View more on these topics

Overseas openings

The global economy entered 2007 having seen its strongest period of synchronised growth since the Second World War. Strong growth combined with low levels of inflation and interest rates created a very favourable backdrop for investors.

However, a new year has brought plenty of issues for investors to worry about. Bond markets have been under pressure from poor news on inflation while a sharp setback in the US housing market has caused investors to question whether companies’ profitability will start to deteriorate. It certainly seems that after several years of strong stockmarkets, it is going to get tougher for investors to make money.

In managing iimia’s income funds, we have reacted to the poor value we see in UK commercial property and fixed-interest markets by increasing exposure to overseas holdings. By investing overseas, we hope to combine holding assets that are more attractive than comparable ones in the UK and also have exposure that stands to have its value boosted by currency movements. The following are three examples:

Japanese and German property. While most UK commercial appears fully valued, the same can not be said for property in Japan and Germany, where conditions could hardly be more different. With local confidence only just being restored in the countries’ property markets, yields stand at a significant premium to borrowing costs.

Far East ex Japan equity income. While the number of high-yielding equities in the UK market has been steadily falling, a growing number of companies in Asia are paying high dividends. Indeed, the Far East ex Japan region has a greater number of companies’ shares yielding over 3 per cent more than any other area of the world.

Technology stocks. With many technology companies listed in the US, the weakness of the dollar compounded the dull performance of the sector for UK investors in another year when “value” stocks led markets higher. The prospects for the technology sector look brighter in 2007, with corporate spending expected to boost demand at a time when a number of important new products are being launched. One sub-sector within technology that stands out as looking particularly interesting is biotechnology. Biotech companies’ shares prices fail to reflect adequately the rapid development of new drugs and the favourable prospects for merger and product licensing interest from the traditional big pharmaceutical companies.

Richard Scott is fund manager of the CF iimia growth & income fund.


Capital One links up with In Retirement Services

Capital One has entered the equity-release sector.The credit card and secured loan company has signed a deal with In Retirement Services which will see it pass cases on to the equity-release specialist.It will not aggressively promote the service during the initial stages of the deal but that could change in the future. Instead, Capital One […]

Singing the blues

Chris Salih examines some of the factors that are helping mid-caps to consistently outperform the FTSE 100.

‘TCF in danger of adding too much red tape’

Any positive benefits resulting from the move towards principles-based regulation could be cancelled out by industry guidance and firms’ own compliance procedures brought in to support the treating customers fairly initiative, warns the Better Regulation Commission.BRC chairman Rick Haythornthwaite says he supports the FSA’s focus on principles-based regulation and the drastic reduction of the sourcebook […]

Commission warning of principle problems

The Better Regulation Commission says the FSA’s move to principles could be scuppered by supplementary guidance and compliance measures brought in by firms to replace prescriptive rules.BRC chairman Rick Hay-thornthwaite says unless the FSA and industry acts, one layer of prescription will be replaced by another. The BRC is an independent body set up by […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    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