Investing

Fossil fuels are widely blamed for climate change. Should we exclude companies that own fossil fuels entirely from socially responsible investments? This blog looks at the methodology employed in Nutmeg’s socially responsible portfolios and what this means for carbon exposure.

Sweltering heat in the south of France, the worst drought in living memory in parts of India, and the insidious retreat of ice floes and glaciers. As one Spanish meteorologist put it, while anticipating Europe’s recent heatwave, “Hell is coming.”

You may be following the story of the suspended Woodford Equity Income Fund. As expected, the fund is not yet ready to reopen, which means investors still cannot get their money back. We think the fiasco reveals many things that are wrong with the traditional fund management industry. One of them is that investors in funds such as Woodford’s are often not told exactly what they are really invested in or whether those holdings are liquid (in other words, whether the holdings are easy to buy and sell).

Investors in the suspended Woodford Equity Income Fund are hoping it will reopen and that everyone who wants their money back will get it straight away. Unfortunately, we doubt that will happen. Moreover, we would argue that the fund . Here’s why.

The debacle over the suspended Woodford Equity Income Fund has focused investors’ attention on the issue of liquidity. This is a financial term that describes the ease with which an asset can be bought and sold (liquidated). The Woodford fund, like many others, promised daily liquidity.

A revival of trade tensions between the US and China unnerved investors and prompted selloffs in stock markets in May. Some equity investors suffered losses that offset or even exceeded the gains made during a rally in the first quarter. Though this is bad news for those who have lost money, some new investors might see this month as a chance to buy stocks at attractive prices. Are equities cheap? Let’s look at the evidence.

As the Woodford Equity Income fund suspends investors from withdrawing their money, director of investment strategy Brad Holland looks at why Nutmeg won’t ‘do a Woodford’ with your money.

As you may have seen in the press, investments in the Woodford Equity Income Fund have been ‘gated’1.  This means that investors can’t get their money back in the short term, with all buying and selling suspended for 28 days. 

What, if anything, do you remember being taught about personal finance in school? Has its introduction to the statutory citizenship curriculum had a big impact on students’ financial literacy five years on? 

After an investor exodus at a widely endorsed equity fund, we ask, are “best buy” lists a good guide for investors? Evidence suggests they are not.

There is a battle raging in the fund management industry. Active fund managers, those that pick individual securities in an aim to beat the market [1], like the UK stock market, are at war with the ‘passive’ fund industry. Passive funds use rules-based systems to invest, such as weighting the amount held in each company based on its size, usually at an incredibly low cost. In recent years, money has been flowing out of active funds and into passive funds, nevertheless the amount of money held in active funds is still many times greater than in passive funds – about seven times greater in the UK retail fund industry for instance [2].

Not quite ready to invest at the moment but want to secure your 2023/23 ISA allowance early to help maximise your long-term returns? Our new feature gives you the chance to hold money in cash within a stocks and shares ISA wrapper until you’re ready to invest it. When you’re comfortable, you can invest it all at once, or drip-feed your money into the markets month-by-month. Here, we explain why drip-feeding can be a sound investment strategy and show how new and existing customers can set it all up.