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Bulls rush in after London bombings

US institutions took advantage of falling equity prices after the July 7 London bombings to switch billions of dollars out of bonds, pushing indices higher.

Iimia chief investment officer Nick Greenwood says, as a result of falling bond yields, US institutional managers had been waiting for a chance to switch money back into equities.

He says US institutional investors holding government bonds have seen yields driven down by mass-buying of bonds by pension funds looking to balance their liabilities.

Greenwood compares a running 4.1 per cent yearly yield on US 10-year government bonds and 4.3 per cent yearly yield on UK 10-year bonds with an 8 per cent average return on equities over the same period.

Following the bombings, the FTSE 100 fell by 200 points but rallied within 24 hours and has since risen above pre-bombing levels. Greenwood feels equities have been buoyed by the opportunism of US institutions.

Greenwood says: “Following a shock that should have reduced people’s risk appetite, we are finding that the FTSE is actually up, as people took advantage of liquidity in the market to shift into equities. Billions of dollars cannot just move without an opportunity and a number of US institutional managers found that the bombings opened the door for the switch of bond money.”


Aifa in fee hike warning as it proposes admitting multi-ties

Aifa has warned members unwilling to accept multi-tied members to be prepared to pay a 25-30 per cent hike in subscriptions to keep it afloat without them. The trade body has launched a consultation paper seeking feedback from members to help determine its profile and size post-depolarisation. Members have to decide whether they want a […]

‘Treating customers fairly could provide gift-wrapped claims’

The FSA’s treating customers fairly initiative could prompt the next wave of “gift-wrapped” complaints against IFAs, warns Aifa director general Chris Cummings. He says claims management groups could exploit TCF’s high-level principles and encourage customers to take complaints over fairness to the Financial Ombudsman Service. He says the vagueness of the TCF principles, which all […]

All change at assureweb

There was confirm-ation last week of what must be one of the industry’s worst-kept secrets this year.

Investor perceptions are not realistic, says New Star

Almost 98 per cent of investors are unaware that equities are better performing than property, according to New Star Asset Management.Only 2.2 per cent of investors identified equities as returning the most over the last two years to 30 April 2005. Most investors, 62.8 per cent, thought property offered the best returns, whilst 2.7 per […]

India correction: a terrific entry point?

By Kunal Desai, head of Indian Equities, Neptune A key concern for investors who were looking at India afresh has been the rich valuations and strong prior performance. We view the correction in the market through short-term growth concerns from demonetisation as a terrific entry point for the long-term investor. Investors should not be overly concerned […]


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