Whether the rich should pay more tax is a debatable political issue but Enable, Independent Financial Advisors of many years experience note that The Revenue are targeting the wealthy and have started with Owners of overseas property first. A 200-strong team of investigators has been set up to identify wealthy tax evaders, Revenue & Customs declared this at the end of last year when it unveiled a new “affluent” unit, which will focus on the tax affairs of those earning more than £150,000.
Commodity traders are said to be the Revenue’s next target, and holders of offshore accounts will come under scrutiny later next year. The tax affairs of the very wealthiest 5,000 individuals, with at least £20m in assets, are handled by a specialist group that generated an extra £86m of revenues in 2009-10 and £162m in 2010-11.
Danny Alexander announced the launch of the unit which will deal with the 350,000 richest people, at the Liberal Democrat conference in September when he said “the small minority who don’t pay what they owe” would be found and made to pay their fair share. David Gauke, financial secretary to the Treasury, said the new unit was expected to raise £560m in the next few years, adding: “The government is committed to tackling tax evasion and avoidance across all areas of the economy. That is why we allocated HMRC £917m to reduce the tax gap over the next four years in the last spending review. This new team is part of that investment.”
Making sure you are tax efficient is part of good financial management expert advice from experience IFA like Enable of Bishop’s Stortford is always best.
Tuesday, 17 January 2012
Wednesday, 11 January 2012
Pension Fund mangers vindicated...
Fund managers that run liability-driven investment strategies, offering protection on pension schemes against moves in interest-rates and inflation, were dramatically vindicated in 2011, according to Cardano, which said some of its clients made 25% on their money last year.
Our Independent Financial Advisors at Enable of Bishop’s Stortford have noted that strategies offered by big fund managers including Black Rock, Legal & General and F&C match those of Cardano and offer the same kind of service, which traditionally has involved replacing a portion of a pension scheme's assets with a series of cash funds, overlaid by inflation and interest-rate swaps purchased from banks.
More modern variants of the idea can include switching out of cash-plus-swaps and into inflation-linked bonds as market conditions dictate, but the basic idea remains the same - investing in a portfolio that brings in cash returns that precisely match the pensions that have to be paid, automatically adjusted for movements in inflation and interest-rates.
Cardano said that LDI strategies have typically returned over 20% in 2011. Keith Guthrie, the firm's UK chief investment officer, said: “Some of our delegated clients have seen returns of over 25% in 2011. We have also proposed that our advisory clients hedge a significant proportion of their liability risks for some time.”
LDI strategies did so well because they worked exactly as intended, Cardano said. The yields on swaps, index-linked swaps and conventional UK Government gilts all tumbled in 2011 as safe-haven demand, coupled with the Bank of England's policy of quantitative easing, kept the price of bonds high. If you have any queries about your pension Enable are here to help.
Our Independent Financial Advisors at Enable of Bishop’s Stortford have noted that strategies offered by big fund managers including Black Rock, Legal & General and F&C match those of Cardano and offer the same kind of service, which traditionally has involved replacing a portion of a pension scheme's assets with a series of cash funds, overlaid by inflation and interest-rate swaps purchased from banks.
More modern variants of the idea can include switching out of cash-plus-swaps and into inflation-linked bonds as market conditions dictate, but the basic idea remains the same - investing in a portfolio that brings in cash returns that precisely match the pensions that have to be paid, automatically adjusted for movements in inflation and interest-rates.
Cardano said that LDI strategies have typically returned over 20% in 2011. Keith Guthrie, the firm's UK chief investment officer, said: “Some of our delegated clients have seen returns of over 25% in 2011. We have also proposed that our advisory clients hedge a significant proportion of their liability risks for some time.”
LDI strategies did so well because they worked exactly as intended, Cardano said. The yields on swaps, index-linked swaps and conventional UK Government gilts all tumbled in 2011 as safe-haven demand, coupled with the Bank of England's policy of quantitative easing, kept the price of bonds high. If you have any queries about your pension Enable are here to help.
Keeping up with the Chinese
IFA’s at Enable are interested to note that the Chinese too have issues with the spending of their local governments. Last June, the IMF laid out a plan for Chinese state bankers which focused on absorbing excess liquidity and appreciation of the Yuan. But in the same month, the Chinese National Audit Offices announced a $1.6 trillion hole in the balance sheets of local governments.
For some this hole, and a slowdown in global growth, has led commentators to be increasingly cautious on the prospects for the world’s second-largest economy. “The question is whether China will act in time and avoid wholesale capital outflows, a property crash and shattering of confidence.” Said Ewen Cameron Watt chief investment strategist at the Black Rock Investment Institute.
With $3.2 trillion in foreign exchange reserves however and GDP growth of 9.1% in 2011, China still has considerable amount of clout with which to confront a deteriorating economy.
Much of the world is looking to China to prop up the global economy, but it is easy to underestimate how far China itself needs to reform; they do not have a deposit insurance system, for example, meaning its banks do not have to insure savers against bankruptcy. Western banks are hoping China opens its borders but liberalising China’s economy too soon holds dangers, “any major change to the vital banking sector is potentially destabilising in the medium term, given that other countries in recent decades experienced some form of a banking crisis within 10 years of interest rate liberalisation.” Enable’s independent financial advisors will be watching events in China closely this New Year.
For some this hole, and a slowdown in global growth, has led commentators to be increasingly cautious on the prospects for the world’s second-largest economy. “The question is whether China will act in time and avoid wholesale capital outflows, a property crash and shattering of confidence.” Said Ewen Cameron Watt chief investment strategist at the Black Rock Investment Institute.
With $3.2 trillion in foreign exchange reserves however and GDP growth of 9.1% in 2011, China still has considerable amount of clout with which to confront a deteriorating economy.
Much of the world is looking to China to prop up the global economy, but it is easy to underestimate how far China itself needs to reform; they do not have a deposit insurance system, for example, meaning its banks do not have to insure savers against bankruptcy. Western banks are hoping China opens its borders but liberalising China’s economy too soon holds dangers, “any major change to the vital banking sector is potentially destabilising in the medium term, given that other countries in recent decades experienced some form of a banking crisis within 10 years of interest rate liberalisation.” Enable’s independent financial advisors will be watching events in China closely this New Year.
So what’s happening in China...
China held its once-every-five-year state meeting on the direction of its financial markets this week-end and the decisions the country’s leaders take are likely to have a large impact not only on their domestic market, but also the global economy so at Enable our experienced financial advisors will be looking at the financial news to keep track of events.
It has long been the case that many of us within the financial sector hope China will continues to liberalise its economy, but that it also takes measures to prevent a domestic economic slowdown that would damage any attempt to stabilise the Eurozone.
According to Yao Wei, a Hong Kong-based economist with the French Bank Societe Generale: “The progression of the reforms will determine whether China can avoid a hard landing in this decade.”
At the last Financial Work Conference, held in 2007, China’ Premier Wen Jiabao expanded the management and use of the country’s giant foreign exchange reserves, setting up the China Investment Corporation which has now one of the largest sovereign wealth funds.
For this years conference there are a number of factors we hope the Chinese politicians and regulators will consider. They lack a strong regulatory framework for local governments and have a shadow banking system, a euphemism for black market lending, that is spiraling out of control, and many businesses need to find alternative financing methods aside from bank credit. Enable reputable IFA’s of Bishop’s Stortford look forward to following events in the Chinese economy for their clients.
It has long been the case that many of us within the financial sector hope China will continues to liberalise its economy, but that it also takes measures to prevent a domestic economic slowdown that would damage any attempt to stabilise the Eurozone.
According to Yao Wei, a Hong Kong-based economist with the French Bank Societe Generale: “The progression of the reforms will determine whether China can avoid a hard landing in this decade.”
At the last Financial Work Conference, held in 2007, China’ Premier Wen Jiabao expanded the management and use of the country’s giant foreign exchange reserves, setting up the China Investment Corporation which has now one of the largest sovereign wealth funds.
For this years conference there are a number of factors we hope the Chinese politicians and regulators will consider. They lack a strong regulatory framework for local governments and have a shadow banking system, a euphemism for black market lending, that is spiraling out of control, and many businesses need to find alternative financing methods aside from bank credit. Enable reputable IFA’s of Bishop’s Stortford look forward to following events in the Chinese economy for their clients.
Thursday, 5 January 2012
Thinking of investing in 2012?
Enable IFA’s of Bishop’s Stortford can help you find the right place to look for your silver lining. It would seem that UK gilt funds dominated the top performance charts in 2011, according to figures from Morningstar at the end of December. Eight of the top 10 performers sat in the Investment Management Association UK gilts and UK index linked gilts sectors, with the Henderson long-dated gilt, managed by Phillip Apel and Mitul Patel the top performer, having risen by 24 per cent between January 1, 2011 and December 20, 2011. That fund was closely followed by Henderson index linked bond and the BAM UK long dated gilt, which have risen 23.59 and 23.58 per cent respectively.
The figures did also reveal that less than one in six funds managed to produce a positive return in 2011, compared to 97 per cent of funds producing a positive return in 2010 but as expected, the IMA UK index linked gilts sector was the best performer, with the 13 funds in the sector up by an average of 21 per cent in 2011. The IMA UK gilts sector rose 15 per cent with the UK corporate bond sector up 4 per cent. The IMA China and greater China sector was the worst performing sector having fallen 24.2 per cent. If you need help looking for the right place to think about investing for the New Year Enable of Bishop’s Stortford are happy to talk it through.
The figures did also reveal that less than one in six funds managed to produce a positive return in 2011, compared to 97 per cent of funds producing a positive return in 2010 but as expected, the IMA UK index linked gilts sector was the best performer, with the 13 funds in the sector up by an average of 21 per cent in 2011. The IMA UK gilts sector rose 15 per cent with the UK corporate bond sector up 4 per cent. The IMA China and greater China sector was the worst performing sector having fallen 24.2 per cent. If you need help looking for the right place to think about investing for the New Year Enable of Bishop’s Stortford are happy to talk it through.
Cup half full is needed for 2012
IFA’s Enable of Bishop’s Stortford are determined to have a cup half full view of the New Year. Just before Christmas the Office for National Statistics, revised up our quarterly growth rate in the three months to September by 0.1%. Something to celebrate. There will be some pedants about who will point out that the figure for the previous quarter was revised down, by 0.1% - meaning we are pretty much exactly where we thought we were and they might also point out that the current account deficit hit a record £15.2bn, or an alarming 4% of GDP. But we also know that these trade figures jump about a lot from quarter to quarter and the average current account gap for the first three quarters - at 2.7% of GDP - is below the 3.1% of GDP for the same period in 2010. So it could be worse but it’s not.
It might be easy to see why the likes of India and China can be so much more upbeat than us and the real living standards in Brazil rising will clearly cheer people up there. But Italy's economy is now only about 1% bigger than it was a decade ago, and the forecast for the next ten years within the euro, is not much better and they are more optimistic than us. Even the Spanish with a fifth of the Spanish workforce unemployed are being more upbeat than us. Enable IFA’s might be able to help you look at your glass differently.
It might be easy to see why the likes of India and China can be so much more upbeat than us and the real living standards in Brazil rising will clearly cheer people up there. But Italy's economy is now only about 1% bigger than it was a decade ago, and the forecast for the next ten years within the euro, is not much better and they are more optimistic than us. Even the Spanish with a fifth of the Spanish workforce unemployed are being more upbeat than us. Enable IFA’s might be able to help you look at your glass differently.
It's 2012 and here are some reasons to be cheerful
As experienced IndependentFinancial Advisors Enable have seen that confidence is vital to recovery and for some reason we Brits find that hard. In a recent poll just one in ten Britons (9%) expect their local economy to improve in the next six months, half the level seen in America according to new research from and online survey conducted in 24 countries.
Managing Director, Ipsos MORI, Bobby Duffy, said:
“With all the frenzied talk of a global meltdown it’s easy to miss that there are actually large parts of the world economy that are still feeling pretty confident about the future. And this is not just Brazil, India and China – the majority in many other countries like Canada, Australia and Saudi Arabia also feel their economy will improve in the next few months. Even within Europe, which does face real dangers in the coming months, there is a stark difference between high confidence countries (like Sweden and Germany) and low confidence countries (like the UK and France).
Only the Hungarians (6%), Japanese (6%), Belgians (4%) and the French (2%) are more pessimistic about the future of their local economy than the Brits. Even the Spanish are more optimistic than Britons (17%). By the far the most optimistic of the 24 countries are the Brazilians with 72% expecting improvement.
Enable of Bishop’s Stortford would like to play their part in helping you to be less gloomy about 2012, as we know consumer confidence has a direct relationship with real economic outcomes.
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