The Willis Owen View
From time to time we will voice our view on topical subjects relating to investments,
funds and wealth management in general. If there is something particular you’d like
us to cover email us on invest@willisowen.com.
Prudential decides not to proceed with a reattribution of its Inherited Estate July 08, 2008
Background
In March 2007 it was announced that Prudential were considering the possibility of the reattribution of the inherited estate of their With Profits fund.
Willis Owen View
Last week Prudential declared that they will not be proceeding with any reattribution at this stage.
What this means for policyholders is that those who held With Profits policies before 15th March 2007 will continue to have an interest in any potential future distributions as long as their policies remain in force, but those who took out With Profits policies after 14th March 2007 will now also have an interest in any potential future distributions.
Please visit the Prudential website to read the full Prudential Press release on this matter.
If you are at all unsure about what action to take then please seek
independent financial advice.
Archive
Schroder Income Maximiser – Manager change April 22, 2008
Background
It has been announced that Richard Lloyd the manager of the Schroders Income Maximiser
fund is leaving Schroders.
Willis Owen View
His replacement will be John Teahan, who has been a member of the Schroders Structured
Investments team since 2003 and has worked closely with Lloyd on the Income Maximiser
fund, therefore, we feel that there is immediate and relevant continuity of fund
management.
Our research team (Money Portal) have no concerns about this change and have decided
to continue the fund’s position on our recommended fund list.
If you are at all unsure about what action to take then please seek
independent financial advice.
New Star February 06, 2008
Background
New Star have issued a profit warning and have admitted that a number of its funds
have underperformed including the New Star European and several of its UK funds.
The New Star share price has subsequently fallen sharply and there has been considerable
press coverage.
Willis Owen View
Although there has been a profit warning there is no suggestion that the business
is in financial difficulty. John Duffield, New Star's founder and chairman, is still
in place and is determined to get the business back on track.
If you are thinking of selling any particular fund it is worth checking the actual
performance in detail. Our Investment Check-Up
service can give you a detailed picture of the performance of your funds.
Also remember that short term periods of underperformance can quickly reverse and
that if you switch funds there is no guarantee that the new fund will perform better
in the future.
If you are at all unsure about what action to take then please seek
independent financial advice.
Commercial Property February 06, 2008
Background
The market sentiment around commercial property investment has become negative,
with falls in valuations and a number of commercial property funds have deferred
redemptions for up to 12 months, which means that for a period investors will be
unable to withdraw any funds.
Willis Owen View
After a period of positive returns, investor attitude towards commercial property
has gradually deteriorated over 2007 and has been made worse by the recent credit
crunch. This has led many investors to pull out of the asset class, even though
many fund managers believe that commercial property fundamentals remain strong and
that the sector should continue to have appeal as a longer term investment.
As investors switch away from property funds, there can come a point where the funds
have too little cash to meet short-term demand (i.e. requests to switch or withdraw).
Selling a fund's property assets can raise cash, but this process takes time and
in the current market environment it can be challenging to sell at fair value. If
properties are sold at discounted prices it isn't fair to clients remaining in the
funds. Hence some funds have introduced delay periods for clients wishing to withdraw
or switch.
Over the short-term commercial property may to continue to struggle, producing flat
to negative returns, given current market sentiment and uncertainty.
Over the longer term there is no reason to believe that commercial property should
not produce positive returns. Often the worse time to come out of an asset class
is after a significant correction and current market conditions could be seen as
a potential opportunity for new longer term investors.
If you are at all unsure about what action to take then please seek
independent financial advice.