On 20 January, Donald Trump was inaugurated as the 45th President of the United States. Global stock markets had rallied since the election result on 8 November, with many in corporate America hoping to benefit from promised tax reforms. Not everyone was happy. The day after Trump's inauguration, approximately half a million people protested in the Women's March in Washington DC, making it one of the largest one-day protests in American history.

In Europe, the Dutch were hailed as having “defeated populism” in the 15 March election by denying the Geert Wilders-led Party of Freedom’s bid for power.

On 7 May Emmanuel Macron of En Marche! was declared President of France having won the second-round vote against the Marine Le Pen-led National Front by a decisive margin. Again, the election is billed as a win against populism and Europe’s far-right. World stock markets are at their highest point for the year so far.

Across the Channel, the UK general election on 8 June restored Theresa May as Prime Minister, but only after the Democratic Unionist Party of Northern Ireland agrees to support a Conservative minority government. As the results came in, the prospect of a hung parliament led to an immediate fall in the value of the pound. May’s intention was to seek an overall majority, paving the way for easier Brexit negotiations.

After a relatively quiet end to the summer, aside from ongoing Brexit discussions, the Eurozone’s biggest player Germany held its federal election on 24 September. The result saw the Christian Democratic Union win only 33% of the vote – its lowest share of the vote since 1949 – but enough to see Angela Merkel remain as Chancellor. Markets then rallied for the last week of September and continued to climb in October.

Into autumn and it was the turn of the Japanese to go to the polls on 22 October. Given the dramatic fall in popularity that many world leaders had found themselves in over the year, it was a relief for Prime Minister Shinzo Abe to secure a big election win. The father of ‘Abenomics’ and the ‘three arrows’ policy of monetary easing, fiscal stimulus and structural reform, Abe’s victory was welcomed by a rise in markets.

Elsewhere in Asia, perhaps the most significant global change was happening in China where the hugely powerful Communist party held its five-yearly congress. President Xi Jinping cemented his legacy with his own political philosophy being written into the country’s constitution.

Emerging markets will dominate the electoral calendar in 2018, with votes due in the likes of Russia, Mexico, Brazil and Pakistan.

If you're concerned about how global events could impact your investment portfolio, please get in touch.

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If you're considering investing in the stock market, one crucial and very personal issue is, quite simply, how you feel about the prospect of putting money at risk and your ability to accommodate any loss in value.

What's your appetite for risk?

It's a fact that risk and the potential for reward go hand in hand: Investments that are low in risk are low in potential reward, whereas the more risk you're willing to take with your money the greater the potential for reward.

Factors in determining risk

As investment advisers, we will consider a range of factors  when assessing your attitude to investment risk:

• Age - how old you are may affect how you would like to invest, particularly the closer you get to retirement.
• The need for emergency cash - you should always keep a certain amount readily accessible (for example, in a deposit account) in the event of an emergency or as a foundation for your longer-term savings and investment.
• Can you afford to take a risk? - if your investments dropped in the short term, do you have the time to wait for them to recover?
• Can you afford not to take a risk? - leaving all your money on deposit may carry minimal risk, but you may miss out on higher potential returns and possibly see the spending power of that money fall due to inflation.
• Are there tax-efficient opportunities available - such as pensions or ISAs?

Devising an appropriate investment strategy

Once you are clear about the risk you need to take to reach your goals and you feel entirely comfortable with your risk profile, you'll need an investment strategy that is finely calibrated to deliver the results you’re looking for.

This is where a number of other key aspects of investment come into play:

1. How to avoid the ‘eggs-in-basket’ principle. We can make sure your portfolio is invested across a range of assets in order that the positive performance of some neutralises the negative performance of others.
2. Making sure that your money is in the hands of some of the best and most consistent investment managers in the business.
3. Making sure you can give your investments time - the longer you can leave your investments in place, the more likely you are to cope with any short-term changes in market value.

Talk to us

As members of Openwork, one of the UK’s largest networks of financial advice businesses, we follow a clear and thorough process designed to clarify exactly what you need from your investments. We also have access to a meticulously researched and managed range of investments specifically designed to meet clients’ different needs.

Taken together, you will know not only that your money is in good hands, but also that given time, there is an increased level of probability that it will perform in line with your expectations.

Need advice?

Good investment advice involves building a clear picture of the results you're looking for, taking into account your current financial position, your future goals and your personal attitude towards the subject of investment risk.

Talk to us for expert advice.

The value of investments and any income from them can fall as well as rise. You may not get back the amount originally invested.

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Most business owners are aware how they can do this through dividend payments or by paying a higher salary or bonus.  However, making a pension contribution may be something that you have not considered.  We believe this may be an effective tax efficient option for you and would be keen to discuss the benefits with you.

£40,000 is the limit for individuals on what can be paid into a pension each tax year, but this is reduced for anyone with an annual income which exceeds £150,000.

However, any pension contributions made by the company (rather than the individual) will normally reduce the business’s overall profit, meaning the amount of Corporation Tax is also reduced.  Unlike personal contributions, there is no limit on how much a company can pay into a pension scheme.

Please note, depending on the employee’s previous contribution history, there may be an annual allowance charge which we can calculate for you.

Both a short-term way of extracting profit and a long-term way of planning for retirement, paying into a pension is a great way to make the most of your business’s income.

HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen

For specific tax advice please refer to an accountant or tax specialist

Every commentator will have a different idea about which areas and which funds are the best bet; and these varying opinions can cause confusion for anyone relying on their expertise.

It’s also important to note that none of these talking heads will be privy to your specific financial circumstances and goals – no matter how impressive their CVs. That’s why it is so important to seek advice from professionals – like us – who will take the time to find out more about you, what makes you tick and what you’d like to do with your money. This ensures a robust process which results in an appropriate plan and appropriate investments that match your specific risk profile and financial goals.

Diversification matters

Any investment professional worth their salt will tell you about the importance of diversification across your investments, particularly if you plan to save money in your ISA over the longer term (ie. more than five years).

If you invest in individual funds, and we can recommend funds from some of the leading fund managers, the trick is to blend exposure to different asset classes. These asset classes include equities, often referred to as ‘stocks’ or ‘shares’, which represent a stake in the ownership of a company.

There are also bonds – sometimes referred to as ‘fixed income’ securities – which could be described in similar terms as a loan to a company or government which pays interest. Compared to equities, bonds can be less risky should you require a more stable investment environment.

Other, so-called ‘alternative’ investments could include property, or commodities like gold, natural gases or agriculture, which are all accessed via specialist funds.

Active, daily management

We can recommend a spread of funds through a range of risk-rated portfolios. These are the auto-rebalancing Openwork Graphene Model portfolios and the actively managed Omnis Managed Portfolio Service.

The latter is managed on a daily basis by experts whose aim is to deliver consistent returns while managing risk through investing in a wide variety of Omnis funds.

Whichever way you invest, it’s important that you take up your maximum ISA allowance if you can afford to. This is £20,000 for the 2017/18 tax year.

If you’d like advice on your investment planning, please get in touch.

The tax efficiency of ISAs is based on current rules. The current tax situation may not be maintained. The benefit of the tax treatment depends on the individual circumstances.

The value of your stocks and shares ISA and any income from it may fall as well as rise. You may not get back the amount you originally invested.

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In terms of global stock markets, the FTSE 100 bounced back from a tough August, closing September at 7,408.21, which was 2.8% higher than the August closing level.

In the US, the Dow Jones 30 was also higher, albeit slightly lower at 1.9%, ending September at 26,916.83.

Regarding currency, £ Sterling ended September at 1.23 US Dollars. This was 1.1% higher than the closing figure at the end of August.

Against the Euro, £ Sterling ended September at 1.13 Euros, which was 1.9% higher than the August closing figure. 

Inflation, as measured by the Consumer Prices Index including owner occupiers’ housing costs (CPIH), was 1.7% in August 2019 (this is August’s data which is reported in September). This was down from 2.0% in the previous month. The 12-month rate for the Consumer Prices Index (CPI) rate which excludes owner occupied housing costs and council tax was 1.7% in August 2019, which was similarly lower than the previous month.

The Bank of England maintained interest rates at 0.75% in September. The last change was an increase in August 2018. This means long-suffering deposit savers are likely to continue to lose money in real terms when you consider the rate of savings interest compared to the rate of inflation. 

The Omnis Managed funds, Openwork Graphene Model Portfolios and Omnis Managed Portfolio Service provide you with a diversified asset allocation in line with your Attitude to Risk, investing in Developed Market Equities, such as UK, US, Europe and Asia Pacific as well as Emerging Market equities. Cautious and Balanced investors will also have significant holdings in UK and Global Bonds, as well as Alternative Strategies.

We believe this multi-asset approach aims to give you the best opportunity for the highest level of return for your stated level of risk.

Past performance is not a guide to future performance. The value of an investment and any income from it can fall as well as rise as a result of market and currency fluctuations.  You may not get back the amount you originally invested.

With more uncertainty in the air we know that many of you might be concerned about what may lie ahead for your investment. It can be tempting at times like these to make short term decisions in an attempt to protect your money from the prospect of adverse market conditions.  As understandable as this is, it goes against a basic principle which all investors should endeavour to follow – ‘time in the market, not timing the market’.

What do we mean by this? Well, it is quite normal for markets to rise and fall and Omnis strongly believe that with any uncertainty comes opportunity.  They are both active and agile in approach and well positioned to be able to take advantage of these opportunities as they arise. Simply put, the Omnis aim is to use market fluctuations to buy low, sell high. By being an active investor, we are always looking for these opportunities.

As always, diversification – the concept of not having all your eggs in one basket – is a key investment principle which all investors should follow. Diversification is central to the Omnis approach when managing your money and key to protecting against unfavourable market outcomes. Omnis fund ranges, and portfolios are spread across a multitude of top tier fund managers, sectors, geographies and investment types. So, you can rest assured that your Omnis investments are being carefully managed with your long-term investment goals in mind.

We ensure your portfolio is only taking on as much risk as you are comfortable with, to meet your long-term financial goals. That’s why our partnership with your Omnis is so important to us.

Omnis are a long term active investment manager, and consider the wider, longer term impact of short term economic or political events. There will always be changes and challenges - it’s important to remember, that investing should not be considered with a short-term view.  

The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.

In Britain’s first December general election in nearly 100 years, the Conservative Party has won a very comfortable majority, soaring past the magic 326 seat mark in the early hours of Friday morning. With the Conservatives now occupying 364 seats with just one left to declare at the time of writing, Boris Johnson’s gamble certainly appears to have paid off – it’s the party’s best election performance since the 1980s. The Prime Minister said the result marked a “new dawn” for the UK and that he would work “night and day” to repay the trust of the electorate.

Despite the inclement December weather, millions of voters made their way to the polling stations on Thursday to have their say; even so, it was a disappointing night for some. Labour sustained huge losses in the party’s worst election performance since 1935, causing Jeremy Corbyn to announce that he will not be fighting another general election as Labour leader. Meanwhile, Liberal Democrat leader Jo Swinson resigned after losing her seat to the Scottish National Party’s Amy Callaghan – albeit by just 149 votes.

In fact, it was a very good night for the SNP, which made significant gains across Scotland and won an additional 13 seats, bringing the party’s total to 48. Speaking about the results, First Minister Nicola Sturgeon said the huge support for her party had sent a “clear message” on the prospect of a second independence referendum.

Early indications suggest that voter turnout was down on 2017, at 66.71% against 68.7% at the previous general election.

Market Reaction
In the run up to the election, the markets had a few jitters, with investor sentiment reactive to various polls and surveys. On election day, both currency and equity traders started the session cautiously, but were later boosted by hopes of progress in the US-China trade deal. On the afternoon of the election, the FTSE 100 closed up 57.22 points at 7,273.47; the FTSE 250 closed up 145.92 points at 20,793.03.

On election day, Sterling ticked up to touch the highest level against the dollar since March as traders bet the ruling Conservative Party would secure a majority, trading at around $1.31. Following the results, Sterling traded even higher on 13 December. The pound surged against the dollar to initially trade at around $1.34, its highest level since May last year, on the hope a majority would remove the Brexit uncertainty that has reigned since the referendum. Sterling also jumped to a three and a half year high against the euro.

As the markets opened following the results on 13 December, the FTSE 100 and the domestically focused FTSE 250 experienced strong gains. Clarity is now needed on the future relationship between the UK and the EU.

What Now?
What next then for the Prime Minister? Well, firstly, his visit to Buckingham Palace and the traditional speech outside No. 10. Next? His overwhelming priority is, he says, to take the UK out of the EU next month “no ifs, no buts”.

Parliament is set to resume on 16 December and the Queen’s Speech is scheduled for 19 December. This will enable Boris Johnson to push through his Brexit bill as soon as possible. The state opening of Parliament will take place with reduced ceremonial elements, due to its close proximity to Christmas.

A Budget is likely to follow early in the New Year.

Life Goes On
Major events such as this always have an effect on markets. It can be challenging to look through the political noise; however, it is essential to consider longer-term timescales instead of focusing too intently on short-term events. It’s always important to maintain investment focus to navigate any challenges ahead.

Financial advice is key. Please don’t hesitate to get in touch with any questions or concerns you may have. We are here to help.

The Bottom Line
Whichever way you voted on 12 December, the country has acted decisively to provide a comfortable majority, and, under Boris Johnson’s leadership, we will be led into the New Year with a clear mandate to “get Brexit done”. Whether you voted remain or leave, it is clear the Conservative government will strive to achieve Brexit to keep their key campaign pledge. The clock is ticking – the 31 January Brexit deadline is on the horizon.

Ben is one of Jupiter’s leading UK fund managers. Omnis specifically sought him to take over this Fund because of his excellent long-term track record in value investing - a style that Omnis wanted to retain within the range - and his skills in identifying opportunities among larger companies. Jupiter also appointed Richard, a specialist in smaller companies, to the Fund. His role is to carefully migrate assets out of smaller company investments as opportunities to do this arise and shift the Fund’s focus to larger companies. The intention is that, over time, Ben becomes the sole fund manager of the Income & Growth Fund.

In the first six months under Jupiter’s stewardship, performance has started to show signs of recovery (although it is still too soon to assess the Fund as a long-term investment). The allocation managed by Ben; mostly his additions to the portfolio with a few legacy holdings that he chose to retain, has added the greatest value.

Overall the Fund has underperformed against its benchmark (FTSE All Share Total Return) which is due to the poor, relative performance of the legacy smaller company holdings. However, Jupiter has made significant progress in refocussing the portfolio towards larger companies and this transition will continue over the coming months. It has relatively little exposure to smaller companies now, so their impact going forward should be reduced.

There have also been some encouraging stock stories from within the Fund’s portfolio of investments. Capita, a retained holding, has rallied more than 50% since the transition after recovering from difficulties it was facing over the summer. Vodafone, one of Ben’s additions and a top ten holding, appeared undervalued because it may have to cut its dividend, but has risen nearly 20%. Volkswagen, added by Ben as Omnis gave him the freedom to invest in a limited number of overseas stocks, has seen sales pick up and could benefit from spinning off Lamborghini.

Overall, Omnis are optimistic about the change they are seeing under the Fund’s new stewardship. Omnis believe that this transition to Jupiter and the appointment of Ben Whitmore, highlights one of the key benefits of investing with Omnis - Flexibility. Omnis manage their own funds, allowing us to make decisions in relation to the selection of fund managers as they see fit, where they believe that this is in the best interests of investors. With Omnis, you can always be sure that your investment is in safe hands.

If you have any questions about this fund manager change, or want more information on investments available through Omnis, please contact us.

This update reflects Omnis’ view at the time of writing and is subject to change.

The document is for informational purposes only and is not investment advice. Omnis is unable to provide investment advice. Every effort is made to ensure the accuracy of the information but no assurance or warranties are given.

The value of investments and any income from them can go down as well as up and you may not get back the original amount invested. Past performance is not a guide to future performance and should not be relied upon. Always seek professional advice before acting.