Confirmed FSCS levy significantly under forecast at £265m for 2024/25

This marks a significant drop from the £415m forecast in November 2023, and a £5m reduction from the levy paid last year. The FSCS said the fall was partly due to its successful recovery of £54m from the estates of failed firms during 2023/24. FSCS warns industry levy set to rise to £415m for 2024/25 Compensation expected to be paid this year stands at around £363m, the scheme said. The reduction in the overall figure also stems from lower average compensation forecasts, with the average compensation paid out for pension transfers last year around £35,000 – almost a 30% fall fro…

AJ Bell attacks ‘counterproductive’ GB ISA as dividend jumps 21%

Michael Summersgill, chief executive of the platform, argued the GB ISA was “not the right solution” to boost investment in the UK economy or revive the health of the London stock market, suggesting the “extra complexity” would only further damage an ISA system that has “already become too complicated”. GB ISA panel: Success for UK equities will be in the details “Our research shows complexity deters would-be retail investors from engaging with investing altogether, meaning that over the long term there is a high risk a UK ISA would actually be counterproductive,” he wrote. “We bel…

PGIM Investments’ Matt Shafer: Private markets rise resembles the ascension of EMs

While unlisted assets have been components within institutional strategies for some time, wealth management portfolios continue to carry modest exposure to private markets, normally in the single digits of average weightings. However, as regulations aimed at increasing private markets access continue to evolve, we could be on the cusp of an additional unprecedented surge in demand, with individual investor allocations to alternative assets estimated to jump from $4trn last year to $13trn by the end of 2032. Investment Week Private Markets Summit in pictures It is not difficult to d…

Why is The UK Stock Market at Record Highs?

The UK stock market rally has caught many by surprise, with the FTSE 100 and Morningstar UK index hitting record highs in recent weeks. A number of factors are driving the gains, including an improving economy, a revival of M&A activity and a fall in inflation.

Here we speak to UK-focused fund managers and look at the key stocks behind the recovery.

Which Stocks Have Driven The UK’s Bull Market? 

Over the last six months Rolls-Royce Holdings (RR) has been the lead driver of FTSE gains.

The stock, a standout in the industrials sector, jumped 82.03% over that time to hit a record high of 432.4p, and is now ahead of Morningstar analysts’ fair value estimate of 380p. As a maker of airline engines, Rolls-Royce has been able to capitalise on the travel and transport boom since the pandemic.

Antofagasta (ANTO), the London-headquartered Chilean copper mining company, comes in close second, having delivered a 61.06% increase in its share price over that same period. That comes from lows of £14.17 to its current high of £22.73, as the business continues to benefit from elevated copper prices.

NatWest Group (NWG), the British banking stalwart whose 2023 was not exactly punctuated with brilliant news headlines, also helped boost the FTSE 100, with the company’s share price jumping 55.04% over the last six months. Its current price sits at 316.60p, some way above Morningstar analysts’ fair value estimate of 280p. As banks have profited from higher interest rates, the idea that these will stay “higher for longer” have helped UK banks, which profit from the rising cost of consumer and mortgage debt.

Housebuilders have also risen this year as economic conditions improve and developers anticipate interest rate cuts and a potential change of government which could see a relaxation of planning rules. Shares in large developer Persimmon (PSN), are up 15% in the last six months as sentiment improves.

A Sustainable Shift Towards UK Stocks?

Abby Glennie, deputy head of smaller companies at abrdn, lead manager of the abrdn UK Mid-Cap Equity fund and co-manager of abrdn UK Smaller Companies, feels the FTSE’s gains reflect global sentiment shifting in favour of the UK.  

“Flows have improved towards the UK market and UK sectors,” she says.

“A lot of the fund manager surveys have put the UK back towards the most preferred incremental areas. People were coming from very low levels of allocation, but now they are saying that the

Investment Company of the Year Awards Winners Interview – Law Debenture

Law Debenture were winner’s at the 2023 Investment Company of the Year Awards. Here, Investment Week hears from James Henderson and Laura Foll, Portfolio Managers on their recent win. Law Debenture Corporation p.l.c took home the UK Income award. Read more about the trust here: Can you give a brief overview of the team running the trust and the resources available?  Our portfolio managers James Henderson and Laura Foll are part of the Janus Henderson Investors Global Equity Income team which has 15 members. Ideas also come from other teams within Janus Henderson both in London a…

Scope 3 Reduction Support Slips at Shell AGM

Resolution backing reveals receding shareholder commitment to reducing emissions, as investors told to “put their vote where their mouth is”.

Institutional investors have expressed concern over oil and gas firms’ lack of resolve to reduce environmentally harmful activities following shareholder vote results from Shell’s 2024 AGM this week. The AGM featured a proposal to align the company’s medium-term Scope 3 emissions targets with the Paris Agreement goal of limiting global…

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Australia’s second-largest pension fund to increase private credit allocation

The Australian Retirement Trust, a pension fund valued at AUD260bn ($174bn), plans to increase its private credit allocation over the next year, targeting opportunities in Europe and North America. 

In an interview with Bloomberg, Andrew Fisher, Head of Investment Strategy at ART, Australia’s second-largest pension fund, said that it aimed to raise its position from just under 1.5% to 2.5% within the next six to twelve months, though he did not specify the target value of the exposure. 

To build its exposure to the asset class, ART plans to blend external managers with its internal team. 

The firm is adopting a “disciplined” approach to building its allocation, directing funds towards the lower-risk, unlisted segment of the credit market. Fisher said: ““There’s a lot of money chasing the space. 

“We are competing with banks, which is why there’s a tendency to be offshore, because the banks have a pretty dominant position here.” 

He added that there were opportunities in global credit for small-to-medium size businesses. 

Other leading funds in Australia’s rapidly expanding AUD3.7tn pension industry are also showing an increased interest in private credit. Cbus, which manages AUD90bn, plans to triple its global allocation to this asset class, while Hostplus, with AUD104bn, is seeking to expand its already substantial private credit holdings. Last December, the country’s largest pension fund AustralianSuper increased its partnership with private credit specialist Churchill Asset Management to $1.5bn. 

Last month, ART opened an office in London, joining AustralianSuper and Aware Super’s expansion into the UK. Fisher added that ART, which already owns a stake in Heathrow Airport, is looking to expand its infrastructure and real estate portfolio in the region. 

Scottish Mortgage sells out of Tencent as Chinese investments become more selective

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Hargreaves Lansdown rejects bid from private equity consortium

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