Will politics intrude further into investment calculations even for long term advised strategies? The following feels quite important and is perhaps symbolic of some of the rifts opening up.
Deutsche Bank’s currency chief is now questioning the dollar’s safe haven status as reported by CityAM.
We also know that European stocks are outperforming the US, defying many assumptions as the FT reports.
This may still be mostly about short or short to mid term movements, but does it eventually have an impact on longer term asset allocations?
I am going to suggest that the trade magazines have been a little slow to grapple with these issues. Be great to hear more of the views of asset allocators among asset managers and indeed IFAs.
Elsewhere, there seems to be something close to carnage in ESG and DE&I on a host of fronts. Here are jiust a few of the stories.
Royal London CEO Barry O’Dwyer has pushed back against criticism of the provider’s exclusion of some armament stocks from ethical funds after the pension provider was criticised in a report by The Telegraph.
The article stated ‘the fact that defence is excluded on claimed ethical grounds has alarmed ministers and is likely to provoke anger among some customers’.
Responding to the article, O’Dwyer told Citywire of the importance of ‘customer choice’.
This is, I think, important journalism from New Model Adviser as all manner of assumptions shift.
And this is causing even more ructions. As Fintech Magazine reports, the People’s Pension, has made a significant move by withdrawing £28bn (US$35bn) from State Street due to ESG concerns.
This reshuffling involves reallocating a substantial £20bn (US$25bn) to Amundi, and another £8bn (US$10bn) to Invesco.
State Street retains a few billion for now, but it is in the firing line elsewhere.
The left of centre Guardian newspaper puts it this way. "Investment firm State Street, the company that commissioned the Fearless Girl statue that once faced down the Wall Street Charging Bull sculpture and became a symbol of gender diversity in the workplace, has quietly ended some of its diversity policies as US companies continue to retreat from diversity goals."
It is also feeling the heat on climate change policies, losing a Danish pension mandate as Pensions & Investments reports.
There is, it seems, a very strange rift opening up between Europe and the US on some of these policies. Now, IFA clients mostly want to see decent returns and the sustainable fund labelling regime really feels as if it has not had the intended impact except perhaps at the specialist end of things.
But there must be challenges for light green or ‘do no harm’ investors and clients. The retreat by US firms and managers still feels very dramatic although the UK is often somewhere in between Europe and the US on these matters.
FTAdviser reports on data from the Saltus Wealth Index Report suggesting that 42% of HNWIs said their children’s education will be disrupted as a direct result of Labour’s decision to add VAT to private school fees.
Some 10% of respondents said their child could be moved to a less expensive private school, while 10 per cent could go from being boarding to day pupils at their existing school.
Interesting comment piece in Money Marketing from Paul Harper, managing director of Paul Harper Search, and author of ‘Reinventing the Financial Advice Profession’
Ineffective bonus schemes are a major cause of employee dissatisfaction and staff turnover.
While most employers recognise that their bonus scheme should motivate individuals and encourage them to engage in the right behaviours, many would admit that they may not have got it exactly right on occasion.
