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Why are commodities over-represented in indices?

Do investors have an outdate view of commodities? Far from helping to diversify portfolios, or representing a tangible way to benefit from economic growth, commodities have become volatile financial plays. A misguided view of the nature of these assets has resulted in them being over-represented in indices. Indeed, many passive investors may be surprised to […]

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Risks are growing in big equity and bond funds

Money printing and the current stockmarket boom are increasing systemic risk, pushing problems into new areas. Now the questions is; are some asset managers too big to fail? The financial crisis highlighted risks in banks and insurance, but other areas have been overlooked. Finally, regulators are beginning to recognise risks in the investment sector, and […]

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Will China be sucked into the currency wars?

Currencies are fast becoming 2015’s big investment risk. A factor once largely ignored can now make or break performance. Already, sharp moves this year in the Swiss Franc and Euro have hit some funds hard. But, do investors get enough information from managers about the risks being run? Although many funds do not hedge, monthly […]

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Does London’s Alternative Investment Market deserve its tax breaks?

London’s Alternative Investment Market (AIM) enjoys tax breaks that can suck in unwary investors. Created as a lightly regulated junior Exchange, it is failing to live up to its promise of fostering enterprise. Scandals in the market have seen some AIM shares fall over 90% in the past year. Yet, the market enjoys tax privileges […]

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Do executive incentives actually work?

Executive remuneration is not just a problem for banks. Headlines from other industries show there is a broader pay problem. Rewards in companies such as Tesco and Serco seem to have been a part of a weakness in strategy and governance. Boards assume that complex pay structures and incentives will drive useful management behaviour, but […]

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Risks for blue chips: Disruption for supermarkets, banks, autos & big oil

Results of most for the third quarter are coming in ahead of City forecasts. But it is the exceptions, such as Tesco and Morrisons, that have grabbed more attention. Headlines have focused on accusations of poor management and governance failure, and the deeper long-term problem has been largely overlooked. It is clear that some industries […]

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Financial services facing more social media regulation

To many in the financial sector, social media looks like the wild west; too new and fast moving to be touched by real world regulations. But, the Financial Conduct Authority’s (FCA) new advice on social media and financial promotionsis a sharp reminder of the long reach of regulators. The FCA’s last advice on the topic […]

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When will the ECB crack down on banks’ related party lending?

Will the European Central Bank’s asset quality review spot all the problem banks? Asset quality is a risk factor in the European Banking Authority (EBA) Comprehensive Assessment, but regulators may be missing a key underlying pattern in failure. Banco Espirito Santo has highlighted the issue of inter-related lending: loans to shareholders, affiliates and related parties. […]

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How to cut investment costs – and what bits to keep

Investors might be surprised at how big an impact expenses can have in the long term, and how much is still hidden. Yet there are ways to cut costs, as well as some apparent savings that are likely to be a false economy. “Do costs matter?” might look a simple question, but is often confused […]

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Hidden agendas: Danger of anonymous stockmarket “research”

Some respected online financial sites have recently taken down more than 100 “research” articles anonymously written. The noise of this conflicted commentary, often in the guise of research, threatens to distort share prices and swamp markets. While much of this problem has been focused on the US, UK and European companies are also covered on […]

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