BBC Radio Scotland – Amanda Forsyth on “Good Morning Scotland”

Amanda Forsyth – Investment Manager & Business Development

Amanda Forsyth and BBC Radio Scotland’s Gillian Marles discuss the regulatory elephant in the room for the competing Sky bidders; discuss the likely content of Carolyn McCall’s inaugural results announcement at ITV; debate the expected trends in insurance pricing seen by Admiral; and highlight the forthcoming changes to the FTSE Indices, and whether they matter.

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The MAM Blog – Bitcoin

Charles Robertson – Senior Investment Manager

Having returned recently from the USA there was one topic of conversation that frequently occurred and it wasn’t what you would have thought. It was ‘should I invest in Bitcoin’?

Bitcoin is a virtual or cryptocurrency that was created in 2009. Created/’mined’ by computer code they exist within an interlinked computer system and the maximum number in circulation will be limited to 21 million. A ledger, Blockchain, can store, monitor and be used to exchange the Bitcoin in the ‘real world’ or on-line economies. It is perceived to be attractive because of the limited supply, the lack of regulation and anonymity it affords and the lack of government control. The last two features means that it has also been associated with on-line criminal activity. Bitcoin has displayed a staggering increase in value from 6 cents in August 2010 to more recently when the price has exceeded $8000. The number of exchanges where Bitcoin can be traded and the number of retailers prepared to accept Bitcoin has also increased exponentially. The price has displayed a staggering level of volatility, but after each dramatic fall it has so far recovered and pushed higher.

Perhaps it is the rise in value that has prompted so much discussion and persuaded so many investors to become involved. People are prepared to trade and accept Bitcoin because other people are prepared to accept Bitcoin. If this source of demand is materially reduced for whatever reason (and my best guess would be some form of synchronised interference by governments) then recent investor behaviour does start to look a lot like ‘a mania’, the epitome of the so-called ‘greed trade’.

This week saw the launch of Glint Pay Services which has the aim of ‘re-introducing gold as money’. Based on a debit card and supported by mobile technology, it will allow people to store rights to gold i.e. a very different type of currency to Bitcoin. Gold as a currency has been in existence for nearly 3000 years, but over the past few years the performance has fallen well short of the price rise seen in Bitcoin. However, I can say with a degree of certainty that gold will have a value in 10 years’ time, but I am far less confident about making the same statement about Bitcoin, particularly if we are in a period of investor mania. So would I invest in Bitcoin right now? The answer would be no, but the development of cryptocurrencies is a phenomenon that is likely to last and so should be monitored carefully.

On my trip the ‘Trump effect’ was also discussed a fair amount, but I will save that for another time – perhaps it should be in the form of a Tweet!

Amanda Forsyth selected as finalist in Investment Week’s ‘Women in Investment’ Awards

Amanda Forsyth – Investment Manager & Business Development

Murray Asset Management is delighted that Amanda Forsyth has been selected as a finalist in Investment Week’s ‘Women In Investment’ Awards, in the category of ‘Fund Manager of the Year’ for small- to medium-sized firms.

Ruthven Gemmell, Chief Executive of Murray Asset Management, said, “I am pleased, but not surprised, to have Amanda’s expertise recognised in this way. She has brought her years of experience to bear for our clients, and provides a role model for younger women in the investment community.”

Amanda said, “It is an honour to have reached this stage of the awards process, particularly when I look at the company I keep on the shortlist.”

The winners of the Women in Investment Awards will be announced on 29th November.

The MAM Blog – Defined Benefit Pension Transfers

Richard Johnston – Financial Planning Director

Recently, there has been a surge in individuals transferring their entitlement within defined benefit (DB) pension schemes (e.g. a final salary pension scheme) to a defined contribution (DC) arrangement (e.g. a personal pension) – and with good reason.

Why the Sudden Interest?

The ability to transfer the entitlement has always existed, but the sums offered have increased significantly since the Brexit referendum of June 2016 as a result of changing economic factors which influence the calculation performed by the DB schemes’ actuaries. (Specifically, the reduced Gilt yield and increased inflation rate are largely responsible).

As DC arrangements have become much more flexible in recent years, this has also increased the demand for such plans. Many people view the transfer as an opportunity to enhance the potential inheritance for their children, given that the income from a DB scheme often ceases upon death (unless there is a surviving spouse), whereas a DC pot can be inherited – potentially with little or no tax being payable.

Who Can Transfer?

Essentially, any person with benefits within a ‘funded’ DB scheme can transfer (so excluding schemes such as those applying to the NHS and Civil Service), but normally only deferred members (i.e. those no longer actively accruing entitlement) are likely to pursue it, given that it would otherwise be necessary to opt-out of the scheme.

From a practical perspective, however, there is a legislative requirement to obtain independent financial advice if the value involved is over £30,000 and so those with transfer sums below, say, £150,000, may find it unviable to pursue the matter.

For a person in their late 50s, current transfer values are typically 25-30 times the annual deferred pension income and so this can be used as a means of estimating.

How to Proceed

Firstly, it is important to obtain a guaranteed transfer value quotation from the scheme which, once presented, is guaranteed for three months. The main concern with doing this is that most schemes only permit members to obtain one valuation each year – but otherwise there is no cost to requesting it.

The next step is to approach an appropriate and qualified financial adviser so that they may assess the valuation, discuss the pros and cons, and advise accordingly.

Murray Asset Management provides this service, so please get in touch if it interests you.

The MAM Blog – Hung Parliament – Good for [doing] Absolutely Nothing

Amanda Forsyth – Investment Manager & Business Development

From an initial suggestion that Conservative seats at Westminster would number 400 after the 2017 General Election (perhaps we should call it the first 2017 General Election) to the position which emerged on 9th June of no overall majority for any party was a journey that took many by surprise. Our task, however, is not to debate the electoral process, but to interpret the results for investors; and from that perspective, the implications are wide-ranging.

First, the fact that Mrs May’s hand has not, after all, been strengthened for Brexit negotiations is likely to force a more conciliatory approach to questions of single market membership – especially given her reliance on the DUP who favour open borders with Eire. For companies with key clients within EU member states, therefore, the picture is perhaps a little less gloomy than it was under the cloud of Hard Brexit.

A major factor has been the weakness of sterling. Some of its recent gains have been lost and the inflationary pressures facing businesses who source goods from overseas have also been brought to the fore once more. Below is the chart of the pound against the US dollar, showing the dramatic moves over the past five years; this kind of inflation is unhelpful for the Bank of England, stemming as it does from sterling weakness rather than any strength of domestic demand; in the short term, though, there will be a benefit to the companies with UK costs and overseas sales.

Source – Thomson Reuters Eikon

The UK consumer was already starting to look a little nervous, and the current hiatus in political leadership is unlikely to help that. The high street, therefore, remains as competitive as ever and investments whose success relies on gaining a greater share of the shopper’s wallet will need to be carefully considered.

What seems certain is that any legislative changes are likely to be more limited, constrained as the Government is by the weakness of its bargaining position. The most enduring theme, therefore, emerging from the election result is that it is likely to be good for – setting to one side Brexit considerations – maintaining the status quo.

The MAM Blog – Our thoughts

Stuart Ralph Investment Manager, Murray Asset Management
Stuart Ralph – Investment Manager

In a previous article we provided evidence as to why an increasing number of investors believe the 30 year secular bull market in Gilts has run its course.

While Gilt yields have already risen modestly and are expected to rise further over the months ahead, making them less unattractive to private client investors, our latest Client seminar discussed why we continue to favour Equities and highlighted where we see developing opportunities.

Equity investors will be aware that equity markets have performed strongly over recent months.   In the UK, the FTSE100 has made new highs following the sharp decline witnessed immediately after the EU referendum.

For UK investors, it’s perhaps worth examining the performance of a broad range of financial market indices, rebased to 100 in June 2016 and expressed in Sterling to show how markets have moved since the referendum for Sterling investors.


However, this only tells one part of the story.  By examining the 12 month forward Price / Earning Ratio, which represent the total value of the market divided by the total earnings expected in 12 months time, it’s clear from this valuation tool that Emerging Markets has tended to remain one of the cheapest while the US the most expensive, with the EU and UK somewhere in the middle of the range, with the UK cheaper than it has been since 2015. While we note that the US forward PE Ratio remains the highest of those illustrated, historically US equities have never been particularly cheap.

Of course we also need to consider the outlook for these regions / countries.

Economic Prospects
While there are a multitude of data series that provide lagging and leading indicators of economic and earnings growth, one useful measure is the Global Purchasing Managers Index – which is indicative of confidence in growth over the coming months.   Although the underlying numbers are an important detail, we simply draw focus towards the important transition of colour from Red to Green.   Ultimately, what we can see is that Green (growth) has been getting stronger over time.

Source: JP Morgan

It is clear that an improvement in Developed Markets has been underway for some time, and that in selected Emerging Markets, the outlook for growth looks increasingly positive.   Within Developed Markets, we can see that the picture has been improving for the Eurozone over recent months which might offer opportunity if politics allow.