View more on these topics

Lawrence House chief delivers warning on “clever” investment products

Lawrence House Fund Managers head of investments Alan Stokes believes that advisers with limited experience are buying into new investment strategies without fully understanding the potential risks.

Stokes says that the principles of investing in real assets have disappeared in favour of the likes of ‘multi-strategy’ portfolios.

He says: “Today, a number of investors with structured products or Exchange Traded Funds have found to their cost that their investment has all but disappeared.

“Older School investors such as ourselves, who as individuals have been in the industry some 30 years or more, do use new financial instruments but in a limited way as we have always felt understanding risk and your potential downside is the best way of preserving clients capital.”

Stokes says that it is this approach that has led to his firm avoiding these ‘instruments of mass destruction’ such as Barlow Clowes gilt plans, split-cap investment trusts, TMT stocks and now hedge funds that lack transparency.

He says: “We all have a responsibility to our clients and investors, and a major part of that is always understanding fully what we are buying.”

Recommended

Adviser Fund Index

Global funds are growing in popularity as investors seek to diversify equity exposure.

Shorting ban won’t hit absolute return

Hargreaves Lansdown believes investors should not be concerned about placing assets in absolute return funds following the FSA’s short-selling ban on 32 financial institutions.

India GDP surprise

By Kunal Desai, head of Indian Equities, Neptune Kunal Desai, manager of the Neptune India Fund, comments on the strength of India’s latest GDP figures. Click here for more Important Information Investment risks The Neptune India Fund may have a high volatility rating and past performance is not a guide to future performance. The value […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment