10 YEARS OF PA: More fund choice, but lower costs

Added 4th October 2016

As Portfolio Adviser celebrates its 10th anniversary, we reflect back to inform our view on what challenges the investment industry will encounter in the decade to come.

10 YEARS OF PA: More fund choice, but lower costs

“Growth forecasts for Europe and Japan being upbeat, along with the US facing marginal downgrades, would indicate a global economy heading for a slowdown rather than a major correction.”

This was the relatively rosy state of the world when Portfolio Adviser first went to the printing press in October 2006.

Against a backdrop of concerns about the Bank of England base rate breaching 5%, global inflation and China’s record trade surplus, were features on new, exotic absolute return strategies, the then-buoyant world of hedge funds and with-profits products.

Absolute beginnings

Advertising in our first issue came from Gartmore, Scottish Widows Investment Partnership and New Star, which gave us ‘Ten reasons to diversify into commercial property’.

A decade on, and much has changed. But there are lessons we can learn from looking back that will inform the industry’s future. Nostalgia, it is said, is a seductive liar; not quite a fibber on the scale of Mr Madoff, but the ‘once bitten’ mood of caution that has held sway since the great financial crisis is likely to remain in place for some time yet.

"Nostalgia is a seductive liar; but not quite a fibber on the scale of Mr Madoff"

In September’s Portfolio Adviser, we looked at innovation across the industry, including initiatives in emerging markets and absolute return funds. It is worth noting there was not a home for the latter until the Investment Association – formerly the Investment Management Association – created a suitable sector in 2008.

Now known as Targeted Absolute Return, the sector boasts £65bn in assets, having been the best-selling retail sector in eight of the 12 months between July 2015 and July this year.

David Miller, executive director at Quilter Cheviot, suggests it is ironic that the creation of the absolute return sector was partly a consequence of their cousins, hedge funds, failing to deliver during the tough times in 2008-9.

“Post the credit crunch, one of the things people wanted was more security of return,” he says.

“They had been damaged by the market setback and fall in value of things that had been presented to them as low risk. The move was towards security and that is what created the absolute return focus.”

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Vincent McEntegart, manager of the Kames Diversified Monthly Income Fund, explains how he aims to deliver a stable and sustainable income of 5% p.a.*, paid monthly, by investing in a range of asset classes

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About Author

Gary Shepherd


Portfolio Adviser

Gary joined Last Word Media in 2009, becoming editor of Portfolio Adviser a year later. Previously, he worked at Incisive Media with roles across its Professional Adviser, Investment Week, Bloomberg Money and Mortgage Solutions titles. Gary has been shortlisted for various awards, winning Headline Money Investment Writer of the Year in 2010.



Investment Strategy




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PA Channel Island 2016

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