Trustnet Magazine Issue 10 September 2015 | Page 20

INVESTMENT STRATEGY

EMERGING MARKETS

Receive
These are the growth
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don’t want to see in your next ISA
Annual Platform Fees over 10 years*
£1,000

0.45%

£900

0.40%

£800

0.35%

£700

When you transfer your investments
0.25%
to Trustnet Direct. Terms and conditions apply.

£600
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Open an account using thisTrustnet
code:
Direct

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platforms charging 0.45%, 0.40%, 0.35% and 0.25% per annum in platform fees. Assumes £15,000 new ISA limit
invested each year for 10 years and assumes 5% growth net of charges.

Relax while we do the hard
work for you.

The good news is that if you invest the new ISA limit of £15,000 per annum over the next 10 years and it grows at 5% per annum
net of charges, you’ll have built a nest egg of over £198,000 tax-free.

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The bad news is that platform fees can seriously damage your wealth, as the chart above shows.

Terms & Conditions:
Trustnet
Direct,
charge
in platform
fees but cap it at just £250 max per annum (£200 + 5 trades at £10 per trade).
1. YouAtwill
need to
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offer0.25%
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2. We will give you a credit of £25 for every fund or share you transfer to us from another broker, agent, platform or company.
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3. This offer is limited to £250 in total. For example, if you were to transfer 15 funds or shares to Trustnet Direct, we would credit
your investment account at £25 per item transferred, up to a maximum of 10 items, totalling £250.
4. We will credit your account in approximately 30 days of the completion of the transfer.
Direct
does noton
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It is an execution-only service. If you are unsure
5. If youTrustnet
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this offer
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6. Applications for this offer must be received by midnight on 30 August 2015. We reserve the right to alter or withdraw this
offer at any time.
The price and value of investments and their income fluctuates: you may get back less than the amount you invested.
7. This offer
be used
conjunction
with any
other offer on the Trustnet Direct site.
Past cannot
performance
is noinguarantee
of future
performance.
Trustnet Direct does not provide advice on the suitability of investments. It is an execution-only service. If you are unsure about
Prevailing tax rates and relief are dependent on your individual circumstances and are subject to change.
the suitability
of investments, seek independent financial advice. The price and value of investments and their income fluctuates:
you may get back less than the amount you invested. Past performance is no guarantee of future performance. Prevailing tax
rates and relief are dependent on your individual circumstances and are subject to change.
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are highly volatile, with returns not
only resting on the performance of
the underlying companies but also
the political and macroeconomic
situations in the individual regions.
“It is best that investors adopt a
long-term view when investing to
weather the ups and downs of this
asset class,” she said.

However, he adds this will
“WE CONTINUE
only happen when he sees some
TO BELIEVE THAT
stability in global markets, and
there is clarity on the strength of
EMERGING MARKETS
the US dollar and when interest
SHOULD FORM PART OF rates will rise.
AN INVESTOR’S OVERALL
LIMITED AVAILABILITY
PORTFOLIO”
One immediate challenge facing

STOCK MARKET DECLINES

Lee Robertson, chief executive at
Investment Quorum, notes what
happens today will have little
effect on a region or asset class in
20 years. So if you are investing for
growth, market “routs”, “tumbles”
or “freefalls” should not cause an
investor to panic.
“We continue to believe emerging
markets should form part of an
investor’s overall portfolio,” said
Robertson. “As a sector it has been
suffering as a result of the stronger
US dollar and the slowdown in
China, but the longer themes
such as the younger productive
workforces remain, so if you take
the long-term view that emerging
countries will continue to grow in
value, then it is a case of picking it
and sticking with it.”
As it happens, Investment
Quorum took the decision a year
ago to cut its emerging markets
exposure right back to the bare
trustnetdirect.com

minimum. “This time last year
there were rumblings interest rates
in the US would rise sometime in
early 2015, which would lead to a
stronger dollar and higher lending
costs,” said Robertson.
“This is never a good thing for
emerging markets, especially when
they have been benefiting from a
low interest rate environment over
the past few years.”
“Therefore, we cut our
weightings towards this asset
class in favour of topping up our
Japanese and European exposure,
given their central banks remain
accommodative, valuations are
attractive and corporate profits
should rise over the next few years.”
Robertson says emerging markets
will clearly come back into favour,
and with valuations currently quite
cheap he will consider upping his
exposure again.

potential emerging market
investors is the limited availability
of leading funds/strategies that do
not have capacity issues.
“Finding strategies with a proven
investment approach that over long
periods of time have experienced
different market cycles is difficult,”
said Assan.
“Those that have been successful,
such as Aberdeen Emerging Markets
Equity and First State Global
Emerging Markets Leaders, are at
capacity and have soft-closed.”
Therefore, she says conducting
qualitative research on new players
is becoming more crucial.
“There are strategies that have a
strong quality focus and are wholly
focused on this meaning, so they do
not look to invest with an index in
mind,” she added.
“While this approach will appeal
to certain investors, others may
prefer strategies that focus on stock
selection but also limit big sector or
country allocations as they are keen
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