Margin and opportunity

As long-term investors looking at the fundamentals of a company, we analyse what the intrinsic value of a business is. This is not a single number, but a range of scenarios. Any models created are questions rather than answers. A key focus is getting an idea of what ‘normal’ earnings are. Two competing issues in working out ‘normal’, are the dynamism of the market and mean-reversion. History is full of examples of companies that were doing very well, and then they weren’t. Before cars, makers of...

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January in review

January saw mixed returns across global equity markets. In the US, the S&P 500 had a strong month as it rose 5.7%. This was during a month where Federal Reserve chair Janet Yellen held her final meeting before she hands over to successor Jerome Powell in early February. In contrast, the broad index for UK stocks - the FTSE All Share - fell 1.9% as pound sterling strengthened against all major trading partners, rising 5.0% relative to the US dollar and 1.5% relative to the euro. Elsewhere in Europe, the Euro STOXX 50 rose 3.1%. In fixed income, following a year that saw a significant flattening of the US yield curve, 2018 began with a slight steepening and increase in level as rates across the maturity spectrum rose. Focusing on 10-year rates, US Treasuries finished the month at 2.7%, while UK Gilts and German Bunds rose to 1.5% and 0.7% respectively.

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Understanding the Trade Blotter - Part 1

MyCredo Tip

Want to see detailed information regarding an order on the “Blotter”? MyCredo allows you to check the order details of your trade.

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Flexing to grow

As Equity Investors, we are a step away from where decisions are made and implemented. Shareholders own a slice of the business, but the business is run on our behalf. Ideally, we get a great management team, who build up a track record of reacting well to whatever complexity, uncertainty, and ambiguity gets thrown their way. In that way, when evaluating a business, we are able to look at what ‘normal earnings’ are. Then when there are challenging periods, and short-term investors make their decisions based on the next few quarters, buying opportunities present themselves. Merlin Entertainments is the second largest...

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December in review

2017 drew to a close with mixed returns across equity regions. December saw a 1.1% rise in the S&P 500, in a month where President Trump signed US tax reforms into law. In contrast, markets across continental Europe were down over the period, with the CAC 40 and DAX falling -0.9% and -0.8% respectively. UK equities saw the largest rise, with the FTSE 100 increasing 5.0%, despite the government losing a vote that required any Brexit deal to be approved through a full parliamentary vote. Having flirted with the 2% level earlier in the late summer, US 10 year bond yields ended the year where they began, at 2.4%. This masked a continued flattening of the US yield curve, as 2 year interest rates reached 1.9%, a significant rise from their 1.2% level in January.

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Best Ideas Portfolio   Dividend Growth Portfolio   Multi-Asset Portfolios 20/80   Multi-Asset Portfolios 45/55   Multi-Asset Portfolios 60/40   Multi-Asset Portfolios 70/30