View more on these topics

Investment view

I had not realised how comprehensively mid-cap companies had trounced the FTSE 100 index. The FTSE 250 has outperformed the FTSE 100 by 35 per cent since 1999. This trend is even more marked in the US, where the outperformance has been even greater. The gridlock in our main market, on which I have commented before, has certainly taken its toll.

The disappointing performance of Vodafone has not helped. Once the biggest company by miles in terms of market capitalisation in the UK, it has lost its crown and has helped drag back the performance of this headline index over what is amounting to a particularly lengthy bear market. This is not an easy period for fund managers. You only have to look at Isa sales to realise there is considerable investor apathy.

Certainly, I was disappointed that more people did not turn up to the AITC forum held in York last week. Sitting on a stage on which Hank Marvin would shortly be strutting his stuff in his farewell tour as the Guitar Man, an audience of 60 IFAs was scattered among several hundred seats. It reminded me of a conference in Abu Dhabi several years ago. There, a plush conference hall with a seating capacity of more than 500 played host to an audience that started at 70 and dwindled to single figures. And this despite having such august figures on the platform as Howard Davies, then deputy governor of the Bank of England, and Sir William Purves, who was still heading HSBC. We even had a bull market running at the time. Apathy is not confined to bear markets.

I felt the apparent lack of interest in York owed more to a general disenchantment with investment matters than to a belief that investment trusts may not be appropriate to an IFA&#39s clients. There were some concerns expressed over the reputational risk that recent publicity concerning split-level trusts may have had, but overall the mood seemed to be one of quiet acceptance that the heady days of the 1980s and 1990s were behind us and that trying to be too clever going forward was not the right approach.

Even CP121 did not appear too threatening to this audience. True, those IFAs who expressed an opinion clearly took the view that they would rather not have any change but no one felt that the ending of polarisation would bring an end to their business.

Meantime, we learn that house prices continue to power forward, with yet another massive jump recorded for April. Simon Rubinsohn, Gerrard&#39s chief economist, has gone on record to say that he does not believe this to be a bubble about to burst. Lower interest rates and competitive mortgage conditions are creating a situation where houses are much more affordable than they were at the end of 1980s, when we last had such a surge in residential property value. The situation then was also buoyed by artificial conditions, thanks to the injudicious warning of an ending of tax relief. If the information I receive in my role as a parish councillor is anything to go by, there is still a shortage of certain types of housing, most particularly in the South-east.

Despite the relentless sideways move of the stockmarket, much of the big-picture news recently has been positive. Even manufacturing seems to be taking a turn for the better. The slowdown in the UK economy was undoubtedly greater than many expected, given the preliminary figures published for the first quarter of this year, there are now clear signs of a pick-up, and perhaps the Treasury&#39s optimistic forecasts for growth will not be quite so difficult to achieve. Still, there are not many manufacturers in the FTSE 100, so news that output is on the up can only serve to enhance the attractions of mid-cap shares. Perhaps the old economy will start to exert more influence.

Recommended

Revenue says no charge for switch to New Star fund

The Inland Revenue is allowing investors in Rathbone&#39s special situations fund to switch without charge to Patrick Evershed&#39s new select opportunities fund at rival New Star.In a move the firms believe is unique, the Revenue is permitting Rathbone unitholders to keep their investment with manager Evershed – who recently left the company to join New […]

Who wants to be a with-profits investor?, ask psychologists

Psychologists claim the reluctance of many gameshow contestants to take a gamble provides a clue to why with-profits products appeal to consumers.According to behavioural psychology research commissioned by CIS, investors and contestants on shows such as Who Wants to Be A Millionaire? are generally risk-averse. The research found the impact of a loss on an […]

Reshuffle at Inter-Alliance

Inter-Alliance is restructuring its management with three appointments. Gerard Moore will become group development director and will sit on the board. Carey Shakespeare is to be director of marketing and John Standley director of business development. All three were poached from St James Place, which Interalliance chairman and chief executive Keith Carby co-founded.

Webb attacks Government pension lies

The Liberal Democrats have called the Government to bite the bullet on compulsory pensions and stop telling the public lies about its failing pension policies in damning attack at the NAPF conference in Brighton.Lib Dem work and pensions spokesman Steve Webb said the Government was guilty of undermining pensions while at the same time paying […]

10 September thumbnail

Johnson Fleming set to hold auto-enrolment support webinar

Two years since the process of auto-enrolment began, the looming re-enrolment deadline provides the perfect opportunity to assess whether the support you have in place, which may well have been hastily selected at the start, is fit for purpose. Johnson Fleming is holding a webinar on 10 September at 11:00 to discover the key issues and concerns you should consider when thinking about your current support options.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com