Investment has been a key focus as we continue to take steps to integrate The Fry Group with Progeny. So, what are the principles which define our global investment approach? And how are the latest developments in world markets impacting investment performance?
The Fry Group and Progeny both enjoy strong alignment when it comes to investment principles, with a focus on long-term strategic asset management and well diversified portfolios, to offer clients as smooth an investment journey as possible.
At our recent webinar Charlie Buxton, our Head of Investment Management, was joined by Ian Hooper, Chief Investment Officer at Progeny, to explore the investment process used at Progeny Asset Management, which has £3.6 billion under management. All areas of the investment process are supported by a team of dedicated experts at Progeny, including investment specialists, portfolio managers and analysts who deliver solutions based on three core strategies:
- Passive – low-cost portfolios, applying a variety of different indices across the various asset classes.
- Systematic – evidence-based portfolios, combining a passive and multi-factor approach.
- Active management – an unconstrained approach to investment management, blending both active and passive styles.
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The role of investment in financial planning
Ian offered a recap about investment’s role as the engine to help you meet your financial plans. He also touched on the steps to a smooth investment journey, explaining how Progeny’s five practical imperatives help navigate markets, which of course don’t always act rationally. These guiding principles ensure that the asset mix is right, portfolios are broadly diversified, any financial and emotional costs are taken into account and portfolios can be rebalanced as required.
What’s happening in world markets?
2024 has seen equities and bonds continue to diverge, with global equities performing well, whilst bonds remain challenged by still persistent levels of inflation, and interest rates subsequently having to remain high. The challenge for central bankers is when to begin to cut rates, especially given that pockets of inflation remain.
Recent forecasts by the Federal Reserve (the Fed) suggest that they are likely to stick to three rate cuts, but it’s worth noting that the board was not all in agreement on this point! This is partly because the US economy is continuing to perform well, enjoying an acceleration of GDP growth. As the only major economy to be functioning at pre-pandemic levels, with unemployment being close to a 50 year low, fiscal stimulus during the pandemic still in play, major spending packages announced for infrastructure and technology, and high productivity, the Fed hasn’t had to worry unduly about the impact of higher rates. Oil and gas production is also strong within the US, meaning that consumers there pay (for example) just a quarter of the gas price seen in other parts of the world. As a result, there’s really been no need for the Fed to race to reduce rates.
Charlie concluded by noting that markets for the rest of year are likely to continue their focus on the outlook for inflation and rates. The challenge for investors could be a potential policy misstep, especially given that the Fed doesn’t have great track record of anticipating inflation. And of course, there will be plenty of focus on upcoming elections, which always create plenty of noise in financial markets, with half of the world’s population heading to the polls this year.
To discuss any aspect of your investment portfolio please contact your nearest office.
