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Cash in on volatility

Too many people have nearly all their money on deposit with banks and building societies. It is sensible to keep an emergency fund in cash but equities have shown the best returns over the medium to long term if run by the top managers.

The stockmarket is likely to continue to be volatile in the short term but equities are cheap now and I believe that investors with large amounts in cash Isas and deposits should now consider putting at least half their money into equities or multi-asset funds. The new rule now making it possible to switch out of cash Isas into stocks and shares Isas is helpful.

I believe that for most investors, a global equity fund is the answer. The three I like best are Neptune global equity, Neptune global alpha and M&G global basics. Over the past five years, Neptune global equity has returned over 26 per cent a year and Neptune global alpha over 24 per cent a year. M&G global basics invests mainly in commodities and has returned over 27 per cent a year to April 21, 2008.

All these funds made money over the year to May 1, 2008 at a time when most funds lost money.

The two Neptune funds, both managed by Robin Geffen, invest around 30 to 40 per cent of their assets in emerging markets with the rest widely spread between the UK, Europe, North America, Asia Pacific and Japan. At present, they also have fairly big cash holdings awaiting investment into new opportunities.

For the more cautious investor, some of the structured products issued by Barclays, Meteor and NDFA are lower risk and can still show attractive returns above those available on cash deposits.

The sensible advice for most investors is to spread your risk.


HBOS sells out of Rightmove

HBOS has sold its entire stake in property website Rightmove for 59.2m. It announced last week the sale of 16.2 million shares at 365p each through UBS and Numis. It previously held 20 per cent of the firm when it floated on the stockmarket in 2006.

A wake-up call on Omo

Annuity providers have been given until December to improve consumer correspondence on the open market option after the FSA found that much of it fails to meet regulatory standards.

Sub-Saharan Africa Near-Term Outlook

By Paul Caruana-Galizia, Neptune Economist

Sub-Saharan Africa’s economic renaissance continues. After growing at an average rate of five per cent over the past decade, the IMF projects an acceleration to 5.5 per cent growth among Sub-Saharan economies in the next two years, as developed economies emerge from the crisis. We expect this growth to be sustainable for three broad reasons.


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