Sunday, 29 March 2015

Exchange Traded Funds - ETF's



If you have ever sat and looked at your investment portfolio, wondering why it seems to be that your mutual funds (unit trusts) are stagnant or simply lagging behind when markets around you are continuing to show growth then you may want to consider ETF’s (Exchange Traded Funds).  What exactly is an ETF? An ETF is a type of fund, some entity that owns assets (bonds, stocks, gold bars, etc.) and divides ownership of itself into shares that are held by shareholders. The shareholders indirectly own the assets of the fund, and they will typically get an annual report. Shareholders are entitled to a share of the profits, such as interest or dividends, and they may get a residual value in case the fund is liquidated. Their ownership of the fund can easily be bought and sold.

Why ETF’s? Firstly, in 2014 only 18% of actively managed funds actually beat the returns of the index they were measuring themselves against. Let’s use an investment in the FTSE 100 as an example. If you bought a traditional UK FTSE equity fund there was a very good chance that the fund performed worse than the FTSE 100 as a whole. This is because the investment managers job is to try and pick the stocks within the FTSE 100 that they feel are going to perform best, it’s difficult to do consistently as most funds will only hold 40-60 stocks thus there will always be around half the FTSE 100 that does not affect the performance of the fund. This results in a gap between the index performance and the fund performance. The second problem is that on average a managed fund investing in stocks will charge around 1.5% per annum in management fees. An ETF designed to track and match a specific index will cost around 0.2-0.5% per annum in management fees. So not only is there a better chance that your ETF will yield better returns than the managed fund but you will also have a smaller fee hurdle to clear before you start to make a profit. The third advantage of ETF’s is the trading cost. Many traditional managed funds will charge an entry fee of 1%-5% when you purchase the fund. Assuming you have a good quality investment platform the dealing charges to purchase ETF’s are usually no more than 0.2% of the amount invested. It’s a win, win, win situation.

There are still many good traditional investment funds out there, so they shouldn’t be discounted entirely but where available our client portfolios usually have around 50% of the value invested into ETF’s. There is a huge choice available with ETF’s that track the price of everything from different stock markets around the globe, precious metals, oil, bonds, property and many more. There are some pitfalls to be careful of when investing in ETF’s. The biggest for me is to only buy an ETF that has physical holdings as the underlying assets. As an example, if you wanted to buy gold, some ETF’s will buy and store the physical gold bullion (usually stored in London or Switzerland) while other ETF’s will buy a contract that matches the movement in the gold price (known as a derivative). I would only ever buy the physical gold ETF, that way, if for any reason there is ever a problem with the fund it has physical assets to back the share price of the ETF.


There are many providers of ETF’s, at the end of 2014 here were over 5,000 different ETF’s available but, as with most things, its best to buy from the big names. Companies such as Deutsche Bank, Vanguard, Wisdom Tree and iShares all have a large selection of ETF’s at competitive prices, you will, of course, require a trading account / platform to purchase them. By using these ETF companies you should avoid making any mistakes with your choice of custodian for the assets. Investment always carries risk, however, using ETF’s can provide a way to minimize costs and improve returns.

Have a great day, Andrew Lumley-Holmes

Friday, 13 March 2015

Предоставление Европейского гражданства инвесторам в экономику Кипра!

Предоставление Европейского гражданства инвесторам в экономику Кипра

Кипр является одним из самых выгодных мест в Европе по минимизации налоговых платежей и налогового планирования. Здесь самый низкий налог на прибыль в Европе и самые низкие ставки налога на прибыль в оншорных юрисдикциях в мире. Также существует Соглашение об избежании двойного налогообложения, в которое входят около 50 стран.
Как член ЕС Кипр является выгодным местом для инвестиций в Европейский Союз, используя преимущества ряда Европейских Директив. Таким образом уменьшая налоговые издержки.
Правительство Кипра прилагает все усилия для привлечения иностранных инвесторов и укрепления роли Кипра в качестве юрисдикции, предлагающей широкий спектр фидуциарных и финансовых услуг. Введен ряд новых улучшенных, быстрых схем получения Европейского Кипрского паспорта.
К слову сказать, Российско-Кипрские отношения традиционно носят дружественный характер. Этому способствует не только взаимодействие органов государственной власти двух стран, но и давние культурные связи наших народов, религиозная общность. В последние годы очень много россиян не только отдыхает на Кипре, но и проживает здесь, ведет бизнес и растит детей и это число растет с каждым годом. Это далеко не случайно, ведь Кипр — это одно из немногих мест в мире, где дышится легко и спокойно, а жизнь безопасна и размеренна.
Ни одна другая страна Евросоюза не предлагает экономическое гражданство так же беспрепятственно, на таких простых и понятных условиях:

·Паспорт гражданина Кипра является полноценным паспортом Евросоюза
·Срок оформления паспорта - 3 месяца
·Инвестор получает кипрский паспорт для себя, супруги/супруга и всех финансово зависимых детей в возрасте до 25 лет
·Нет необходимости проживания на Кипре
·Нет жестких требований к образованию, языковым навыкам или истории
·Республика Кипр поддерживает возможность второго гражданства, т.е. при получении кипрского паспорта не нужно отказываться от первого гражданства
·Нет обязательного условия по созданию компании на Кипре и трудоустройстве граждан Кипра
·Выбор для инвестиций предельно широк – это может быть приобретение акций и облигаций, размещение депозита в банке, создание/покупка бизнеса либо просто покупка недвижимости
Минимальный срок размещения инвестиций - 3 года.
Минимальный размер инвестиций — 2,5 (два с половиной) миллиона евро.
Следует добавить, что закон предполагает обязательное приобретение инвестором личной недвижимости стоимостью не менее €500,000+НДС.

За более подробной информацией обращайтесь по адресу anastasia.shumikhina@chasebuchanan.com ,  предоставляется полное юридическое сопровождение для получения гражданства Республики Кипр.

Friday, 6 March 2015

5 Stocks For Retirement

Whether you are already retired or just starting to save for the future, having good quality investments to provide growth and income is a must for any successful retirement strategy. The quality of your investment decisions can have a huge effect on your quality of life. Companies with healthy balance sheets, dominant market positions, and reliable cash flows should form the core of every investor’s portfolio . While a stock portfolio should contain at least 20 holdings, these five stocks are a good start for your long term portfolio, to be bought and held for the investment gains and income they have to offer.
#1 Google Inc. (NASDAQ:GOOG)
Google, a global information technology leader, specializes in how people access and interact with information. Google provides the leading search engine along with many online services such as Gmail, Adsense, and Chrome. Google operates in over 50 countries with unique domain names for each country. Internet advertising is the fastest growing segment of the advertising market, but still only represents 8% of total U.S. advertising dollars -- suggesting considerable room for further growth. To tap these opportunities, Google has used the profits from its paid search business to support innovative projects such as Google Editions, Google Maps and the Android Market.
Google’s search tools allow users to efficiently search through vast amounts of web-based information, organizing and delivering results based on relevance. It also has a long and growing list of products in many other areas of computer applications. Consumer usage of its products is free, financed through advertising and licensing sales.
#2 Unilever (LSE:ULVR)

The Anglo-Dutch consumer goods group boasts an impressive portfolio of brands across personal care (Lux and Dove), foods (Knorr and Hellmann’s), home care (Cif and Surf), and refreshment (Lipton and Heartbrand). In fact, it has 14 brands that can each boast more than €1 billion in sales a year, and its total annual sales come to €50 billion. Unilever sells its products in 190 countries to 2 billion consumers every day, and over half of those sales are happening in emerging markets (a character­istic that sets Unilever apart from many of its competitors). Unilever’s products tend to be relatively inexpensive and purchased frequently (they’re sometimes referred to as Fast Moving Consumer Goods, or FMCG), and they are sold around the world.

This should mean that, as long as the company’s brand appeal remains intact, its cash flow should be relatively resilient, regardless of economic conditions. People like to eat and shower (though generally not at the same time), even when times are tough. Unilever’s dividend yield isn’t the highest around, but the company’s strong cash flow should help bolster it in times of turmoil and grow it going forward.
 #3: Reckitt Benckiser (LSE:RB)
Say the name “Reckitt Benckiser” to most people and you’ll probably draw a blank expression. Mention Neurofen, Dettol, Strepsils and Durex however, and millions of people around the world will instantly know the products you’re talking about — household names that you’ll find in homes and supermarkets across the globe. Big brands can be a long-term investor’s best friend – unlike most valuable assets, they require little capital expenditure to maintain. Instead of depleting in usefulness each year, the brand becomes more embedded in our lives, and instead can become more valuable. Few things command the same kind of protection for consumer demand as a successful brand — and Reckitt’s product portfolio is up there with the best.
The company also generates roughly 40% of its sales from emerging markets — a proportion that I expect to continue to increase in the coming years. As Reckitt’s brands become more embedded in these markets consumers in these regions should buy more and more of Reckitt’s branded goods.
 #4: Diageo (LSE:DGE)
When building a strong core for your retirement portfolio, big can be beautiful, because large companies should have the geographic and product diversification to weather most storms. And in the spirits business, they don’t come any bigger than Diageo. They appeal because of the relatively defensive nature of its products – people continue to buy alcohol in good times and bad, and often view it as a small luxury, and seem to be willing to spend on brand names.
Speaking of which, Diageo has lots of brand names: Johnnie Walker – the world’s number 1 Scotch whiskey, Smirnoff, Bailey’s, Captain Morgan, and Guinness are some of the headliners. Just as impressive as its brand portfolio is its global reach. Diageo’s products are sold in 180 markets around the world. Although Diageo’s dividend yield is lower than most blue chips, its payout has been growing nicely recently. It’s up an average of 7.5% per year over the last five years.
#5: GlaxoSmithKline (LSE:GSK)
Saving for retirement is all about building up an insurance policy against the uncertainty of the future. If we knew exactly how much our golden years were going to cost us, it would take some of the stress out of our working life. Unfortunately, we can’t see the future with that amount of precision. However, as science helps us live better for longer, it does seem likely we’ll be using more and more pharmaceutical products. As one of the largest pharmaceutical companies in the world, GlaxoSmithKline will benefit from demographic trends in developed economies, like Europe and the US, as well as the rising wealth and demand for modern healthcare in emerging markets.
Over the past four years, GlaxoSmithKline has increased its focus on emerging markets, streamlined operations in its slower growing markets, and refined its all-important research and development (R&D) program. Since 2008, sales to emerging markets have more than doubled, and now account for over a fifth of GlaxoSmith­Kline’s business.
Summary

All five of these stocks offer solid, well diversified product ranges. They are well placed globally to continue their growth and continue to provide good levels of dividend income. However, as always, remember that the prices of investments can go down as well as up and these should be viewed as long term (5yrs +) portfolio holdings.
Have a great day! Andrew Lumley-Holmes