As I write, investment markets are being hit by a potential Coronavirus pandemic, various trade wars, weather and a variety of situations that take confidence out of ‘the markets’. Yet there are examples of healthy fund performance in many areas and, although this will seldom sell newspapers or make the evening news, it is there.

Sustainable Investing

Some well managed funds that invest in ethical and / or sustainable organisations have held up well when ‘traditional’ funds have been falling. This might be because they are making and/or supplying goods or services that are modern and desirable. It could be that they are focusing on goods and services that are currently heavily in demand, such as hygiene products or consumables for those working from home.

Conversely, there are transport related companies having a hard time and companies who usually make their money from gathering people together may be best avoided by investors at the moment. This virus might be a ‘blip’ but it has proven to be the last straw for at least one airline already.

Active Management

Times like these are where ‘Active Management’ of funds can be better than simply tracking an index (e.g. the FTSE100). Tracking a downward sloping graph will result in downward sloping returns. There is no guarantee that an active fund manager will make the best decision every time, but they usually have a strategy and a heap of research to make the decision-making process easier.

As usual it is best not to have all your eggs in one basket but to spread things around. Coronavirus is the issue now but it might go away in warmer weather. However, something else could happen that has a similar impact in the future. Investing needs to be viewed over the long term.

Tax Allowances

Another aspect to consider is the use of as many tax allowances as possible. Generally, we all have a personal allowance to offset some of our income, Capital Gains Tax allowances and there are effective tax wrappers, such as pensions and ISAs to help us retain more from our financial planning.

Contact Us

If you need clarity for your investments and/or pension funds, contact us at Brooks Wealth for a free initial consultation.

Author: Eamonn Dorling Dip PFS, Senior Independent Financial Adviser, Brooks Wealth Management