elstonviews

Confidence that UK equities having "made up lost ground" post-Brexit is misplaced. The largest UK companies that make up the bulk of the FTSE 100 and the MSCI UK Index have high exposure to global earnings. Apparent "strength" in the largest UK equities is just a translation effect of that revenue exposure. So the apparent uptick in UK equities offers no real comfort for global USD-based investors. For GBP-denominated ETFs tracking MSCI UK Equity (e.g. LSE:CSUK) performance is +3.7% since the EU Referendum Day 23rd June 2016 before votes were counted. Over the same period, the USD version of the same ETF (e.g. NYSEARCA:EWU) performance is -9.3% while sterling has weakened -12.4% (FXB). Performance of MSCI UK (LSE:CSUK) in GBP since EU Referendum Performance of MSCI UK (EWU) in USD since EU Referendum Chart Source: Google Finance

Trading in UK property funds totalling £9bn AUM has been suspended, locking investors into an asset class exposure they may no longer wish to have. This is a stark reminder that the liquidity of any fund is only as good as its underlying holdings Investors using UK property ETFs are unaffected owing to the more liquid nature of the structure and of the underlying Post-Brexit fears around commercial property values has led to managers of three UK property funds locking investors in.  They fear a potential rush of investors to sell units following the Brexit result in the EU Referendum.  Decisions to suspend will typically reviewed every 28 days.  The funds affected are those managed by Standard Life, Aviva and M&G, totalling some £9bn of assets (see table). While the justification given – to “protect the interests of all investors in the fund” – is fair and reasonable, some investors may not be too happy to be locked in for potentially quite a s...

The average all-in cost of a managed portfolio is approximately 1.82%p.a. A 1.25% fee reduction saves £1m in fees for £1m invested over 30 years Advisers offering portfolios of Exchange Traded Funds can help reduce cost of investing for Trustees Trustees could reduce investment costs by up to £1m on a £1m investment over 30 years by using low-cost “Exchange Traded Funds” within portfolios instead of relying on active management. Focus on fees Traditional wealth managers’ fees average 1.82% each year to cover costs of fund research and stock selection, according to some reports [1] . However a broad body of investment research [2]  suggests that the main driver of portfolio risk and return is not which stocks to choose, but the mix of assets that make up the overall portfolio. By using low-cost Exchange Traded Funds that track major asset classes, fees can be saved on the selection of funds and shares, to focus on the mix of assets instead. Exchange Traded Funds ...

The portfolio targets a total return of 4% above inflation over the long-term Diversified asset allocation constructed using highly liquid Exchange Traded Funds Investors keep more of available return as portfolio Total Expense Ratio just 0.42% Elston Consulting announces today the launch of its Charity Multi-Asset Income ETF Portfolio. The portfolio has been designed to target a total return of 4% above inflation over the long-term with an income yield of approximately 3.6%, diversified across a broad range of asset classes. Elston’s expertise is in designing, back-testing and scenario-testing research portfolios that focus on asset allocation as the primary driver of risks and returns. The portfolio construction process uses Elston’s proprietary quantitative models for the screening, selection and optimisation of portfolios of exchange traded funds (ETFs). Where suitable, the research portfolios can be constructed or adapted for clients by wealth managers and fina...