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Expat Investor : December 2007
December 2007 EXPAT INVESTOR 11 INVESTMENT NEWS for all new International Accounts Lloyds TSB Bank plc does not guarantee the liabilities of its subsidiaries. *Only applies to the monthly subscription fee of £7.50/$7.50/ 7.50. Other charges may apply. Lloyds TSB International is a registered business name of Lloyds TSB Offshore Limited. International accounts will be opened with Lloyds TSB Offshore Limited. Lloyds TSB Offshore Limited is incorporated in Jersey, and its registered office and principal place of business is PO Box 160, 25 New Street, St Helier, Jersey JE4 8RG. Registered in Jersey, number 4029. Regulated by the Jersey Financial Services Commission to carry on deposit-taking business under the Banking Business (Jersey) Law 1991, and investment and general insurance mediation business under the Financial Services (Jersey) Law 1998. Copies of our terms and conditions and latest report and accounts are available upon request from the above registered office. The paid up capital and reserves of Lloyds TSB Offshore Limited was £319m as at 31 December 2006. Rules and regulations made under the UK Financial Services and Markets Act 2000, including the Financial Services Compensation Scheme, do not apply to the financial services business of companies within the Lloyds TSB group carried out from offices outside the United Kingdom. The Isle of Man branch of Lloyds TSB Offshore Limited is licensed by the Isle of Man Financial Supervision Commission to conduct banking and investment business and is registered with the Insurance and Pensions Authority in respect of General Business. PO Box 111, Peveril Buildings, Peveril Square, Douglas, Isle of Man IM99 1JJ. Deposits made with the Isle of Man branch of Lloyds TSB Offshore Limited are covered by the Depositors Compensation Scheme contained in the Isle of Man Banking Business (Compensation of Depositors) Regulations 1991. Complaints involving the Isle of Man branch of Lloyds TSB Offshore Limited that it cannot settle should be referred to the Financial Services Ombudsman Scheme for the Isle of Man. The information contained in this advertisement does not constitute an invitation to buy or the solicitation of an offer to sell securities or accept deposits or to provide any other products or services in any jurisdiction to any person to whom it is unlawful to make such an offer or solicitation, nor should it be construed to constitute any investment advice. Legislation or regulations in your home jurisdiction may prohibit you from entering into such a transaction with us. We reserve the right to make final determination on whether you are eligible for any products or services. Residents or Nationals of certain jurisdictions may be subject to exchange controls and should seek independent advice before entering into any transactions with us. We may monitor or record phone calls with you in case we need to check we have carried out your instructions correctly and to help improve our quality of ser vice. Messages sent by email may not be secure and may be intercepted by third parties. Please do not use email to send us communications which contain confidential information as we require these communications to be in writing. If you disregard this warning, you agree that you do so at your own risk and that you will not hold the Bank responsible for any loss that you suffer as a result. Whether you are living, working or retiring abroad, or simply want long-term security for your savings, we're here. With accounts and debit cards available in sterling, US dollars and euro, Lloyds TSB International gives you easy access to the currency you need. You'll also have a dedicated relationship management team on hand to support you, 24/7 -- wherever you are. ACT NOW to take advantage of fee-free subscription for the first 3 months... Call: +44 (0)1624 638000 Email: email@example.com Web: www.lloydstsb-offshore.com/international Secure banking Living in the UK Working abroad Retirement abroad * Investors not fooled by 'greenwash' Fast Facts 10007 Fast Facts 10195 As interest in ethical funds gathers pace it has also become more sophisticated and investors are no longer fooled by 'greenwash', says F&C's manager Hilary Aldridge, confirming that investors are more savvy when making their ethical investment decisions. "Undeniably the popularity of these products has increased, and this is likely to continue into the future, but it is not a case of investors jumping on the bandwagon without doing their homework. Investors are becoming increasingly well versed on a range of ethical issues, from climate change to waste management, arms trading and human rights. They are also wary of companies promoting an ethical and environmentally friendly image to deflect attention from less savoury activities they are involved in -- a phenomenon known as 'greenwash'." According to research by consultancy firm McKinsey, the early approach of ethical funds, which was to simply screen out the 'sin sectors'' such as tobacco and arms trading, "tended to force an unacceptable trade-off between social criteria and investment returns." "Investors do not want to buy a product simply because it is green," says Ms Aldridge. "They also want a well-managed, quality fund which can generate good returns whilst at the same put their conscience at ease through a combination of positive and negative screens and a programme of active shareholder engagement. The strong returns of the Stewardship Income and Stewardship Growth funds have dispelled the myth that to invest ethically you have to sacrifice returns. Responsible companies make good investments." But according to an IFA Census by NMG Research, 38% of IFAs don't feel well enough informed on the screens being applied by managers when selecting investments. Only six per cent felt well informed. "F&C's Stewardship funds are classified 'dark green', which means IFAs and their clients can feel assured that we actively look for companies that are strong performers in terms of sustainability. We apply the strictest ethical criteria to our process. Although we, as fund managers, undertake the final evaluation of whether or not to invest in a given company, each of the companies we invest in has been screened by our dedicated Governance & Sustainable Investment team with the oversight of an independent external Committee," concluded Ms Aldridge. The Stewardship Income Fund has returned 113.89% over five years compared to the UK Equity Income sector, which has returned 85.1%. The Stewardship Growth fund has returned 105.43% over five years compared to the UK All Companies sector which has returned 79.57% over the same period. Money Tool from Fairbairn Private Bank Asset allocation is a process whereby a portfolio is split across a number of major asset classes, including: cash, bonds, property, equities and alternative investments (such as hedge funds or commodities like gold or oil). In fact, research over the past 30 years has established that the determination of asset allocation is the main driver and contributor to overall investment gains. Ideally, the assets should be chosen for their lack of correlation, which means they will not all respond in the same way to changes in economic conditions. This minimises the impact of a negative performance of any one asset on the overall performance of the portfolio and, in this way, the risk can be spread and investors will experience a much smoother return. Fairbairn Private Bank has developed its Strategic Asset Allocation Service (SAAS) to balance the risk and return characteristics mentioned above. The service targets a real return in excess of risk-free cash interest rates over a three to five year period. Investment is made in all the major asset classes and the asset allocation is actively managed to reflect changing market conditions. Costs are rigorously controlled to further enhance compound investor returns, using methods such as selecting low cost Exchange Traded Funds (ETFs) as opposed to expensive managed funds; particularly in developed markets, where active management can rarely be justified. This strategy also means, in certain markets, there is a much higher certainty of achieving the benchmark return than by using managed funds. Fairbairn aims to select the best performing asset classes given the prevailing conditions, both positive and negative. The efficient use of different asset types can deliver a number of advantages over a traditional equity-only investment approach. These may include: reduction in the inherent volatility of returns. the opportunity to gain exposure to less traditional asset classes, such as hedge funds, commodities and property. wider opportunities from a greater range of investment market conditions. scope to benefit from the market upside and protect against the downside. significant reductions in overall costs. SAAS portfolios can be based in either sterling or US dollars for a minimum of £100,000, or currency equivalent. Fairbairn Private Bank's SAAS can boast a strong track record and will celebrate its three- year anniversary in December 2007. During this time, it has produced an enviable risk weighted performance for both its sterling and US dollar models.
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