Thomas Moore

A great flow chart from the UK Investment Association for those who want to understand which fund share class to select as 'primary'. In contrast to how some data providers default to the oldest, legacy share class, it seems very clear that one should perhaps choose a share class that is 'unbundled', and 'freely available to all investors... '. For the Marlborough Multi Cap Income Fund, this is the 'P' share class! This also covers c.99% of all fund units in issue so most representative of the returns delivered to the wider investor base.

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Hello everyone. Hope your week has started well. I just wanted to highlight some excellent reporting from Jamie Colvin in Citywire - see article in first link below. Tom Poynton has also had the ingenious idea to create a "forum" to garner an understanding of retail investors' understanding of the many issues facing the investment companies sector (the link is in the article). Our campaign has often highlighted how new well-intended Consumer Duty regulations have turbo-charged the negative impact of IC "cost" disclosures. Recent attention has rightly been given to one aspect of this turbo-charging: retail platforms wrongly interpreting "value" and "cost" and not only misinforming consumers, but now banning them from investing in investment companies based on utterly floored logic. Do these platforms have the expertise to be making these judgements? Where they do not and they outsource, has there been proper due diligence on third parties used to make assessments of value? https://lnkd.in/eA4SHXjW We will not rest. Have a good week. Ben https://lnkd.in/eh9G9NWM

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I often refer to select specific investment options as “assets and earnings” plays where one gains exposure to tangible assets and growing profits at the same time. Whitbread (in the FTSE 100) ticks this box for me. The shares have retreated significantly from previous highs and thus have not been part of the increased buoyancy we have witnessed in the blue chip index in the recent past. This is Premier Inns in disguise with most of the business in the UK. Capital growth potential with a growing dividend not to mention always a possibly of takeover interest, an interesting opportunity perhaps. This is not investment advice and everyone must do their own research in determining suitability.

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Good morning. My latest blog re the #budget yesterday titled Dawn of the dread which gives you an inkling of my thoughts. It covers our approach to UK assets from here

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Many thanks to Sean Farrington for inviting me on BBC News Radio 4 Today to discuss the rapid rise in UK gilt yields since the start of the year. The yield on ten-year UK gilts has risen to 4.84 % last Friday. This means that it is becoming more expensive for the UK government to finance its public debt. It also means that the cost of borrowing for the wider economy is rising, as fixed rate mortgages and private sector loans and bonds are all priced off UK government bond yields. There are two main drivers behind the rise in yields. First, financial markets are becoming increasingly concerned that the Bank of England will not be able to cut its policy rate much further. The Bank Rate is currently at 4.75 per cent and markets had priced in 0.75 percent cuts over the next two years. Now markets think that the Bank of England will only be able to cut its base rate by 0.5 per cent because inflation in the UK is quite persistent. This change in expectations explains about half of the move we've seen in the UK gilt market. The other half of the change in yields has to do with a rising risk premium on UK government bonds. Investors feel less certain about what the future will hold and are therefore demanding a higher yield on long-term fixed-rate government bonds. In my view, the main driver of the current rise in UK government bond yields has been a spillover from the US. Since it became likely that Donald Trump would win a second term as US President, risk premia on long-term US government bonds have risen, and this has spread to the rest of the world.  Ever since the financial crisis that Chancellor Liz Truss and her government provoked in September 2022, commentators in the UK have been quite alert to changes in Gilt yields. However, what’s happening in markets now is really not about the UK. Back in 2022, the UK Gilt market sold off sharply on the back of the announcement of a wholly irresponsible fiscal policy by Chancellor Kwarteng – while yields in other countries barely moved. This time around we have a simultaneous sell-off in government bond markets all around the world, and it is not being driven by anything specific to the UK. Still, the movement in the UK bond market has been a little stronger than elsewhere. I think this is mainly due to the lack of liquidity in the UK gilt market. Liquidity in the UK is quite poor compared to other government bond markets. It also has to do with the fact that sterling isn't really a reserve currency anymore, so there's no automatic foreign demand for UK gilts. And the UK has long run what are known as "twin deficits", that is, deficits on both the fiscal and the current account. The UK relies on foreign investors to finance some of its government deficit and debt, and if you rely on the kindness of strangers, you become particularly vulnerable to jitters in global markets.

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Morning all. The latest edition of Rathbones Asset Management’s In Conversation has arrived. Watch the latest Rathbone Multi-Asset Portfolios video here: https://lnkd.in/erP8VwGV   For Professional Investors. #ProfessionalInvestorsOnly #InConversation #RathbonesAssetManagement #OutNow #RathbonesMultiAsset

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What’s the outlook for #equities in 2025? Portfolio Manager Arancha Cano is positive on the asset class, especially in the US. However, #currency volatility — as we've recently seen in the UK — and #interestrate moves are likely to have a far greater impact on equities in 2025 than they did in 2024. Watch Arancha and me discuss the reasons why. https://lnkd.in/eU2iJgje For professional investors only. Capital at risk.

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An interesting article in Citywire this morning by Henry Cobbe, CFA (see below). https://lnkd.in/einXyGNY It would be remiss of me not to make the following points: 1) Public markets 'discount' (take into account) known recurring expenses. Take two listed closed-ended investment companies ('investment trusts'): A and B. Both Boards employ investment advisers who invest the trust's capital in identical cash deposits bearing 0% interest. Let's assume a 5 year management contract. A's adviser charges 1%, B's 2%. Will the share prices be the same? Of course not. B's share price, all other things equal, will be c. 5% lower to account for higher fees over the life of the management contract. Investors invest in the share price NOT the NAV. Expenses are a drag on the NAV NOT the share price. It has to be so otherwise there would be a risk-free arbitrage to short B and long A. It is inappropriate to treat these expenses in the same way we do the ongoing charges of open-ended funds and aggregate them in total cost figures (whether that's a fund of funds or a wealth management portfolio). Platforms should also not disclosure the figure to retail investors in this misleading way. Look what happened when BH Macro upped fees by 1% - the shares fell by c. 10% to discount the increased drag on NAV. I went into more detail on these issues in the below blog, and show why it is appropriate to aggregate ongoing charges of open-ended funds, but not expenses of investment trusts: https://lnkd.in/eSiyEMn5 2) Mr Cobbe has deployed a straw man. I am not aware of anyone campaigning for no disclosure. First, there is and always has been, as much disclosure for investment trusts as there is for other listed corporate entities via UK Listing rules (the reports and accounts). Second, we have been campaigning for additional disclosure via our "Statement of Operating Expenses". This would surface operating expenses in an appropriate way, express them as a percentage of NAV (for use alongside other relevant information such as premium / discount) to enable cross-comparison with open-ended funds and other investment trusts. We recognise that investment trusts share characteristics with open-ended funds, and we need disclosures that recognise that. But some trusts resemble operating companies (and compete with them) more than collective investment schemes. Crucially, the listing on a public market is a key differentiating feature and matters hugely for how expenses are disclosed. Disclose. Don't Double Count.

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Our just-released survey of 100 UK asset owners* explores views on the current opportunity in fixed income markets, the value of active management, preferred credit sectors for the year ahead, and the growing role of emerging market debt. For the full survey see: https://lnkd.in/eDX2h9br For professional investors only. *Views of 100 UK based institutional fixed income professionals, canvassed during February and March 2024. #CapitalGroup #FixedIncome #Investing #Bonds

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*********** READING WITH IMPACT ************ After nearly 16 years with Orbis I'm lucky enough to be taking a bit of an extended break this summer to regroup and recharge ahead of getting stuck into some of the exciting opportunities ahead. I want to use some of this time to review some of the most impactful material I've come across AND to seek out the best of what others have found impactful. By impactful I mean books/articles/essays that have meaningfully changed the way you think/act/behave. Lots of content is interesting, or provides a different perspective, but, in my experience, it's rare to find those gems which REALLY shift your lens, the mental models you use, or how you show up for family, friends and colleagues. I've included some of my all-time top hits below, and would like to tap into the enormous wisdom of my LinkedIn network to source other ideas. Please add your unique suggestions in the comments below. As an incentive, I'll compile the final list and circulate it to everyone who gets involved. Thanks - I'm excited for the journey this could take me on. Superforecasting - Tetlock The Upside of Stress - McGonigal Bounce - Syed Mindset - Dweck The Creative Act - Rubin Clear Thinking - Parish (summarises a lot of the best of others' work)

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NEW FEES PAPER: bfinance today published it's biennial Investment Management Fees paper, which you can download here: https://okt.to/EAld1w As market circumstances change, investment fees and costs can be re-evaluated productively. This edition of the paper focuses on three key themes that may merit careful examination in the current climate; ESG, hurdle rates, and fee compression.

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We’re thrilled to share that the IFSL Blackfinch NextGen Infrastructure Fund has been recognised in Morningstar's latest report for August 2024. It ranked as the #1 best performing equity infrastructure fund and overall, the 5th best-performing fund in the UK out of 3,039 funds across all asset classes. Thank you to both Blackfinch Group and Marlborough teams for their ongoing support. At Blackfinch, we are choosing to do something different than our infrastructure sector peers, so there is no reason to expect results that align with the indices. At times we may underperform, and at times we may outperform, but at all times we will do our best to think and act independently. Over longer periods, we believe we will be rewarded for taking an unconventional approach to infrastructure investing and separating ourselves from the herd. We continue to believe that the companies we hold (such as the publicly disclosed positions GFL Environmental Inc., Clean Harbors, Grenergy Renovables, TransAlta, Macquarie Technology Group, Rai Way S.p.A., American Healthcare REIT) have better business models, more properly incentivised management partners, and greater future earnings potential than the average infrastructure company. Our strategy centres on buying high quality specialist infrastructure companies prioritising capital appreciation over income, supported by ‘next generation’ growth themes – such as the energy transition, digitalisation and sustainable urbanisation – that are trading at reasonable valuations and led by well-incentivised management teams. If our analysis is sound, with time we should benefit from the dual forces of improving business fundamentals and improving sentiment, which could help the fund achieve its return objective. Disclaimer: Capital at risk. Past performance not indicative of future results. This post does not constitute any form of solicitation to buy or sell units in the fund or the companies mentioned. For UK investors only. 

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Our head of Macro Strategy, John Butler, is sitting down in two weeks' time to cover our views for the year ahead, particularly on UK fiscal, the Bank of England reaction function and the implications for gilt yields, the health of the European economy, and the implications of US policy - expected to challenge some current thinking on the macro backdrop. Register here: https://lnkd.in/ewQXsCAr #macro #economics #wellingtonmanagement #outlook #fixedincome #wealthmanagement #assetmanagement

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More positive developments in the investment trust sector........

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UK Financial Advisers: Question Time with Your DFM Why does the allocation to Absolute Return Strategies typically remain below 3% of a portfolio, while bonds still occupy over 30%? The standard response to this question often cites underperformance from Absolute Return funds and poor experiences with flagship offerings such as Standard Life GARS. As a result, many discretionary fund managers (DFMs) have sidelined this asset class. However, we believe this dismissal is both flawed and rooted in a lack of education and expertise in investing in Absolute Return Strategies. At Apollo, we argue that the challenges in this space stem not from the asset class itself but from misapplied approaches. Traditional equity and bond fund analysis simply cannot be repurposed to select Absolute Return managers effectively. Few DFMs have team members with direct experience in Hedge Funds or Absolute Return Strategies. Furthermore, relying on a single fund or a small number of funds to represent the category often leads to underwhelming outcomes. Our Approach: A Diversified and Skilled Multi-Manager Model Apollo takes a different path. Our Absolute Return portfolio consists of 18–25 funds, diversified across sub-sectors of the Absolute Return universe. This multi-manager strategy provides resilience and better positioning to achieve consistent results. Consider research from JP Morgan: within equities and bonds, the performance gap between top and bottom quartile managers is around 2%, leaving less room for alpha from manager selection . By contrast, in Hedge and Absolute Return Strategies, this difference exceeds 14%, making skilled manager selection a critical driver of Alpha. The Case for Rethinking Bond Allocations Meanwhile, the persistent reliance on bonds—despite their underperformance relative to cash returns over the past five years—is concerning. Bonds have not delivered net returns after fees, especially in an environment where the zero-interest rate era was never sustainable. The path of future inflation remains uncertain, shaped by factors like deglobalisation (tariffs), decarbonization, geopolitical shifts, rising deficits, and extreme government debt levels. Would you place 30% or more of your portfolio in that basket? In the U.S., pioneers like Yale’s David Swensen demonstrated the benefits of diversifying beyond traditional equities and bonds. Yet in the UK, many portfolios remain stuck in outdated 60/40 models. Proven Expertise in Absolute Return Strategies Apollo’s team brings decades of direct experience from Hedge Funds and proprietary trading desks at top-tier investment banks. The chart below illustrates the value of this expertise. If you’re curious about how Apollo consistently outperforms in this space, we’d love to share more details. Contact us to learn about the processes and strategies behind our success.

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A wonderfully differentiated perspective from Baillie Gifford’s Stuart Dunbar of how…”It’s not about growth or value, it’s about trying to identify the very, very small number of companies that have the potential to be truly world-beating." 👏

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I'm looking forward to what should be an insightful discussion tomorrow on a range of timely sustainability topics. #sustainableinvesting

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Not just the North West's pretty face Interesting video update from the U.S 👇 PMJ Capital had been working on the recently launched 'Private Credit No.1' for over a year... Financial advisors and wealth managers reach out to me directly for more information. 🔔 Follow me for me private market news, views and clues. https://lnkd.in/emSHbXqC #privatecredit #investments #wealthmanagement #financialplanning

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