Press comment: Consumer confidence slump could hit some companies but here’s why investors should keep cool heads
If you are reporting on the fall in UK consumer confidence uncovered in the GfK index, please see the following commentary from Anthony Gillham, head of investments at Quilter Investors, the multi asset investment manager:
“UK consumers are clearly nervous about the future and have worries about their financial prospects. That is troubling for companies that are dependent on domestic demand. In particular, this includes retailers who stand to suffer if consumer spending power is depressed, especially as we approach the key Christmas period. Combine that with the continued pressure retailers face from e-commerce and it is likely high street retailers will be entering the festive season with some trepidation.
“The decline in financial confidence echoed in investment trends this year. 2018 has seen outflows from UK investment funds this year as retail investors pull their money out of UK assets.
“In the immediate term there will almost certainly continue to be volatility in UK assets, so it is understandable that investors are cautious about putting their savings into the market. And there may be a temptation to withdraw into cash and attempt to re-invest once the market calms. However, history shows us that timing the market is difficult if not impossible – nobody rings a bell and announces when markets are going to rebound.
“And there are other reasons for those investing for the future to keep their cool and remain judicious, despite their pessimistic outlook for the future. For investors that hold UK assets, for example through a UK equity fund, the domestic economy is not the primary determiner of investment performance. UK companies, especially those large cap firms in the FTSE 100, earn a lot of revenues from a overseas operations. As a result many have benefitted from the Pound’s fall in value since it provides a currency conversion effect that boosts overseas earnings when translated back into Sterling.
“Equally, investors in assets overseas will have experienced a similar impact. While global stock markets have struggled in 2018, investors in Sterling denominated funds have been shielded to some extent from the relative strength of other global currencies.
“And investors holding a diversified portfolio should be galvanised against domestic worries in the UK. Portfolios with a diverse range of holdings in different asset classes and regions are linked to global financial markets and are not tied to the performance of UK bonds and shares.”
Notes to editors
Quilter Investors is part of Quilter plc. It provides multi-asset investment solutions designed for advised clients in the UK and internationally and manages 18.8bn on behalf of its investors (as at 30 September 2018).
Quilter plc is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.
Quilter plc oversees £118.1 billion in customer investments (as at 30 September 2018).
It has an adviser and customer offering spanning: financial advice; investment platforms; multi-asset investment solutions and discretionary fund management.
The business is comprised of two segments: Wealth Platforms and Advice and Wealth Management.
Wealth Platforms includes the Old Mutual Wealth UK Platform; Old Mutual International, including AAM Advisory in Singapore; and the Old Mutual Wealth Heritage life assurance business.
Advice and Wealth Management encompasses the financial planning network, Intrinsic; Quilter Private Client Advisers; discretionary fund management business, Quilter Cheviot; and Quilter Investors, the Multi-asset investment solutions business.
The Quilter plc businesses are being re-branded to Quilter over a period of approximately two years:
• The Multi-asset business is now Quilter Investors
• Intrinsic to Quilter Financial Planning
• The private client advisers business is now Quilter Private Client Advisers
• The UK Platform to Quilter Wealth Solutions
• The International business to Quilter International
• The Heritage life assurance business to Quilter Life Assurance
• Quilter Cheviot will retain its name
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