|Spring is a time of renewal, as the start of a new tax year, it also marks an important time to think about your finances anew. |
At REALM, we believe that planning for future prosperity starts today. So, whether you are new to investing or are looking for a more personalised portfolio strategy we are happy to provide advice and simplified guidance.
In our latest newsletter, we unpick financial markets’ reactions to the recent banking turmoil, as well as provide our latest economic views and forecasts. We also delve deeper into our investment strategy, this time highlighting why commodity-rich countries like Australia, Canada and Latin America offer attractive investment potential. Finally, we highlight a useful, but perhaps not widely known, professional service to ease the administrative burden for those who have experienced bereavement.
We hope that you enjoy reading this latest newsletter and, as always, we would like to hear from you too, so please email us at email@example.com with any questions or requests for future topics.
|Market views and outlook |
The first quarter of 2023 continued to see the fortunes of global equity markets dominated by the question of surging inflation, followed by concerns that central banks were willing to overcook interest rate rises. The period culminated with the failure of two US banks, followed by the disappearance of the 160-year-old bank, Credit Suisse, in Europe.
As seen over the past 30 years, interest rate increases often trigger subsequent crises. A side effect of such events is a credit squeeze in lending, and estimates suggest the credit squeeze from the recent banking crisis is equivalent to almost a 100 basis points interest rate hike. While these proceedings grabbed the headlines, the underlying economic data was encouraging. Notably, inflation fell in all the major economies apart from the UK, which is fighting its own battles. Consequently, we still foresee an economic slowdown, but we do not expect a hard landing. Furthermore, corporate balance sheets are strong in both emerging and developed markets, and we consequently expect dividends to contribute a higher proportion of equity returns going forward.
Read our latest market commentary in full.
|Getting to know your investment portfolio: Canada, Australia and Brazil|
We are all feeling the pinch from higher inflation these days. One of the key drivers of inflation has been the surge in commodities prices since the pandemic. In fact, commodity prices are close to 50% higher since the start of 2020. Much of the rise in commodity-driven inflation can be attributed to prevailing shortages in global supply chains, as well as sanctions against Russia pushing energy prices higher.
However, long-term structural changes – such as the energy transition – are creating an increased demand for certain minerals, including those used in the production of electric cars. From an investment perspective, as well as trying to shield our portfolios from the pain inflicted by higher inflation, we also consider how we can benefit from the commodity boom. Commodity-rich countries, such as Canada, Australia and parts of Latin America (notably Brazil), are major beneficiaries of the rise in commodity prices. While not immune to the economic challenges posed by inflation, these countries’ overall economies also benefit from higher commodity prices in terms of their tax revenues and fiscal situation, as well as through the companies that operate directly in commodities.
We believe the commodity story will remain integral in the near term, therefore our portfolios hold dedicated funds which invest in these commodity-abundant parts of the world.
Find out more about the current positioning of our portfolios.
|And another thing… Taking the administrative burden out of bereavement|
When someone close to you dies, dealing with bereavement is just one of the challenges you may have to face. Many people drawing up a Will commonly name their children as Executors of their estate. There are a series of formal steps that need to be taken following a death, but unbeknownst to most Executors they are also legally responsible for the accurate distribution of the estate that is entrusted to them. The responsibility of this role can therefore make a tough time even more stressful. Thankfully, there are many professional providers of probate and estate administration services who can help with the process.
To find out more about how you can access award-winning probate and estate administration services, please click here.
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Disclaimer: ‘Where the business has expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice. The information contained within this communication is believed to be reliable but Realm Investment Management Limited does not warrant its completeness or accuracy.
This communication is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell investments.’