Holly's Blog: Curtain-twitching, bumpy stuff and a festival!
23 July, 2021
A scorching week as we digest more pictures of empty shelves, live in fear of a ping and try to understand the rules of the new board game called “Going On Holiday” BUT despite all of this, investors are feeling more confident about the economy and the general outlook. Yup you are in a positive groove.
Curtain twitching and snooping
Every 3 months we check in with 1,500 investors on what they’re up to. In June this year, 50% told us they think the FTSE100 is heading up and just 14% thought it would get worse. This time a year ago just 1 in 3 thought it was heading up.
Looking more specifically at the UK economy – a different kettle of fish to the largely internationally-exposed FTSE100 gang of companies - the over 55s are the most confident about the UK economy. 47% think it will improve in the next 6 months compared to just 15% last year.
And what are you planning to buy? Interest in global shares and property has waned and sustainable and ethical investments are marching up, particularly with the under 55s – a quarter of this younger group are planning to increase their investments in sustainable funds over the next 6 months.
Intentions to buy emerging markets funds go up
I’ve always been interested in the potential of emerging markets, particularly after a 3 month stint in India working in part as a volunteer in a slum and in part for Tata Asset Management, part of the astonishing Tata Group which makes pretty much everything you see in a day in India (trucks, steel, salt, watches, chemicals, tea, hotels, funds, etc!). The sheer size, scale, numbers and growth of this country were mind-boggling at every turn.
I was reading one of the pieces on our site this morning by Andrew Lister, investment manager at what was Aberdeen Standard Investments (is that now abrdn? …’m nt sr….. ) He reminds us that 80% of the world’s population lives in an emerging market and writes that “Non-China emerging markets now account for around 40% of global GDP growth". China adds another 30%, leaving emerging markets delivering more than 70% of the world’s economic growth.” Those are pretty big numbers.
Our data shows us investors are planning to up their holdings in this sector. In terms of future intentions, UK shares are the most favoured, followed by global shares, sustainable funds and then emerging markets funds.
I’ve held the JP Morgan Emerging Markets Investment Trust for about 100 years now (not a recommendation, just a fact) and it’s a bumpy old ride but does the job. You can have a look at platforms’ favourite funds in this sector – AJ Bell Youinvest has four picks; Hargreaves Lansdown features two on their sector favourite list and Interactive Investor highlights the Mobius Investment Trust on its Super 60 list.
From bumpy to bitcoin
If you thought emerging markets were bumpy, they look like a millpond compared to bitcoin which has basically halved in value since April. On Tuesday night we hosted our webinar on cryptoassets, sponsored by eToro, and talked about the difference between bitcoin & Ethereum, the outlook for these assets and – basically – are they dodgy or not?
When you have an economist share a vision that bitcoin could eventually play a similar role in future portfolios to Government bonds today, and when a highly erudite machine learning researcher from Oxford tells you that she uses crypto to enhance risk-related returns in her portfolio (oh and by the way her technical analysis suggests to her than bitcoin will increase from $30,000-ish to a potential $400,000 by 2030)...well that’s pretty mind-blowing stuff whatever your personal take. We’ll have the webinar available to watch on replay next week and it will be shared here ).
Have a lovely weekend everyone. I am going to a festival tomorrow. I am in part excited and in part concerned about the lack of decent wine, available toilets, germ-addled revellers and mostly what time it finishes. The good news is that it is a 6 minute taxi ride from my bathroom and fridge and I’d like to thank Mr Rag’n’Bone Man for coming to my village which is most kind and I am much obliged. The glitter tattoos and Daisy Duke hotpants are ready! 🤣