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...While asset allocators often spend more time thinking about geopolitics than is ultimately warranted, 2024 presents an electoral labyrinth....
...way — then there’s a really good place to park your money where you can get paid 4 to 5 per cent on your money and that will compound,” he said, extolling the virtues of top interest-paying cash savings accounts...
...The documents did not disclose if the figures took account of fees....
...In the UK, The Investment Association estimates that passive accounts for a third of all assets under management, and index fund assets eclipsed those in actively managed funds in the US market at the end...
...The return of normalised inflation that anyone over the age of 40 will remember will inevitably influence asset allocation as investors expect returns significantly above the risk-free rate....
...Poor long-term performance and the allure of cheaper passive strategies — which account for 40 per cent of the $45tn worldwide fund assets tracked by Morningstar, up from 14 per cent in 2008 — have eroded...
...Yet Vanguard’s popular LifeStrategy funds range (which also feature within my own Isa) have an inbuilt bias towards the UK, which accounts for 25 per cent of the equity component....
...Long before quantitative investing was a multibillion-dollar investing complex, Asness wrote his dissertation on what would today be called “equity factors” — the measurable attributes of stocks that account...
...The writer is an FT contributing editor The belief that stocks outperform bonds over the long run sits behind almost every strategic asset allocation process and is backed by centuries of empirical data...
...A series of academic studies have shown that asset allocation accounts for the lion’s share of investment performance, with stock selection and market timing only adding a little extra on top....
...While the 6.2 per cent account is no longer available, savings rates above 5 per cent on offer in the US and UK still present a major challenge for fund managers....
...It is not difficult to envisage a world where Gen AI engines are an integral part of all the higher-skill tasks of asset allocation, model portfolios, security selection and risk mitigation....
...UK investors returned to equities for the first time in six months, as asset managers looked to reorientate their portfolios to account for brighter sentiment on inflation and interest rates....
...But if the money was part of a cash/bond/fixed-income allocation, returns on that allocation have been awful in the past few years, because of the monstrous year 2022....
...Tiedemann’s wealth clients are mostly based in the US or Europe, have investible assets of between $25mn and $1bn, and collectively account for $49bn....
...Accounts showed that All Perspectives — the business he co-owns — had provided a further £41mn in funding to cover the lossmaking activities at GB News, an upstart British broadcaster in the vein of Rupert...
...But good asset allocation practice is to avoid any “home bias” of investing too much in UK shares....
...And the number of accounts increased by 77 per cent, from 301mn accounts to 535mn....
...Banks are unlikely to offer the same high yield on their savings accounts due to costs of intermediation. Direct debt sales to retail investors will therefore suck out funds from bank accounts....
...However, given that these individuals have chosen to place their ISA allocation in risk-free assets, we expect adoption of the British ISA to be low....
...UK pensions have lower allocations to domestic equities than pension funds in many other countries....
...The US has scraped together a few hundred million of unspent change from previous allocations. That was what Denmark, one-hundredth the size or so, put up just last month....
...If so, then hurrah: the government has effectively extended the Isa allowance by 25 per cent and set a floor of a 20 per cent allocation to UK equities....
...I think there will be, at the very minimum, much small allocations into cash and probably some withdrawals....
...And, if you include money which is not run systematically but is effectively governed by backward looking volatility-based risk metrics, that probably accounts for the majority of the asset management industry...
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