Investing
THE RISK OF COMPLACENCY CALLS FOR MORE CIRCUMSPECTION

By JaisalPastakia, Investment Manager at Heartwood Investment Management
This summer has been a rather uneventful one for financial markets. The S&P 500 traded within a tight range in August and remains at an all-time high. UK equity markets have also shrugged off worries about Brexit, with the FTSE 100 rising through July and consolidating those gains in August. Meanwhile, the FTSE 250, which includes smaller- and medium-sized companies, has also seen a meaningful recovery. Since the Brexit-related spike in June, volatility has subsided across global indices. The most well-known of these ‘fear indices’, the CBOE Volatility Index (VIX Index), which measures expected volatility levels of the S&P 500, has fallen significantly and is now below its historic average.
Markets are being driven less by fundamentals and more by liquidity, hopes of continued central bank policy measures and, recently, perceptions of a potential boost from significant government spending. Many investors are comfortable in the belief that, as long as global central bank support remains forthcoming, this ‘goldilocks’ state can continue. Hedge funds, in particular, have been fervent sellers of S&P 500 volatility via option contracts. They consider that monetary stimulus and improved forward guidance from policymakers, which provides financial markets with predictability, are likely to suppress volatility for some time. The income generated from selling option volatility is an attractive source of income for many investors, particularly when government bond yields are so low.
Upcoming events highlight ongoing uncertainties
There is a danger, though, that investors are relying too heavily on global central bank support and perceptions of potential government stimulus. Global central bank credibility will continue to be tested and questions persist around the efficacy of current policies; note how Westminster parliamentarians have recently questioned the Bank of England on whether it has acted too early. The Federal Reserve remains caught between an economy reaching full employment and a corporate sector that is still reluctant to invest for future growth. This creates challenges for Fed policymakers as they attempt to raise interest rates from near zero levels. Furthermore, attempts by the Bank of Japan to weaken the yen have so far proven counter-productive, leading to greater calls for fiscal intervention.
Central bank policy manoeuvring remains a key driver of market behaviour and, no doubt, there will be a lot of focus on the upcoming policy meetings this month. Over the next few weeks, we also have the first of the US presidential debates and, in November, an Italian referendum on constitutional reform, which may potentially provide another forum for anti-establishment dissatisfaction. While these events could pass unremarkably, investors need to be alert to underlying risks, which may have faded over the summer but have not been eradicated.
In particular, US equity valuations across a range of multiples remain at historic highs, though corporate earnings have yet to catch up. US companies are adjusting to the strength of the US dollar but tighter employment conditions could lead to higher wage demands, adding further pressure to profit margins. Moreover, while we have had some reprieve from the Brexit headlines over summer, the clock will start ticking on how the UK government will deliver. Needless to say, there remains opaqueness around the UK’s relationship with the Single Market and how it will forge a compromise on freedom of movement principles.
Bolstering portfolio defences in becalmed markets
Being risk-aware should not be mistaken for being overly pessimistic about the future. However, as equity markets remain in a becalmed state, investors should consider opportunities to bolster portfolio defences. As volatility falls, the cost of insuring a portfolio against a market downturn gets cheaper. We believe it is prudent to protect some of those gains made in equity markets over the summer, strengthening our portfolios in the event of any potential shock.
Investing
What is the procedure for proving a missing or lost Will?

By Alexa Payet, Partner at Bolt Burdon and listed specialist in the Certainty
Contentious Probate Hub & Area
Initial steps
When an individual dies it is necessary to search their paperwork to establish whether they made a Will and gather information regarding their estate. This is important because the personal representatives of the estate have a legal duty to distribute the estate correctly and could be held financially responsible for any mistakes made through any breach of duty.
Where a Will cannot be found but is believed to exist there are a number of steps that can be taken to help confirm its existence, including (but not limited to) the following:
- making enquiries of the deceased’s family and friends;
- making enquiries with the deceased’s professional advisors;
- instructing The National Will Register to undertake a Certainty Will Search.
Presumption of revocation
Where the original Will is known to have been in the testator’s possession before their death and cannot be located afterwards, there is a rebuttable presumption that the Will was destroyed by the testator with the intention of revoking it. If an order for the proof of a copy is to be obtained then this presumption must be rebutted.
Procedure for proving a copy Will
The procedure for proving a copy Will is set out in Rule 54 of the Non-Contentious Probate Rules 1987 (‘NCPR’).
The application is made to the Probate Registry at which the application for the grant will be made and the order can be made by a district judge or registrar.
The application must be supported by evidence in the form of an affidavit (although during the global pandemic the rules have been amended by the Non-Contentious Probate (Amendment) Rules 2020, SI 2020/1059, to provide for the use of witness statements as an alternative to affidavits).
The evidence must set out the grounds of the application and any available evidence that the applicant can adduce as to the Will’s existence after the death of the testator or, where there is no such evidence, the facts on which the applicant relies to rebut the presumption that the Will was destroyed by the testator during his/her life.
The applicant must ensure that the Court has the best available evidence of what happened to the testator’s Will in order that effect may be given to his/her testamentary wishes.
It is important to understand that the applicant does not need to demonstrate that the Will has been lost (it is the fact of its loss which gives rise to the presumption of revocation). Instead, the applicant must establish, by evidence, that the Will was not in fact revoked.
What is a Certainty Will Search and why is it necessary?
A Certainty Will Search searches for Wills that have been registered on The National Will Register (circa 8.7 million Will registrations in the system) and for Wills that have not yet been registered in geographically targeted areas where the deceased used to live and/or work. A Certainty Will Search is extremely important as it will be necessary to notify the probate registry of any persons who would be prejudiced by the grant if the copy Will is proved. If no such person exists then the registrar is more likely to grant the application. Alternatively, if such a person does exist then you should seek to obtain their written consent to the application. The written consents can then be lodged with (or following) your application.
Investing
Oil prices rise as investors look to higher demand seen in second half

By Shadia Nasralla
LONDON (Reuters) – Oil prices climbed on Tuesday as optimism that government stimulus will eventually lift global economic growth and oil demand trumped concerns that renewed COVID-19 pandemic lockdowns globally are cooling fuel consumption.
Brent crude futures for March rose 72 cents to $55.47 a barrel by 1152 GMT after slipping 35 cents in the previous session.
“The perception that any retracement will be quick as confidence in economic and oil demand recovery is unlikely to fade away,” said PVM analysts in a note.
U.S. West Texas Intermediate crude was at $52.65 a barrel, up 29 cents. There was no settlement on Monday as U.S. markets were closed for a public holiday. Front-month February WTI futures expire on Wednesday.
Investors are upbeat about demand in China, the world’s top crude oil importer, after data released on Monday showed its refinery output rose 3% to a new record in 2020.
China also avoided an economic contraction last year.
Investors are watching out for U.S. oil inventory data from the industry association API, due on Wednesday, the same day U.S. President-elect Biden’s inauguration speech will likely give details on the country’s $1.9 trillion aid package.
The International Energy Agency cut its outlook for oil demand in 2021, but pointed to a recovery in demand in the second half of the year to an annual average of 96.6 million barrels per day.
“Border closures, social distancing measures and shutdowns…will continue to constrain fuel demand until vaccines are more widely distributed, most likely only by the second half of the year,” it said in its monthly report.
(Additional reporting by Florence Tan, editing by Louise Heavens)
Investing
Can Thematic Investing provide investors with growth opportunities in uncertain times?

New whitepaper from CAMRADATA explores
CAMRADATA’s latest whitepaper on Thematic Investing, considers the role this type of investing can play in asset management and explores trends that can permeate society and traverse sectors. The whitepaper includes insights from guests who attended a virtual roundtable on Thematic Investing hosted by CAMRADATA in November, including representatives from CPR Asset Management, Sarasin & Partners, Impact Investing Institute, PwC, Quilter Cheviot, Scottish Widows and Stonehage Fleming.
Sean Thompson, Managing Director, CAMRADATA said, “In these seminal times, thematic investing has the potential to shape how the future unfolds. Yet running a successful thematic fund is no easy feat – it is a bit like navigating unchartered waters trying to identify the trends and the long-term opportunities.
“Trends such as AI and biotechnology are still in their relative early days, for example, and global economies are undergoing dramatic changes. But mapping out certain trends, identifying potential sustainable returns through a unifying thread that spans multiple sectors, could help future-proof investments. “Our roundtable guests considered current key themes, which themes worked well, and which have not and how thematic investors could identify trends with the potential to offer future growth.”
The guests named themes they currently like which included artificial intelligence, China, climate change, clean energy, automation, evolving consumption, ageing, digitalisation, water, waste management, biodiversity, and board diversity.
After discussing themes that have worked or not, the guests looked at total allocation to themed funds, and whether clients might be blinded by themes to the overall risk exposure in their portfolios.
Key takeaway points were:
- Themes have a habit of coming and going. One guest recognised that automation and robotics, for example, were cyclical, which means that investors will have to think carefully about entry-points.
- It was agreed that the commodities ‘super cycle’ of the 2000s came about with the economic development of China. Many commodities-based products found their way into mainstream investing, but this is unlikely to happen again.
- One guest was surprised by some of the themes that interested their customers; with their research showing that Board Diversity was almost the lowest-ranking concern among the ESG choices they listed.
- There was correlation between environmental impact and social benefits to investing. The theme that concerns the Impact Investing Institute, which is less than two years old, is improved measurement of such relationships.
- In terms of successful themes, one clear winner due to COVID had been digitalisation.
- One theme that has not done so well is the Ageing theme focused on older people travelling and enjoying experiences abroad later in life.
- One guest said their firm used themes for ideas generation, not as a shortcut for portfolio construction. They said themes lead to good ideas, but they then spend at least three months researching a stock, so that the best themes are represented by the best investments.
- The final point was that there are sensitivities for any global investor in allocating to themes, even the biggest one of all, Climate Change.
- But on a positive note, one guest added if all stakeholders can resolve their differences on definitions such as impact and ethical investing, then more capital will be readily transferred into opportunities.
The whitepaper also features two articles from the sponsors offering valuable additional insight. These are:
- CPR Asset Management: ‘Central Banks: leading the path towards Impact Investing’
- Sarasin & Partners: ‘Theme or fad? How to invest for the long term’
To download the Thematic Investing whitepaper, click here
For more information on CAMRADATA visit www.camradata.com