It’s the Labour party’s plans for scrapping of IHT that take prime position in The Sunday Telegraph Money section this weekend.
The article reports that Jeremy Corbyn’s alternative tax regime involves plans for IHT to be replaced with a “lifetime gifts tax” levied on recipients at the marginal rate, with an allowance of just £125,000 of protections – as well as the removal of the “family home allowance”.
“Hargreaves bosses refuse to give up bonuses” That’s the headline on the front page of the Sunday Times business section, all linked of course to the suspension of Woodford Equity Income fund and its inclusion on the HL wealth-50 list.
It’s the government’s ‘Help to Buy’ scheme which dominates the front page of the ST Money section. The article reports on charges made by Target Servicing, the organisation servicing the housing policy, through billing first time property buyers for a range of different fees.
Also on the front page is a report from James Coney on plans that a ‘taskforce’ for the Investment Association has been working for more than a year to develop a new type of fund, one which encourages investors to invest for the long term. A report is expected to be released this week to help the fund management sector to ‘stay competitive after Brexit’ and which includes proposals to avert liquidity issues by limiting when investors can sell their holdings for example. Timely!!
Delving further into the ST money section, we find comment on the bid by M&G to ‘simplify’ the charging structure on its fund following the announcement made by the group last week. The ST questions whether it might hit transparency as M&G will now bundle up the costs of running a fund, making it more difficult for analysts to see how much the company charged to cover its administration costs. The article suggests that the reason M&G is making the change to ‘…make its fees simpler to understand and more “predictable”.
Meanwhile, Ian Cowie reminds readers of the significant increases in dividends being enjoyed by equity investors in Asia – himself included. He quotes research from Janus Henderson which indicates that payouts to shareholders of Asian businesses tripled over the past decade, rising by 221%.He doesn’t shy away from the risks to capital however, in particular that higher tariffs in America and China have hit valuations of late.
Finally, the ST is delving into the ethical fund sector and reporting that available details on stock holdings within funds are often limited and out of date – including the Standard Life UK Ethical Fund: its reports that its latest published list of fundholdings is dated August 31 last year. Others named and shamed are Threadneedle, Royal London, BMO and L&G.
Over at the Financial Mail on Sunday, Jeff Prestridge isn’t sparing any punches in his article which looks at some of the content from Effective Investing, the book written by Mark Dampier of HL, which was published four years ago. In the light of the Woodford fund debacle, Prestridge points the finger at some of the angles covered by Dampier, including the matter of research and ‘vested interest’ are points which Prestridge throws right back at Dampier and HL in the current environment.
Then in a more detailed article, Prestridge goes on to give his ‘blue print’ for change in the investment fund and platforms sectors in the light of the Woodford situation. It’s mainly focused on the need for greater transparency and fairness – looking at matters such as how many investment funds fail to deliver what they suggest they will provide ‘on the tin’. One example he highlights is the use of the word “income” shouldn’t be allowed in a fund’s title if it doesn’t produce an income higher than that of the stock market it is investing in. The charges that are levied are also on his hit list, with a call for 0.5% per annum to be the new charges norm. M&G (as well as Vanguard) comes in for praise on the back of its announcement of reduced fund charges – Prestridge calls them ‘honourable exceptions’. There are plenty more suggestions – you can find them all in the article if you’d like more detail.
Finally, the fund in focus is the Scottish American Investment Trust, an investment trust – which has been part of the Baillie Gifford stable since 2017 – with a global mandate which aims to find reliable dividend payments from equities across the world and has achieved a steady record of dividend growth.