As we close out the first half of what has been a very turbulent 2022 it’s worth looking at some of the victories and some of the setbacks which TAM has seen. Importantly, where we go from here remains paramount if one wants to see this as an opportunity and as the title says, not waste a recession. There is no detracting from the fact that both equity and bond markets have suffered collectively in 2022. With inflation proving extremely difficult to control, investors in both bonds and growth stocks, which have been on a parabolic rally since 2008, both...

Reading the latest investment surveys from the largest fund managers in the world, there remains an air of uncertainty in the top echelon of decision makers - a perception that we are marching towards a more challenging investment landscape than the last decade. Its effects on a bastion of wealth management, the 60/40 model portfolio, will likely lead to a revamp of the theory underpinning this behemoth style of investing. For now, the mood music in stock markets is turning increasingly pejorative when it comes to the prospect of economic growth in the next 12 months. This is framed against...

In recent weeks, Russia has progressed with a full-scale invasion of their Southern neighbour, Ukraine, under the orders of leader Vladimir Putin. Although the initial aggression was shrouded as ‘self-defence’, Putin’s intentions have proved barbaric with catastrophic loss of life as brave Ukrainians stand up to a tyrant. We sincerely hope peace will prevail and our thoughts are with the millions affected. It feels somewhat inappropriate to discuss investments at such a deeply sensitive time for so many. Unfortunately, the conflict shows no sign of slowing down and we believe it is at moments of great uncertainty where communication with...

Yale Hirsch, as well as being the quasi-demi-god of market patterns and cycles, also coined the phrase used for the title of this note. And so far, nearing the end of February as I write, Mr Hirsch’s adage seems to be playing out. And in some fashion. The S&P 500 is down -9.21% YTD and in January the index declined 5.26%, troughing to -11.4% at one point, surpassing its worst January level in history. So, as traders and investors battled an average daily volatility of 2.06% (double that of January 21’), what fell, why, and conversely, what held up? Inflation...

2022 has seen an unprecedented negative impact for long-term growth only investors. Some of the biggest, most renowned and highest performing funds of the past years have taken a quantum hit, falling anywhere between 13-30% in 6 weeks. Wow. At the same time the FTSE100, the UK bellwether index has gone… nowhere. If clients have not yet been asking what is happening… they soon will. The core of the problem is that the US equity indices are universally down but with the darling of the 2010s, the Nasdaq, down circa 13%. That’s a big hit in 6 weeks and leads...

January is usually when we reflect on the year just passed and look at tactics for the year ahead after markets tick higher on New Year positivity. Well, 12 days into the year, US CPI has hit 7%, a number not seen since the 80s, and the volatility in markets is already eye watering. It looks like markets have decided that the US Federal Reserve are actually a lot keener on raising rates than anyone knew. This is one of these scenarios we like to call a “known unknown” - people know it’s there but don’t know how to react...

Well, in the time it’s taken me to write this review, the outlook for 2022 must have changed about twice in respect to Omicron and central banks.

In 2020, those companies in the MSCI All Countries World Index (ACWI) screened by their sustainable impact outperformed the MSCI ACWI as a whole by 27.8%. This part of the market really led global equities and offered stellar returns for our clients investing in this space. In 2021 so far this index has lagged the broader ACWI by as much as 19% at -0.05% (as of 15-12-21). Despite all our sustainable & impact focused equity managers comfortably outperforming this benchmark, within much of the same mandate, the portfolios as a whole are sitting slightly behind the risk-rated benchmarks we hold...

One may read the title of this note and find it hard not to question: ‘what about regulation? What about Evergrande? What about inflation and bottlenecks?’ And in the previous quarters of the year the inclination to agree with these tenets would have been easier. However, as we near the end of 2021 – a year which has blighted China and Emerging Markets as a whole – it seems that for numerous reasons, China could be a fertile territory for returns in 2022. Alas, this note will not indulge the reader with ubiquitous phrases found in China fund manager commentaries...

As the fiscal outlook of the Chancellor was being presented on Wednesday, it would be fair to say that viewers could slowly feel a metaphorical Tory galleon had set sail on a trajectory for what one could call no other than ‘tax and spend’. With no indication of National Insurance and Corporation Tax hikes being pulled back, and a major increase in public spending, Rishi Sunak’s proposals seemed a far-cry from the traditional Conservative governments of the past. So, the notion that a buoyant Autumnal Budget - cushioned by the news of an upgraded growth forecast from the Office of...

The market for ESG focused investment opportunities continue to grow at truly breakneck speed. According to Bloomberg, 2020 saw ESG assets surmount $35 trillion up 35% from 2016 alone, now comprising a third of global assets under management. ESG is now at a point where it is fundamentally reshaping the financial industry. Within such a paradigm shift, long-term opportunities readily materialise and there are now a multitude of ways to obtain exposure to the growing ESG universe. It is the job of TAM as a Discretionary Fund Manager to navigate the increasingly omnifarious marketplace to identify and build a portfolio...

Did it happen? Didn’t it? Are we still waiting for it? These are Questions we have asked ourselves about the “re-opening trade” and recovery of the UK stock market in 2021, specifically the Small and Mid-cap sectors. Our view, pre-pandemic, was that the UK was trading at a discount to global markets. This opportunity was then exacerbated by a slower acceleration off the March 2020 lows, meaning the UK looked very much like the laggard in the developed markets. With Brexit in the rear view mirror and the UK consumer looking set to open their wallets in 2021, it looked...

As I sit at my desk postulating on our clients’ investment positioning, it dawned on me that many fund managers have never lived through an inflationary market cycle. Many managers have instead lived through a market almost entirely tilted to expensive fixed income, negative value, and long growth stocks. Unsurprising then, that much of this cohort are still firmly sat in the growth camp when it comes to investment positioning and remain reluctant to embrace the recovery of value. This chronic “group think” is not that hard to excuse when one considers the notion of value investing has been largely...

Many have said central banks are the punch bowl for markets. Loosely speaking this means central banks have been pumping money into markets in such volume that the equity rally is almost entirely propped up by that cash injection and, much like a huge bowl of punch at a party, it is the key factor in keeping the party going. This narrative has amusingly twisted of late to reflect that central banks are no longer seen as the punch bowl of the party (AKA the equity rally), they are now the bartender of the party. This alludes to the fact...

Last week the US hosted 40 world leaders for a two-day virtual summit on climate change, with newly elected President, Joe Biden, making it clear that climate is indeed a key focus for his administration. Having only recently re-joined the Paris Climate Agreement, the US took centre stage at the conference to demonstrate their commitment to tackling this existential threat to our planet, emphasising the need for collective action from nations across the world, many of whom joined the US in setting higher climate ambitions. As this conference has drawn to a close, we reflect on some of the key...

Model Portfolios are specialised investment vehicles designed to deliver a wide range of financial goals, at pre-agreed risk tolerances”. Sounds good doesn’t it? I often like to remind clients that a good model portfolio can consist in excess of 350 underlying companies. In this respect it can, on occasion, seem a little curt to validate a portfolio of businesses against a single benchmark over a six or twelve-month period. Make no mistake, having a short-term comparator is very important, but over the long term, it’s active management in fantastic business opportunities which is going to be the driver of strong...