I’ve been judging a beauty parade, but I hasten to add that no bikinis were involved. Four leading investment firms were competing for the mandate to manage a charitable endowment – and offering insights into the way professional stock-pickers see the world. First, despite (or if you’re a disciple, because of) the madness of Donald Trump, any portfolio designed for even a moderate-risk UK investor will be heavily weighted towards US tech and consumer stocks. On the other hand, none of the pitches said anything about China or other previously fashionable emerging markets. And their lack of enthusiasm for pure UK equities (as opposed to London-listed multinationals) was impossible to disguise.
In one sample list, the only domestic businesses were the housebuilder Persimmon; the Yorkshire-based food manufacturer Cranswick; London Metric, which owns distribution warehouses; and as a proxy for everything else, the London Stock Exchange itself. In another, grouped by global themes such as ‘automation’ and ‘ageing’, there were no UK companies at all.
Of course every sensible UK portfolio will include, for low-risk income, a portion of our own government’s debt. But the lesson of this contest was that, despite so much rhetoric about the need to attract capital into high-growth British ventures, British institutional investors don’t see merit, reward or patriotic duty in making that happen. And let’s face it, we’re all too hypnotised by America.
Kim’s IT crowd
Speaking of which, Trump’s eagerness to please Vladimir Putin has distracted attention from the favour he’s done for another world-class psychopath, namely Kim Jong-un of North Korea. By announcing the creation of a ‘crypto strategic reserve’, the US president has boosted the prices of Bitcoin, Ethereum and other cryptocurrencies, while fuelling the belief that future crypto prices will be underpinned by the US Treasury as a major buyer.
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