Do you still have long-term investment in the institutional game? On the retail side of the fence where I spend most of my time, it feels an ever more endangered species. In a world that increasingly seems to value the immediacy and availability of information over its quality, maybe we should not be surprised but, if investment timescales are indeed growing shorter, one may at least wonder how much further they have to shrink.
Having written at the end of last year, for example, that a new government and a more aggressive central bank could signal better things for Japanese markets, some commentators now suggest new investors have already missed the boat. Apparently the thing to do was to sell up the day after Shinzo Abe’s party won in mid-December as all the good news was already in the price. I apologise for ever thinking anyone might want to invest anywhere for longer than a few weeks.
If investment is still a bit more considered and long-term in the institutional world, there will certainly be some retail managers looking enviously your way after recently being berated in the national press. For it turns out more than half the funds in the UK All Companies sector, including some high profile names, have missed out on the gains enjoyed by the FTSE 100 since it bottomed out in the middle of last year.
Bad fund managers. Never mind that the average UK All Companies fund spanked the Footsie over 2012 as a whole (up 15% compared with 9%) or that some of those funds ‘named and shamed’ have done a good job of preserving investors’ wealth in trickier times or even that different funds will have different benchmarks and aims, any excuse to lay into active managers and active fees must be seized – even one based on six months’ worth of data.
Maybe I should not be too despondent – after all, it cannot be more than a month or two before the good, good people at Fidelity issue their reassuringly regular reminder that it is not ‘timing’ but ‘time in’ the market that counts. But they had better hurry as I am sure I am not imagining it when I see signs of the rot spreading beyond the boundaries of the retail sector.
Take the institutional investor that spent the best part of £1bn on a London property project in 2007 and now appears to be getting edgy about the proposed outlay of another £2bn because of the “prevailing economic environment”. Of course there are plenty of property investors who would have bought in London at the top of the market and, if they had not yet gone bust as a result, might now be getting cold feet as the market softens.
But the property arm of the Qatar Investment Authority? If even sovereign wealth funds start thinking like day-traders, then the volatile markets of the last few years may one day come to be regarded fondly as a period of relative calm.
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