Managing investor’s money should place fund managers at a juxtaposition with advisers and investors, but in a world where instant gratification is now the norm, it isn’t always the case. The volatility in markets inevitably tests whether investors are really willing to accept the risk involved with investing, but for fund managers avoiding the noise and staying calm is the order of the day.
Investors, advisers and fund managers alike should take a pragmatic approach to achieve the obvious goal of seeing an investment appreciate.
Last week, Broadgate Mainland hosted an event with presentations from four fund managers who gave their views on investing in the current climate. Against a backdrop of Greek tragedy, Cameron/Clegg mania and jubilation that the English cricket team have finally won a competition, there is also the small fact that millions of investors pin their faith on the ability of fund managers to make the right calls.
All the fund managers felt that over the long term there are very sound reasons to be investing in the world’s stock markets with the caveat that it isn’t going to be a smooth ride. Malcolm Millar, fund manager on the Jupiter European Equities team said, “UK income investors are increasingly realising they need to look abroad for income. Europe offers similar levels of income to the UK market with equivalent levels of risk, particularly legal, cultural and political.”
Malcolm felt that the Greek crisis has highlighted the UK’s strength in addressing its excessive debt, the ability to devalue the pound. Angelos Damaskos, CEO, Sector Investment Managers and fund advisor, Junior Mining fund explained the impact of the devaluation of major currencies resulting from policy makers printing money,“investors are turning to gold as an alternative store of value by investing in gold coins, bullion and ETFs. There is a finite supply of the yellow metal and the increased demand is pushing up its price, along with the price of gold mining shares.”
Despite concerns over the sovereign risk of some European economies and UK public debt, Neil Veitch, fund manager SVM UK Opportunities Fund, continues to believe that the UK market can ultimately resume its upward path, albeit with speed bumps along the way. He said, “Valuations are reasonable, liquidity abundant and for the time being fundamentals improving.”
An upbeat note was also sounded by Scilla Huang Sun, fund manager, Julius Baer Luxury Brands Fund, who told the audience that “the wealthy are back in the mood for spending. Growth is mainly driven by emerging markets, particularly China where the luxury industry is booming, driven by increasing wealth and a strong affection for Western luxury brands.”
The key point from all the fund managers is that investors need to take a long term view and not get bogged down in short-termism. When every piece of news is dissected within minutes of an announcement, the ability to cut through this noise and invest for the long term sets successful fund managers apart, to the benefit of investors and advisers.
';