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Normal Pension Age Update re early access to pension benefits

HM Treasury and HMRC quietly launched additional proposals on 11/02/2021 with the potential to have a much greater effect on retirement planning over the coming years.

The proposals

The main proposal is this: anyone who was a member of a registered pension scheme on 11 February 2021 (the date of the consultation) and had a right to take pension benefits before age 57 on that date, would keep that right as a protected pension age. That protected pension age (which in most cases would be 55) would be scheme specific and work similarly to existing protected pension ages. This would mean:

  • Anyone joining a new pension scheme from 12 February 2021 onwards would have an NMPA of 57 from 2028 for that scheme, although they may have other pensions that they could still access before age 57.
  • From 12 February 2021, anyone who transfers to a new scheme would lose the right to take benefits from that pension before age 57 (assuming the original scheme offered that right), unless they completed a block transfer.

One key difference highlighted between the rules for existing protected pension ages and these proposals, is that clients would not need to crystallise all the benefits within a scheme on the same date in order to keep their protected pension age.

Next steps

The timing of proposals like these is always difficult. The consultation doesn’t close until 22 April, and we don’t expect to see draft legislation from the Treasury until the summer. However, if the proposals do go ahead as they stand, transfers that take place from today could affect when clients are able to take benefits. While many people may not expect to retire at 55 or 56 (and until yesterday might have assumed it simply wouldn’t be an option), it still adds an additional consideration into people’s pension planning.

It’s still early days, and I’m sure you’ll see more about the industry’s thoughts about the proposals over the coming weeks. What seemed like a very straight forward upcoming pension change has suddenly become something to keep a keen eye on.

Our Comment

We need to see what the outcome is in the summer, but this is one to watch for those who are considering retiring early at age 55 or if you thought you might access your pension benefits, typically tax free cash, early at age 55 from 2028.

In real terms this will only be a few people, most in the UK haven’t got the pension assets they need for early retirement and shouldn’t access their pension funds too early either.

However, if you are one of the few that may have a plan to retire early or access your pension benefits early, at age 55, from 2028 you now need to be careful about any pension switching or consolidation. Let’s see what we get at the end of the consultation, hopefully draft legislation in the summer.  Watch this space.

Steve Speed


Technical content cut and pasted from Curtis Banks Technical Update.

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ESG: Lessons from the COVID crisis

Fund managers Invesco published a paper last week called ‘Appetite for change: food, ESG and the nexus of nature’ which looks at the impact of the Covid pandemic on ESG considerations.

We have picked out some of the key points from this paper below and added our own commentary in blue.

ESG Recap

Before we look at Invesco’s paper and the points they raised, lets recap on what ESG is.

ESG stands for Environmental, Social and Governance. Investopedia definition for ESG is; ‘Environmental, social and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments.’

The key points raised by the Invesco paper are as follows:

  • The COVID-19 crisis has demonstrated that humanity’s understanding of its own relationship with the natural world remains inadequate – often dangerously so.
  • The pandemic has particularly exposed the interconnectedness of numerous existential threats, all of which might be described as components of the “nexus of nature”.
  • One of the most perilous yet underappreciated of these threats is the unsustainability of prevailing attitudes towards food production and consumption.
  • From the use of resources in developing countries to policies and practices around factory farming in the industrialised world, this issue affects the entire value chain.
  • Guided by the idea of materiality and initiatives such as FAIRR (Established by the Jeremy Coller Foundation, the FAIRR Initiative is a collaborative investor network that raises awareness of the environmental, social and governance (ESG) risks and opportunities caused by intensive animal production), investors are increasingly applying environmental, social and governance (ESG) principles in this sector.
  • As well as promoting and protecting sustainable investments, these efforts are showing how positive change in one area can benefit the nexus of nature more widely.
  • Interconnectedness means that the ripple effects can encompass concerns including deforestation, biodiversity loss, waste pollution, climate change and human health.

The ‘nexus of nature’

The longer-term survival of our planet and its inhabitants is strongly connected to various existential threats that are themselves highly interrelated. They include climate change, overpopulation, deforestation, loss of biodiversity and – perhaps least appreciated – the ways in which food is produced and consumed. In turn, each of these has a major influence on our health and wellbeing.

The World Economic Forum’s latest Global Risks Report underlines this. Eight of the 10 potentially most impactful risks over the next decade can be linked to humanity’s tendency to take the natural world for granted. Only weapons of mass destruction and cyber-attacks can reasonably be thought of as removed from the nexus of nature.

Why is it so important to grasp how food production and consumption might fit into this picture? The short explanation is that many of the practices that have become commonplace in the face of ever-rising demand for animal protein have consequences that are both far-reaching and deleterious. There may be no better illustration than the circumstances behind the advent of COVID-19.

As has been extensively documented, one of the likeliest sources of the outbreak was a “wet market” where livestock was reportedly kept in close proximity to dead animals. Here, originating either in bats or pangolins, the virus is believed to have been transmitted to humans via a process of zoonosis.

Something analogous happened in the late 1990s, when the emergence of the Nipah virus provided a salutary demonstration of how the nexus of nature can function. Native fruit bats were driven from their traditional habitats by deforestation; they started foraging in trees near farms; through their bodily fluids, they infected land used for raising pigs; and the pigs duly passed the disease on to farmers and abattoir employees.

Similarly, the SARS virus of 2002 is now thought to have come from horseshoe bats, eventually reaching humans via consumption of cat-like mammals known as civets. This, too, was an ominous warning of our collective vulnerability to a type of natural hyperconnectivity that is often woefully underestimated or wilfully ignored.

At first glance, given the circumstances surrounding these examples, it may be tempting to infer that the nexus of nature is at its most threatening in relatively rural settings or in developing economies. In fact, this is far from the case. As we explain in the next chapter, the phenomenon is present throughout the value chain of food production and consumption and represents a genuinely worldwide concern.

According to the World Economic Forum (WEF), risks related to the natural world now dominate the existential threats confronting humanity. They have gradually displaced economic, geopolitical and societal concerns in recent years, particularly since 2011.

The top 10 potentially most impactful global risks over the next decade, as collated in the WEF’s latest report, are shown below. Note that even those classified as societal are in some way linked to nature.

Intensive food production through the lens of material ESG risk

The FAIRR initiative is a collaborative investor network that raises awareness of the ESG risks and opportunities caused by the intensive farming of animals. Through its research, it helps investors integrate such factors into their decision-making and active stewardship processes. FAIRR has identified 28 material ESG issues that could affect factory farms’ financial performance and returns. Set out below, they include community health impacts and infectious diseases.


The COVID-19 crisis has underlined the hyperconnectivity of multiple existential threats, all of them constituents of the nexus of nature. It has also highlighted the position within the nexus of food production and consumption, and in doing so it has provided a stark warning that many of the prevailing policies and practices within this arena are likely to prove unsustainable.

Of course, investors have no more entitlement than anyone else to pass judgment on what is right or wrong. They are not self-appointed saviours or heroes. They do not constitute a deus ex machina for this sector or any other.

Relatedly, investors do not have all the answers. In food production and consumption, as in so many corporate spheres, progress and transformation stem in the main from the companies themselves and from the gathering weight of scientific evidence.

What investors do have, though, is capital; and it is capital that enables positive, lasting change to take place. This has already been demonstrated in a variety of settings, and it is now increasingly being demonstrated in reshaping how we meet the challenges of feeding an ever-growing global population – as we will explore in more detail in our next paper.

By applying ESG principles, investors can make a difference – one likely to have far-reaching impacts. This is the essence of responsible investing and shareholder capitalism, as is already well known, but it is also the essence of the nexus of nature. Positive, lasting change in one area should lead to positive, lasting change in many others – just as the bleak effects of taking the natural world for granted in one area have been felt in many others in the past.

Deforestation, biodiversity loss, waste pollution, climate change, human health – responsible investments in food production and consumption can play a part in addressing all these issues and many more. Nature’s boundless imagination, as so admired by Richard Feynman, guarantees as much.

Feynman once also memorably remarked: “Nature cannot be fooled.” This truth has become all too obvious in recent decades and during 2020 in particular. By engaging with companies and policymakers and by supporting initiatives that prize sustainability, transparency and accountability, investors can go a long way towards helping ensure that humanity does not fool itself.

Our Comments

We have been talking about ESG for a while now, and as we have noted before, the pandemic has really put this topic under the spotlight. As you can see from the key points of the Invesco paper that we have picked out, ESG is a wide-ranging topic and is much more than just ‘being a ‘good’ investor.

The principles behind ESG need to be embedded in an investment framework which encourages positive change.

We build ESG into our ongoing due diligence process to ensure we have a wide range of ‘core investments’ for our clients, which not only seek to provide good returns, but also to drive ESG forward and make lasting and positive impacts in the world.

More investment managers and fund houses are launching ESG investments or starting to move in the right direction with their existing investment offerings, engaging with businesses they invest in.

The demand for ESG and socially responsible investments is growing. Even in the past few months, the term ESG is seen much more in the financial press now than it was.

One thing investors and we as an independent financial advice firm need to watch out for is ‘greenwashing’.

Greenwashing is the process of conveying a false impression or providing misleading information about how a company’s products are more environmentally sound. Greenwashing is considered an unsubstantiated claim to deceive consumers into believing that a company’s products are environmentally friendly.

This can be an attempt to capitalise on growing demand for socially responsible investments.

We recently watched a webinar by Royal London on responsible investing and they highlighted that 85% of funds labelled ‘green’ have misleading marketing* (*Source: 2degrees investing initiative, 2020).

We try to avoid ‘greenwashing’ by doing thorough due diligence, such as asking investment providers questions such as ‘what are their responsible investment policies?’ and ‘how is ESG integrated into investment decisions?’

Our due diligence process is also ongoing, we make sure we stay in regular contact with any of the investment providers we recommend ensuring we understand their investments and investment decisions on an ongoing basis.

The Invesco paper looked at here in this post, gives some food for thought. Invesco are a large investment house and we rely on their input and updates to help us get a handle on key investment issues alongside their peers. We quickly understand the consensus view.

Stay tuned for more on ESG and socially responsible investing along with our regular blog content providing updates and insights from a range of fund managers to help you understand what is happening in the markets and the world.

Andrew Lloyd


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Blackfinch Group Monday Market Update

Happy New Year and welcome to 2021!

Please see below for our first blog post of the year, a Monday Market Update from Blackfinch.

Please note, this is a 2 week update for the two-week period 21st December 2020 – 1st January 2021):

The ever-changing world we live in reinforces the importance of regular up-to-date communication. This weekly news update from our multi-asset portfolio managers provides you with a summary of global events for your reference and to share with clients.


  • On Christmas Eve, and with just days to spare, the UK Government and the European Union (EU) put pen to paper on a post-Brexit trade agreement, with UK politicians voting overwhelmingly to back the deal.
  • The UK government confirmed that a new strain of COVID-19 was sweeping across the nation. Travel bans were imposed by a significant proportion of Europe, including cross-channel trade with France. Many travel restrictions were eased within days, although the backlog continued over the festive period.
  • A post-Christmas review of lockdown tiers resulted in a further 20 million people placed into stricter Tier 4 restrictions.
  • The UK government was set to mobilise large-scale vaccination programmes, choosing to focus on ensuring a larger proportion of the public receive their first jab than was planned under the initial roll-out.
  • Third quarter Gross Domestic Product (GDP) bounced back stronger than previously reported, rising 16.0% quarter-on-quarter, following a record contraction of 18.8% in the second quarter.
  • Official figures showed the UK government borrowed £31.6bn in November.


  • Congress approved a $900 bn stimulus package in the days after Christmas, despite a last-minute hold up prompted by President Trump over payment amounts to individuals.
  • The US economy grew at a record pace in the third quarter, and quarter-on-quarter GDP was revised slightly higher, from the initial reading of 33.1% to 33.4%.
  • Jobless data for the week to the 19th December showed 803,000 new unemployment claims, down from 892,000 in the previous week.


  • Vaccine producers are confident their existing vaccines will provide similar levels of immunity against the new strain of COVID-19, although no official test results have confirmed this.
  • The UK approved the use of the AstraZeneca and Oxford University vaccine after it passed the necessary regulatory hurdles. The UK has ordered 100 million doses of the vaccine, which is easier to store than the already approved Pfizer/BioNTech version.
  • Many EU countries began their roll-out of the Pfizer/BioNTech vaccine.

Our Comment

Whilst the beginning of this year may not be as happy as usual, we can now finally see light at the end of the tunnel. Yes, the next few months are still going to be difficult with potential lockdowns and heavier restrictions, but with the vaccine roll out which has now begun, life will soon return to normal.

Of course, with this will come market volatility, however they will recover, the FTSE 100 for example is today at its highest point since early March 2020 (this is great news!).

The restrictions and lockdowns are not ideal, but it’s part of a necessary plan to control this virus once and for all, plus, lockdowns are easier to deal with now than they were last year, as this time we know what to expect compared to the end of March last year, when it was all brand new unchartered territory for us, people and businesses (see what I did there?) know how to adapt better now.

Soon the US will inaugurate Present Elect, Joe Biden, into the White House, the mass vaccine roll out is now underway, whilst the next months will still be bumpy, we now have plenty to look forward too!

Thank you to all those who read our blogs last year, and this will be the first of many to come this year. We are not slowing down and we will continue to provide you with market updates from a range of experts and fund managers, plus plenty of our own original blogs and insights into the markets and this new world we are now living in.

Again, a very Happy New Year to all our readers, and I’m sure we are all together in the view that this year will be better than the last!

Andrew Lloyd


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What a year that was!

You couldn’t have made it up.  If anybody had tried to tell you in January this year what was going to happen, you would have thought they had completely lost it!

We are nearly at the end of 2020 and we have been through the mill.  Covid 19 has had a severe impact on markets, economies, our health, and our wellbeing.  We have not been able to live our lives normally.

Thankfully markets and economies have started to recover. China is in a better place than it was in January.  Different sectors thrived, in particular, Technology.  With c 75% of Technology businesses in the USA their markets have fared well with indices higher.

In November, with the Biden win and then the really good news on the Pfizer vaccine, markets recovered further.  As you know we are now getting vaccinated in the UK in priority-order and we await further good news on the Oxford/Astra Zeneca vaccine.

This Oxford/Astra Zeneca vaccine will make a considerable difference as it’s easier to handle and distribute, and much lower cost.  Not only is this good news in the UK, but also globally and for developing and emerging markets.

The only issue outstanding now, which I understand is nearly resolved, is Brexit.  It looks like we are on the verge of doing a deal.  Hopefully, by the time I relax at home later on, a deal will have been done.  This will bring some certainty to the UK and the EU and we can get on with doing business.

How have we changed?

Personally, I think we have learnt a lot from this challenging year.  As people and leaders, we now hopefully do a better job, with more of an understanding of the needs of our staff and clients, family and friends.  Our culture in the business will have changed as we understand everybody’s needs better.

We now know, more than ever, that we need to work as a team and look after each other.  A healthy culture is one that is diverse and inclusive.  We need to nurture and grow our people.

In terms of investments, we have seen a significant shift to ESG (Environmental, Social and (corporate) Governance) investing.  I think this will continue as Covid 19 has made us reflect on what is important, our health, looking after our environment and dealing with climate change.

The future?

Markets appear to have priced in a good recovery.  With the vaccine roll out in the UK, we would expect volatility to continue and the economy to pick up in the second half of 2021.  We still have a few headwinds. The end of furlough could see unemployment spike and zombie businesses could close.

To counter this, the pent-up demand of consumers will help, if the vaccine roll out is fast and efficient and people in the UK can return to their normal spending habits and make up for this year.

We also need to see the vaccine roll out globally so our amazing scientists and health care professionals can deal with any further mutation of the virus.  Technology and further developments will help too.

I feel positive about the future. It’s been a tough year, but the outlook is brighter.  Innovation and science will really help as we work hard to recover economies globally.

Thank you for reading our blogs. Hopefully, they help keep you informed in this fast-changing world we live in.  If you have any specific questions, please get in touch.

Merry Christmas and a happy, healthy, and prosperous New Year!

Steve Speed


Festive opening hours

24/12/2020 close at noon.

 Return on 29/12/2020 for standard office hours on both 29/12 and 30/12.

Close at noon on 31/12/2020.

Return to normal working practices on 04/01/2021

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Jupiter: Views from the House

Please see the below look back at 2020 from Jupiter Asset Management’s Chief Investment Officer:

Jupiter’s Chief Investment Officer reflects on the longer-term implications of a year most unlike any other.

In a year overwhelmingly dominated by the pandemic, it could be tempting to dwell on the challenges that have been presented to businesses and to global society.

Long before any of us had heard – let alone uttered – the words “COVID-19,” there was a trend towards more flexible working in many sectors of the economy, including in asset management. Some in our industry were embracing growing requests for more flexible working arrangements, while others may have viewed them with a certain degree of scepticism, pondering whether fund management was the kind of industry that could accommodate such arrangements at scale.

As much of the world went into lockdown, personal opinions on the merits and disadvantages of remote working became largely irrelevant; a significant policy decision that would, historically, have been the preserve of individual businesses was essentially taken for them.

Simultaneously, the important question as to whether a firm like ours could operate effectively with virtually all employees working remotely for a prolonged and potentially open-ended period was answered; we could, and we did. Indeed, a recent conversation with our head of dealing, Jason McAleer indicated that our industry as a whole has not only coped with the challenges presented, but has seen no perceptible increase in operational errors or issues.

In my view, the changes we have seen have the potential to make asset management a fundamentally more inclusive industry. Put simply, it now feels reasonable to hope that many of those who – for oft-cited reasons, including perceptions of long hours, punishing travel schedules and reconciling the demands of a challenging career with family life – might never have considered a career in fund management, will feel newly emboldened to take a closer look.

If, like me, you believe that more diverse investment teams are better performing ones, then this can only be a welcome development from the perspective of our clients.

Inclusivity leads to diversity

The pandemic and associated changes to working patterns and practices have also reminded us of the value of the office environment, as evidenced by numerous requests from colleagues for permission – which was generally denied, in line with the official guidance at the time – to continue to work from the office as the second UK-wide lockdown came into force.

This all begs a question: how quickly will the potential benefits of changes to working patterns in our sector filter through into the reality of the make-up of our workforce? Naturally, in a profession like fund management, hiring cycles are relatively lengthy. For this, there can be no apologies; the business of taking fiduciary responsibility of other people’s money is a serious one, and it is right that those charged with this duty should first have to prove their aptitude.

Of course, recruitment decisions are largely devolved to hiring managers; while this makes it difficult to “force” change in hiring practices from above, as CIO I am committed to continuing to challenge ourselves.

Changing behaviours: impact on markets and innovation

For a business like Jupiter, one of the more testing trends to emerge over the last year has been a tangible increase in direct participation in financial markets by retail investors. The exact cause of this change in behaviour is difficult to pinpoint, but we can reasonably speculate that it may have much to do with a combination of increased market volatility creating perceptions of attractive entry points, and the simple reality of the increase in available time many people have found in lockdown.

Whatever the cause, there is no doubt that such a sharp increase in activity in stock markets among individual retail investors has had an impact not only on stock prices, but also on liquidity and on sources of liquidity.

For asset managers, this potentially disruptive trend should act as something of a wake-up call; as retail investors in growing numbers show signs of exploring different ways to put their money to work, we must remain relevant, and continue to demonstrate that our products offer value.

As a firm, we place great emphasis on the importance of fostering innovation. A particularly exciting development for us in this regard was the formalisation earlier in the year of our strategic partnership with US-based NZS Capital, LLC (“NZS”), a highly innovative investment boutique which itself focuses on identifying disruptive businesses with the potential to generate favourable outcomes simultaneously for investors, customers, employees, society, and the global environment.

2020: when ESG became truly “mainstream”

Our partnership with NZS also serves as a timely reminder of our commitment to innovation and leadership in the field of ESG investing, a topic that has enjoyed a meteoric rise in prominence over the course of the last year. Indeed, I would be unsurprised if, in the future, social anthropologists looked back on 2020 as the year ESG investing became truly “mainstream.” This is an overwhelmingly positive development, and one to be embraced.

From a fund management perspective, I believe that ESG in the years ahead will be a refinement, evolution and re-categorisation of many of the assessments managers already make when looking at an investment case. How is a company run? Do its activities and/or products cause detriment to the environment? Are its employees mistreated or endangered? Does it mistreat its customers in a way that is detrimental to them and unlikely to build long-term loyalty? Has it taken on excessive leverage in pursuit of short-term shareholder returns that might undermine its longer-term viability? For us, these are not new questions, but they are being asked of us by a broader range of clients and other stakeholders, and with a frequency and determination not before seen.

Such focus on these issues is having a marked effect on markets, and on the way in which capital is being allocated to investment managers. This, in turn is undeniably changing and disrupting perceptions of the characteristics of a business most prized by investors.

The “what” and the “how” of asset management

I believe that the single most important thing we can do as a business is to generate strong and sustainable investment returns for our clients. As the end of every year approaches, we take the time to reflect on our performance; for a year that is likely to stand out in the collective memory for many of the “wrong” reasons, in this particular regard, 2020 has been a year much like any other.

The change, challenges and uncertainties we have all faced notwithstanding, it is pleasing to see that many of our strategies have performed very well throughout this period. Meanwhile, the new colleagues who joined Jupiter through our acquisition of Merian Global Investors have already made a significant contribution to Jupiter, bringing fresh energy, ideas, and perspectives to our debates.

But investment and performance are not the only things about which we hear from clients, who increasingly want to know how a firm like Jupiter manages its money managers. This is perhaps the most important part of the role of the CIO office, and it has been a privilege to speak with so many clients over the course of the year about how we seek to hold our fund managers to account. Put another way, it might be said that in 2020, what we seek to do (generate strong, sustainable investment performance), and how we go about it have become first among equals in the pecking order of clients’ priorities.

In truth, nobody knows how 2021 will play out. With the promise that vaccine programmes may be imminently deployed, a final end to the next chapter of Britain’s exit from the EU in sight, and a the potential for a more stable geopolitical scenario, it is tempting to look forward to the coming year with a great sense of optimism. At the same time, none of us must be under any illusion over the scale of the challenges facing the global economy as the world emerges from the pandemic. Whatever happens, our focus in the CIO office will be on seeking to ensure we deliver the best performance we can, in the most sustainable way we can; it is this pursuit, I believe, that gives us our real licence to operate.

As the end of every year approaches, reflections on the year we are about to leave behind tend to come naturally to everyone.

Look backs at the financial world and investment markets pour out from fund managers followed by outlooks, predictions, and goals for the year ahead.

2020 was a year that nobody could have predicted, and a year I’m sure nobody will look back fondly on.

One of the (positive) key points that can be taken away from this year (as demonstrated in the article above) is something we have been talking about for a while now, ESG is now mainstream.

It’s real, it’s important and it’s here to stay.

From firms and fund managers beginning their ESG journey, to the ones talking about how they already factor in a strong ESG process within their operations.

Whatever our industry takes away from this year, one thing is for sure, ESG is now firmly on everyone’s radar.

Andrew Lloyd


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Janus Henderson ESG Thought Pieces and Our Thoughts

Investment Management House Janus Henderson recently published some thought pieces on ESG and Socially Responsible Investing. Please see the key takeaways from these pieces below:

Sustainable equities: the future is green and digital

  • The pandemic has accelerated investment into digitalisation, which we consider to be a key enabler of sustainability.
  • We expect support for sustainable development to gain momentum as countries embrace the need to be low carbon and as Joe Biden takes his seat in the White House.
  • Investment into electric vehicles is expected to surge in 2021 as innovators ‘race’ to the top.

Sustainable design in consumer products

  • The apparel sector is well known for its detrimental effects on the environment. However, as consumers become more aware of their own environmental footprints, there has been a surge in demand for sustainable goods.
  • A circular economy is based on the principles of designing out waste and pollution, keeping products and materials in use, and regenerating natural systems.
  • Companies including Nike, Adidas and DS Smith have incorporated a circular approach to the design and production of their goods, creating durable and long-lasting products with a reduced environmental footprint.

Investing in Diversity: analysing the investment risks and opportunities

  • Companies are increasingly being held accountable by consumers who reward brands aligned with their values.
  • For many global businesses, matters of diversity and inclusion go beyond the workplace, and efforts are made to address discrimination in the countries in which they operate.
  • Investors should be wary of companies that fail to futureproof themselves in terms of diversity. Socially conscious brands that make inclusivity a central part of their business strategy and brand ethos are more likely to succeed.
  • What gets measured, gets improved. Investors should focus on company disclosure, diversity-related targets, and meaningful initiatives in place. A list of suggested investor questions can be found at the end of this paper.

Janus Henderson are ahead of the game with ESG policies and started factoring this in back in 1991 shortly following the 1987 United Nations Report, ‘Our Common Future’ which I mentioned recently in an ESG blog. Their philosophy is below;

‘We believe there is a strong link between sustainable development, innovation and long term compounding growth.

Our investment framework seeks to invest in companies that have a positive impact on the environment and society, while at the same time helping us stay on the right side of disruption.

We believe this approach will provide clients with a persistent return source, deliver future compound growth and help mitigate downside risk.’

As I wrote about in our blog, as a firm we undertake regular due diligence with regards to the investments we recommend to our clients. This an ongoing process and we are constantly monitoring the market, and this year ESG has become a key factor in what we look for in the due diligence process.

Of course, many businesses may have a broad and generic ESG statement, but having a strong and well defined ESG process embedded into a businesses culture and investment process is definitely one of our key determining factors in the companies we choose to recommend.

We start off with an investment houses ESG statement, but then we dig deeper, to make sure these investments do exactly what they say they do, in terms of ESG, then factor this into the rest of our research i.e. investment returns, track records, cost etc.

It’s good to see so many investment houses now openly talking about and promoting ESG and demonstrating their views and philosophies.

Now could be a great time to invest whilst asset prices are still generally low, all whilst taking a responsible approach to investing!

As always, keep checking back for a variety of blog content from a wide range of investment houses, fund managers and our own original pieces.

Andrew Lloyd


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Five top tips for people accessing their pension during Covid-19

I’ve just cut and paste this from an article received from A J Bell yesterday, Sunday 29/11/2020.  It’s a little late into the pandemic but I agree with most of the content.

1. Can you use other income sources to tide you over?

If you take taxable income from your pension, your annual allowance will reduce from £40,000 to just £4,000 (the ‘money purchase annual allowance’ or MPAA). This is one of the main reasons why you might avoid taking taxable income from your retirement pot. If you have money saved in an ISA, for example, you could consider taking this out tax-free, while also keeping your full pensions allowance intact.

2. Take your tax-free cash first

Note that the MPAA only kicks in if you take taxable income from your pension pot. So if you have no other options open to you, taking only your tax-free cash will at least leave you more flexibility to rebuild your retirement fund later on.

3. Do you have a plan?

If you have been forced to access your pension early – or are planning to in the coming months – spend some time thinking about how you can rebuild your fund once your income bounces back. It might be that you need to pay more in as a result to get back on track, or consider working a bit longer. But whatever you do, don’t stick your head in the sand.

4. Sustainability is the key

For those who have already stopped working and are taking a retirement income via drawdown, it is vital to review withdrawals regularly to make sure they remain sustainable. These reviews should happen at least annually, and you should be prepared to potentially reduce your income if your investments suffer significant short-term falls (as we saw in March and April).

5. Consider a ‘natural income’ route

A ‘natural income’ retirement strategy involves living off the dividends your investments produce, thereby preserving the capital value of your underlying fund, allowing it more time to grow. While a natural income strategy has been particularly difficult in 2020 as swathes of companies have cut dividends, positive vaccine news could mean it is more viable in 2021 and beyond.


I struggle with the last point on a ‘natural income.’  If this were for your main source of income, you would have to be able to manage significant variation in income yields, particularly at the moment.  This would work for a secondary income, a top up income from, for example, a Stocks & Shares ISA portfolio.

From my point of view, I advise all clients to build at least three different assets to help manage risk and aid tax efficiency in retirement; cash deposits, Stocks & Shares ISA portfolios and pension funds.

If markets drop as they did in March and your pension fund values follow, you can then switch your Drawdown pension income off, start to draw on your cash deposits to cover living costs and wait for the market to recover.  This will help you protect your pension assets for the long term.  As the markets recover, you can start your Drawdown pension income, perhaps at a lower level initially.

When markets fully recover, you can use your Stocks & Shares ISAs to top up your cash deposits.  Your Stocks & Shares ISAs and pension funds remain invested and recover in value so that you are fully prepared for the next shock to markets – hopefully, a good long time away.

Any guaranteed income you have, for example State Pensions, will help through volatile periods.

Take care.

Steve Speed


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ESG… the ‘new normal?’

Firstly, yes, this blog is called ‘the new normal’ and yes, I know you may be fed up of this phrase (believe me, I am too!), but dare I say it? Is ESG ‘the new normal’ when it comes to investing?

You may have seen some of our posts over this past year on ESG and sustainable investing.

We posted a 3 part series over the summer called ‘What is ESG? – An Introduction’, this was written by us to help our clients really understand what ESG is, and it’s a good thing we did… a recent study was undertaken in this industry and it was found that the majority of clients didn’t understand what ESG was, in fact it was found that people thought it stood for ‘ethically sourced goods’.

Google searches also show an increase of 216% in the term ‘ESG’ since 2018. This shows if people don’t know what it is, they want to learn.

Over the summer we wrote;

What does ESG stand for?

ESG stands for Environmental, Social and Governance

But what is it?

Investopedia definition for ESG is;

‘Environmental, social and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments.’

ESG is more of a theme or a set of principles to follow rather than a single set principle.’

In case you missed it, please revisit this blog series using the following links: What is ESG? – An Introduction – Blog Series – Part 1, Part 2 and Part 3.

One Planet, One Society, One Economy

ESG is a set of principles throughout not just investing, but throughout the world.

Climate change is a factor within ESG principles, but why is it important to focus on climate change?

Well we are one planet. We are one society and one economy. Yes, I am aware that sounds very ‘tree hugger-ish’… but look at how issues caused by climate change can affect society and the economy.

You will have seen hurricanes, floods, the wildfires in California and Australia on the news over the past few years. These are all driven by global warming. Since 1980, the cost of weather related catastrophises has been over $4,200Billion.

Boris Johnson recently announced that the aim is for the UK to have no sales of new fossil fuel cars by 2030.

Climate change is not an abstract future concept anymore and ESG isn’t just the latest trend, it is a future state of being, it’s an input into the outcomes of the future and it’s about companies embracing opportunities and making changes now to invest in the future.

The concept of ‘ESG’ or ‘ethical’, ‘socially responsible’ isn’t new.

Over 30 years ago, in 1987, there was a study by the Brundtland Commission called ‘Our Common Future’ which said that;

‘Sustainable development meets the needs of the present without compromising the ability of future generations to meet their own needs, guaranteeing the balance between economic growth, care for the environment and social well-being’

ESG has been gaining momentum for a while now as climate change and other social issues presented themselves but then of course, the pandemic hit.

Many investors probably assumed that the ESG focus would fade however it was only strengthened, with people looking at how everybody working from home would reduce carbon emissions, international travel was halted which again contributed to the drop in carbon emissions and early on in the pandemic when companies had to send employees off to work at home or on furlough and their mental and physical wellbeing became a focus.

Sustainable investments were once few and far between and usually meant sacrificing returns in order to stand by your beliefs, but these days, you would be hard pressed to find a company or an investment that doesn’t have some form of ESG policy or statement. Of course some may just be doing this to ‘tick the boxes’ but some will be actively involved in ‘doing the right thing’.

ESG has momentum now, we no longer think you have to sacrifice returns either!

As we have said before, ESG is not a tangible ‘thing’ that you can see or hold, it is in fact a complex interconnected system of ideas and processes.

Think of it as a journey, rather than a destination.

Andrew Lloyd


Team No Comments

Do Active Managers Truly Deliver in Volatile Times?

Please see the below content from Blackfinch Asset Management:

The role of an active manager is to make investment decisions based on analytical research, forecasts, judgement and experience with the aim of outperforming a specific benchmark or achieving a target return. This is as opposed to passive management, which involves tracking a market index.

The optimal environment in which active fund managers should thrive is when there are heightened levels of stock market volatility. Large swings in market direction create attractive investment opportunities as well as compelling exit points for profit taking. Arguably, markets have rarely been more volatile than in 2020. As a result, we’ve been extremely vigilant in assessing and monitoring the actively managed funds to which we allocate within our portfolios.

Our Approach to Active and Passive Managers

We’re whole-of-market investment managers, meaning we have the luxury of being able to make investment decisions freely, without fear of compromise. We’re unbiased in our investment selection. This extends not only across underlying fund houses, geographic regions and asset classes, but also when it comes to selecting between active and passive mandates.

We blend active and passive strategies within our portfolios, recognising the benefits that both approaches bring. When selecting an actively managed fund, we expect to clearly see value being added over and above an equivalent passively managed fund.

It’s important to establish whether a fund is delivering outperformance versus its selected benchmark. We’re also just as concerned about how it’s performing against its comparable peer group. This helps us to ensure that our investment screening process enables us to identify active managers with the ability to deliver attractive risk-adjusted returns versus other similar mandates.

Active Equity Managers

Equities are the main driver of performance in most portfolios. Our most recent assessment showed that, out of all actively managed equity funds to which we allocate, 84.6% have outperformed their respective benchmarks this calendar year. Perhaps even more comforting is that when compared to their peer groups, an impressive 92.3% of our underlying funds have outperformed their peer groups.

North America

Notably, within the North American equity sector, one of our core active equity funds has delivered a year-to-date return of 84.5%. This is some 71% ahead of the base market and equivalent passive mandate.

Asia and Emerging Markets

China, emerging markets and Japan have also been areas where our active managers displayed strong returns over equivalent passive and sector comparators. Of course, past performance should not be used as a guide for future returns. These impressive returns do mask some periods of significant volatility. However, when used at the correct weight and managed appropriately, these funds can be a fantastic component in a portfolio.


On the flip side, within our UK equity allocation the margin of outperformance from active managers was far less, particularly in the large cap space. While outperformance was achieved, the difference between active managers and their passive equivalents was around just 2-3% after fees. We feel this performance differential is down to the notable challenges that the UK market has faced this year above and beyond the pandemic. For this reason, we remain comfortable in maintaining our current underweight to the region.

Ongoing Assessment and Monitoring

As ever, we’re conscious that the investment backdrop can change at a moment’s notice and we remain vigilant in our allocation to active managers. This is reflected in how we stick to our established process and also highlights the importance of regularly screening and assessing both active and passive mandates. This discipline helps us to ensure we don’t become wedded to ‘star’ managers and continually focuses attention on selecting the correct strategy depending on the particular stage of the market cycle.

As you may have seen with some of our other blog content, we regularly share updates from Blackfinch Asset Management as we believe they are a very good investment management firm. They have a good solid ESG proposition built in to their investments and as you can see in this article, they have a very good approach to investments and are varied in their methods to help deliver the right returns depending on the clients circumstances.

As Blackfinch note in the article, they are conscious that the investment backdrop can change at a moment’s notice and remain vigilant in their allocation to active managers.

We share the same view, and one of the ways we remain vigilant is by staying up to date on markets by taking in a wide range of views from across markets to help us get a handle on what’s going on.

We are also vigilant with the investments that we recommend to our clients and review these on an ongoing basis to ensure that they are doing exactly what they say they will and looking after clients assets in the right way. This is part of our ongoing research and Due Diligence.

Please keep an eye out for further updates from both us and from a range of different fund managers and investments houses.

Andrew Lloyd


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Where are we now? (Part 2)

As we discussed in Part 1 of this blog: , I had the privilege of listening to a great interview held between Karen Ward of J. P. Morgan and Dr. Gertjan Vlieghe, a voting member of the Bank of England’s monetary Policy Committee.  This blog covers the second half of the interview, which I have based on my notes and which hopefully does not distort the discussion.  To re-iterate, the following is based on my interpretation and I believe I have been faithful to the key content and questions and answers discussed.

Karen raised the topic, ‘About negative interest rates and stimulating growth?’

Gertjan responded, ‘Macro Economists think about ‘real interest rates’. These have been around for a while.  It’s (about) nominal interest rates at 0% or below.  If you lower interest rates further, banks will start to lose money, lose deposits and therefore can’t lend.’

‘In reality, (in Europe) there has been no large-scale withdrawal of deposits. People/corporates are willing to pay to keep deposits in the banks.  Is the UK fundamentally different?  Probably not.  So, it (negative interest rates) could achieve further stimulus to the economy.’

Gertjan continued, ‘My reading and very extensive studying found that it did not impede lending and it did not reduce bank profitability.  It worked as intended.  The risk of unwinding macro stimulus is low’, (in Gertjan’s opinion).

Karen then asked, ‘But has it worked?’  (in Japan and Europe)

Gertjan responded, ‘The question is, if negative interest rates were never used, would it be even worse?  Actually, it would have been.’

Karen went on to enquire, ‘How will this interest rate persist?  How will it reverse?’

Gertjan answered, ‘I am a believer in the ‘low for long’ story and the importance of demographics. We have seen a big increase in longevity without a commensurate increase in the retirement age.  Reduced capital amounts for businesses and increased need for savings generates a world where the equilibrium for interest rates is very low.  Look at what is happening in Japan – look how their interest rates are.’ 

Gertjan further discussed the global ageing demographics, except for the Middle East and Africa, who are much younger.  He added ‘The one way to adjust this is to increase the pension age.’  He did not clarify whether he was referring to the State Pension age or the minimum pension age – probably both!

Karen then went on to ask, ‘What are the Bank’s specific forecasts for inflation?’

Gertjan replied, ‘Now at 0.5% for the next two quarters, then it will rise and be roughly at target in 2 years and slightly above in 3 years.’

Karen continued, ‘Is there a risk post-vaccine of seeing a bottleneck-demand pushing up against supply?’

Gertjan responded, ‘If inflation is rising because the economy is roaring back, we will take action.  The Covid shock is dominant on demand but there is some element of supply shock.  We are looking for a sustained inflation affect.’

Karen moved on and asked, ‘Climate change – who’s responsibility is it?’

Gertjan replied, ‘It is not for the Bank of England to decide how green the economy should be – it is political.  We (the Bank of England) have a mandate for financial stability.  If you look long-term, certain assets could potentially lose a lot of value.  Fund Managers should take this risk seriously, so you don’t start losing money.  We (the Bank of England) want to lead by example – everybody should do this kind of reporting.’  I believe he was referring to environmental-based reporting.

One of Karen’s final questions on the matter was, ‘Should we review our framework and targets?’

Gertjan answered, ‘The Government sets us an inflation target of 2% CPI.  It’s OK for us to periodically review our toolkit.’ 


The whole interview was just over an hour long but was well worth listening to.  I understand that Gertjan is only one voting member of the Bank of England’s MPC, but if they all have his level of understanding and grasp on the issues and potential solutions, then I think we are in good hands.

The Bank of England’s independence and the range of tools available to them will help the Government with their drive to get the UK economy fully recovered as soon as possible.

We still have our headwinds, but distribution of vaccines will considerably aid our recovery here in the UK and globally.

Steve Speed