Tag Archives: investors
The Next Big Thing? Investors Switch From Emerging To Frontier Markets
27 Aug 2013 | 11:08 Anna Fedorova The poor performance of emerging market equities year-to-date has caused investors to turn to frontier markets in search of better returns. Assets under management in frontier market funds have more than doubled to $3.1bn since the start of the year, according to BofA Merrill Lynch, while EM funds have suffered outflows of $2.1bn. Frontier markets are enjoying a strong year, with MSCI Frontier Markets outperforming both developed and emerging market equities with a return of 14.7% for the year to 20 August, versus 12.1% for the MSCI World and 11.7% for MSCI EM. Adrian Lowcock, senior investment manager at Hargreaves Lansdown, said underperformance from major Asian markets in particular has led investors to look further afield. “With China having disappointed since the 2008 crisis, investors are now looking for the next big thing.” Charles Hepworth, investment director in charge of GAM’s discretionary fund management, has recently sold a global emerging markets fund and replaced it with Templeton Frontier Markets. “Frontier markets are a key area in the emerging market universe for us at the moment and we are shunning more generalist EM funds,” he said. Choosing a frontier markets fund can be tricky, as there are few on offer and many have recently soft-closed due to liquidity constraints. The Templeton fund soft-closed in May at $2bn and Goldman Sachs Asset Management soft-closed its Next 11 fund, which offers exposure to similar countries, in June at $1.7bn. Mona Shah, co-manager of multi-asset portfolios at Rathbones, tipped Renaissance Asset Management’s Eastern European fund as an option for investors wanting to gain access to these markets. Shah added that if the group was to overweight emerging markets, this would be an interesting option due to its exposure to high beta markets, particularly Russia. Meanwhile, Ben Seager-Scott, senior research analyst at Bestinvest, highlighted the BlackRock Frontiers investment trust, which has returned 48.7% over the year to 9 August, according to Morningstar. “The investment trust format means you do not have to worry so much about liquidity because it has a limited life, and it has a sizeable team covering the region, which is very important,” he said. Baring Asset Management is the latest provider to launch a Frontier Markets fund, and Seager-Scott expects many competitors to follow suit over the next ten years. The top performing global frontier markets equity fundsover one year to 19 August are the Schroder ISF Frontier Markets Equity and Charlemagne Magna New Frontiers funds, which have returned 38.9% and 24.3% respectively. Shah said frontier markets are particularly interesting because they have remained uncorrelated to both developed and emerging markets equities, with a correlation of 0.6% for the respective MSCI indices. Before the 2008 crisis, frontier markets followed the performance of developed and emerging equities but, after the crash, money failed to flow back into these markets. Seager-Scott said: “I particularly like frontier markets because they are not as mainstream as emerging markets and therefore not as sensitive to hot money flows and investorsentiment. When investors go into risk-off mode, they pull money out of EM, but that does not happen in frontier.” However, he cautioned frontier markets should be considered a long-term investment owing to their volatile nature. Continue reading
Buy To Let Best Returns Table By Postcode
27/02/2010 Buy-to-let investors looking for the best returns should look outside trendy hotspots, with many less fashionable areas delivering far better returns, a study shows… A report into the Top 100 towns for buy-to-let yields, compiled by property listing website FindaProperty.com for This is Money, shows that Blackpool is the postcode delivering the best returns in the UK. The Holy Grail for property investors is a combination of low average property prices compared to rental returns and the report shows that locations not typically considered property hotspots make up a sizeable chunk of the top 25 postcodes. Investors in property in Blackpool are looking at an average home asking price of £161,722 and monthly rent of £720, according to FindaProperty.com, delivering a gross yield of 5.34%. This represents a far more accessible investment than the next best postcode, which covers Kingston on Thames, where the average house price is £420,469. While the top 20 is peppered with more fashionable locations, including Kingston, east London, Manchester, Central London and Twickenham, it is the more run of the mill locations that stand out. Blackpool is joined by Kirkcaldy, Romford, Sunderland, Wigan, Blackburn, Bolton, Luton and Cleveland, all of which offer yields above 4%, but a far lower cost of purchasing a property. FindaProperty.com calculated the gross yield by taking a property’s rent over 12 months as a percentage of its purchase price. Noticeably, while all the postcodes delivered far greater yields than the return on the average savings account of around 1.5%, none managed to breach the 6% mark that attracted investors in the early days of the buy-to-let boom. Once mortgage costs, letting fees, maintenance costs and tax are factored in, returns on the buy-to-let investments would be much lower. Nigel Lewis, of FindaProperty.com, said: “This shows that the best places for high gross yield are those with lower housing costs, a changing population and in particular if they have one or more universities.’ ‘London is strong because it’s under population pressure and has multiple universities and therefore even satellite areas such as Twickenham do well. ‘The other places where gross yields tend to be high are where there is a large inbound ethnic population getting on its economic feet and rental demand is high but house prices usually lower than the average.’ TOP 100 BUY-TO-LET POSTCODES Area Postcode Ave price Monthly rent Yield % Source: FindaProperty.com, February 2010 1 BLACKPOOL FY £161,722 £720 5.34 2 KINGSTON UPON THAMES KT £420,469 £1,843 5.26 3 KIRKCALDY KY £198,118 £856 5.19 4 LONDON (East) E £275,844 £1,147 4.99 5 MANCHESTER M £141,435 £575 4.87 6 DURHAM DH £128,730 £521 4.86 7 ROMFORD RM £230,792 £909 4.72 8 UXBRIDGE UB £266,486 £1,029 4.63 9 LONDON (south East) SE £275,267 £1,060 4.62 10 SUNDERLAND SR £131,336 £498 4.55 11 WIGAN WN £123,052 £463 4.52 12 BLACKBURN BB £123,326 £463 4.5 13 LIVERPOOL L £161,325 £598 4.45 14 GLASGOW G £154,084 £563 4.38 15 LONDON (central) WC £726,415 £2,612 4.32 16 BOLTON BL £142,150 £508 4.29 17 LUTON LU £182,388 £650 4.27 18 CARDIFF CF £158,736 £564 4.26 19 TWICKENHAM TW £328,924 £1,162 4.24 20 CLEVELAND TS £155,013 £547 4.23 21 SHEFFIELD S £141,691 £499 4.22 22 WARRINGTON WA £194,709 £682 4.21 23 MEDWAY ME £210,421 £737 4.2 24 DONCASTER DN £150,021 £523 4.18 25 DARTFORD DA £234,077 £810 4.15 26 SOUTHEND ON SEA SS £220,562 £763 4.15 27 GUILDFORD GU £374,124 £1,287 4.13 28 NEWCASTLE UPON TYNE NE £185,928 £636 4.1 29 MOTHERWELL ML £155,170 £530 4.1 30 CHESTER CH £196,250 £665 4.07 31 HULL HU £151,975 £510 4.02 32 CROYDON CR £271,135 £908 4.02 33 BIRMINGHAM B £180,558 £604 4.02 34 FALKIRK FK £185,138 £617 4 35 SUTTON SM £279,164 £927 3.98 36 WOLVERHAMPTON WV £153,470 £507 3.96 37 PRESTON PR £173,044 £566 3.93 38 WALSALL WS £162,956 £531 3.91 39 LONDON EC £581,944 £1,886 3.89 40 LEICESTER LE £202,522 £656 3.88 41 NOTTINGHAM NG £171,205 £554 3.88 42 OLDHAM OL £147,390 £471 3.84 43 LONDON SW £763,873 £2,415 3.79 44 WAKEFIELD WF £151,705 £479 3.79 45 ILFORD IG £316,562 £997 3.78 46 HARROW HA £358,059 £1,120 3.75 47 ABERDEEN AB £296,788 £928 3.75 48 DUNDEE DD £236,304 £735 3.73 49 CANTERBURY CT £210,284 £652 3.72 50 MILTON KEYNES MK £243,106 £754 3.72 51 NORTHAMPTON NN £195,595 £603 3.7 52 BRIGHTON BN £270,454 £834 3.7 53 BRISTOL BS £238,133 £732 3.69 54 COVENTRY CV £215,250 £661 3.68 55 BRADFORD BD £159,527 £489 3.68 56 PORTSMOUTH PO £243,599 £744 3.66 57 HALIFAX HX £159,201 £482 3.63 58 CAMBRIDGE CB £299,459 £903 3.62 59 CREWE CW £217,792 £655 3.61 60 CARLISLE CA £175,168 £526 3.61 61 READING RG £329,551 £990 3.61 62 ENFIELD EN £339,492 £1,010 3.57 63 STOKE ON TRENT ST £181,652 £539 3.56 64 STEVENAGE SG £286,730 £851 3.56 65 STOCKPORT SK £195,535 £579 3.55 66 WATFORD WD £362,059 £1,070 3.55 67 LEEDS LS £198,555 £585 3.54 68 DARLINGTON DL £181,717 £535 3.53 69 SWINDON SN £255,832 £743 3.49 70 KILMARNOCK KA £163,562 £475 3.48 71 DERBY DE £179,080 £517 3.46 72 COLCHESTER CO £228,779 £655 3.44 73 BROMLEY BR £349,775 £1,001 3.43 74 PETERBOROUGH PE £205,970 £589 3.43 75 CHELMSFORD CM £305,268 £873 3.43 76 LONDON NW £566,176 £1,616 3.43 77 BATH BA £241,395 £686 3.41 78 SOUTHAMPTON SO £315,063 £895 3.41 79 SALISBURY SP £294,765 £835 3.4 80 TONBRIDGE TN £318,006 £898 3.39 81 OXFORD OX £339,426 £951 3.36 82 NEWPORT NP £189,680 £529 3.34 83 NORWICH NR £237,902 £661 3.33 84 GLOUCESTER GL £272,069 £753 3.32 85 HUDDERSFIELD HD £175,771 £486 3.32 86 SLOUGH £ £453,701 £1,254 3.32 87 INVERNESS IV £233,018 £643 3.31 88 LANCASTER LA £238,246 £655 3.3 89 LINCOLN LN £191,717 £524 3.28 90 REDHILL RH £354,207 £962 3.26 91 HEMEL HEMPSTEAD HP £372,837 £1,009 3.25 92 BOURNEMOUTH BH £304,095 £817 3.22 93 DORCHESTER DT £268,855 £721 3.22 94 LLANDUDNO LL £232,060 £622 3.21 95 PERTH PH £302,464 £792 3.14 96 LONDON N £493,492 £1,276 3.1 97 DUDLEY DY £228,510 £587 3.08 98 LONDON W £996,894 £2,531 3.05 99 SWANSEA SA £214,500 £533 2.98 100 EXETER EX £278,522 £691 2.98 Read more: http://www.thisismon…6#ixzz0gmD8nSLj Continue reading
Property Investors Had 2,200pc Return Potential Says Savills
London was the best performer for 11 years out of that 18-year stretch. By Emma Rowley 9:30PM BST 11 Aug 2013 Someone who had bought and then sold in the best performing local housing market for each of the last 18 years would have enjoyed a near 2,200pc return on their initial outlay, according to data from estate agency Savills. Taking a less specific view of the UK housing market, by picking the best region each year, the return would have been 549pc, or £5.5m, researchers said. Those figures compare to a headline 158pc average return on the value of housing across England and Wales as a whole for the same period. The research was based on Land Registry data tracking the market from 1995 to the end of 2012. In terms of region, London was the best performer for 11 years out of that 18-year stretch. The worst performances were more evenly spread across the country, although the North East appeared the most on that list, seven times during the period. However, despite the progress in the capital’s market in recent years, the numbers show that the best returns would have been achieved by moving about. Lucian Cook, director of residential research at Savills, said it was a question of “picking the leading and lagging regions over the course of a housing market cycle”. To have followed the strongest regional performances, “would have meant focusing heavily on London in the early years of the recovery – skipping investment in the South East of England – and moving onto the markets of the East of England and subsequently the East Midlands and North East.” Looking at the market on a more local basis, the expensive London neighbourhood of Kensington and Chelsea appeared most frequently. But it was Blaenau Gwent in South Wales that saw the biggest yearly increase, with a 43pc rise in house prices in 2004. That same area also performed badly enough in 2000 to be the worst performer that year, with a fall of 4pc. While Savills acknowledged that no one will have played the property market with that level of acumen, the figures point to the returns that could have been made – and also to the losses. By picking the worst performing local area over the 18 years, the hypothetical investor would have made a 68pc loss on a £1m starter pot, left with a property worth just £324,000. The pain in terms of worst regions is not so dramatic: here, the investor would have made 5pc gain over the period, or £54,718. However, the figures for potential returns have not been adjusted for inflation, which means that would have been a “real” term loss. Looking ahead, Mr Cook said that London’s outperformance looked likely to continue for a few more years. In collating the data, Savills stripped out particularly volatile areas, which tend to be the smaller markets. Continue reading
