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Stephen Bailey, Macro-Thematic: Budgeting for growth

Our conviction in the asset managers macro theme has strengthened in the wake of the UK Budget. We have continued to add to our asset management exposure, and now also have appetite to own wealth management firms within the Funds.

Chancellor Osborne’s decision to increase pension flexibility – removing the compulsion for SIPP holders to purchase an annuity by the age of 75 – is at the same time a boon to the investment industry and a source of concern for the insurance sector. As a consequence, we believe that insurance groups will look to forge closer links with asset managers in order to develop more flexible product offerings and offset the projected decline in their annuity revenues. Mergers or acquisitions may be seen as the most efficient way to pursue this goal, with the £390m paid by Standard Life to acquire Ignis Asset Management potentially a sign of things to come.

James Inglis-Jones, Cashflow Solution: What next for markets - sentiment or fundamentals?

Valuation spreads have collapsed worldwide, meaning that the opportunity for contrarian value investments styles to perform well – as they did in 2013 – should have receded. While we would be cautious in stating that the sentiment-driven environment has been replaced by one based on fundamentals that is more supportive of our Cashflow Solution investment process, we saw some encouraging signs during the 2013 results reporting season in the UK and Europe to suggest that companies are being rewarded for evidence of good cash flow management and other indicators of quality.

However, the US market seems to have decoupled slightly from other developed world stockmarkets this year, perhaps showing that some of the bullish sentiment of the QE-led rally has carried over to its tapering phase.



Disclaimer

Any opinions expressed should not be construed as advice for investment in any [product or] security mentioned or which may form the underlying content of any topics discussed in this blog.  The information and opinions provided in this blog take no account of the investors’ individual circumstances and should not be taken as specific advice on the merits of any investment decision.   Any opinions or information provided has been based on sources we believe to be reliable at the time of this blog’s preparation: no representation or warranty, express or implied, is made as to the accuracy, reliability or completeness of such information.  Neither Liontrust, nor any of its partners, employees, representatives or agents accepts any liability whatsoever for any direct or consequential loss howsoever arising, directly or indirectly, from any use of our research or its contents.

Liontrust, its partners and/or employees may have had, have or will have positions in the securities (or related financial instruments) which are those referred to, or those underlying the content discussed in this blog.

Any individual who chooses to invest in any securities should do so with caution. Investing in securities is speculative and carries a high degree of risk; you may lose some or all of the money that is invested.  Always research your own investments and consult with a regulated investment advisor or licensed stock broker before investing.

Shares in companies referred to may be relatively illiquid and hard to trade, therefore riskier than other investments and there could be a large bid/offer spread, so if you need to sell soon after you’ve bought, you might get less back than you paid. This can make them riskier than other investments.