Best of British list gives UK consumers’ confidence in Britain and shows active fund managers can weather the Brexit storm
With the triggering of Article 50 just around the corner, interest rates remaining low and inflation on the rise, people may be wondering where to put their money in this climate of change. The Best of British Fund Managers list revealed today by TD Direct Investing shows there are a group of British stalwarts who have delivered returns despite Brexit, and outperformed their sector and benchmark for the last decade net of fees.
Mark Slater, of Slater Investments, has once again been crowned the Best British Fund manager, with his focus on investing in smaller companies with unique business models and strong growth prospects continuing to prove attractive. Schroders has stormed its way into the list with three out of four of its funds new additions to the list. Every one of the top 25 has outperformed the FTSE all Share over the ten-year period. Slater delivered returns of 12.6% against the FTSE’s 5.6%, confirming that despite the turbulence of the referendum, active management is still very much alive and working in the UK.
Michelle McGrade, Chief Investment Officer of TD Direct Investing, says: “There has been much criticism of active funds, with many saying that the average manager has failed to beat the benchmark. But what this means is that people shouldn’t invest in an average manager. We analysed more than 400 UK funds looking for equity managers with a track record longer than ten years, so ranking in the Top 25 for ten-year performance is a great achievement – these managers really are the best of British.”
The outlook for growth in the UK is strong with Theresa May at the helm, and a growth upgrade announced by the Chancellor in the recent budget. However, our own research has shown that investors are most worried not so much about the outcome, but the perceived resistance to it and the potential inability of the government to swiftly exit Europe.
Michelle McGrade continues: “The performance of the Best of British managers and the continued dominance of Mark Slater demonstrates the value of battle-hardened fund managers, and gives investors and savers reassuring inspiration for where to put their money, particularly as we approach tax year end and the date of the trigger.”
Mark Slater, Chief Investment Officer at Slater Investments said: “I’m delighted to be at the top of the list again this year as it validates an extremely effective and long-standing investment process, a team that has worked together for many years and our long-term approach.”
The Best of British research, now in its third year, reviews fund managers on their performance over the last decade and against their sector average. Slater was one of a number of fund managers who have maintained their ranking from last year showing that despite the volatile market conditions – and headlines – focusing on the long term and sticking with trusted fund managers is often the best approach to dealing with short-term turbulence.
Three Schroders funds are new entries into the list and James Rainbow, Co-Head of UK Intermediary at Schroders, said: “Taking a long term view of investments and the returns that skilled fund managers can generate for their clients are both things we are passionate about at Schroders. It is always welcome when our fund managers are recognised for the job they have done but it is particularly pleasing in this case. The research that TD Direct Investing have done for their Best of British List clearly demonstrates that there are managers who have added significant value to their clients’ investments over the long term. For our fund managers to be included amongst some of the best-known managers in the industry is a credit to the job that they have done.”
Key themes that TD has identified in its research include a shift away from growth-style investing, with value now appearing to be more in fashion. Additionally, managers with exposure to cyclical sectors including financials and materials are typically performing better since Trump’s election win and his promise to invest heavily in infrastructure. Finally, managers focusing on large-caps with a greater international exposure have tended to outperform especially since the decision to leave the European Union.
Recipe to success
Not everyone has taken the same route to the top of the list. Every manager uses a disciplined approach and sticks to their guns to the point of being stubborn, irrespective of what markets are doing. Investors can take a leaf out of fund managers’ books – if there’s one thing they’re good at it’s holding their nerve. But there are also many ways to skin a cat.
- The lone hunter – Mark Slater buys for the long term, seeking companies with growth prospects and unique business models. He believes in running profits and cutting losses.
- The scavenger – Alastair Mundy only looks at companies which are deeply unloved and have fallen 50% or more. It takes discipline to maintain this approach, especially during prolonged periods of underperformance, as can happen.
- The historian – Nick Train hasn’t sold a stock from his fund since 2013. He spends most days reading and researching. But the numbers prove his approach works.
- The power of the crowd – Majedie adopts a different approach to many, with four managers running their own portfolio, then blending them into an overall, diversified fund.
The Best of British list contains industry veterans with different styles and approaches who have demonstrated the ability to consistently outperform through different market cycles. The continued inclusion of fund managers identified in previous years, illustrates that their success is a result of discipline and focus and that, over the long term, quality comes to thefore.
You can find the hub here: https://www.tddirectinvesting.co.uk/best-of-british-fund-managers
Sunak to use budget to expand apprenticeships in England
LONDON (Reuters) – British finance minister Rishi Sunak will announce more funding for apprenticeships in England when he unveils his budget next week, the government said on Friday.
Employers taking part in the Apprenticeship Initiative Scheme will from April 1 receive 3,000 pounds ($4,179) for each apprentice hired, regardless of age – an increase on current grants of between 1,500 and 2,000 pounds depending on age.
The scheme will extended by six months until the end of September, the finance ministry said.
Sunak will also announce an extra 126 million pounds for traineeships for up to 43,000 placements.
Sunak’s March 3 budget will likely include a new round of spending to prop up the economy during what he hopes will be the last phase of lockdown, but he will also probably signal tax rises ahead to plug the huge hole in the public finances.
Sunak is also expected to announce a “flexi-job” apprenticeship scheme, whereby apprentices can join an agency and work for multiple employers in one sector, the finance ministry said.
“We know there’s more to do and it’s vital this continues throughout the next stage of our recovery, which is why I’m boosting support for these programmes, helping jobseekers and employers alike,” Sunak said in a statement.
(Reporting by Andy Bruce, editing by David Milliken)
UK seeks G7 consensus on digital competition after Facebook blackout
LONDON (Reuters) – Britain is seeking to build a consensus among G7 nations on how to stop large technology companies exploiting their dominance, warning that there can be no repeat of Facebook’s one-week media blackout in Australia.
Facebook’s row with the Australian government over payment for local news, although now resolved, has increased international focus on the power wielded by tech corporations.
“We will hold these companies to account and bridge the gap between what they say they do and what happens in practice,” Britain’s digital minister Oliver Dowden said on Friday.
“We will prevent these firms from exploiting their dominance to the detriment of people and the businesses that rely on them.”
Dowden said recent events had strengthened his view that digital markets did not currently function properly.
He spoke after a meeting with Facebook’s Vice-President for Global Affairs, Nick Clegg, a former British deputy prime minister.
“I put these concerns to Facebook and set out our interest in levelling the playing field to enable proper commercial relationships to be formed. We must avoid such nuclear options being taken again,” Dowden said in a statement.
Facebook said in a statement that the call had been constructive, and that it had already struck commercial deals with most major publishers in Britain.
“Nick strongly agreed with the Secretary of Stateâ€™s (Dowden’s) assertion that the governmentâ€™s general preference is for companies to enter freely into proper commercial relationships with each other,” a Facebook spokesman said.
Britain will host a meeting of G7 leaders in June.
It is seeking to build consensus there for coordinated action toward “promoting competitive, innovative digital markets while protecting the free speech and journalism that underpin our democracy and precious liberties,” Dowden said.
The G7 comprises the United States, Japan, Britain, Germany, France, Italy and Canada, but Australia has also been invited.
Britain is working on a new competition regime aimed at giving consumers more control over their data, and introducing legislation that could regulate social media platforms to prevent the spread of illegal or extremist content and bullying.
(Reporting by William James; Editing by Gareth Jones and John Stonestreet)
Britain to offer fast-track visas to bolster fintechs after Brexit
By Huw Jones
LONDON (Reuters) – Britain said on Friday it would offer a fast-track visa scheme for jobs at high-growth companies after a government-backed review warned that financial technology firms will struggle with Brexit and tougher competition for global talent.
Finance minister Rishi Sunak said that now Britain has left the European Union, it wants to make sure its immigration system helps businesses attract the best hires.
“This new fast-track scale-up stream will make it easier for fintech firms to recruit innovators and job creators, who will help them grow,” Sunak said in a statement.
Over 40% of fintech staff in Britain come from overseas, and the new visa scheme, open to migrants with job offers at high-growth firms that are scaling up, will start in March 2022.
Brexit cut fintechs’ access to the EU single market and made it far harder to employ staff from the bloc, leaving Britain less attractive for the industry.
The review published on Friday and headed by Ron Kalifa, former CEO of payments fintech Worldpay, set out a “strategy and delivery model” that also includes a new 1 billion pound ($1.39 billion) start-up fund.
“It’s about underpinning financial services and our place in the world, and bringing innovation into mainstream banking,” Kalifa told Reuters.
Britain has a 10% share of the global fintech market, generating 11 billion pounds ($15.6 billion) in revenue.
The review said Brexit, heavy investment in fintech by Australia, Canada and Singapore, and the need to be nimbler as COVID-19 accelerates digitalisation of finance, all mean the sector’s future in Britain is not assured.
It also recommends more flexible listing rules for fintechs to catch up with New York.
“We recognise the need to make the UK attractive a more attractive location for IPOs,” said Britain’s financial services minister John Glen, adding that a separate review on listings rules would be published shortly.
“Those findings, along with Ron’s report today, should provide an excellent evidence base for further reform.”
Britain pioneered “sandboxes” to allow fintechs to test products on real consumers under supervision, and the review says regulators should move to the next stage and set up “scale-boxes” to help fintechs navigate red tape to grow.
“It’s a question of knowing who to call when there’s a problem,” said Kay Swinburne, vice chair of financial services at consultants KPMG and a contributor to the review.
A UK fintech wanting to serve EU clients would have to open a hub in the bloc, an expensive undertaking for a start-up.
“Leaving the EU and access to the single market going away is a big deal, so the UK has to do something significant to make fintechs stay here,” Swinburne said.
The review seeks to join the dots on fintech policy across government departments and regulators, and marshal private sector efforts under a new Centre for Finance, Innovation and Technology (CFIT).
“There is no framework but bits of individual policies, and nowhere does it come together,” said Rachel Kent, a lawyer at Hogan Lovells and contributor to the review.
($1 = 0.7064 pounds)
(Reporting by Huw Jones; editing by Jane Merriman and John Stonestreet)
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