John Plassard, Mirabaud Group senior investment specialist, says that digital assets can provide this due to their low correlation with traditional assets.

“They offer high growth potential as emerging technologies with significant upside if widely adopted, making them attractive to risk-tolerant investors,” he says. “Cryptocurrencies are also seen by some as a hedge against inflation, due to their limited supply and decentralised nature.

“However, their high volatility poses substantial risks, suggesting they should only comprise a small portion of a portfolio, typically 1% to 5%. Additionally, the evolving regulatory environment and security concerns introduce further risks that investors must consider.”

He believes the adoption of bitcoin and ethereum ETFs has given a “new dimension” to the asset, as the products have made it easier to integrate crypto into a diversified investment strategy, while the increased accessibility also lowers the barriers to entry for investors who were previously reluctant to gain direct exposure due to perceived risks or technical complexity.

According to research from WisdomTree — who are among the asset managers to embrace digital assets — looking at the 11-year period between 31 December 2013 to 30 April 2024, adding a 1% allocation to bitcoin to a 60/40 portfolio (60% MSCI All Country World, 40% Bloomberg Multiverse) would have increased returns by 0.67% per year, while adding only 0.07% of volatility and 0.5% of maximum drawdown.

Pierre Debru, the firm’s head of quantitative research & multi asset solutions, says: “The correlation with equity and fixed income is lower than commonly used assets like commodities, gold, or Reits. The return potential is well above all other often-used asset classes, and the information ratio aligns or betters most active strategies or hedge funds.

“And yet, contrary to retail crypto ownership, institutional investors’ current crypto ownership remains very small, even if it has recently grown thanks to the ‘wake-up call’ that was the approval and launch of spot bitcoin ETFs in the US.”

He likens professional investor sentiment towards crypto to the ‘Pepsi challenge’, in which consumers of Coca-Cola are invited to participate in a blind taste-test of the two brands as part of a marketing stunt. While most people instinctively think they preferred Coca-Cola, a majority chose Pepsi in the challenge.

“In the same way that consumers, while confronted with tangible proof of their preference for Pepsi, stuck with Coca-Cola, institutional investors continue to disregard the new asset class that is crypto, dismissing all the accumulating research on its strong potential as a source of growth and diversification.

“The asset class and bitcoin, in particular, continue to carry the stigma of many disproven and often contradictory misconceptions, such as that it is only useful for criminal activities and, simultaneously, that it has no real-life use case. Those misconceptions are creating a psychological bias for many investors that stops them from recognising what are now hard-to-contradict facts.”

Syz Capital’s Byworth adds that there is huge value in a decentralised and secure network that has proven its antifragility “time and time again” over the last 15 years.

He says the volatility of bitcoin can make it problematic for clients focused on short-term returns and liquidity.

“But for anyone with a time horizon over four years, the asymmetric upside of bitcoin is a cheat code for increasing portfolio performance.”

Key election issue

Following Republican nominee Donald Trump’s speech at the bitcoin 2024 conference in July, cryptocurrency has emerged as a new political battleground in the race to the White House.

Among several pro-crypto pledges, Trump said that, if elected, his government would stop selling the bitcoin it currently holds and would transfer it to a strategic reserve.

The US currently holds 213,000 bitcoin, of which 94,000 were seized in connection with criminal activity.

Trump also vowed to make America the “cryptocurrency capital of the world” by developing its crypto industry, while he also pledged to fire SEC chair Gary Gensler and appoint a crypto-currency adviser to “design transparent regulatory guidance” within his first 100 days.

While the Democrats under Joe Biden have taken a cautious stance on crypto, Plassard argues that Kamala Harris may also warm to the asset.

“Kamala Harris may soon recognise that cryptocurrencies are here to stay and propose developing policies accordingly. She could have staff trained on the subject and work with industry players.

“Secondly, Kamala Harris could commit to working with the cryptocurrency industry, appointing regulators who understand and do not look down on the technology. It should be remembered that cryptocurrencies do not fit easily into existing regulations and require an extremely nuanced approach.

“Last but not least, the US industry is crucial to national security and the dominance of the dollar. The Harris camp cannot deny this.

“A more constructive approach from the Vice-President would be a unique — and opportunistic — opportunity to show that Democrats support technological innovation at a critical time before the elections.”

Plassard adds that, from an electoral perspective, crypto and blockchain technologies have an outsized impact in securing victories ahead of and behind the polls.

“Cryptocurrencies are at the heart of voters’ concerns in key swing states, and a balanced approach to cryptocurrencies that drives innovation while protecting consumers is very positive for policymakers and candidates.

“More than 20% of voters in key states have identified crypto as a major issue in the 2024 election, and it’s critical that the Democratic Party makes a compelling case to crypto voters while ensuring that consumers benefit from thoughtful and appropriate regulation.”

Why specifically bitcoin?

Though digital assets incorporate a wide variety of different cryptocurrencies, bitcoin has received the most attention from investors.

“While we do allocate to managers who have demonstrated success in navigating the opportunities within crypto markets, we maintain a cautious approach towards the broader crypto space,” says Syz Capital’s Byworth.

“In our view, bitcoin stands apart due to its unique characteristics, while many other cryptocurrencies face significant challenges, such as limited utility, centralised structures, and weaker network effects. As a result, we believe that a majority of these assets may struggle to maintain value over time.”

“It often requires some time, and willingness to accept that preconceptions may be wrong for an investor to understand the various aspects that make bitcoin such a unique asset,” he adds.

“Perhaps the shortest path to taking a first step is understanding that there is growing demand for bitcoin, that 19.7 million have already been issued, that 21 million will be the limit of that issuance for eternity, and that we are at 4% adoption by humans, less than 1% adoption by corporates, less than 1% adoption by nation states and 0% adoption by AI… and that it will take another 116 years to issue the remaining 1.3 million bitcoins.

“As Satoshi — bitcoin’s creator — once said: ‘it might be worth getting some, in case it catches on’.”

Please Note:

This article is provided for information only. 

The above article was published by Portfolio Adviser and should not be regarded as individual investment advice on whether to buy, sell or hold any of the assets mentioned.

Please speak to Ethical Offshore Investors or your personal adviser BEFORE you make any investment decision based on the information contained within this article.

Interested in having some Bitcoin exposure…??

Speak with Ethical Offshore Investments to learn how you can get exposure to the asset with minimal costs, through our strictly regulated platforms and Exchange Traded Funds (ETF’s)

Socially Responsible Investing – Ethical Business Standards 

The post Is a bitcoin allocation a diversification ‘cheat code’? first appeared on Ethical Offshore Investments.

The post Is a bitcoin allocation a diversification ‘cheat code’? appeared first on Ethical Offshore Investments.

FundCalibre explains the Core Satellite method of portfolio construction

Juliet Schooling Latter – FundCalibre – 12 January 2023

There are many ways to build an investment portfolio. For example, you can decide to focus on just one area, such as UK equities, or cast the net wider for more global exposure.

Which is the best option will depend on your investment needs, the amount of money you can put away, and your overall attitude to risk.

Confident investors may choose to painstakingly blend together a wide variety of funds covering different asset classes, countries, and sectors. The less gung-ho, meanwhile, are more likely to buy a multi-asset portfolio instead and let the manager make all the important selection calls.

Another popular approach is known as “core and satellite”. Here we explain the concept, highlight the potential benefits, and consider the possible downsides.

What is core and satellite investing?

Let’s start with a basic definition. ‘Core and satellite’ is a portfolio construction technique that aims to help investors strike a balance between growth and risk. It involves having a stable building block at the core, to which you add some riskier but potentially more lucrative investments to the overall portfolio.

For example, core holdings can include index tracking funds that follow particular indices and generate a return in line with these markets. Alternatively, they may be funds that focus on stable, dividend paying large companies that have well established, reliable business models.

The extra so-called satellite holdings will then hopefully add some extra spice, while not being a large enough percentage of the portfolio to cause major damage should they underperform.

What are the benefits of a core and satellite investment approach?

The main benefit of this approach is providing a bedrock of investment performance with the additional benefit of (hopefully) enjoying some extra returns. It also enables investors to have some limited exposure to areas they may find of interest, just without taking too much risk when it comes to overall returns.

The core-satellite approach can embrace a variety of assets, including equities and fixed income, as well as being adjusted to suit an investor’s objectives and attitude to risk.

What are the downsides to a core and satellite investment approach?

As with any investment, there are no guarantees that the satellite positions will actually make you money. In fact, they may act as a drag on performance.

Such funds will also require more analysis, particularly if they cover sectors or industries on which there isn’t a lot of easily accessible information. This research is likely to take a lot of effort. Potential investors will need to weigh up whether they have the time and inclination required.

As with all investment funds, you’ll also need to consider the impact of fees – in terms of both core positions and satellite holdings. These charges will obviously impact the overall level of returns enjoyed.

More niche funds, for example, may come with higher charges. If the satellite fund subsequently delivers bumper returns, then the extra costs won’t be too much of a problem. However, if it fails to meet expectations, then it will have more of an adverse impact.

What type of investor is best suited to a core and satellite approach?

An investor wanting the comfort of having most of their holdings in stable investments – with a small percentage in more exciting assets – could be drawn to this approach.

Of course, what percentage of their overall investment they choose to put into the satellite positions will influence the amount of risk being taken.

The more cautious investors will probably limit the amount held in such extra funds to 5-10%. Those willing to take more risk, meanwhile, may opt to have more in satellites.

Choosing your core-satellite approach

Before you choose funds, you’ll need to decide which assets you want in the overall portfolio. For example, are you after a core of bonds of equities? Do you want passive index trackers or income producing actively managed funds?

Depending on the level of returns generated, the core-satellite mix will need to be regularly rebalanced to ensure it reflects the preferred asset allocation. It’s also worth revisiting your core-satellite approach on a regular basis to ensure it continues to deliver the risk-reward that best meets your needs.

How to choose a core holding

A core holding will generally be a fund that has a decent growth target, with a manager at the helm that has a proven ability to deliver returns. Such portfolios will often invest in stable, established companies that can usually be relied upon to deliver decent returns, irrespective of the economic backdrop.

These funds can generally be held for many years. For example, core funds may have a UK large cap mandate, which means they buy into the largest UK-listed companies.

Alternatively, they may have more of a global reach and the freedom to invest in interesting companies across the globe.

How to pick satellite holdings

Having the opportunity to buy satellite funds means investors can have a bit of fun with their portfolios and put some money into areas that are of interest.

A satellite holding can be pretty much anything. For example, investors may choose funds covering more potentially exciting areas such as the emerging markets. These portfolios will invest in companies within regions that are still developing and aren’t as closely followed as more developed markets.

This means that they have greater potential to deliver better-than-expected returns, which can translate into unexpected improvements in the stock price.

However, the downside is that returns will be more unpredictable. You’ll need to expect a fair degree of turbulence by embracing these areas.

Other examples of satellite funds could be those investing in single countries like India or China, or those investing in single industries, such as the insurance, healthcare, technology, or financial sectors.

Important information:

This article is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. Tax treatment depends of your individual circumstances and may be subject to change in the future. If you are unsure about the suitability of any investment you should seek professional advice. Whilst FundCalibre provides product information, guidance and fund research we cannot know which of these products or funds, if any, are suitable for your particular circumstances and must leave that judgement to you. Before you make any investment decision, make sure you’re comfortable and fully understand the risks.

Please note the above article was first published by Fund Calibre in January 2023 and should not be regarded as individual investment advice on whether to buy, sell or hold any of the funds or strategies mentioned. Please speak to Ethical Offshore Investors or your personal adviser BEFORE you make any investment decision based on the information contained within this article.

As we aim not to use commission paying funds, we will access the lowest charging version of the managed fund that is available on the relevant platform…… resulting in more of the investment growth staying in your pocket.

Socially Responsible Investing – Ethical Business Standards 

The post Core and satellite investing explained…. first appeared on Ethical Offshore Investments.

The post Core and satellite investing explained…. appeared first on Ethical Offshore Investments.

9 August 2024

The Magnificent Seven have been knocked off their perch but do their less frothy valuations make them a more attractive prospect?…

By Emma Wallis,

News editor, Trustnet

The savage sell-off in technology stocks has hit the Magnificent Seven hard but now they are no longer priced for perfection, investors may be wondering whether this is a good time to pile back in.

Chris Beauchamp, chief market analyst at IG Group, believes that current market volatility is “a growth scare” and “probably not the beginning of something more dramatic”.

A reset was arguably needed, he continued, and now share prices are more attractive. “If you wanted to be in tech, now is a better time.”

In mid-July, the Magnificent Seven as a group were trading on 52x earnings – a 15% premium to their five-year average. By 6 August, valuations had fallen to a 3% discount versus their five-year average price-to-earnings (P/E) multiples, as the table below shows.

Magnificent Seven P/E ratios vs 5yr average

Sources: IG Group, Reuters Eikon

Amazon’s P/E ratio has slumped to almost half (47.5%) of its five-year average, while Nvidia’s P/E of 58.5x represents a 24% discount compared to its five-year average of 77x.

After months of gravity-defying gains, Nvidia’s share price slid from $134.91 on 10 July to $98.91 on 7 August – a $36 or 27% fall.

If he had told an investor two months ago that they would soon be able to buy Nvidia at today’s prices, they would have “bitten my arm off”, Beauchamp said.

Share price performance of Nvidia over 1 month

Source: Google Finance

Looking at the US stock market more broadly, Beauchamp thinks the recent falls should not cause panic. The less liquid summer months are usually a tricky period for markets and volatility is part and parcel of investing.

The S&P 500 has retreated to its May 2024 levels, wiping out a couple of months of gains which is “not cataclysmic” and perhaps volatility is “the price you pay” for the exponential returns earlier this year, he said. “We’ve been riding so far ahead of an average year, so there had to be a reckoning.”

Performance of S&P 500 over 6 months in dollar terms

Source: FE Analytics

Beauchamp thinks the US equity market to end the year above its current level but “we should expect the ride to be choppy from here.”

Judging by their trading activity, IG Group’s clients were net short US equities at the market’s mid-July peak but have been buying during the sell-off, he added.

IG Group clients’ exposure to the S&P 500

Source: IG Group

For Simon Webber, head of global equities at Schroders, the correction also came as no surprise. “We have been anticipating increased equity market volatility given the disconnect between buoyant consensus expectations, mixed economic data and an apparent mispricing of risk.”

He agreed with Beauchamp that equities have become a more attractive prospect following the sell-off. “The bottom line is that equity markets were vulnerable to a correction but company fundamentals are decent and heightened volatility is an opportunity for repositioning where dislocations occur,” he said.

“A soft landing for the economy remains our central scenario and we still expect equity markets to be well-supported in the medium term by modest growth in corporate earnings.”

Conversely, Franklin Templeton’s chief market strategist Stephen Dover warned that “the market moves may not yet have run their course”.

“Opportunity will eventually present itself, but we think it is too early for all but the most long-term investors to seek value,” he cautioned.

Timing the market is notoriously difficult, especially as the best days often come hot on the heels of the worst. As such, most stick with the tried and tested mantras of diversification and drip feeding, even – and perhaps especially – during volatile periods.

Rob Morgan, chief investment analyst at Charles Stanley, said: “At these times it is usually best to keep calm, stick to your investing plan and keep focused on the fact that sharp short-term moves should pale into insignificance over multiple years and decades. It’s rather like avoiding seasickness by keeping your eyes on the horizon rather than the rolling waves below.”

For anyone with cash on the sidelines who is thinking about investing but might be nervous about current market conditions, making regular contributions, perhaps at monthly intervals, is “one way to counter market ups and downs, as well as take some of the stress out of investing”, he said.

“The advantage of dripping money into the market is that you don’t need to worry about market timing. The strategy can even turn market volatility to your advantage as you average down if prices fall further.”

Please Note:

This article is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. Tax treatment depends of your individual circumstances and may be subject to change in the future. If you are unsure about the suitability of any investment you should seek professional advice. 

Please note the above article was first published by Trust Net and should not be regarded as individual investment advice on whether to buy, sell or hold any of the investments mentioned. Please speak to Ethical Offshore Investors or your personal adviser BEFORE you make any investment decision based on the information contained within this article.

As we aim not to use commission paying funds (where applicable), we will access the lowest charging version of the managed fund that is available on the relevant platform…… resulting in more of the investment growth staying in your pocket.

Speak with Ethical Offshore Investments to learn how you can save on your investment costs.

Socially Responsible Investing – Ethical Business Standards 

The post The charts showing the true scale of the Magnificent Seven’s fall first appeared on Ethical Offshore Investments.

The post The charts showing the true scale of the Magnificent Seven’s fall appeared first on Ethical Offshore Investments.

Investment Charges – How much is it really costing you & your future.

Our solution keeps more of the investment growth in your pockets.

At Ethical Offshore Investments, we have been strong advocates of helping clients reduce their ongoing costs. And we believe that our Global Index Investing option will not only provide clients access to investing in the world’s greatest companies, but doing so at a fraction of the costs.

Before we show you how low the total charges are if you become a client of Ethical Offshore, below is an illustration of why reducing your costs is so important.   

Don’t let high costs eat away your returns

There is the common saying that you have to spend money to make money…. But the money you spend to invest has a big effect on what you have left in your own pocket.

Points to know

• All investments have costs

• Money you pay for costs compounds (rises exponentially) over time

• Because some investments with higher costs have to overcome these expenses, their performance tends to suffer vs. lower-cost investments.

Understand what you are paying

At Ethical Offshore Investments, we have always strongly suggested that you ask your adviser or investment consultant, for a breakdown of all of the costs associated with holding an investment portfolio (don’t stop there….. ask your financial consultant what service or benefit is being provided for that specific fee / charge).

Every investment has a cost, even if you don’t realise that you are paying it

There are many different kinds of costs, but they all have one thing in common: if the money is going somewhere else, it is not going to you.

Why do costs matter  

Investment costs might not seem like a big deal, but they add up, compounding along with your investment returns. In other words, you don’t just lose the tiny amounts of fees you pay – you also lose the growth that money might have had for years into the future.

For example: you invest $ 100,000 and the underlying investments generated a gross 6% each year for the next 25 years and had NO costs or fees, you would end up with an investment value of $ 429,190.

If on the other hand you had paid a combined 2% a year in investment costs & charges, after 25 years, you would have an investment value of only $ 266,580

That’s correct: the 2% of total charges you paid every year would reduce your investment value by nearly 38%……. that 2% doesn’t sound so small anymore, does it..??

Costs can eat away at your investments

The above example & image is provided by Vanguard Ltd

What can you do to control your costs..??

Because all investments have some form of costs, it might seem like a waste of time to worry about them. Or maybe you assume that a high cost means that you are getting higher quality investments & better total returns.

Unfortunately, nothing could be further from the truth. Research on mutual / managed funds has shown that in most cases that the higher-cost funds generally underperform lower-cost funds. That is because the fund managers charging these higher costs may struggle to add enough value to overcome the additional expense (in addition to this, they may have to take a slightly higher risk, more volatile approach to achieve the higher returns).

A Diversified Global Exposure for less than 1%pa

Actually, our global equity allocation total costs is 0.80%pa – that includes the fund manager charges, the offshore holding platform charges and the costs for having your dedicated, Private Manager at Ethical Offshore Investments who will continue to provide guidance and is your direct contact if you have any queries or concerns.

For clients that would like to invest in a dedicated US equity or a UK equity portfolio, the total cost is even lower at 0.75%pa

This is done through a selection of high quality Exchange Traded Funds (ETF’s) from the likes of Legal & General (L&G), iShares (Blackrock) and Vanguard.

Our Global Allocation will result in exposure to over 1,600 of the worlds biggest and most successful companies, which includes Apple, Microsoft, Amazon, Nvidia, Alphabet (Google) and Tesla. This can be invested in a range of different currencies.

Clients can also choose to have dedicated Ethical and Socially Responsible Investment index ETF which will only include the highest quality, screened ESG companies….. and all still for less than a total all up cost of 1%pa. 

Finally, we can also offer a risk adjusted, diversified approach (using the expertise of Vanguard Ltd) where you can select a diversified asset portfolio of Bonds and Equities in-line with your preferred risk tolerance and investment objectives.

• Vanguard LifeStrategy 100% Equity
• Vanguard LifeStrategy 80% Equity (20% Fixed Interest / bonds)
• Vanguard LifeStrategy 60% Equity (40% Fixed Interest / bonds)
• Vanguard LifeStrategy 40% Equity (60% Fixed Interest / bonds)
• Vanguard LifeStrategy 20% Equity (80% Fixed Interest / bonds)

The above funds are invested across a range of 10 different Vanguard index funds or ETF’s, which will result in portfolios having allocations across the different geographical locations, economies (both developed and emerging) and business sectors.

The total maximum cost with utilising the Vanguard LifeStrategy range of funds, along with the platform and client servicing costs would be 0.92%pa  

What is the benefit to you…… the investor.

Well let’s go back to the previously mentioned $ 100,000 being invested, but instead of 2%pa ongoing charges, it is the 0.80%pa of total charges being deducted (& don’t forget, you still will have your own dedicated Ethical Offshore consultant to assist you with queries & guidance).

That cost saving would result in a portfolio value after 25 years of $ 355,140…….. that is $ 88,560 more in YOUR POCKET…!!!

For clients that have a personal offshore pension (QROPS or a UK SIPP), the investment cost savings are even more important. In addition to the platform, fund management and client management costs, Pension portfolios are also subject to Trustee fees as well as their own administration costs. While we will always try and use the more cost effective pension schemes and trustees, there will unfortunately continue to be trustee costs associated with offshore pensions….. so the more you can save on the portfolio costs, this will help negate the additional trustee charges.  

At Ethical Offshore Investments, we are determined to show how clients can invest in a global portfolio of quality companies, but ethically through low cost, flexible investment structures. 

If you would like to learn more on how you can invest in a quality global portfolio with minimal costs, please click on the More Information button below and our senior consultant will contact you personally.

Ethical Offshore Investments also provides guidance on portfolios that have an ESG (Environmental & Social Governance) bias and an SRI (Socially Responsible Investing) focus. By avoiding high charging, commission paying funds, this results in lower portfolio costs, so more of the growth staying in the pockets of our clients.

If you would like to get more information on the Sustainable Ethical Allocation portfolios, or enquire on the vast array of Sustainable and Ethical style funds available, please click on More Information.

The post Global Exposure for a Fraction of the Cost….. first appeared on Ethical Offshore Investments.

The post Global Exposure for a Fraction of the Cost….. appeared first on Ethical Offshore Investments.

7 August 2024

The first seven months of 2024 have seen robust gains in the stock market, with global equities up some 13%* off the back of positive economic indicators and the continued anticipation of interest rates cuts by the US Federal Reserve.

Mega-cap technology stocks, such as Nvidia, have continued to make strong returns, while traditionally defensive stocks like utilities and gold outperformed. It’s not been completely smooth sailing as small-caps across the globe have lagged, while interest rate predictions have continually been pushed back due to the resiliency in markets – something which has kept investors on their toes.

But crucially, volatility has remained low. The VIX index is a calculation designed to produce a measure of constant, 30-day expected volatility of the US stock market. A number greater than 30 is considered to signal heightened volatility from increased uncertainty, risk and investor fear. VIX values below 20 generally correspond to more stable, less stressful periods in the markets. For much of 2024, it has been below 20 (it has had an average closing price of 14)**.

But the recent sell-off has seen this change markedly. The VIX reached its highest level on Monday (August 5) since the height of Covid in March 2020 as global equities fell sharply**. It briefly broke above 65 on Monday morning, up from about 23 on Friday and roughly 17 a week earlier – a reflection of the volatility in markets. It has since dropped back down to 23 as of writing (August 7)**.

What caused this latest bout of volatility in global markets?

Disappointing jobs data from the US at the back end of last week acted as a catalyst for the sell-off, with investors fearing that the Federal Reserve made a mistake by keeping interest rates unchanged, potentially pushing the world’s largest economy towards recession.

Stock markets were already worried about high borrowing costs and unsettled by signs that a long-running rally in share prices, fuelled in part by optimism over artificial intelligence, might be running out of steam.

The start of this week saw most global markets fall sharply. Japan’s market plummeted to its biggest fall by points in history on Monday***, before subsequently recording a record rise the following day (August 6). The UK, Europe and Asia also saw markets tumble amid the uncertainty.

Most markets have since stabilised and begun to recoup some of those losses, but there remains significant uncertainty about the US economy, with analysts now expecting the US Federal Reserve to cut interest rates sooner to stave off the threat of recession.

Regardless of whether we are out of the woods or not, volatility can be an unnerving time for investors, and can lead to knee-jerk emotional reactions we can often regret. Investing based on emotion really is one of the biggest mistakes anyone can make, particularly in uncertain times.

With recession still a possibility and geopolitical uncertainty rife, more volatility may be on the way – with this in mind here are a few ways to handle these challenging periods.

1. Focus on long-term goals

Short-term volatility doesn’t always affect the long-term growth of your investment. So, it may help to focus on those long-term goals during volatile periods.

It sounds silly to say, but recessions do not last forever. According to NBER data, the average US recession lasted about 17 months in the period from 1854 to 2020. In the post-World War II period, from 1945 to 2020, the average recession lasted about 10 months. Riding these short-term fluctuations could bring positive returns when you look further ahead^.

2. Time in the market – not timing the market

It is important to realise you are only making losses if you crystallise them. It can help to think of any falls in value as ‘paper losses’. Staying invested gives you more time to recover and grow those assets.

Time in the market – not timing the market – is essential for those who want to maximise their long-term goals.

Over 35 years (1986-2021), mistimed decisions on an investment of just £1,000 could have cost you almost £33,000-worth of returns. Research from Schroders examined the performance of three indices that reflect the performance of the UK stock market – the FTSE 100, the FTSE 250 and the FTSE All-Share^^.

If, at the beginning of 1986, you had invested £1,000 in the FTSE 250 and left the investment alone for the next 35 years, it might have been worth £43,595 by January 2021^^. However, the outcome would have been very different if you had tried to time your entry in and out of the market.

During the same period, if you missed out on the FTSE250 index’s 30 best days, the same investment might now be worth £10,627, or £32,968 less^^, not adjusted for the effect of charges or inflation.

Between 1986 and 2021 your original £1,000 investment in the FTSE 250 could have made:

• 11.4% per year if you stayed invested the whole time
• 9.5% per year if you missed the 10 best days
• 8.1% per year if you missed the 20 best days
• 7% per year if you missed the 30 best days

3. Balance and diversification

Investment portfolio diversification is a tried-and-true strategy that aims to strike the right balance between risk and reward. It sounds simple in practice – but is something which can easily be forgotten when markets are doing extremely well or struggling.

By combining different types of investments, you could potentially lower your overall risk of loss. That’s because a lower return in one type of asset, like equities, may typically be compensated by a gain in another type, such as bonds. There are also plenty of multi-asset funds to consider which invest in the likes of property, commodities, infrastructure and more.

Funds to consider

With the direction of markets looking distinctly uncertain – here are a few funds to consider for various approaches to risk and return.

Capital preservation

There are a couple of routes to take here. The first would be a fund with lower volatility. A good example would be JOHCM Global Opportunities. Manager Ben Leyland has a strong bias towards larger and medium-sized multi-national businesses in his portfolio, which typically holds 30-40 stocks. The philosophy of this fund is ‘heads we win, tails we don’t lose too much’, and if markets do struggle, the fund’s strict valuation process will help in this regard. The fund also can, and will, hold large cash positions if valuations are unattractive.

Others to consider include absolute return vehicles like WS Ruffer Diversified Return, which is already defensively positioned on markets and holds a number of uncorrelated assets.

Going global

For full exposure to the market, investors could look to global funds with a focus on pricing power (the ability to pass on pressure to their end customer). These quality businesses are usually able to grow in periods of uncertainty.

Funds to consider here include the IFSL Evenlode Global Income fund. The managers take a long-term approach, focusing on quality, cash-generative businesses. They define quality companies as those with three characteristics: asset-light business models; high barriers to entry which can’t be disrupted easily; and finally, their customers’ decision to buy their product or service should not be determined completely by price. An alternative would be the Murray International Trust, which is an international portfolio of global equities while also having the flexibility to invest in fixed income. The trust is also trading on an attractive discount of 9.2%^^^.

Diversification – multi-asset funds

Those looking for a multi-asset solution might consider the Orbis Global Balanced fund, which scours the world for the best investment opportunities across a number of asset classes including equities, fixed income and commodities.

An alternative would be the M&G Episode Income fund. The name ‘episode’ refers to those periods of time when investors’ emotions cause them to act irrationally and thereby open up opportunities for those who can put their emotions aside. Manager Steven Andrew uses behavioural finance to find pockets of value and invest against the herd, rather than following it.

*Source: FE Analytics, total returns in pounds sterling, from 1 January to 31 July 2024

**Source: Macrotrends, VIX Volatility Index

***Source: BBC, 5 August 2024

^Source: Forbes Advisor, 15 August 2023

^^Source: Schroders, 2 June 2021

^^^Source: AIC, 5 August 2024

Please Note:

This article was first published by Fund Calibre and is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. 

Please speak to Ethical Offshore Investors or your personal adviser BEFORE you make any investment decision based on the information contained within this article.

At Ethical Offshore Investments, we can access the funds mentioned in this article on the various offshore investment platforms we offer. We do NOT CHARGE any additional entry and/or exit fees to purchase these funds for our clients.

As we aim not to use commission paying funds, we will access the lowest charging version of the managed fund that is available on the relevant platform…… resulting in more of the investment growth staying in your pocket.

Speak with Ethical Offshore Investments to learn how you can save on your investments costs

Socially Responsible Investing – Ethical Business Standards 

The post Recession, correction, rally – an investor guide to market volatility first appeared on Ethical Offshore Investments.

The post Recession, correction, rally – an investor guide to market volatility appeared first on Ethical Offshore Investments.

6 August 2024

After markets dove on US recession worries, Trustnet finds out where the worst losses were borne yesterday…

By Gary Jackson,

Head of editorial, FE Fundinfo

Stocks plummeted yesterday after a crash in Japanese equities spread to global markets, leaving areas such as Japan, emerging markets, the UK and tech stocks nursing heavy losses.

Market commentators attributed the sell-off to worries about a US recession, rising Japanese interest rates and the stronger yen, and lofty tech stock valuations. Although markets have rebounded today, experts warn that volatility might continue to flare up for some time to come.

Stephen Innes, managing partner at SPI Asset Management, said: “This wasn’t just any market dip; Japan witnessed its second-largest stock plummet ever, sending shockwaves through global markets and whipping up a storm of volatility usually reserved for catastrophic events.

“Having navigated numerous market downturns, I can say that insights become clearer post-crisis. When you identify the cause and effect, the worst is often over and the cleanup begins. Yet, each meltdown can still shock those who’ve never weathered a major downturn.

“A defining trait of these self-perpetuating market crises is the vicious cycle where sell-offs amplify volatility, which in turn cripples the market’s risk management abilities, feeding back into more declines. That’s precisely our current scenario – a loop of rising volatility and shrinking risk capacity that challenges even the most seasoned traders. Just look at yesterday’s VIX surge; the fear gauge truly takes no prisoners.”

The VIX over 1yr

The above chart shows how the VIX, which measures the implied volatility in the S&P 500, has been climbing over recent weeks but spiked yesterday as markets routed. At one point, it reached 42 points – its highest since markets tanked at the start of the 2020 pandemic.

Performance on 5 Aug 2024 by asset class

How did this play out among asset classes? Global equities were the focus of the selling with the MSCI AC World index dropping 3.4% over Monday’s session. With investors worried about the health of the economy, it was natural that they would pull back from risk assets.

Conversely, investors moved into government bonds yesterday – the classic safe haven when stock markets sell off and beneficiaries if the US cuts rates to deal with recessionary risks.

Performance on 5 Aug 2024 by geography

Japan fell hardest of the major regions, as yesterday’s headlines made clear, with the Nikkei 225 plunging 12.4% in its worst fall since 1987. The unwinding of the Japanese carry trade, whereby investors borrow in yen to reinvest in higher-yielding assets, impacted global liquidity and caused the sell-off to spread first to Asian markets then globally.

Emerging markets tended come off worse than developed markets, although Brazil and China – which have been sold down heavily recently – escaped with muted losses. The FTSE All Share lost 2.2%.

Performance on 5 Aug 2024 by industry

Tech stocks were another area that bore the brunt of yesterday’s selling, reflecting the meteoric rise in recent years and more recent concerns over the profitability of the artificial intelligence (AI) revolution.

All of the ‘Magnificent Seven’ – the group of AI-linked stocks that made specular gains in 2023 – were down in the 5 August sell-off. Nvidia dropped furthest, falling 6.7%, while Apple lost 4.8% and Alphabet shed 4.6%.

Performance on 5 Aug 2024 by investment factor

Momentum was the investment factor that sold off the most. Momentum investing has led the market for some time but investors have been drifting away from these stocks since early July; the style is known for staging dramatic reversals when strong runs come to an end.

Small-cap stocks were also hit hard. Investors had been rotating into small-caps in recent weeks but sold them on yesterday’s recession worries as they tend to more cyclical (tied to the strength of the economy) than large-caps.

Performance on 5 Aug 2024 by Investment Association fund sector

It should be little surprise that the IA Japan sector felt the most pain in the sell-off, with the average fund down 5.7% – someway off the 12.4% drop in the Nikkei but painful nonetheless.

What might be more surprising is the fact that the three UK equity sectors – IA UK Smaller Companies, IA UK All Companies and IA UK Equity Income – were hit with a heavier average loss than the IA Technology and Technology Innovations sector.

In all, 84.4% of the funds in the Investment Association universe made a loss on 5 August. There were 20 sectors were every fund made a loss, including IA Japan, IA UK All Companies, IA UK Equity Income, IA UK Smaller Companies, IA Technology & Technology Innovation, IA North America, IA North American Smaller Companies and IA Global.

The 20 worst-performing funds all focusing on Japanese equities, with the biggest faller being Amundi MSCI Japan. Indeed, most of the 50 funds with the biggest losses are Japanese funds, with the exception of a few Korean and Taiwanese equity funds and one tech fund.

Please Note:

This article is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. Tax treatment depends of your individual circumstances and may be subject to change in the future. If you are unsure about the suitability of any investment you should seek professional advice. 

Please note the above article was first published by Trust Net and should not be regarded as individual investment advice on whether to buy, sell or hold any of the investments mentioned. Please speak to Ethical Offshore Investors or your personal adviser BEFORE you make any investment decision based on the information contained within this article.

As we aim not to use commission paying funds (where applicable), we will access the lowest charging version of the managed fund that is available on the relevant platform…… resulting in more of the investment growth staying in your pocket.

Speak with Ethical Offshore Investments to learn how you can save on your investment costs.

Socially Responsible Investing – Ethical Business Standards 

The post A quick-fire look at where the 5 August sell-off hit hardest first appeared on Ethical Offshore Investments.

The post A quick-fire look at where the 5 August sell-off hit hardest appeared first on Ethical Offshore Investments.

6 August 2024

Market volatility pits the bulls against the bears…….

By Emma Wallis,

News editor, Trustnet

Global equity markets are plummeting after ratcheting up strong gains this year, which presents a dilemma for long-term investors.

Should they take profits and position their portfolios defensively to guard against further falls? Or should they utilise the current volatility to buy on the dips? The third option is to hold tight, ride out the volatility and focus on the long term.

Several factors are contributing to the market sell off, from weak US jobs data and tech companies delivering slightly disappointing results, to the strengthening yen leading to an unwinding of the carry trade. Yet sky-high valuations are also to blame for the correction, said Chris Metcalfe, chief investment officer of IBOSS, given that some share prices had reached “unreasonable levels”.

Jean-Louis Nakamura, head of conviction equities at Vontobel, agreed that the current repricing is “legitimate”.

“Earnings growth forecasts were probably excessive for 2025 and later and had to adapt from a more realistic baseline,” he said. The correction was “not completely surprising”, therefore, but it has “proved more brutal and concentrated in times than expected”.

While some investment managers see the sell-off as a healthy correction, other more bearish market participants will interpret it as “the start of something altogether nastier”, said AJ Bell investment director Russ Mould.

“Bears will say that someone, somewhere has lost $2.3trn on the Magnificent Seven since May, while the Nasdaq is just 5% above where it was in November 2021, before the AI hype machine moved into top gear.”

Adding to the bear case, legendary investor Warren Buffett has sold 50% of his stake in Apple.

Below, experts reveal whether they are bullish or bearish.

The bulls are treating the sell-off as a buying opportunity

Lindsay James, investment strategist at Quilter Investors, said the economic backdrop remains “reasonably solid” so she views the current period of “outsized volatility” as a buying opportunity for long-term investors.

“Current market moves in the US and Europe are well within the bounds of normal market volatility,” she pointed out.

The US stock market, meanwhile, looks worse than it actually is due to its concentration, with large-cap tech leading the major indices downwards. “The MSCI USA Equal Weighted Index remained flat in sterling terms for the month up to 2 August. In contrast, the MSCI USA Index declined by 3.9% over the same period. This indicates that recent declines have been more concentrated among the Magnificent Seven stocks, as other companies, with more reasonable valuations and less ambitious earnings expectations, have been less affected,” James explained.

Euphoria over the Magnificent Seven is being “rightly tested”, she added, hopefully leading to a broadening of market returns.

“Whilst recent data has done little to calm investors nerves, we are at point in the economic cycle where central banks have maximum firepower to stimulate growth and are entering a phase where we would expect this to be gradually deployed to good effect,” she concluded.

Joe Bauernfreund, portfolio manager for AVI Global Trust, also sees the sell-off as a buying opportunity. “History tells us that as uncomfortable as such environments are whilst they play out, they also present highly attractive opportunities at prices few imagined possible just a matter of days ago. As such, whilst cognisant that we do not know precisely what is around the corner, we proceed forward slowly, with a balanced mix of caution and conviction,” he said.

Furthermore, Nakamura warned that bearish investors who move out of equities now risk missing a potential bounce. If the prices of risky assets fall much further, the US Federal Reserve might intervene with an emergency cut, he said. Should that happen, “the rebound in stocks may then be as brutal as the recent sell-off, with sectors and markets the most supported by secular drivers and/or interest rates sensitivity (tech, AI, US, Taiwan, India) progressing the fastest”.

The bears are playing it safe

On the other hand, Metcalfe thinks that investors should consider increasing their exposure to fixed income. “Even before the recent sell-off in the US and the dramatic collapses in Japan and other parts of Asia, data suggested that higher-yielding assets were undervalued compared to equities,” he said.

“If market volatility continues, we might see a shift back into bonds, as they are currently acting as a safe haven. This trend is likely to persist if equities remain unstable, providing a more secure option for investors during these turbulent times.”

Other parts of the market have held up comparatively well, namely gold, value stocks, defensive sectors and markets driven by their own monetary cycle, such as China.

Metcalfe warned, however, that “historically, in times of crisis, investors end up selling what they can rather than what they want to, which might eventually affect gold as well”.

Please Note:

This article is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. Tax treatment depends of your individual circumstances and may be subject to change in the future. If you are unsure about the suitability of any investment you should seek professional advice. 

Please note the above article was first published by Trust Net and should not be regarded as individual investment advice on whether to buy, sell or hold any of the investments mentioned. Please speak to Ethical Offshore Investors or your personal adviser BEFORE you make any investment decision based on the information contained within this article.

As we aim not to use commission paying funds (where applicable), we will access the lowest charging version of the managed fund that is available on the relevant platform…… resulting in more of the investment growth staying in your pocket.

Speak with Ethical Offshore Investments to learn how you can save on your investment costs.

Socially Responsible Investing – Ethical Business Standards 

The post Is the market sell-off a buying opportunity? first appeared on Ethical Offshore Investments.

The post Is the market sell-off a buying opportunity? appeared first on Ethical Offshore Investments.

6 August 2024

With a rout taking place in global equities, Trustnet finds out what the experts think is behind it.

By Gary Jackson,

Head of editorial, FE fundinfo

Stocks markets enjoyed a strong opening half to 2024 but have retreated in recent weeks and were hit by a major rout yesterday, so what is driving this sudden nervousness?

Japanese equities plunged more 12% as Asian equities fell overnight on Monday, leading US and European markets to head downwards when their sessions opened. Although the drop in Japanese stocks was eye-catching, equities have been drifting down since 10 July as shown in the chart below (which doesn’t capture yesterday’s moves).

Many headlines have pointed to investors worrying about a looming US recession as the main cause of the sell-off, although not everyone is convinced by this narrative.

Performance of asset classes between 10 Jul and 2 Aug 2024

Source: FE Analytics. Total return in sterling.

Russ Mould, investment director at AJ Bell, said there are three main reasons why “a market storm is emerging from a seemingly cloudless summer sky” – with worries about a US recession being one of them.

“First, equity, and to some degree bond, markets have priced in the ‘perfect’ scenario of a cooling in inflation, a soft landing in Western economies (and thus corporate earnings) and rate cuts from the Fed, Bank of England and others,” he said.

“Any deviation from that path could therefore lead to trouble – either stickier inflation, economic and earnings disappointment or slower-than-expected rate cuts.”

On Friday, the non-farm payrolls data revealed that US unemployment was rising while, earlier in the week, the purchasing managers’ index data showed US manufacturing is contracting.

The latest Bank of America Global Fund Manager Survey found 68% of investors think the global economy is heading for a ‘soft landing’ – where activity slows but recession is avoided. This suggests that any concerns about an economic contraction would go against consensus and potentially spark significant portfolio shifts. Just 11% of fund managers were expecting a recessionary ‘hard landing’ at the start of July, Bank of America found.

Mould explained: “A US slowdown is not priced in at all – if anything markets were more concerned about it overheating earlier this year – and those with long memories will remember how frantic rate cuts in 2000-02 and 2007-08 failed to stave off a bear market in stocks, because the economy tipped over and corporate earnings fell far faster than the headline cost of money.”

Most fund managers expected ‘soft landing’ in Jul 2024

Source: Bank of America Global Fund Manager Survey

Mould pointed to the strength of the Japanese yen as another contributing factor to the sell-off. The yen carry trade – shorting a weakening yen, borrowing against it and using that money to go long non-Japanese risk assets – has been a major source of global liquidity but this trade is being unwound as the currency strengthens after the Bank of Japan hiked interest rates.

The third reason highlighted by the AJ Bell investment director is the fact that US equities have rallied much faster than GDP growth, corporate earnings or cash flows over recent years and are starting to look expensive – and potentially ripe for a correction.

Of course, there are differences of opinion. George Lagarias, chief economist at Forvis Mazars, said he is not convinced that worries about a US recession are driving the sell-off. He pointed out that history suggests bad macroeconomic data leads to higher rate cut expectations, which tends to fuel a market rally rather than a pullback.

“The equity markets have corrected initially on the same limited tech-focused basis they had rallied in the past few months and then more broadly, due to technical factors and during a period which traditionally features low trading activity, at least from humans,” he added.

“While they may well continue to correct in the next few days or weeks, we don’t see a fundamental case for a broader equity re-rating.”

Lagarias noted that the market decline since 10 July has mainly been focused on the so-called Magnificent Seven, especially Nvidia, Microsoft and Amazon.

Performance of MSCI ACWI sectors since 10 Jul 2024

Source: FE Analytics. Total return in sterling

Nvidia – which has been the darling of the market for some time thanks to supplying chips critical for the artificial intelligence revolution – is down more 20% since 10 July. However, it is still double its value at 2023 year-end and trading 40x its forward earnings, despite this fall, Lagarias said.

“While US large-caps are down 5%, ex-the Magnificent Seven they are only down 0.75%. Notably, the FTSE 100 hasn’t moved significantly,” he added.

“As of Monday 5 August, we are seeing evidence of spillover in the wider market (the Nikkei down 12.5%, US futures down 3%). However, this is precisely the point where we’d expect the Fed to affirm it’s ‘Put’, one way or another.”

The Fed Put referred to is the belief held by investors that the Federal Reserve will intervene to support markets if their prices drop to a certain level.

Michael Langham, economist at abrdn, is another who thinks concerns about a US recession might be overdone.

“We think the macro backdrop isn’t as terminal as markets are indicating. Strong labour supply growth in recent years has helped to cool the labour market and layoffs remain low in the US. In Asia, the upturn in tech exports and still buoyant domestic demand shouldn’t set alarm bells ringing yet for policymakers,” he said.

“We expect the Fed to begin easing in September, which should provide the runway for cutting cycles in parts of emerging Asia, and likely further stimulus in China could also have some positive spillovers, softening any slowdown in the region.”

On what to do next, investors are equally split.

Lindsay James, investment strategist at Quilter Investors, sees opportunities, noting that market moves in the US and Europe seem to be “well within” the range of normal volatility while companies have just posted a “generally positive” second quarter earnings season.

“Ultimately this period of outsized volatility against what remains a reasonably solid economic backdrop should present a buying opportunity for long-term investors,” she said.

But Peter Berezin, chief global strategist at BCA Research, was much more bearish, saying investors should be underweight stocks and overweight government bonds. In equity portfolios, investors should be tilted towards defensive sectors such as consumer staples, utilities and healthcare, he argued.

Berezin reiterated a warning he put out last month: “Don’t buy the dip. The equity bull market is over. The US will enter a recession in late 2024 or in early 2025.”

Please Note:

This article is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. Tax treatment depends of your individual circumstances and may be subject to change in the future. If you are unsure about the suitability of any investment you should seek professional advice. 

Please note the above article was first published by Trust Net and should not be regarded as individual investment advice on whether to buy, sell or hold any of the investments mentioned. Please speak to Ethical Offshore Investors or your personal adviser BEFORE you make any investment decision based on the information contained within this article.

As we aim not to use commission paying funds (where applicable), we will access the lowest charging version of the managed fund that is available on the relevant platform…… resulting in more of the investment growth staying in your pocket.

Speak with Ethical Offshore Investments to learn how you can save on your investment costs.

Socially Responsible Investing – Ethical Business Standards 

The post What’s causing stocks to sell off..?? first appeared on Ethical Offshore Investments.

The post What’s causing stocks to sell off..?? appeared first on Ethical Offshore Investments.

Has the Fed made a mistake?’: Weak US jobs data sparks recession concerns

S&P 500 fell 1.84% on Friday following the report, while Japan’s Nikkei 225 dropped over 12% on Monday

Jerome Powell. Copyright: Flickr/Federal Reserve       5 AUGUST 2024

Christian Mayes

Weaker than anticipated US jobs data has sparked concerns over the likelihood of a recession.

The S&P 500 fell 1.84% on Friday following the report, while on Monday, circuit breakers were triggered in Japan to curb panic-selling as the Nikkei 225 ended trading down 12.4%.

The report, released on Friday, showed US job creation had slowed to 114,000 in July. Meanwhile, the unemployment rate also rose to 4.25%, up 90 basis points from a cycle-low in April 2023.

Friday’s data led to the triggering of the ‘Sahm rule’ – an indicator which hints at a recession when the three-month moving average of the national unemployment rate exceeds the lowest three-month moving average rate from the previous year by 50bps or more.

It follows the Federal Reserve’s decision to hold the Fed Funds Rate at 5.25% to 5.5% last week.

Seema Shah, chief global strategist at Principal Asset Management, questioned whether the data may leave the Fed regretting it had not cut rates at last Wednesday’s meeting.

She said: “Oh dear, has the Fed made a policy mistake? The labour market’s slowdown is now materialising with more clarity. Job gains have dropped below the 150,000 threshold that would be considered consistent with a solid economy.

“The rise in the participation rate is certainly good news and dulls the recession signal from the newly triggered Sahm Rule. Even so, a September rate cut is in the bag and the Fed will be hoping that they haven’t, once again, been too slow to act.”

Despite the recessionary signals, Tiffany Wilding, PIMCO managing director and economist, adds that there are mitigating factors not reflected on paper.

“While the headline numbers were weaker than expected, and certainty reflect an economy that is slowing, there were some caveats in the details, which continue to paint a picture of a slowing but not yet crashing economy.

“First, Hurricane Beryl hit Texas during the survey week, with 436,000 workers unable to work due to bad weather, and an additional 1,079,000 forced to work part time.

“Second, some inability of the seasonal factors to fully adjust for seasonal hiring also likely contributed to the noise. Third, the increase in the unemployment rate has occurred without a notable fall in the level of employment. Rather labour supply has expanded.”

With inflation easing to 3% in June, just ahead of the Fed’s target of 2%, Charles Schwab UK managing director Richard Flynn said the jobs report shows that the balance of risks are changing.

He said: “The recent loosening in the jobs market has been a positive indicator for inflation prospects, as too much activity can be a precursor to demand-side pressure on prices. Since inflation figures have come into shooting distance of the Fed’s target, however, the balance of risks has begun to change.

“Today’s figures may stir anxieties that central bankers haven’t moved fast enough to cut rates, nudging the jobs market into a downward spiral. The Fed’s lengthy hiking campaign is so close to achieving its objective for inflation – let’s hope that success on that front doesn’t cause the labour market to tumble.”

Please Note:

This article is provided for information only. 

The above article was published by Portfolio Adviser and should not be regarded as individual investment advice on whether to buy, sell or hold any of the assets mentioned.

Please speak to Ethical Offshore Investors or your personal adviser BEFORE you make any investment decision based on the information contained within this article.

As we aim not to use commission paying funds, we will access the lowest charging version of the managed fund that is available on the relevant platform…… resulting in more of the investment growth staying in your pocket.

Speak with Ethical Offshore Investments to learn how you can save on your investment costs.

Socially Responsible Investing – Ethical Business Standards 

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A new red dawn: UK investment markets this morning

5 July 2024

Since the UK general election was called in May our view has been that the Labour party would achieve a large working majority. We were obviously in line with the consensus but this has now proven to be the case nevertheless. Despite polls suggesting there would be a Labour landslide, it’s still shocking to see the scale of their victory and the defeat of the Conservative party.

The results this morning demonstrates the new Labour government will have a considerable majority to work with. There were some extraordinary individual events, with several cabinet ministers and a former prime minister all losing their seats, making this election one that will last long in the memory of UK voters.

A calm market amid a landslide

Given the result was extremely well telegraphed by opinion polls, we felt that the market impact would be limited. The opening moves across financial markets have been calm, with immediate reactions muted, suggesting that this result was expected. Despite the scale of the victory and the opportunity a huge majority presents to the incoming government, financial markets are currently relaxed by the prospect of the new administration. This could change in the coming months, as the Labour government start to flesh out their policies and unveil how they intend to manage the country and the economy in the coming years.

An obvious focus for all of us will be the new government’s immediate and future spending and taxation plans, in which expectations are that to fund their policy programme, there will have to be a rise in taxes. While there was very little open discussion of this on the campaign trail, the incoming government will recognise they need to keep the bond market calm, by attempting to raise revenues as their spending grows, as the UK’s current debt pile is already extremely large and there will be a lot more debt to be issued (in the form of UK government bonds).

Having won so big, despite only winning a relatively small number of extra votes, we are already seeing many on the left of the party demanding a more aggressive stance on tax and spending. How the new prime minister and his inner circle control these pressures will be watched keenly. Keeping the cost of borrowing under control and avoiding the market turbulence experienced during the short-lived Liz Truss premiership will have to be a priority for our new chancellor and the Treasury. Whether they can master this will be a key factor for market volatility in the UK in the coming years.

There will be no immediate changes to our investment strategies after the election. Our view remains that UK assets are good value and can offer investors attractive returns in the coming years.

From polls to portfolios, ballot papers to bond markets

UK equities have been consistently relative underperformers, but there is a chance that the promise of political stability – even if there are understandable concerns about future tax policies – can usher in a period where the discount that was applied to UK equities because of our uncertain political situation is gradually removed. Based upon corporate fundamentals and valuations, there is a strong case to be made that UK equities could go from global laggards to global leaders in the coming years.

UK corporate bonds also offer comparatively high yields to investors, leading us to believe that they too deserve a place within clients’ portfolios. Current yields compensate investors properly for the risks they’re taking in lending money to high-quality companies and are considerably higher than they were only a few years ago. We are still expecting the Bank of England to start cutting interest rates in the next few months, with support for the economy necessary and inflation appearing to be mostly under control. This could benefit areas of UK fixed income.

Bigger questions undoubtedly linger over the outlook for UK government bonds and our currency. In recent months we have seen renewed volatility in longer-term borrowing costs for governments as uncertainty rises over the prospect of a second Donald Trump presidency in the US and the possibility of political change in France and the UK. With government bonds, we have limited exposure and have insisted on keeping the maturity profile of the bonds we own relatively short, ensuring that we do not expose our clients to the potential volatility that can take place with longer maturity bonds, where interest rate, inflation and political risk could become a reality in future years.

In terms of our currency, which is typically the earliest place to view signs of concern, we feel that sterling will remain in a similar range to where it has been in recent times and are not expecting any outsized moves in the coming months. This could of course change, and we will be open-minded about what might happen as we start to see the Labour government’s plans coming into action.

Looking across the Atlantic and into the future

That open-minded approach will be vital as we go through a period of political uncertainty across the world in the coming months. The immediate election in France, with the final round of voting on Sunday 8 July is a possible source of short-term market stress. The daunting and uncertain prospect of the US presidential election in November is another reason why our balanced and diversified approach to investment is appropriate.

We remain cautiously optimistic that the outlook for many assets is attractive. Valuations across many financial markets, including those in the UK, are sensible and we believe that this will be the much bigger determinant of future portfolio success, rather than the continued shifting sands of politics across the world.

Please Note:

This article is provided for information only. 

The above article was published by Canaccord Genuity Wealth Management and should not be regarded as individual investment advice on whether to buy, sell or hold any of the assets mentioned.

Please speak to Ethical Offshore Investors or your personal adviser BEFORE you make any investment decision based on the information contained within this article.

As we aim not to use commission paying funds, we will access the lowest charging version of the managed fund that is available on the relevant platform…… resulting in more of the investment growth staying in your pocket.

Speak with Ethical Offshore Investments to learn how you can save on your investment costs.

Socially Responsible Investing – Ethical Business Standards 

The post A seismic shift in UK politics – stability in asset markets first appeared on Ethical Offshore Investments.

The post A seismic shift in UK politics – stability in asset markets appeared first on Ethical Offshore Investments.

With 2024 turning into year one of “the institutionalisation of bitcoin”, investors focus is quickly moving from “does it make sense to allocate to crypto in a multi-asset portfolio?” to “what is the optimal allocation to crypto in my portfolio?”.

Adding crypto to a multi-asset portfolio is an idea more mainstream than cutting-edge

Our research paper, Bitcoin in multi-asset portfolios, which was first published a few years back but updated earlier this year, aimed to highlight the advantage of adding cryptocurrencies to a multi-asset portfolio. Our work provided four important results for institutional investors:

• Digital assets represent between 1% and 2% of the market portfolio (depending on when one looks). Multi-asset allocations that don’t invest in cryptocurrencies are effectively underweighting the asset class and betting against it, which, in our opinion, should be a position reserved to investors with deep knowledge and a strong “negative” thesis on the space.

• Bitcoin exhibits high growth potential compared to other asset classes, having been the best asset in nine of the last 12 years and remains uncorrelated. It is, therefore, a very strong candidate for a multi-asset allocation.

• Even a modest allocation in a portfolio can significantly boost returns with a minimal increase in overall risk, thereby enhancing the portfolio’s risk/return profile. The information ratio of such an addition hovers at around 1, making it a highly appealing proposition.

• The increase in volatility and drawdowns caused by the inclusion of bitcoin in a portfolio is effectively managed through diversification and regular rebalancing. Adding 1% to a 60/40 portfolio historically would have only added 0.07% of volatility, demonstrating the stability of the portfolio².

A framework to assess the optimal allocation to bitcoin for investors

While the answer will vary depending on investors’ specific situations, In a second paper, The role of bitcoin in a portfolio, which we published recently, we have leveraged three different quantitative techniques to help answer investors’ new questions about the optimal allocation.

The first technique used is a bootstrapping technique that consists of using historical data for fixed income, equities and cryptocurrencies over the last 10 years and then generating Monte Carlo simulations of 36 months periods through random sampling. In other words, bootstrapping creates new series of returns by reordering existing historical series. This makes the bootstrap samples inherit the same distribution as the original data, allowing estimation of the sampling distribution of various statistics.

Using those simulated series, we can construct a time series for a 60/40 portfolio (equity/fixed income) and portfolios that add bitcoin to the 60/40 portfolio. We then study the resulting distribution and in particular the distribution of relative risk and relative drawdowns.

In Figure 1, we can see that in the case of 5% bitcoin investment, in 99% of the cases the investor would have experienced a relative maximum drawdown (versus the 60/40) of less than -4.4%, and in 1% of the cases they would have experienced a relative maximum drawdown worse than -4.4% (the blue bar).

Figure 1: Using relative drawdown to calibrate the allocation to bitcoin

Source: WisdomTree, Bloomberg. S&P. From January 2014 to May 2024. Calculations are based on monthly returns in USD. Historical performance is not an indication of future performance and any investments may go down in value.

Using this technique, an investor can determine their preferred crypto allocation from the risk they are willing to take. For instance, consider a conservative investor who is comfortable with a maximum 1% relative drawdown (compared to a traditional 60/40 portfolio) with a 99% confidence level. From the chart, they can conclude that allocating between 1% and 2% to bitcoin would be most suitable.

The second technique consists of using a mean-variance optimisation framework, as proposed by H. Markowitz, based on JP Morgan Long Term Capital Market Assumptions for equity and Fixed Income and based on three scenarios for Bitcoin:

• Good scenario: Bitcoin’s return is assumed to be equal to the US large cap equity estimated return + 20% per annum — this remains significantly below historical returns and below the 2023 performance by a wide margin. The volatility is assumed to be 20% lower than bitcoin’s historical volatility

• Mid scenario: Bitcoin’s return is assumed to be equal to the US large cap equity estimated return + 12.5%. The volatility is 10% lower than bitcoin’s historical volatility and the correlation with the other assets is increased by 10%

• Bad scenario: Bitcoin’s return is assumed to be equal to the US large cap equity estimated return +7.5%. The volatility is equal to bitcoin’s historical volatility and the correlation with the other assets is increased by 20%

We can note that:

• In both the good and mid scenario, bitcoin receives a non-negligible weight even in low volatility portfolios. For example, in the mid scenario, the optimal portfolio with a 5.5% volatility would allocate 1.5% to bitcoin

• Bitcoin allocation is present in all portfolios with more than 5% volatility, even in the bad scenario, where crypto returns only 7.5% more than equities per annum

• For an aggressive multi-asset portfolio (~10% volatility) allocations range from ~ 1% to ~9% depending on the scenario

Figure 2: Asset allocation of efficient portfolios by portfolio volatility in three forward-looking scenarios

Source: WisdomTree, JP Morgan. Calculations are based on monthly returns in USD. Historical performance is not an indication of future performance and any investments may go down in value.

The third technique is to construct portfolios not based on allocating weights to assets but on defining target risk contribution for each asset and deriving weight from those targets. An investor that wants to dedicate one per cent of its portfolio risk to bitcoin would then have to allocate 0.7% to bitcoin, as indicated in Figure 3. A more aggressive investor who wants to dedicate 5% of the risk would allocate 2.2%.

Figure 3: Average overweight/underweight vs. benchmark portfolio

Source: WisdomTree, Bloomberg. From January 2014 through December 2023. ‘TRC’ denotes ‘Target Risk Contribution’, and ‘90/5/5/0’ representing the benchmark portfolio of 90% risk allocated to equities, 5% to bonds, 5% to commodities, and 0% to bitcoin. Historical performance is not an indication of future performance and any investments may go down in value.

Conclusion

As cryptocurrencies slowly gain their place in multi-asset portfolios, it becomes necessary to create a framework to assess the relevant allocation to those assets, taking into account their growth potential, diversification potential, and the change wrought by their wider adoption. Our findings can be found in the table below summarised across three types of portfolios: Conservative, Balanced and Aggressive.

Overall, it looks like a conservative portfolio would aim for a slight underweight to crypto compared to the market portfolio, with an allocation of around 1%. This is perfectly logical as a conservative portfolio is also underweight other risk assets, such as equities.

A balanced portfolio could aim for a slight overweight with around 3% of the allocation. Finally, an aggressive portfolio, with its classic overweight to risky assets compared to the market portfolio could easily target a 5% allocation to crypto.

If there is one thing to take away from this research, it’s that the time for ignoring this asset class has passed. Not allocating to the asset class is no longer the default decision. Investors or multi-asset managers need to have a view and a plan for this maturing asset class.

¹ Conservative behaviour for cryptocurrencies: positive return but well below what we experienced historically, similar volatility and correlation.
² Bloomberg, WisdomTree. From 31 December 2013 to 31 December 2023. In USD. Based on daily returns.

The above article was published by Wisdom Tree and should not be regarded as individual investment advice on whether to buy, sell or hold any of the assets mentioned.

Please speak to Ethical Offshore Investors or your personal adviser BEFORE you make any investment decision based on the information contained within this article.

Clients of Ethical Offshore Investors can get access to a range of regulated, daily traded Exchange Traded Funds (ETF’s) that have a direct holding of Bitcoin. This will result in performance in-line with the daily movement of the Bitcoin price.  

Speak with Ethical Offshore Investments to see how you can get Bitcoin exposure in a regulated, cost effective manner…….. 

Socially Responsible Investing – Ethical Business Standards 

The post The role of Bitcoin in a portfolio first appeared on Ethical Offshore Investments.

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Cumulative Performance

Annualised Performance

If you would like to get more information on the Fundsmith Equity Fund, or on the many equity funds that can compliment the Fundsmith Equity Fund, please click on the More Information button below and we will forward the information to you.

Fundsmith published Terry Smith’s semi-annual letter to shareholders of Fundsmith Equity Fund.

If you are interested in reading it, a copy can be found on the Fundsmith website by clicking HERE  

Please Note:

This article is provided for information only. 

The above article was published by Fundsmith and should not be regarded as individual investment advice on whether to buy, sell or hold any of the assets mentioned. Please speak to Ethical Offshore Investors or your personal adviser BEFORE you make any investment decision based on the information contained within this article.

As we aim not to use commission paying funds, we will access the lowest charging version of the managed fund that is available on the relevant platform…… resulting in more of the investment growth staying in your pocket.

Speak with Ethical Offshore Investments to learn how you can save on your investment costs.

Socially Responsible Investing – Ethical Business Standards 

The post Fundsmith Equity Fund – Semi-annual Letter to shareholders first appeared on Ethical Offshore Investments.

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All change for our government… but no change for UK asset markets?

25 June 2024

Understandably, the forthcoming general election has garnered a huge amount of interest from our clients. You want to know whether the likely change of government in early July matters for your portfolio and if it changes our views on UK investments. The short answer is no, not really. Although as always, we should keep an open mind. Whilst we in the UK might look upon the general election of early July with keen interest, global investors just don’t care, and market shockwaves are unlikely to be felt in the coming months.

We believe that there are three reasons why the UK election is unlikely to move markets in a major way, aside from the inescapable fact that the UK is shrinking in global influence.

No alarms and no surprises

The chief factor is that the result is already deeply discounted. What happens is highly unlikely to be like the ‘surprise’ thrown up by the result of the Brexit referendum in 2016, or a high-stakes gambit like President Emmanuel Macron’s recent election call in France, both of which triggered significant market volatility.

Investors and markets are expecting the incumbent Conservative Party to suffer a crushing defeat and the Labour Party a major victory.