Here comes the new face of opposition party politics, says David Cowell from Myddleton Croft Investment Managers. Fresh, sincere, committed, sandal-wearing, and strangely innocent of the wicked ways of the world. Three days in office, and already ‘clarifying’ his position on EU membership, IRA terrorists, Nato….. (We’ll give him till Christmas. Editor.)


Comrade Corbyn: On one hand, his victory was called “the greatest against all-odds victory in British political history”, On the other, it was called “an act of political stupidity unparalleled since Caligula appointed his horse to the Roman senate”.


As a full-time advocate for peace and human rights, political campaigning has been his lifetime’s work but this is what we do know about his interests: according to the Financial Times, “he loves making jam with fruit grown on his allotment, belongs to the All Party Parliamentary Group for Cheese and is a borderline train-spotter”.

He is a vegetarian and a keen cyclist – he does not own a car – as well as being a supporter of Arsenal football club. He has been married three times, most recently earlier this year. He has three sons, one of whom worked for his leadership campaign, while his brother Piers is an astrophysicist and weather forecaster.

Oh, and he loves hummus.


(Blatant plug from editor: Corbyn’s first attempt at Prime Minister’s Question Time)


The dog that didn’t bark: The Fed bottled out of raising US interest rates. Methinks they, and us, may regret it.


Multi-asset funds are favoured by more than half of IFAs as the retirement income vehicle of choice, a survey by Barings Asset Management has revealed. The report, which canvassed 106 independent financial advisers in July, found that 56% of those surveyed view multi-asset options as most suitable for generating retirement income over a 20-year period. Furthermore, 28% favour using single multi-asset income products rather than multiple income funds spread across various asset classes, while 54% believe that multi-asset funds will become the pre-eminent income option in the post-pension freedoms environment.

So why use most of these funds when the managers have little experience or track record – whereas we have been at it for years? Our Balanced Moderate portfolio has done 7.5% over the last year, making it number three in the 20-60% Mixed Sector of 194 funds with a one-year record. The sector average has done less than 1%

The above doesn’t include our 0.75% annual management charge but does include underlying.


MC chart Sept 18 two

From a Deloitte’s release: “HMRC has previously confirmed that the current UK Jersey Disclosure Facility is to come to an end on 31 December 2015, and will be replaced by a general disclosure facility (with less generous terms) which will run until 31 September 2017, when reporting under the Common Reporting Standard will commence.” Or the twelfth of never, whichever comes first.



Continuing their relentless hoovering up of smaller fund managers, Aberdeen is to purchase Advance Emerging Capital, wholly buying out the company’s £409 million in client assets for an undisclosed sum. Seems I was right about them needing to grow by acquisition rather than performance.

As last Saturday was Leger Day, we bought on Monday.



Interesting chart on the long term oil price, which shows that on an inflation adjusted basis it is on its long term average:

MC chart Sept 18

The Artemis Income and Invesco Perpetual Income and Growth funds are among those that have been ditched from the FE Invest Approved funds list and its Model Portfolio Service. The research house has released details of the manager switches of the 130 passive and active funds on its approved list for the first time, saying it got rid of larger funds and has brought in more nimble alternatives. Yet another instance of unauthorised fund-pickers closing the door after the horse has bolted.


Whilst on the subject of backward-looking, Advisers should be questioning the output of their strategic asset allocation tools as they may be operating under false assumptions, according to a new study from Square Mile Investment Consulting & Research and the Personal Finance Society (PFS). The review of the tools by Square Mile and the PFS labelled all those assessed “satisfactory” but said advisers should “beware of the limitations” of these instruments. Areas for concern include the inability to compare performance between different tools, the possibility that such models create a “false sense of security” for advisers, and the simplistic assumptions made by the models, according to the report. “A number of the models assume returns are normally distributed and that correlation coefficients remain constant,” the study stated. “[But] empirical evidence demonstrates that these assumptions are false… and care may be required in interpreting the output of some models.”


The growth in the use of third-party strategic asset allocation tools among advisers has risen sharply in recent years, as regulators’ focus on client suitability increases. One firm, Distribution Technology (DT), now has more than 500 advisory firms licensed to use its Dynamic Planner tool, which undertakes a number of tasks including risk-profiling and strategic asset allocation. We provide portfolios which match their risk profiling for a number of IFAs. Jason Broomer, head of investment at Square Mile, said strategic asset allocation tools, such as that provided by DT, are not prepared for a scenario where the negative correlation between bond and equity markets breaks down. DT calculates its correlations on a rolling 15-year basis, updating the figures quarterly.

However, a spokesperson from DT said: “No model can accurately forecast how correlations will evolve over time and hence our approach using rolling historic periods provides a robust and transparent foundation for our long-term strategic modelling.” So what is it that they are trying to do for the money?


The likelihood of a repeat of the 1970s, when both equities and bonds fell at the same time, is increasing as bond and equity valuations continue to trade near record highs. The Square Mile and PFS report also noted other potential issues. Its authors said none of the asset allocation tools assessed provide “empirical evidence” of attaining their aim to “maximise returns for a given level of risk”, stated the report.


Murphy showed up at Mass one Sunday & the priest almost fell down when he saw him. He’d never been to church in his life. After Mass, the priest caught up with him & said, ” Murphy , I am so glad you decided to come to Mass. What made you come?” Murphy said, “I got to be honest with you Father, a while back, I misplaced me hat & I really, really love that hat. I know that McGlinn had a hat just like mine & I knew he came to church every Sunday. I also knew that he had to take off his hat during Mass & figured he would leave it in the back of church. So, I was going to leave after communion & steal his hat.”

The priest said, “Well, Murphy , I notice that you didn’t steal McGlinn ‘s hat. What changed your mind?”  Murphy replied, “Well, after I heard your sermon on the ten Commandments I decided that I didn’t need to steal McGlinn’s  hat after all.” With a tear in his eye the priest gave Murphy a big smile & said;” After I talked about ‘Thou Shalt Not Steal’ you decided you would rather do without your hat than burn in hell, eh ?”

Murphy slowly shook his head. “No, Father, after you talked about ‘Thou Shalt Not Commit Adultery ‘ I remembered where I left me hat.”


Have a good weekend



David Cowell


For and on behalf of Myddleton Croft Investment Managers

1 Woodside Mews

Clayton Wood Close


LS16 6QE

Tel:        0113 274 7700

Fax:       0113 274 7711

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