Barbour will not seek re-election at the AGM. Luke Savage will be appointed as non-executive director and chair, effective 20 September this year.

Savage will also serve as chair of the nomination committee. His experience includes roles such as chair of Chesnara plc, non-executive director of Deutsche Numis, and former chair of Numis Corporation plc. He has also held senior positions at Standard Life plc, Lloyd’s of London, Deutsche Bank AG and Morgan Stanley.

John Ions, CEO, Liontrust, said: “We look forward to welcoming Luke as the new chair as Liontrust seeks to continue to develop the business and ensure we are well positioned for the growth in the savings market.”

While investing in China, or any emerging market, is a long-term game, the story over three and five years is just as stark, with the sector down 49% and 16.5%, respectively. The economic picture is just as uninspiring, as China faces the prospect of lacklustre growth in 2024, with GDP expected to grow 4.5% in real terms, compared with 5.2% in 2023 and 6+% levels in the years before the Covid pandemic. It is little surprise then, with funds under management of just £3.7bn, according to the IA over the course of 2023 to November, the IA China/Greater China sector saw outflows of close to £188m.

So as all eyes focus on China as it enters the year of the dragon, is it really all bad news? In this  head to head, James Klempster (pictured left), deputy head of the Liontrust multi-asset team, explains why he is becoming more optimistic towards China, while Andrew Mattock (pictured right), portfolio manager at Matthews Asia, calls for patience from investors.

James Klempster, deputy head of multi-asset, Liontrust

As long-term, disciplined investors, we are focused on identifying investment opportunities rather than being distracted with macro stories. While a positive economic backdrop should provide a tailwind to markets, fundamentally poor investments are unlikely to prove rewarding, even with a metaphorical gale at their backs.

Over the past 20 years, investors in Chinese stocks have regularly conflated a positive view on the economy with a positive view of the stockmarket, but history has often shown this to be a poor strategy. There are many hazards that can impact markets even against a benign, positive macro backdrop. Important factors to consider include corporate governance: whether there is a genuine culture of rewarding shareholders, and whether capital controls could hinder your ability to retrieve your investment in the future. Even if the above factors are in your favour, investing at the wrong price can mean you’re pushing a rock uphill to get returns.

See also: Head to head: The prospects for global equities in 2024

Similarly, the separation of an investment case from the macro story is equally important when news flow is universally negative. While the Chinese economy is in the doldrums and experiencing an insipid recovery, it does not necessarily follow that the stockmarket should also be written off.

The draconian Covid lockdowns followed by a surprise reopening, political crackdowns on ostentatious wealth, education provision and the property sector have all led to a degree of growing caution among investors, catalysed by a flaring of geopolitical risks.

The combination of Covid, political and corporate developments have acted to rein in globalisation, with heightened geopolitical risk arising from tensions in the Middle East and the ongoing Russian-Ukrainian war further accelerating this contraction. On top of this, China faces demographic headwinds with a declining population and an ageing workforce.

Glimmer of hope?

However, not all economies are created equal, and a poor year for China will still see growth outstripping much of the developed world. The Chinese government continues to focus on improving GDP per capita and moving its economy steadily towards higher-margin, value-adding industries such as electric cars and other technologies.

The latter can, of course, cause alarm, stoking concerns surrounding national security, with governments such as the US having a sceptical view of Chinese technology giants. And while the frosty Sino-US relationship has thawed slightly of late, the US government clearly wants to reduce its reliance on Chinese inputs into its supply chains.

Emerging markets’ poor performance over the past two to three years has a lot to do with problems stemming from China. But now China has adopted a more pro-growth, stimulus-oriented stance, emerging markets could benefit from the relative appreciation of their currencies versus a weakening dollar. They will be further boosted by international strategic supply chains being re-opened.

We do not have direct exposure to Chinese equities through a dedicated fund: an important consideration in our portfolio construction is the avoidance of an over-concentration to any countryspecific risk. Instead, we prefer to access the market in our global diversified portfolios through allocations to Asia ex Japan and emerging markets funds.

Indeed, through our overweight positions in these regions, we are currently overweight in China. Undoubtedly, there are some interesting China managers, but for us to back these strategies, we would like to see a greater number of Asia ex China and emerging markets ex China funds to avoid doubling up on our Chinese allocation.

Overall, we believe valuations on Chinese stocks remain attractive and this will prove rewarding for investors against a more forgiving economic backdrop, as indeed it will for other emerging markets and Asia ex Japan. The main driver of returns will come from the re-rating of stocks from their lowly valuations, which should follow any shift in sentiment from the current levels of scepticism that is keeping a lid on pricing.

Andrew Mattock, portfolio manager, Matthews Asia

Last year was a disappointing one for Chinese equities and the Chinese economy overall. It’s disappointing, in our view, not just in the sense of the underwhelming recovery of Chinese consumer spending post-Covid lockdowns, but also due to the lack of any significant stimulus measures by the government.

Although the government did start to gradually loosen property purchase restrictions across most cities in China, the expectations of potential home buyers regarding future house prices and their own income levels have changed. As a result, these policy changes barely helped to arrest the slump in the real estate market. As the year progressed, investors gradually gave up on the idea that the Chinese central government would step in to engineer a stronger consumption rebound.

From what we can see, many entrepreneurs – whose animal spirits were curbed during the Covid period – are now hesitating to start any new investments in this environment. From a geopolitical standpoint, the highly anticipated Biden-Xi summit in San Francisco in November didn’t really impact the ongoing concerns of the market. And staying at the macro level, Chinese equites were a key exception in a November global equities rally that followed signals by US Federal Reserve chair Jay Powell that the US interest rate-upcycle was near an end.

Both domestic and international investors have had their confidence severely tested over the past three years. There is no ‘natural’ inflow into China’s market through pensions or retirement savings plans and that has left only selected groups of companies with strong cashflow and balance sheets being active in the market, buying back their own shares.

Although we don’t fully subscribe to the theory of a ‘Japanification’ of China, we believe the government needs to do a lot more to avoid this trap and the risk of a ‘lost decade’.

Looking ahead, we remain cautiously optimistic that there will not be further meaningful deterioration in the property market. While we do not expect significant warming of geo-relations, the current status quo of a more constructive post Apec posturing would be welcomed by the market. Patience is a virtue

Among the traditional drivers of Chinese economic growth, aside from real estate, the export sector is still demonstrating some strength. However, as China grows its share of global industrial output, it raises the spectre of more trade frictions alongside continuing US tariffs.

In terms of consumption, the third economic driver, Chinese consumers are likely to continue to behave very conservatively due to a lacklustre employment market and bleak outlook for income growth. Industries with high-paying jobs have unfortunately become casualties of tightened regulation and some have been subject to pay-cut directives from the government.

Valuations continued to trend down in 2023, and the broader China market hovers around similar levels as 2009, despite a better-quality businesses and earnings profile.

We continue to believe that patience is needed in these market environments and that it will ultimately pay off once the market turns. In the current environment, we continue to stick to our knitting and deliver a consistent growth at a reasonable price strategy for our clients.

This article was written for our sister title Portfolio Adviser’s February magazine.

While the firm pointed out that geopolitical risk only increased last year, it said “there is always a good cohort of fund managers across asset classes” who are able to perform irrespective of how challenging the backdrop is.

Below, Square Mile’s team of fund analysts discuss nine funds they have a “good level of conviction” in for meeting their investment goals in 2024:

Polar Capital Global Insurance

The Polar Capital Global Insurance fund, which holds an AA rating in Square Mile’s Academy of Funds, typically holds 30 to 35 holdings mostly in medium-sized insurance companies. The fund aims to return 10% annually, and avoids investments in long-term liability claims as well as, for the most part, life insurers.

David Holder, senior investment research analyst for Square Mile, said: “We like the AA-rated Polar Global Insurance fund for several reasons, not least due to the proven investment approach of its lead manager, Nick Martin.

“It invests in a sleepy sub-sector of markets that is not widely covered, perceived as complex and which includes many firms of variable quality. Mr Martin has built a deep pool of company knowledge and is well informed in the intricacies of investing in this sector.”

Redwheel Global Emerging Markets

The Redwheel fund, which holds an A rating from Square Mile, aims to outperform the MSCI Emerging Markets index by 3% yearly over five-year periods. The long-term capital growth fund is run by manager John Molloy.

Amaya Assam, head of fund origination, said: “He has an impressive long-term track record and is supported by a diverse and experienced team of dedicated analysts.  Mr Molloy applies a well-constructed process which includes markets that are often overlooked by other investors, and he seeks to take advantage of these where they present attractive growth opportunities.”

Comgest Growth Europe Smaller Companies

The Comgest fund, which invests in 25 to 30 companies with a market cap of €1-€10bn, has an A rating from Square Mile.

“The team’s edge is its company analysis and an absolute return mindset with the strategy’s success measured by investee companies’ longer-term earnings capability,” Assam said.

See also: RLAM and Artemis funds added to Square Mile academy

“The portfolio can have some sizeable positions at the stock, sector and country level which can be a double-edged sword at times, as the portfolio concentration can be beneficial when stock selection is working. However, it can also add to the fund’s volatility, which is already an inherent feature when investing in smaller companies.”

Liontrust Special Situations 

Anthony Cross and Julian Fosh’s Special Situations fund is marked with an AA rating and has 55 holdings, with a fund size of £3.9bn. Established in 2005, the fund has a low stock turnover and operates as a capital growth-oriented strategy.

Mark Hinton, equity fund research manager, said: “The team works in a highly collegiate manner and has complementary skill sets, and together its members apply a very well-considered and defined investment process.  This steers them towards relatively steady businesses that are gradually growing, generating high levels of cash and have a clear competitive edge.”

Man GLG Sterling Corporate Bond

While Square Mile said this ‘positive prospect’-rated bond fund can experience short-term volatility, it believes the fund is a good option for offering growth and income. The fund is managed by Jonathan Golan, who has a goal of extracting “100% of the fund’s performance aspirations through credit selection”, said Square Mile’s Eduardo Sánchez, the associate research director for fixed income, alternatives & multi-asset.

“Unlike many of its peer group, this fund’s edge lies in its bottom-up focus on smaller issuers and Mr Golan’s supporting team’s ability to extract excess returns from undervalued credits; many of which are overlooked by larger scale investors,” he said.

Wellington Global Impact Bond

The Article 9 fund from Wellington holds a Responsible AA rating from Square Mile and has $602.7m assets under management as of 9 January.

“Their impact investment process is well thought through, considering issuers against the materiality, the additionality and the measurability of their impact investment case,” Sánchez said.

“We believe that these considerations have created a very solid base on which the team has built a credible impact strategy while also aiming to provide above-market financial returns.”

Artemis US Smaller Companies

The AA-rated fund has 50-70 companies with a market cap ranging from $1bn to $10bn in US companies. Led by Cormac Weldon, the fund holds £748m assets under management and launched in 2014.

Ajay Vaid, investment research analyst, said: “He and his team believe that investors can be slow to price in the implications of change that can enable style-agnostic investors to outperform the market, regardless of market conditions.

“The team conducts considerable macroeconomic analysis in order to understand cyclical and secular trends, as well as the broader outlook for the US economy.”

WHEB Sustainability

The Responsible AA-rated WHEB fund invests in 40 to 60 responsible companies and holds £717.1m assets under management. Stocks fall under nine themes, including cleaner energy, sustainable transport, resource efficiency, environmental services, water management, well-being, health, safety and education, and must derive 50% of its revenue from these themes.

Charlie McCann, investment research analyst, said: “Collectively, they apply an investment process which sets a high hurdle for inclusion in the portfolio to keep the overall impact high.

“As a result of this process, and where the team tends to find suitable stock ideas, the fund is likely to have significant biases to areas of the market such as the healthcare and industrials sectors, and towards mid-capitalisation companies. Conversely, it is unlikely to have any meaningful exposure to the energy and financials sectors and has a notable underweight to the largest companies within its MSCI World benchmark.”

Ruffer Diversified Return

The Ruffer fund, which holds an A rating, is managed by Duncan MacInnes and Ian Rees, but asset allocation and investment themes are determined by Ruffer’s asset allocation committee which meets at least once a week. The fund balances out global equity investments with holdings including cash, conventional bonds, index-linked bonds, and various derivatives. As of the end of December, it held £1.9bn in AUM.

Alex Farlow, associate director of multi-asset research, said: “The exposure to options and other derivatives is primarily used to reduce directional equity market or interest rate risk when deemed appropriate.

“This sets this fund apart and has been particularly and consistently successful in protecting investors’ capital when it matters most. We note that performance has been disappointing in 2023, but we expect it to bounce back in 2024.”

This article was written for our sister title Portfolio Adviser

The wealth manager has hired Jon Urquhart as managing partner and co-head of GSB Private as it continues to expand its UK business.

Urquhart has spent 18 years in financial services, most recently as director of mortgages at Mantra Group, where he led the mortgages division and was a specialist in large loans with private banking clients.

Evelyn Partners

The professional services firm has appointed Bindesh Sajvani as chief risk officer and group head of compliance.

Sajvani joins from Pendal Group the owner of J O Hambro Capital Management, where he was the global chief risk officer.

Prior to this he was global chief risk officer for Intermediate Capital Group Plc, the UK publicly listed alternative asset management group.

His career has included senior risk and compliance roles in subsidiaries of Lloyds Bank Plc (Scottish Widows Investment Management), Aviva Plc (Morley Fund Management) and at Aberdeen Asset Management.

CISI

The institute has promoted Glen Murphy to head of CISI’s Wealth Management Forum Committee.
Murphy takes over from Hamish Warnock, who has chaired the committee since 2020.

He has over 20 years of experience in wealth and investment management. He was formerly chief operating officer at Stonehage Fleming and Multrees and has held leadership roles at Schroders and Rathbones.

He is also a member of the CISI Fintech Forum Committee.

Murphy is keen to grow the professional forum membership to drive more robust engagement in the CISI through regular activities and thought leadership events.

The institute has also appointed Christopher Clark and Sushil Saluja as new members of the board.

Clark is a relationship manager at RBC Brewin Dolphin and has been active with the CISI Scottish Committee for many years.

He served as committee president for four years and has been a keen advocate of financial education.

Saluja is a senior business leader and adviser based in London, focused on international business, technology-led transformation, and education .

He has over 30 years’ prior experience at Accenture. He led business units for EMEA (based in London) and Asia Pacific (based in Hong Kong) and has launched FinTech accelerators in Hong Kong and Dubai.
Since leaving Accenture, he has undertaken roles within Temasek (Singapore) and for the Bank of England. He currently acts as senior adviser to several multinational organisations.

Liontrust

The asset manager has appointed Kristian Cook as head of UK distribution.

Under Cook, the UK single strategy and Multi-Asset sales teams are being brought into one team to further enhance the strong levels of client service at Liontrust.

Cook will report to Ian Chimes, head of global distribution.

Prior to joining Liontrust, he was at Franklin Templeton and JP Morgan Asset Management.

The newly structured UK sales team will promote both single strategy funds and solutions, with the latter including sustainable managed funds, multi-asset funds and portfolios, depending on the individual requirements of clients.

Bravura Solutions Limited

The software solutions provider has promoted Paul Dunn and Chris Spencer to regional chief executive officers.

Dun and Spencer will take up their new roles as chief executive’s of APAC and EMEA business respectively with immediate effect.

Both will be responsible for the end-to-end financial management and operational delivery for their regions, with a focus on driving growth and improving client outcomes.

And will report into group chief executive and managing director, Andrew Russell.

Hampden & Co

The private bank has hired Claire Mann to the new role of head of client proposition.
Mann will lead the bank’s Client Relationship Management (CRM) programme.

She will report to Andrew Bell, chief commercial officer at the bank.

Mann joins from Handelsbanken where she was senior operations and programme manager responsible for the design, implementation and management of CRM.

She has also held senior operational and CRM roles at NatWest, KPMG and HSBC.

Founding development partners Liontrust and Fintel worked with Net Zero Now to develop a sector-specific roadmap to net zero which included a tool to help the advice sector measure, report and reduce greenhouse gas emissions.

The pilot firms were Investing Ethically, James Brewster, The Path, Herbert Scott and Mosaac Ltd, who worked with Net Zero Now to undertake a full calculation of their greenhouse gas emissions.

Calculations showed an average of 35 tonnes of greenhouse gas emissions per firm.

Net Zero Now is working with each of the firms to build a tailored reduction plan and commit to specific targets.

Longer-term firms participating in the Net Zero Financial Advisers Initiative will be able to report on their emissions via the Net Zero Now platform and evidence their performance in reducing these emissions.

As well as compare these to government benchmark figures and achieve a certification to confirm they are ‘On the Road to Net Zero’.

Neil Ross Russell, managing director of Net Zero Now, said: “By showing that they take the transition to a more planet-positive future seriously, these firms are leading the way for the entire sector, and our wider economy, to take action.

“Net Zero Now exists to fight the climate crisis and boost business success – our experience across multiple sectors shows the two go hand in hand. Financial advisers that join this important initiative can help attract and retain staff, reduce costs and meet the increasing demand from clients for firms aligned with their own climate commitments.”

Kate Kwiatkowska, head of ESG and corporate marketing at Fintel, said: “As the UK pivots towards net zero, financial advisers will be a driving force in ensuring client portfolios are invested in a way that matches the client’s ESG preferences.

“Aside from this crucial role, many advisory firms are looking to ensure their own operating models move towards net zero. We are delighted to have been able to use our deep understanding of the advice firms we serve to help design a practical framework for financial advice firms to follow and demonstrate their net zero credentials to clients.”