Spectrum IFA Group Investment Sub Committee Quarterly comments

At the Spectrum IFA group we can help you to make investment decisions if  you are unsure how to invest your own money in today's volatile investment world.

We do this with help from the work and analysis provided by the Spectrum IFA group Investment sub committee The team work to ensure that your money is invested in a structured way and is correctly balanced in line with current market trends.

Each quarter the sub committee provide the Spectrum IFA group Independent Financial Advisers working across Europe with comments on performance and selection of funds in our model portfolios.

The following is their comments for the end of quarter 2, 2013

Commodities

In nearly all of the model portfolios we have been affected by the large falls in the commodity sectors. Even with further falls in the gold price our belief in the long term fundamentals of this sector stand firm.

There are no doubt some short term headwinds to corporate returns in all commodities but we feel, as do many managers, that there is also an enormous overreaction to the Chinese ‘slowdown’ and the ‘end of QE’. We appreciate that for investors it is never nice to see funds fall in value but for anyone investing new money today it would be an opportunity to invest a small portion of a portfolio here. For those suffering the paper losses of exposure here, we advise to sit tight.

As a reminder Evy Hambro (Blackrock Gold and General fund) has “called” the bottom of the gold price at around $1200per oz – below this most miners will stop mining, thereby changing the supply/demand curve.

The portfolios which have suffered most have approximately 15% in the natural resources sectors, these are by nature long term portfolios, those with shorter term or income strategies (mainly retirement strategies) have no more than 5% in these markets anyway.

Please remember we are long term investors, and so are the managers of the funds we buy

Emerging Markets - 

Some of the Spectrum IFA group Investment sub committee recently attended the International Fund Forum in Monaco and it was clear that many investors in the west are significantly underweight in emerging markets (both bonds and equities) so we are undertaking a review of the portfolios to see if this stands for us too. There is also a redefinition of Emerging Markets going on and so we will take this into account and offer you more investment solutions in these sectors. An update will be sent out in due course. 

Bonds / Fixed Interest – following a visit to one of the Bond fund managers in our portfolios it became clear that we need to further management diversification of the fixed interest areas of our portfolios.  We believe the winners over the next couple of years will be the 'flexible' strategic bond managers and so further changes to the portfolios may be made in this area.

We continue to monitor the portfolios and we continue to stick to our process and long term views, not out of denial or in the hope of making our money back but out of a belief in the long term fundamentals of the sectors and funds we invest into. If we stop believing in fundamentals we will change the story/strategy balance of the portfolios and therefore the asset allocation. 

If you would like to know more about our selection process you can go to the following link:

http://www.spectrum-ifa.com/fundselection.html

If you would like to contact us because you would like to benefit from using the Spectrum IFA group investment process to help your money work harder for you then you can contact me on gareth.horsfall@spectrum-ifa.com or on + 39 333 6492356.