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Award winning fund manager comes to Pattaya 0686

Born in the USA

Award winning fund manager comes to Pattaya 0686

(L-R) Simon Philbrook, Graham Macdonald, Bill Popham
(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 collapse.”
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 the benefits.

UK Pension Funds                                          QROPS

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 family/estate
                                                                       on death

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, even
                                                                      after retirement

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 Investor

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
event of                                                            100% of the fund can be encashed in
                                                                        the event of serious

serious illness                                                   illness (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% further.
- 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 insurance company.
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.

How much 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