INVESTMENT REPORT - 14th MARCH 2001
OUTSTANDING INVESTMENT RETURNS FOR OVER FOUR YEARS
ACHIEVED WITH A CONSIDERABLE REDUCTION IN RISK
Many of my low to medium risk investment clients have enjoyed excellent investment
returns for over four years by initially investing into Index Linked Gilts and then into
Property.
By way of example I will summarise the returns achieved by an unnamed client investing into Standard Life's Assurance Funds. My client invested into the Standard Life Index Linked Fund on 1st November 1996 and was subsequently advised to switch into the Property Fund on 14th January 1999 and has remained in that fund to date. The performance of my recommendations is compared to those of Standard Life's own Managed and Equity Funds
below :-
The FTSE100 Index has fallen by a further 4.9% since 9th March!
Most importantly the risk involved in my recommendations is at least 66% less than the risk of investing into the Standard Life Equity Fund and more than 50% less than investing into the Standard Life Managed Fund, as demonstrated by the volatility of each of these funds
below :-
Property 0.3
Index Linked 1.1
Managed 2.9
Equity 3.4
It is important to note that this performance has not occurred purely due to the recent turmoil in stock markets, but can be seen to have been very attractive on a risk/reward basis even during the period November 1996 to January 1999.
Shares
For the first time, on 19th June last year, I put together a share portfolio for a client and I
summarise below it's performance compared to the UK stock market :-
The Future
I now believe that the commercial property market is near to it's peak, particularly as
companies earnings appear to be falling which will make property less affordable to them. Accordingly, for the last seven months I have been advising clients to take profits in Property and move into the Euro currency. During that period the Euro has gained 5% and more for some shorter periods. The Euro, with a volatility factor of 2.8, is comparable in risk to the Standard Life Managed Fund. As the US and UK economies are weakening at a faster rate than Europe, I expect the Euro to continue to gain in strength against Sterling and the Dollar for the foreseeable future.
Against the uncertainty in world stock markets, my other high risk investment
recommendations have begum to perform well, with the Merrill Lynch Gold & General Fund up about 60% and the Save & Prosper Commodity Share Fund up 75% in eighteen months. Valuations and the economic background continue to look favourable for these funds.
All performance figures are based on a bid to bid basis.
Past performance is not necessarily a guide to the future.
The views reflected herein are those of Mitchell Neale Investment Services.
Mitchell Neale Investment Services does not accept any liability whatsoever for any direct or consequential loss arising from any use of this report or it's contents.
Investors should be aware that the value and income from investments can rise or fall.
Mitchell Neale
Mitchell Neale Investment Services
13.03.01
