David Cowell from Myddleton Croft Investment Managers says the markets are still in good heart. And never mind all this silly election business.


The UK economy will take uncertainty created by the general election “in its stride” and grow 2.8 per cent this  year, the EY ITEM Club says. Their spring forecast, which uses HM Treasury’s economic modelling, predicts GDP will hit 2.8 per cent this year and 3 per cent in 2016. That’s somewhat higher than the OBR’s estimates.



Japan’s Nikkei 225 index has closed above 20,000 points for the first time in 15 years after the country recorded its first trade surplus in three years. NASDAQ has scaled new heady heights.



myddleton croft

Neil Woodford’s Patient Capital investment trust raised £800m in its launch period, a record. Patient Capital will invest predominately in early-stage companies, both quoted and unquoted. WIM conservatively estimates it will take one to two years to complete the new trust’s early-stage investments. So what happens in the interim? I know that investing is a long term process but would you want to be out of your chosen market for two years? Subscriptions were scaled back and the share price currently stands at a premium to NAV. Would you pay more than a pound for a pound’s worth of assets?

With the recent sunny weather I was  in a shop that sells sunglasses and those acuvue oasys one day with astigmatism. An assistant came over and asked, “what brings you in today?” I looked at her, hesitated and said, “I’d like to buy some dog food.” Does anyone else find it irksome to be told “no problem” when the spectre of a problem had never entered the arena?


Merrill Lynch International has been fined £13.2 million by the Financial Conduct Authority over the incorrect reporting of more than 35 million client transactions and a failure to report a further 121,387 transactions over a period of years. Deutsche Bank has been fined a record £227m by the FCA for manipulating Libor and Euribor, and misleading the regulator over an extended period. When this added to the US fines the total is £1.7bn. This means that nearly all of the major institutions in the investment world have been economical with the legalities and flown in the face of the global regulators. What has happened to the top people? Not a lot. What would have happened if it had been an IFA? An awful lot. What happens to retiring regulators? They get jobs with these big firms. Watergate’s Deepthroat said ‘follow the money’, I wonder if that’s what he meant.

Speaking at the Association of the Luxembourg Fund Industry Conference, Andy Mack, independent chairman of Morgan Stanley Investment Management, said: ‘If you look at where we are now in the markets, things are looking very unstable. A lot of regulatory effort has led to increased instability. The macro environment is a major concern and it is extremely likely that we will have some form of market correction sometime soon. The lack of liquidity in the market place, scrambling for returns, the bond bubble, there will be a severe correction. I can easily see in the market correction a number of firms will be finding it quite difficult.’ He said that smaller active managers have a better chance of thriving during a market correction, but acknowledged it can feel more comfortable for investors to invest in large funds. However, he believes that the logic disappears when you cannot anticipate what will happen. Of course he’s right; small is beautiful.

Investec Asset Management has soft-launched the Investec UK Equity Income fund for Blake Hutchins. The fund has an initial charge of 4.5% and an ongoing charge of 1.61%, has £10.6m in assets. With those levels of reported charge it may well stay at that level. Expect more ‘me too’ funds in the now popular space.


As one gets older, some things become more obvious. I spent a fortune on deodorant before I realised that people didn’t like me anyway.

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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