Award winning fund manager comes to Pattaya 0686
(L-R) Simon Philbrook, Graham Macdonald, Bill
(all MBMG Group), Roger Clarke, Sam Liddle (both Miton Asset Management),
Ian Ferguson (MBMG Group)
PM Special Correspondent
It is the selection of the right asset classes rather than
individual stocks which delivers 90% of investment returns, according to Sam
Liddle of Miton Asset Management. “Asset allocation is the key. It’s where
you invest, not what you buy that really matters.” As well as this, it is
vital that the manager focuses on absolute and not relative returns. It is
also important that a fund manager is not constrained by benchmarks and
always aims to produce positive returns whilst managing the downside risk.
Liddle went on, “Spread risk, reduce exposure to any one fund, reduce
exposure to any one asset. This reduces the risk of fraud and financial
Speaking at the investment seminar at Royal Varuna Yacht Club which was
organised by MBMG Group, Liddle said the recent bounce in markets over the
last six months had been driven almost exclusively on the supply side, with
companies achieving profits from cutting costs rather than driving revenue.
In his presentation, Sam explained how the markets had collapsed and what to
do in the future. He said that the emerging markets offered massive
opportunities over the next few years, but yields in the UK and US markets
will be much harder to find as the economies of those countries are likely
to take far longer to recover from the global recession.
“No matter what the state of the overall market, there are always
opportunities,” he said. For instance, “The Japanese market has been
regarded as a bear market for many years, but there have been 7 rallies of
up to 35% in that time, so close attention to detail can result in strong
yields, even when the overall market looks gloomy.”
Liddle, who used to work for Morgan Grenfell and has won awards from both
Standard & Poors and Reuters/Lipper for Best Fund Manager, also said things
were not so bad in Thailand. He pointed out that the country has a strong
manufacturing base, especially in automotive, electronics and
petrochemicals. Despite all that is going on, “government finances are in
good shape” and there is a “strong banking sector as it did not get involved
in sub-prime.” He went on, “(Thailand) has youthful demographics to take the
country forward and is self-sufficient in food which will be a key commodity
in the years to come.” Sam also stated that Thailand is well situated as
part of the overall Asian growth story.
At the same event, Bill Popham explained the benefits of Qualifying
Recognised Overseas Pension Scheme (QROPS) which is fully compliant with
HMRC tax regulations and is an exciting option for British retirees to
transfer their UK based pensions offshore. He showed a table which explained
Including Final Salary Schemes
1. Funds drawn are subject to
tax Funds are drawn UK tax free offshore
2. Fund has no value on
death Fund passes to your
3. No Fund to tax on death,
nothing passed on Fund passes to family/estate free of
Inheritance Tax (IHT)
4. You take pre arranged income
payment Far greater flexibility on drawdown of
5. Limited Investment
Choice Unlimited Investment Choice,
6. Typically, 50% spouse pension
on death 100% spouse pension on death
7. Income starts at normal
retirement age Income can start at age 50 (55 after
8. Must purchase an annuity by
age 75 Never obligated to purchase an
9. Risk of company
insolvency Protected by Isle of Man
10. Funds traditionally held in
GBP Funds/assets may be held in different
11. 25% tax free lump sum at
retirement age 25% tax free lump sum when you
decide to retire
12. Death after service and
before retirement Death after service and before
retirement returns entire
gives negligible life
cover fund to your estate
13. Secured funds cannot be
released in the
100% of the fund can be encashed in
the event of serious
(50% if married)
Born in the USA
(L-R) Philip Jones, Simon
Philbrook, David English (all MBMG Group),
Boris Encklemannm (Swisspartners Ltd, Graham Macdonald (MBMG Group), Louis
Zuckerbraun (Swisspaartners Ltd), John Sheehan,
Paul Gambles (both MBMG Group)
PM Special Correspondent
The above is a Bruce Springsteen song title. With it comes many privileges to
those that can say “I was born in the USA”. However, there are also some
disadvantages, foremost of which is the severe taxation system that all
Americans have to endure both when resident and non-resident, as citizens of the
USA have to pay tax irrelevant of where in the world they live.
The MBMG Group hosted an evening at the Amari Orchid Resort & Tower with two
powerful presentations. The first was from John Sheehan who resigned from Lehman
Brothers a month before it went under as he was disillusioned with the way the
bank did business. He gave an insightful look into what has gone on within the
finance industry over the last couple of years and why it all went awry. He also
gave some gloomy figures as to why we are not out of the woods yet. These
included such tidbits as:
- By mid-2007, the US banks held over USD3.2 trillion in sub prime paper. This
was over 20% of the US economy and 75% of this was Triple A rated!
- Credit defaults swaps (CDS) are used to insure against the event of a credit
instrument defaulting or deteriorating.
- By mid 2007 the total value of CDS issued totaled 6.5 X US GDP and 1.5X the
size of the world economy!
- In October 2007 the total capital value of world stock markets stood at USD
62.5 trillion. In October 2008 the total capital value of world stock markets
stood at USD 36.6 trillion. In 12 months USD 25.9 trillion was lost.
- In January 2008 the total value of world real estate stood at USD 60 trillion.
By December 2008 values had fallen by 20%, with a minimum additional 20%
occurring in 2009. Real estate values could potentially fall an additional 20%
- The total value of assets held in structured securities in 2008 was USD 20
trillion. At the beginning of 2009 Govt. estimated a total of USD 5 trillion was
required to clean up structured securities.
- Since sub-prime problems appeared in 2007, in America alone:
a) 8 million people have lost their jobs;
b) 150 public companies have filed for bankruptcy;
c) 89 banks have failed this year;
d) 2000 hedge funds have gone out of business;
- Ten years ago, US Public debt stood at USD 5 trillion. Today US Public debt
stands at USD 11.9 trillion. It is estimated that an additional USD 10 trillion
is needed to clean up the 2008 problem.
Sheehan was asked how much he thought had been lost overall. He responded by
showing a graph:
He went on to say that this analysis excludes any falls in alternative markets,
fixed income, bond and commodity markets. He then went on to point out that it
would be very difficult for governments to recoup this money in the near future.
The second part of the seminar was conducted by Swisspartners which is a company
that provides IRS fully compliant life insurance products which are tax friendly
and totally transparent. The key points are:
IRS Compliant - Complies with all SEC and IRS regulations.
Tax Effective - Deferral or elimination of Capital Gains, Income and Gift
taxes to beneficiaries and possible elimination of Inheritance Tax.
Potential for Higher Investment Returns - Utilizes assets that can grow
significantly in value, such as hedge funds, shares of privately held companies,
real estate and intellectual property (patents for example), along with
traditional liquid assets, such as stocks, bonds and cash.
Principal Protection - Policies are held in segregated portfolios and,
therefore, retain their value irrespective of the solvency of the original
During the presentation it was emphasized that, “If you know the rules, and play
by the rules, then you can work within the system.” It was also stressed, more
than once, that these offshore investments were totally legal and acceptable to
the IRS and thus provided a platform whereby Americans could invest in funds
that were previously not available to them.
money was lost in a year?
Best Case Worst Case
USD 55 Trillion USD 82 Trillion
Equivalent World GDP 1.5 X World Economy
4 X US Economy 5 X US Economy
3.5 X EU Economy 6 X EU Economy
16 X Chinese Economy 23 X Chinese Economy