Connect with us

Investing

Which emerging markets hold the most promise for investors?

Published

on

gbaf1news
By: Richard Webster
Investors need to seriously consider the world’s new emerging economies in order to achieve sustained growth in their portfolios in the long-term, according to the boss of the world’s largest independent financial advisory group.

Nigel Green, chief executive of the deVere Group, says that the so-called Next Eleven (N 11) countries – namely Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, Turkey, South Korea and Vietnam – could have the impact that the BRICs (Brazil Russia, Indian and China) have had over the last 10 years.

He explains: “The BRIC nations have been at the forefront of global growth in the past decade.  Indeed, these four countries currently account for more than 18 per cent of the world’s GDP, which is far greater than had been predicted 10   years ago and of course, this enormous growth has been highly lucrative for those who have wisely invested in these nations.

“But whilst forecasts demonstrate that the BRICs’ growth will continue for sometime – their aggregate share of global GDP in dollar terms will soar from 18 to 26 per cent by 2020 – there are signs that their dominance is starting to slow, due to their exposure to beleaguered western economies.”

Mr Green highlights China’s slow down in manufacturing to illustrate his point. “Due to the ongoing eurozone crisis, European demand for Chinese goods has slumped dramatically.   In fact, Chinese manufacturing output grew in September at its slowest rate in eight months.”

With the ‘Big Four’ showing indications of faltering, investment alternatives are now being sought. “The BRICs narrative is far from over.  But savvy investors looking for strong, solid growth should now be looking elsewhere too.”

For the chief executive of the deVere Group, at the top of the alternatives list are the N-11 countries, which have been identified by the man who first coined the ‘BRIC’ acronym, Jim O’Neill, the chairman of Goldman Sachs Asset Management, as having a high potential of becoming amongst the largest economies in the 21st century.

“The N-11 nations are being tipped as the front runners of the new global economy due their current growth trends.  But other factors also come into play.

“Many of these countries have huge, young, and increasingly educated and wealthy populations, meaning their consumption potential is enormous and growing all the time.

“In addition, these countries are comparatively stabile politically and socially, plus they have relatively robust legal, financial and regulatory systems in place.

“Indeed, they display all the key characteristics the BRICs did a decade ago; characteristics which empowered the bloc’s phenomenal rise into a global economic superpower.

“And those who now invest sensibly in the N-11 countries could benefit as those who previously invested in the BRICs did.”

Taking a closer look at some of the N-11 nations, Mr Green highlights some of the specifics that make them an attractive interest to investors.

He says: “Turkey is widely expected to be the world’s second fastest growing economy by 2018 and it spent much of the last decade positioning itself for inclusion into the European Union, which suggests a high degree of political and social stability – which is increasingly important for investors whose appetite for risk has dwindled since the start of the global economic downturn.   In addition, due to its strong trade links with many developed countries it has comparatively sophisticated business practices.”

“Nigeria is another extremely exciting country which holds masses of potential.  The country has four times the population of South Africa, or in other terms, about 20 per cent of the entire population of Africa, and if it resolves its electricity issues which hamper its production, it could experience double digit growth within a decade.  The oil, agriculture, construction and retail sectors look to be the most promising in Nigeria.  It is already the third biggest supplier of oil to the US.

Mr Green continues: “Indonesia’s biggest asset is it massive, flexible labour market.  There is a population of 246 million, making it the forth most populous country in the world, and again there’s an ambitious, hard-working workforce who receive amongst the lowest wages in the region.  These factors, and the fact there’s an established production infrastructure, create an ideal environment to manufacture goods for the export market and a good place to source products for importers.

The deVere Group’s chief executive tells Global Banking and Finance Review that whilst every emerging market has its risks, the potential is too significant to ignore.  

“The sluggish situation of many established economies is well-documented and it is no surprise that investors are increasingly, and rightly, looking to broaden their horizons as they seek to bolster return on investments and diversify their portfolios.

“The N-11 countries have shown to investors that they have achieved important growth levels and have proven themselves to be self-sufficient, meaning they’ve been somewhat protected from the worst of the economic crash’s knock-on effects.

He concludes: “Whilst the BRICs will remain growth stalwarts, the opportunities now coming to light in the N-11 bloc should ignite investors’ interest.”
 
 
 
 

Investing

Are clients truly getting value from their BR solution?

Published

on

Are clients truly getting value from their BR solution? 1

By Matt Dickens, Senior Business Development Director at Ingenious

Financial planners and wealth managers strive to deliver on the needs of their clients by always providing the most suitable and effective advice. But as with any service, this advice should also be delivered at the best possible value for the investor. Value can be simplistically defined as the service that delivers the most benefit, balanced against the financial cost, but in the estate planning space, how do you assess what good value is?

1. Total fees and charges

Product fees are guaranteed to negatively impact returns, so it is important to minimise their impact when looking to gain the best value from the investment. Some managers report little or no fees paid by the investor to the manager, but instead charge the company or investment service itself. While this might initially be seen as better value for the investor, it is not as simple as that. Investors in unlisted BR services become a shareholder of the portfolio companies, so the reality is that any fees paid by the companies are effectively being paid by the shareholder (or investor). Therefore, both investor fees and company fees will both negatively impact the final return and must be considered together.

Analysis of what a manager is paid by the investor and by the company over a significant period will enable an adviser to conclude if the manager is offering good value, or if a disproportionate amount of fees is going to the manager at the expense of their investors.

2. Real investment returns

Another key component of assessing value is what the investment actually delivers. For BR solutions, investors’ main objective is commonly to pass on the maximum sum possible to their beneficiaries upon death. This may lead to a conclusion that delivering Inheritance Tax relief at the lowest possible cost is the primary driver of value. However, especially for clients with longer time horizons, the one-dimensional goal of avoiding a potential 40% Inheritance Tax bill can easily over-shadow the equally important goal of aiming to steadily grow the investment, preventing erosion by inflation, drawdowns and investment fees. Unlike some IHT-focused solutions, such as trusts or gifting, investors in BR services do not have to accept zero growth of their wealth from the point of investment.  Instead, investors can continue to earn returns, either taking an income stream or increasing the final sum to be passed onto their beneficiaries, precisely in line with their original objective.

While most BR managers predict their ongoing returns at a certain level, those targets are not guaranteed and historic performance varies widely.

3. The relationship between fees and risk

Given that the majority of managers in the BR space state their performance targets net of fees, to produce positive growth and achieve their target return, those managers must first earn back any fees they are taking. Let’s take the below scenario to illustrate this point.

 Are clients truly getting value from their BR solution? 2Manager 1

Annual performance target, net of fees: 3%

Annual fees: 3%

Gross performance target: 6%

 

Are clients truly getting value from their BR solution? 3Manager 2

Annual performance target, net of fees: 4%

Annual fees: 1%

Gross performance target: 5%

Initially, it might appear that Manager 2 must be taking more risk to target a higher net return of 4% than Manager 1, who is targeting 3%. However, Manager 1 has to deliver an additional 2% of gross return than Manager 2, to make up for charging higher fees. Higher fees not only impact returns and value, but they can also mean greater risk.

Market comparison

In the Tax Efficient Review’s most recent analysis of Unlisted BR Services1, they released data that ranks services in the market in terms of both investor returns and total fees. IEP Private Real Estate achieved the top rank for returns delivered, with the second lowest total fees in the market, demonstrating that it represents attractive value for investors in comparison to other services.

Continue Reading

Investing

Reuters Events Launch Global Investment Summit Online Edition Uniting Institutional Investors, Asset Owners & Financial Institutions

Published

on

Reuters Events – today announced the agenda for their Global Investment Summit (Dec 3rd -4th). The 2-day strategic summit has been reimagined in the era of social distancing and will be broadcast free of charge to the public.

This Summit, with a diverse range of international voices and anchored by Reuters News-led sessions, is the only place for institutional investors, asset owners and financial institutions to come to terms with the events of 2020.

Click for more information and for complimentary registration to the online edition

The Energy Transition team report an industry leading speaker faculty for 2020, including:

  • Eileen Murray, Chair, Finra
  • Philip Lane, Chief Economist, European Central Bank
  • Gregory Davis, Chief Investment Officer, Vanguard
  • Hanneke Smits, CEO, BNY Mellon Investment Management
  • Pascal Blanque, Chief Investment Officer, Amundi
  • Desiree Fixler, Group Chief Sustainability Officer, DWS
  • Joe Lubin, CEO, Consensys
  • Bahren Shaari, CEO, Bank of Singapore
  • Mark Machin, CEO, Canada Pension Plan Investment Board

The agenda released by Reuters Events Investment is both ambitious and comprehensive, and will cover four key themes: Market Outlook, Asset Management Strategies, Industry Deep-Dives and the Future of Investment.

View the full agenda here

Continue Reading

Investing

Halliburton & Baker Hughes CEO’s join Reuters Events: Energy Transition 2020

Published

on

Reuters Events – today announced that CEO’s of two of the world’s leading energy service companies, Halliburton and Baker Hughes, will join the speaker faculties for their flagship Energy Transition Summit.

The event will explore the creation of the future energy ecosystem and offer companies, from across the asset spectrum, a definitive guide to their net-zero strategies. The alignment of the two biggest O&G global service companies, Halliburton and Baker Hughes, represents a significant step in the transition to low-carbon energy

More information on the Europe and North America editions can be found below. Registration for the LIVE stream is free.

Alongside their CEO speaker representation, Halliburton join as Platinum sponsors of the North American edition. Baker Hughes join as gold sponsors for the European edition of the flagship energy transition program.

The Energy Transition team report an industry leading speaker faculty for 2020, including:

  • Lorenzo Simonelli, Chairman & CEO, Baker Hughes
  • Jeff Miller, CEO & President, Jeff Miller
  • Tristan Grimbert, CEO, EDF Renewables
  • John Pettigrew, Chief Executive, National Grid
  • Pratima Rangarajan, CEO, OGCI Climate Investments
  • Alex Schneiter, CEO & President, Lundin Energy
  • Gretchen Watkins, President, Shell Oil Company
  • Calvin Butler Jr., CEO, Exelon Utilities
  • Francis Fannon, Assistant Secretary ERB, S. Department of State
  • David Lawler, Chairman & President, bp America
  • Andreas Schierenbeck, CEO, Uniper

More information on the Europe and North America editions can be found below. Registration for the LIVE stream is free.

Governance & Cooperation – Does the energy transition face a ‘governance deficit’? To understand how the energy transition will develop over the next decade, it is crucial to understand the driving governing forces behind it. Will the Green Deal provide the first domino, how can we ensure progress in the shadow of Aberdeen and ensure that we translate targets into action?

Financing Energy Transition – We must address the elephant in the room; who is going to pay for it all? An understanding of where the funds are likely to come from is key to staking claim to the infrastructural projects that will redefine the modern world in the 21st century.

New Energy Infrastructure – Low-carbon energy supply and consumption will need a radical overhaul of infrastructure. As well as revamping the old, we’ll need entirely new assets and new systems of energy delivery. It’s an unprecedented opportunity with estimated spending at $70 trillion over the next decade. Knowing which technologies are ready to be scaled first is the key to understanding opportunity

Business Model Innovation – Who will provide leadership through the age of transition and how do we want our future energy system to look? Speed and timing will be crucial if you are to stay on the right side of the transition. Join us in setting business led, evidence based, targets as industry drives towards net-zero

More information on the Europe and North America editions can be found below. Registration for the LIVE stream is free.

At Reuters Events, we’re committed to tackling the Energy Transition head on; to shed light on the defining issue of our time and help energy companies meet a uniquely difficult challenge. That is, to be both an energy company of today, and the energy companies of tomorrow. In a period that will be defined by uncertainty we can, together, lighten the way forward.” – Owen Rolt, Head of Energy Transition, Reuters Events

Contact

Owen Rolt

Head of Energy Transition

Reuters Events

UK: +44 (0) 207 375 7596

E: [email protected]

Continue Reading
Editorial & Advertiser disclosureOur website provides you with information, news, press releases, Opinion and advertorials on various financial products and services. This is not to be considered as financial advice and should be considered only for information purposes. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third party websites, affiliate sales networks, and may link to our advertising partners websites. Though we are tied up with various advertising and affiliate networks, this does not affect our analysis or opinion. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you, or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish sponsored articles or links, you may consider all articles or links hosted on our site as a partner endorsed link.

Call For Entries

Global Banking and Finance Review Awards Nominations 2020
2020 Global Banking & Finance Awards now open. Click Here

Latest Articles

Entersekt provides clarity on Secure Remote Commerce authentication techniques for financial institutions 4 Entersekt provides clarity on Secure Remote Commerce authentication techniques for financial institutions 5
Technology19 hours ago

Entersekt provides clarity on Secure Remote Commerce authentication techniques for financial institutions

New whitepaper from Mercator available: Revisiting Authentication in the Age of SRC and EMV 3-D Secure Is it time for...

Thinking Long-Term When Your Shareholders Won’t Let You 7 Thinking Long-Term When Your Shareholders Won’t Let You 8
Business20 hours ago

Thinking Long-Term When Your Shareholders Won’t Let You

By MaryLee Sachs, US CEO, Brandpie In a recent study of nearly 700 CEOs across the US and Europe, my...

Are clients truly getting value from their BR solution? 9 Are clients truly getting value from their BR solution? 10
Investing20 hours ago

Are clients truly getting value from their BR solution?

By Matt Dickens, Senior Business Development Director at Ingenious Financial planners and wealth managers strive to deliver on the needs...

New TransUnion Study Finds Smooth Digital Transactions “Essential to Business Survival” During and After Pandemic 13 New TransUnion Study Finds Smooth Digital Transactions “Essential to Business Survival” During and After Pandemic 14
Business23 hours ago

New TransUnion Study Finds Smooth Digital Transactions “Essential to Business Survival” During and After Pandemic

Economist Intelligence Unit report for TransUnion highlights the crucial role emerging technologies will play in balancing fraud prevention and customer...

How technology has made us communicate better in crisis 15 How technology has made us communicate better in crisis 16
Business1 day ago

How technology has made us communicate better in crisis

By Pete Hanlon, CTO of Moneypenny COVID-19 has taught us a lot. We have embraced technology, some might say, survived...

Futureproofing Your Credit Management Now 17 Futureproofing Your Credit Management Now 18
Finance1 day ago

Futureproofing Your Credit Management Now

By Marieke Saeij, CEO, Onguard The pandemic has forced a shift in day-to-day operations for the majority of businesses. In...

Will covid-19 end the dominance of the big four? 19 Will covid-19 end the dominance of the big four? 20
Top Stories2 days ago

Will covid-19 end the dominance of the big four?

By Campbell Shaw, Head of Bank Partnerships, Cardlytics Across the country, we are readjusting to refreshed restrictions on our daily...

Why cybercriminals have ‘Gone Vishing’ during the COVID-19 Pandemic 21 Why cybercriminals have ‘Gone Vishing’ during the COVID-19 Pandemic 22
Business2 days ago

Why cybercriminals have ‘Gone Vishing’ during the COVID-19 Pandemic

More than 215,000 vishing attempts in the last year alone As new coronavirus restrictions look set to confine much of...

Risk Mitigation vs. Risk Avoidance: Why FIs Need to Maintain Risk Appetite and Not Place All Bets on De-Risking 23 Risk Mitigation vs. Risk Avoidance: Why FIs Need to Maintain Risk Appetite and Not Place All Bets on De-Risking 24
Finance2 days ago

Risk Mitigation vs. Risk Avoidance: Why FIs Need to Maintain Risk Appetite and Not Place All Bets on De-Risking

De-risking aims to protect financial institutions from the increasing pressures placed by regulators and threats, associated with clients operating in...

Using AI to identify public sector fraud 25 Using AI to identify public sector fraud 26
Technology2 days ago

Using AI to identify public sector fraud

When it comes to audits in the public sector, both accountability and transparency are essential. Not only is the public...

Newsletters with Secrets & Analysis. Subscribe Now