INCLUDING: The implications of Brexit for shares, bonds, property and more Issue 401 August 2016 £4.50 www.whatinvestment.co.uk MONEY MAKERS GO GO TOKYO? GLOBE TROTTER Where is the value for The opportunities We track down the income investor in available in the Investec manager today’s markets? Japanese market Blake Hutchins No wonder investors love property In or out of the EU, people still need homes to live in. Now you can invest in short-term property loans and earn net returns of 7.19%. Start building your portfolio in minutes at lendinvest.com/whatinv Your capital is at risk. 7.19% is the average return per year to platform investors, based on a 12 month historical rolling average. Past performance does not guarantee future results and whilst the loans which you invest in are secured against property, your capital is at risk. LendInvest is registered at 8 Mortimer Street, London W1T 3JJ (Company No.08146929), and is authorised and regulated by the FCA, no FSCS. Comment – the bigger picture EDITORIAL Editor David Thorpe 020 7250 7026 Group Sub-Editor Alan Dobie Researcher Stephen Grainger Senior Designer John Howe SUBSCRIPTIONS Amy Greene 020 7250 7055 State of f lux ADVERTISING Sales Manager Gordon Sockett 020 7250 7033 hatever else the EU investor. Such dislocations were amplified by VITESSE EVENTS the aftermath of the referendum result. In this Head of Events Ben Brougham 020 7250 7051 referendum result does, it has Events Manager Jenna Read 020 7250 7050 shone a bright, but murky, month’s magazine we look at where the value may have emerged for income investors from light on the character of our politicians. VITESSE MEDIA PLC Whichever side they were on, they seemed the recent turbulence. Despite the brutal, Executive Chairman Chris Ingram 020 7250 7010 W Chief Executive Officer Niki Baker 020 7250 7042 blunt impact on the market of the Brexit eager to extrapolate from the flimsiest of Sales Director Tim Griffiths 020 7250 7032 facts the firmest of rhetoric. With the result result, the flux that has ensued at the political Director of Digital and Social Media Jonathan Sumner 020 7250 7039 announced, the slabs of political sophistry are level has caused the share prices of banks and slowly being peeled away. other sectors to fall. However, as the fog of Email format: [email protected] This issue of What Investment is dedicated uncertainty disappears, the gyrations of share to the task of unravelling from the reams of prices settle, and some opportunities for value speculation the actual impact of the UK’s will be created. decision to leave the EU. Given the sheer deluge of noise, claim and We hope that during the time between the counterclaim that faced investors in the days Follow @whatinvestment on Twitter vote happening and this magazine hitting the before and after the referendum, it would be Like What Investment on Facebook shelves some of the hyperbolic proclamations eminently reasonable for investors to take a Join What Investment on LinkedIn will have distilled into the sort of common ‘plague on all their houses’ approach, and Follow What Investment on Google+ sense that is of far more use to value and invest in the markets and assets that appear to income investors than the machinations of have absolutely no link to the referendum. politicians with a gallery to please, and an With that perspective in mind, we have What Investment is published by Vitesse Media Plc, Vitesse Media, 5th Floor, 14 Bonhill Street, London EC2A 4BX, Tel: 020 7250 7010. ambition to chase. gathered the thoughts of a slew of prominent An annual subscription to What Investment costs £38.80 for 12 investors to understand where the value is issues (UK), £48.80 (Europe) and £68.80 (rest of the world). Claims Property concerns in Japan, one of the few markets that look for non-delivery must be made within 14 days. Our cover feature this month looks at the case exempt from the impact of world affairs, Member of ABC for investing in property. Whatever the result though it’s an economy that has domestic Average monthly circulation – of the referendum, the UK economy has been problems aplenty. January to December 2015: 7,083 pregnant with uncertainty for some time, and It is worth considering that the Japanese yen property is an asset class that typically bears has performed well this year, as a safe haven ADVICE TO READERS: Information carried in What Investment is checked for accuracy, the brunt of any investor nerves. Conversely, during a time of trouble, and may aid the case but we recommend that you make enquiries and, if necessary, many investors were nervous about owning for Japanese stocks this year. take legal advice before entering into any transactions. property assets in 2016 due to fears that For many investors, Japan’s economy interest rates would rise or that valuations also offers a glimpse into the future – the ISSN 0263 953X. © Vitesse Media Plc. would be excessive. ageing population, sclerotic pace of political All rights reserved in respect of all articles, drawings, photographs, etc That farrago of considerations is explored reform and deflation are portents for other published in What Investment anywhere in the world. Reproduction or imitations of these are expressly forbidden without permission in depth this month, to see where the economies around the world, particularly of the publishers. Editorial contributions requiring an answer should opportunities may lie. those in the Eurozone. be accompanied by a stamped self-addressed envelope. Conditions of sale and supply: this periodical is sold subject to the following Although the gyrations of the FTSE have So Japan is potentially a haven from the conditions, namely that it shall not, without the prior written consent been greying the hair of investors over the past strife of today, and offers an insight into of the publishers, be lent, resold, hired out or otherwise disposed of in a mutilated condition or in any unauthorised cover by way of trade. year, in truth the movements have been more the potential strife of the future. All advertising is subject to the terms of our current rate card. akin to the sideways shuffle than the limbo. Happy investing! u Severe movements in the valuations of Printed in England by Stephens & George Ltd. particular sectors and stocks are what throw David Thorpe News agency distribution by Comag Specialists, Tavistock Road, up buying opportunities for the alert private Editor West Drayton, Middlesex UB7 7QE, Tel: 01895 433800. WIN £1,000 to invest in investment company shares Complete the annual reader survey on pages 29 - 30, and return before 26th August to be eligible for the prize. For more details please see page 29 www.WhatInvestment.co.uk 3 We strive to go deeper. Murray Income Trust ISA and Share Plan Investing for income growth is a skill. Sometimes, an investment that seems great on paper may not be so good when you look beneath the surface. Murray Income Trust searches for high-quality income opportunities by getting to know in depth every company in whose shares we invest. We meet management face-to- face. We ask tough questions – and we only invest when we get to the bottom of how a business works. So when we include a company in Murray Income Trust, you can be sure we’ve done the legwork. Please remember, the value of shares and the income from them can go down as well as up and you may get back less than the amount invested. No recommendation is made, positive or otherwise, regarding the ISA and Share Plan. The value of tax benefits depends on individual circumstances and the favourable tax treatment for ISAs may not be maintained. We recommend you seek financial advice prior to making an investment decision. Request a brochure: 0500 00 40 00 murray-income.co.uk Issued by Aberdeen Asset Managers Limited, 10 Queen’s Terrace, Aberdeen AB10 1YG, which is authorised and regulated by the Financial Conduct Authority in the UK. Telephone calls may be recorded. aberdeen-asset.co.uk Please quote MINC WI 29 121024695_MINC_WHAT_INVESTMENT.indd 1 08/07/2016 10:36 August 2016 Cover Story 34 On shaky foundations Regulars A farrago of concerns plagued News and views property investors at the * start of the year, and then 3 Editor ’s comment came Brexit – but is there an 6 News round-up opportunity amid the carnage? Markets and asset allocation 18 Money makers * * Recent market volatility has 10 Prospero shunted equity valuations 14 Market chronicle around, but where is the value 28 Taxing matters for the income investor? 31 The property portal * Funds in focus 26 The big interview – Blake Hutchins 22 The yen also rises 32 New offers * Japan is an economy in 48 The three best... UK smaller companies funds turmoil, but is now a good 81 Platform perspectives time to invest in the country’s stock market? * Pensions and retirement planning 50 Annuity rates 51 Tom McPhail 26 Globe trotter * Blake Hutchins established a Savings and tax rates strong reputation managing his * Investec Global Quality Equity 52 Borrowing rates Income fund when it was 53 Best ways to save Luxembourg based – now he 55 Tax rates and data has brought it to the UK * Performance data 56 Unit trusts 71 Investment trusts Special section: 76 Exchange-traded funds 41 What Investment Trust In this month’s special section, we look at the opportunities Investor insight for investors within the AIC Flexible Investment sector and * 78 The Hare Supper Investment Club weigh up the attractions of those trusts that have adopted a 82 Terry Bond cautious stance for