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Midas looks for a return to real values

Midas chief executive Simon Edwards says a snapback in prices and NAVs could see its funds return double-digit figures in 2009.

Edwards says both his balanced growth fund and Alan Borrows’ balanced income fund will benefit even in relatively flat markets as many assets in the funds, such as property, investment trusts and hedge funds, are trading well below their net asset value.

Balanced growth and balanced income are both fourth quartile in their Investment Management Association sectors over the past 12 months, having lost 31.8 and 29.3 per cent respectively at February 9, 2009.

Edward says: “There has been a severe dislocation, more so probably in property than in any other area between the underlying value of the bricks and mortar that are held under these vehicles and the way that those vehicles are priced.

“We are working very closely with the managers of these vehicles to realise that value as we move forward. We are continuing to make use of structured products and there is significant value in this part of the portfolio, especially given the reduced level of counterparty risk and the scope for volatility to fall further.”

Edwards also says asset correlation is set to slow down in terms of returns over the next 18 months and claims that individual markets will start to reassert themselves.

He says: “We are confident of the positions we have got in the funds, very confident. The strength of the blue-chip holdings that we have been concentrating on, the quality and spread of our corporate bond positions, the real worth of our underlying property investments and some of our closed-ended investments and, frankly, the prices of those vehicles looks very attractive at the moment. Also, there will be a snapback in terms of prices and NAVs that we have talked about.”


Make the switch to money purchase

I don’t know how much more of this nonsense I can take. Joanne Segars is very knowledgeable when it comes to defined-benefit (final-salary based) pensions but the stance she is taking when representing the National Association of Pension Funds can only be because of vested interests. Let us hope that the Mad Hatter rejects her request for the Government to guarantee the Pension Protection Fund.

Questions and answers

Understanding people is all about trying to view matters from their perspective. This allows us to find out what really motivates them.

Ring the changes

The future for the directly authorised IFA is looking pretty bleak. A whole variety of factors are coming together to make life quite tough for the sole practitioner or small business owner who wants a direct relationship with the regulator. If I was a cynic, I could label this as a conspiracy theory against small firms. But I’m not so I won’t.


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