STOCKS | FUNDS | INVESTMENT TRUSTS | PENSIONS AND SAVINGS VOL 19 / ISSUE 46 / 23 NOVEMBER 2017 / £4.49 SHARES WE MAKE INVESTING EASIER CAN YOUR HOME FUND YOUR RETIREMENT? Good and bad news for investors WHY DO 5 QUESTIONS COMPANIES DIGITAL DISRUPTION RAISED BY BUY BACK HOW TO INVEST IN GAME ZPG’S MOVE ON SHARES? CHANGING COMPANIES GOCOMPARE Fundsmith LLP (“Fundsmith”) is authorised and regulated by The Fundsmith Emerging Equities Trust the Financial Conduct Authority and only acts for the funds (FEET) research team searches the world to to whom it provides regulated investment management and find companies that make their money from a transaction arrangement services. Fundsmith does not act for or advise potential investors in connection with acquiring large number of everyday, repeat, predictable shares in Fundsmith Emerging Equities Trust plc and will not transactions and will benefit from the rise of the be responsible to potential investors for providing them with protections afforded to clients of Fundsmith. consumer in developing economies. Prospective investors are strongly advised to take their own For example, Indofood sold 9 billion packets of legal, investment and tax advice from independent and suitably qualified advisers. The value of investments may Indomie noodles last year, Magnit welcomed 11 million go up as well as down. Past performance is not a guide to shoppers a day, MercadoLibre sold over 50 million future performance. items on its website last quarter and Dabur’s Hajmola FEET Performance, % Total Return tablets were taken 26 million times a day in India. Year ending 31st August 2017 2016 2015 Since inception You may never have heard of them, despite their FEET Share Price +3.6 +21.5 -16.2 +15.5 scale, but all can be found in the FEET portfolio. Source: Financial Express Analytics. www.feetplc.co.uk EDITOR’S VIEW When should you sell an investment? Important lessons on monitoring your portfolio and making high quality investment decisions nvestors share a common goal: I remarked to fund manager Chris finding an investment which Bailey of Daniel Stewart Dynamic Isubsequently goes up in value. Opportunities Fund (LU1603418408) Knowing when to sell that investment that I was surprised to see him recently depends on a variety of factors. This taking profits on numerous stocks despite could include hitting a valuation target, the fund only having launched a few a company (assuming you’ve bought months ago. a stock) experiencing a change in Many investors would expect a fund circumstances or you simply needing to be a long-term investor, yet the Daniel the money for something else. Stewart product expects to have an While we’re often told by investment average holding period of between three experts about the merits of a ‘buy and and 12 months for a stock and typically hold’ strategy, that doesn’t mean ignoring your make 10%+ on a trade. investments completely. It is important to monitor ‘We look for anomalies and catalysts to revert a changes in price and the reasons behind a rise or fall stock back to its normal valuation,’ says Bailey. ‘For in the value of your investments. example, we bought Kingfisher (KGF)as we thought If something has shot up in value, try and work its French business was undervalued. We sold out if there is a valid reason and whether that half the position when the shares jumped up on a additional valuation is justified – if not, that might be Goldman Sachs research note.’ your trigger to sell or at least take some profit. The Bailey argues that he’s been investing in theory is that markets will eventually revert to companies during moments of relative fair value. weakness. His approach is fine as long as If an investment has fallen in value, Investors stocks don’t stay depressed for ages. do the same exercise and work out if Don’t assume this fund will always be something has gone wrong or if the suffer from able to crystallise gains in short periods market is being overly pessimistic and short- as there is a real risk that markets stay so now could be a good time to buy irrational for a long time. In this scenario more at a cheaper price. termism investors would still need to be patient Monitoring your portfolio doesn’t when investing in this fund. need to be a daily task, although don’t be too relaxed in your approach and only check in ANOTHER TAKE ON THE SUBJECT once a year. In contrast, Orbis director Daniel Brocklebank says his team of fund managers hold stocks for an TWO DIFFERENT VIEWS average of 3.5 years, even though they are also Strategies behind cashing out of investments looking for under-priced stocks with potential cropped up in two fund manager meetings I’ve to re-rate. had over the past week. Although there were He says investors suffer from short-termism. ‘If similarities with regards to buying cheap and selling you can act in a way to take long-term decisions, you once a stock has re-rated, each fund manager had have a competitive advantage. Few other people are a difference approach in terms of how long to wait thinking this way. If you also take fewer decisions, before hitting the ‘sell’ button. you take high quality ones.’ (DC) 23 November 2017 | SHARES | 3 Contents INTERACTIVE PAGES CLICK ON PAGE NUMBERS TO JUMP 23 NOVEMBER 2017 TO THE RELEVANT STORY EDITOR’S VIEW GREAT IDEAS GREAT IDEAS 03 When should you sell 14 Ba ck NCC’s cyber 15 Alpha Financial an investment? security recovery Markets Consulting looks like a winner BUDGET COVERGARE 06 All the important GREAT IDEAS UPDATE information relevant 06 16 We update on to investors Vodafone, Jaywing and Harwood BIG NEWS 08 Worldwide dividends WEEK AHEAD surge in record high 18 Financial results and third quarter ex-dividends over the coming week BIG NEWS 08 Oc ado growth story TALKING POINT turning sour? Good and bad news 21 Five big questions for investors raised by ZPG’s BIG NEWS ‘opportunistic’ 09 Black Friday to bring takeover approach further retail woe for GoCompare BIG NEWS 10 New clean energy fund heading to the market with 4.5% yield 21 STORY IN NUMBERS 12 Carillion’s dramatic collapse in value and other stories in numbers securities, derivatives or positions with spread betting organisations that they have an interest in should first clear their writing with the editor. If the editor DISCLAIMER agrees that the reporter can write about the interest, it should be disclosed to readers at the end of the story. Holdings by third parties including families, trusts, IMPORTANT self-select pension funds, self select ISAs and PEPs and nominee accounts are included in such interests. Shares publishes information and ideas which are of interest to investors. It does not provide advice in relation to investments or any other financial matters. 2. Reporters will inform the editor on any occasion that they transact shares, Comments published in Shares must not be relied upon by readers when they derivatives or spread betting positions. This will overcome situations when the make their investment decisions. Investors who require advice should consult a interests they are considering might conflict with reports by other writers in the properly qualified independent adviser. Shares, its staff and AJ Bell Media Limited magazine. This notification should be confirmed by e-mail. do not, under any circumstances, accept liability for losses suffered by readers as a result of their investment decisions. 3. Reporters are required to hold a full personal interest register. The whereabouts of this register should be revealed to the editor. Members of staff of Shares may hold shares in companies mentioned in the magazine. This could create a conflict of interests. Where such a conflict exists it 4. A reporter should not have made a transaction of shares, derivatives or spread will be disclosed. Shares adheres to a strict code of conduct for reporters, as betting positions for seven working days before the publication of an article that set out below. mentions such interest. Reporters who have an interest in a company they have written about should not transact the shares within seven working days after the 1. In keeping with the existing practice, reporters who intend to write about any on-sale date of the magazine. 4 | SHARES | 23 November 2017 Contents 24 MAIN FEATURE FUNDS 24 Digital disruption 42 The pros and cons of 32 multi-manager funds MONEY MATTERS 32 Can I use my home to LARGER COMPANIES fund my retirement? 44 GKN payout faces axe MONEY MATTERS SMALLER COMPANIES 34 What does the rise of 45 Major cash injection ‘unretiring’ mean for to boost Science in pension planning? Sport UNDER THE BONET SMALLER COMPANIES 36 Why RELX is one of 46 Keystone to become the best companies third UK-quoted in the FTSE 100 law firm FEATURE INDEX 38 We explain why 47 Index of companies companies buy and funds in this issue back shares WHO WE ARE BROKER RATINGS EXPLAINED: EDITOR: DEPUTY NEWS Daniel EDITOR: EDITOR: We use traffic light symbols in the magazine to illustrate Coatsworth Tom Sieber Steven Frazer broker views on stocks. @SharesMagDan @SharesMagTom @SharesMagSteve FUNDS AND REPORTER: JUNIOR REPORTER: CONTRIBUTORS Green means buy, Orange means hold, Red means sell. INVESTMENT TRUSTS David Stevenson Lisa-Marie Janes Emily Perryman EDITOR: @SharesMagDavid @SharesMagLisaMJ Tom Selby James Crux The numbers refer to how many different brokers have @SharesMagJames that rating. PRODUCTION ADVERTISING MANAGING DIRECTOR Eg: 4 2 1 means four brokers have buy ratings, Head of Design Sales Executive Mike Boydell Rebecca Bodi Nick Frankland two brokers have hold ratings and one broker has a sell 020 7378 4592 rating.