Is that it?
After all the build-up, the resumption of higher US tariffs on imported goods and services on August 1 ended up being something of a damp squib.
Thanks to new trade deals agreed between the US and a host of countries and regions including the UK and the EU, the anticipated major fall-out – and consequential market turmoil – largely failed to happen.
But should all this really be a surprise – and what does it mean for investors?
The one thing which has been predictable since Donald Trump took office at the start of this year has been his unpredictability.
As a result, there are now signs that markets are starting to get used to the somewhat quixotic nature of Trump’s actions and almost pricing in the volatility which they inevitably cause.
Let’s look back to the start of April – ‘Liberation Day’ as Donald Trump called it – when the White House overnight imposed tariffs on goods and services from a vast swathe of countries.
It is fair to say that the decision caused chaos on the markets and leading indices around the world plunged into the red.
At Fairstone Investment Management, we got a lot of calls from advisers whose clients were worried about the value of their investments and how they could be affected by the global market volatility.
In the middle of the storm caused by the initial tariffs – and subsequent days when the US and China embarked on tit for tat tariff rises to three-figure percentages – it was difficult to maintain a steady course.
Yet within a space of a few days, those tariffs were placed on pause for 90 days and the markets calmed considerably.
US equities, which took a battering in the early part of April, recovered fairly swiftly afterwards and were back to all-time highs by the start of July. This suggests that investors see the fundamentals of the US economy as sound and are not anticipating a global slowdown in growth.
Even at the start of the week when the tariff pause was going to be lifted, there was relatively little volatility, suggesting that the markets were pretty sanguine about what was to come on August 1.
While the more punitive Trump tariffs of 50%-plus threatened on some countries have not been carried through, some countries such as Canada (35%), Switzerland (39%) and Brazil (50%) are still threatened with higher rates by the Trump administration for various reasons.
There was a brief surge in the price of copper on world markets after Trump said the US is considering imposing 50% tariffs on the metal. Other than that, reaction on the markets has been relatively subdued. For example, the FTSE 100 ended August 1 close to record highs of 9,100-plus, compared with the 7,544 it sank to in the immediate wake of ‘Liberation Day’ back in April.
The idea that these delays could become a pattern of behaviour from the White House is starting to gain ground. The TACO acronym (Trump Always Chickens Out) is beginning to be quoted by traders in increasing numbers.
However, to quote a more English metaphor, it is by no means certain that the US President will continue to march his men up to the top of the hill only to march them down again.
Markets remain wary of the potential for tariffs to ramp up at short notice and the potential longer term impacts of Trump tariffs on the US economy and global trade. As a result, markets and investors will keep watching the situation closely.
As stated at the start of this article, trying to predict Donald Trump’s next move is almost impossible.
Even though the threat of punitive tariffs has largely disappeared, the effective tariff rate being imposed by the US on the rest of the world is running at around 18%. This compares with levels of between 2% and 4% for the past 40 years.
There are signs that the policy is starting to reshape global trade flows. And while Trump is in the White House, there is always the chance of sudden changes in direction.
This whole episode is almost like an object lesson in the basic rules of investment:
If you had sold investments while the indexes were plummeting at the start of April only to buy them back when markets recovered, you could have lost a lot of capital. Attempting to time the sale and purchase of investments is extremely tricky, even for investment professionals, and unforeseen events can easily upset all your calculations.
Investing is a long-term pursuit and staying invested is more effective than trying to predict market highs and lows. Changing course too often may well mean you miss out on the benefits of recovery and even a few days out of the market can be costly.
Diversifying your investments can help to reduce risk. It also means that no single downturn – even if it’s temporary – can seriously impact the value of your portfolio.
Keeping informed is important, but in the world of instant news alerts and social media froth, you can get caught up in spirals of fear or euphoria. This can lead you to make bad investment decisions. Keep an ear out but don’t let the news cycle dictate what you do.
Investment managers and financial advisers have extensive experience of market swings, unforeseen events and all manner of economic shocks. Lean on that experience by taking professional financial and investment advice to ensure your plans are best placed to withstand the turbulence from Trump tariffs, trade wars or other events which could affect your financial future.
Tariffs are an excellent example of the unpredictable external forces which can impact your investment plan.
Keeping calm, staying the course and sticking to your long-term strategy is a wise way to deal with such events.
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Disclaimer: It is important to note that the value of investments and the income from them can go down as well as up and that you may get back less than the amount you invested. This article is for informational purposes only and does not constitute financial, tax, or legal advice. Tax treatment depends on individual circumstances and may change. Always seek professional advice before making financial decisions.
There’s been a lot of talk lately about non-domicile status and tax changes introduced by the Labour government.
The general feeling is clear: people are tired of the UK’s growing tax burden. High income tax rates, inheritance tax now applying to businesses and farms, rising employer National Insurance costs – the list keeps growing.
One option for wealthy individuals keen to keep hold of their assets is to move to a lower tax country such as the United Arab Emirates (UAE).
However, I know that most of my clients would never actually think of moving to Dubai for tax – for them, the lifestyle change just doesn’t justify the tax savings.
What’s more, there are ways to stay in the UK and shelter your wealth – read on to find out more.
Since Labour came into power in July 2024, there have been growing reports of a wealth exodus from the UK. Initially, the focus was on non-dom reforms, first introduced by Conservative Chancellor Jeremy Hunt in 2024, as providing the spark that made the ultra-wealthy consider leaving.
Now, there’s concern that more of the “mass affluent” may follow, especially with reforms that bring more assets into the scope of inheritance tax (IHT).
One report has claimed that as many as 16,500 millionaires will leave the UK during the course of 2025.
Many of these wealthy people are said to be heading to the UAE because of its low taxes, residency programmes and high-end lifestyle.
But is living somewhere like Dubai all it’s cracked up to be?
Moving to Dubai for tax might seem like a solution, but recent developments suggest it may not be a long-term fix.
For example, neighbouring Oman has become the first Gulf Arab state to introduce income tax, raising concerns that Dubai could follow within the next five years.
Under a royal decree, residents in Oman will pay 5% income tax on earnings above OMR 42,000 (around £80,000). While the tax won’t take effect until 2028 and is modest compared to the UK’s top rate of 45%, it signals a shift in the region.
Most of my clients -those with £1 million to £5 million + in assets – enjoy the UK lifestyle, with plenty of travel built in. So instead of moving to Dubai for tax reasons, we focus on smart, strategic tax planning, retirement planning and estate planning.
Here are some examples of what can be done.
If you’re a high earner now, offshore bonds can help you defer tax on investment gains. Offshore bonds are issued outside UK jurisdiction and are ideal if you expect to be a lower earner in the future or plan to retire in a country with lower tax rates.
For example, if you are a 45% taxpayer, you can defer all gains from tax until you are ready to crystalise them. Later in life, you may become a basic rate taxpayer, meaning you could pay only 20% tax on the profits.
If you are not a basic rate taxpayer and wish to reduce your tax liability, you can assign the Offshore Bond to your children for their benefit (if they are over 18) or your partner to potentially save tax on the gains.
Despite the name, offshore bonds are not complex or shady. They’re a legitimate and often essential part of a well-structured tax plan. Like pensions, they allow you to invest in a wide range of assets while deferring tax until withdrawal.
Pensions remain one of the most powerful tools for tax relief. Contributing £60,000 to your pension every year can attract up to 45% tax relief. Yes, there’s tax when you draw from it, but it’s usually far less.
Here’s a simple example:
If you’re a 45% taxpayer, every £100,000 in your pension only costs you £55,000 net. Later, if you’re a 20% taxpayer in retirement, you could draw £100,000 and receive £85,000 net. That’s a return of £85,000 from a £55,000 net cost.
Note: 25% of any amount drawn down from a pension is tax-free, and the remaining 75% is taxed—netting down to 60% after tax = 85%. Therefore in the above example, you can turn £55,000 net into £85,000.
Venture Capital Trusts allow you to invest in small, high-growth businesses. These investments carry risk, but you receive 30% income tax relief on your investment, and all dividends and gains are tax-free. Names such as Secret Escapes, Five Guys UK, Zoopla, Graze, Tails, Depop were all backed by the UK VCT market.
Individual Savings Accounts (ISAs) are basic but remain very effective when compounded over a long period of time. All gains, dividends and interest from ISAs – whether cash or investment ISAs – are tax free.
A Loan Trust lets you retain access to your capital while removing the growth from your estate. For example, if you lend £500,000 to a trust you set up (of which you can still be trustee) and it grows to £1.5 million over 20 years, only the original £500,000 remains in your estate. The rest belongs to the trust, often for your children/grandchildren. However, it’s important to note that you as the settlor can’t access the growth at any stage!
This strategy is ideal for clients who want flexibility and access to their original capital. If you don’t use the capital during your lifetime, you can write off the loan. If you survive seven years, the £500,000 is outside of your estate. Alternatively, you can spend it on making memories!
These give trustees full control over how and when assets are distributed. They’re perfect for clients who want to gift assets without handing over full control and access to their children/grandchildren.
It’s important to note that if you set up a Discretionary Gift Trust you can’t benefit from the monies. However, a variation of the gift trust – the Discounted Gift Trust (DGT) – allows you to draw a fixed income for life while gifting the capital.
Previously known as Business Property Relief, Business Relief allows qualifying business assets to be passed on free from inheritance tax (IHT), or at a reduced rate, provided certain conditions are met.
There are many Business Relief funds available that qualify for IHT relief after two years of holding the shares. This could potentially save your estate up to 40% in IHT. Nevertheless, there are various risks and conditions that need to be met here. As a result, you should take expert financial advice before going down this route.
A Whole of Life insurance policy is a form of financial protection which can be used to cover a future IHT bill directly.
When written in trust, the payout doesn’t form part of your estate and can be used to pay the tax quickly. It’s especially useful for estates tied up in property or business assets. The proceeds are also free from income tax.
Taking out a Whole of Life Insurance policy also means that there is no investment risk attached. Your family don’t have to worry about whether adverse market conditions will leave them short on the Inheritance Tax bill.
While the tax burden is on the rise, you can mitigate the effects without moving to Dubai for tax.
Taking expert financial advice and planning ahead could help you to keep more of your wealth while enjoying UK life.
For further details on any of the issues raised in this article, please get in touch.
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Disclaimer: It is important to note that the value of investments can go down as well as up and you may not get back the full amount you invested. Past performance is also not a reliable indicator of future performance. This article is for informational purposes only and does not constitute financial, tax, or legal advice. Tax treatment depends on individual circumstances and may change. Always seek professional advice before making financial decisions.
Inheritance tax will be levied on unused pension funds after death from April 2027.
This change has major implications for people looking to leave money to their loved ones.
Here we take a look at how to cope with the new regime and maximise what you can leave your family.
With limited exceptions, inheritance tax (IHT) of 40% is charged on anything you leave after your death over £325,000. This amount is known as the ‘nil-rate band’.
If you leave your main home to your children or grandchildren, you may also get a residence nil-rate band of £175,000. This adds up to a maximum £500,000 before tax kicks in. Therefore a couple who are married or in a civil partnership can potentially pass on up to £1m without their inheritors paying tax.
While this may not sound too bad at first, when you look a little closer then alarm bells may well start to ring.
For example, as of March 2025, the average UK house price was £271,000, a 6.4% increase on the same month in 2024. In 15 years at that annual growth rate, your house would be worth over £531,000.
But with annual house price growth over the last 10 years estimated at 12.1% (by estate agency Zoopla), then after 15 years your home could actually be worth more than £762,000.
With the nil-rate band frozen until 5th April 2030 and higher house prices in certain parts of the country, people even on fairly modest means are now falling into the IHT trap.
At the moment, defined contribution pensions – those where you build up a pot of money to give you an income when you retire – don’t form part of your estate when you die. Consequently, your family doesn’t currently have to pay inheritance tax on any unused defined contribution pensions after your death.
However, from April 2027, any unused defined contribution pensions will be treated as part of your estate for IHT purposes.
Including pension funds in IHT calculations could mean that your estate surpasses the IHT threshold. The rise in house prices and the freeze on tax thresholds makes this even more likely.
Anything above the threshold will be liable for tax at a current rate of 40%. This could have significant financial consequences for your beneficiaries, especially with many people currently using their defined contribution pensions to help pass on assets to the next generation.
As well as potentially paying more in tax, bringing pensions under the IHT umbrella will also cause delays. With HMRC assessing pension funds as part of the overall estate, beneficiaries may face months of waiting for the probate process to be completed. This process could take even longer for more complex estates.
Pension scheme administrators will have to determine the value of any unused pension funds at the time of death and include these in the calculation for IHT. Again, this could lead to significant delays.
With this major change less than two years away, you should take stock of your current situation and evaluate the total value of your assets.
Add up the current worth of your pensions, properties and investments to see where you stand. You should also check you have all appropriate documentation in place. Once you have a comprehensive picture of your financial position, you can start to look at ways of tax-efficient planning.
Careful planning and expert help from a financial adviser can help you to preserve as much as possible of your estate. It can also avoid leaving your family facing major financial headaches.
Here are some options to consider for cutting down on potential inheritance tax liabilities:
As a retiree after being careful with incomes and outgoings for many years, this can be easier said than done. However, it is one sure way of reducing your taxable estate.
You can give away up to £3,000 in any tax year without it counting towards IHT. You can also carry forward unused allowance from the previous year. As a result, you could gift up to £6,000 if you haven’t used it previously.
You can gift additional amounts for weddings and civil partnerships. This can be up to £5,000 to a child, up to £2,500 to a grandchild or great-grandchild and up to £1,000 for anyone else.
Also, you can gift up to £250 per person per tax year, if that person hasn’t received part of your £3,000 annual exemption.
Gifts above these amounts are called Potentially Exempt Transfers (PETs). If you live for seven years after giving the gift, it won’t be taxed. If you don’t, then IHT is charged on a sliding scale as follows:
| Years between gift and death | IHT on gifts over allowance |
| 0-3 years | 40% |
| 3-4 years | 32% |
| 4-5 years | 24% |
| 5-6 years | 16% |
| 6-7 years | 8% |
| 7+ years | 0% |
A Trust is a legal structure that lets you set aside assets for your loved ones while keeping some control over how and when they receive them.
Some trusts are taxed at lower rates or even avoid IHT entirely, depending on how they’re set up. For example:
However, Trusts are complex. A financial adviser or an estate planning expert can ensure they are set up correctly and carry out your wishes.
Many people assume that life insurance policies are only there to help families in the event of an untimely death.
However, you can take out a life insurance policy to cover the anticipated cost of an inheritance tax bill. These policies can be taken out at later stages in life.
If the policy is written in trust, then the payout doesn’t count as part of your estate and won’t be taxed. You should get professional advice since such policies do not come cheap and need careful handling to be effective.
You could consider using some funds to make an investment that qualifies for Business or Agricultural Relief.
From April 2026, any assets worth up to £1m and which you have held for at least two years will get 100% relief from inheritance tax. Assets above that level will qualify for 50% relief from IHT, effectively taxing them at 20% rather than the standard 40%.
Qualifying quoted but unlisted shares (such as those on the Alternative Investment Market) will attract 50% relief from inheritance tax.
This is a complicated area so take expert investment advice and taxation advice before progressing with any plan.
If your defined benefit pension fund is left to your spouse or civil partner, they will not have to pay any inheritance tax.
Nonetheless, when they die, that pension could still attract IHT. The same principle applies when it comes to property.
A financial adviser or estate planning expert can help you put in place joint plans to help maximise benefits.
For example, a joint lives second death policy in trust for the beneficiaries of your estate may help to cover the IHT bill.
Inheritance Tax on pensions will make it harder for people to pass on assets without attracting increased tax bills. This especially the case when you consider rising house prices and frozen tax allowances.
Careful planning with financial and estate planning advisers can create useful solutions to ensure you maximise what you leave behind.
To find out more, why not get in touch with one of our experts by clicking the link below.
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Disclaimer: This article is for informational purposes only and does not constitute financial, tax, or legal advice. Tax treatment depends on individual circumstances and may change. Always seek professional advice before making financial decisions.
How good are you at picking winners?
That’s one of the key questions which any investor should ask themselves before putting their hard-earned money into a particular asset, whether that’s equities, bonds, funds or other forms of investment.
Advances in technology have made it quicker and easier for people to invest directly into things like stocks and shares, but how should you choose where to place your money?
Going with gut instinct or picking up a stock tip from a passing acquaintance is probably not the long-term investment strategy that most people would adopt.
Likewise, researching investments on the internet or leaving it to AI can also be fraught with potential problems and could lead you to invest in products that you don’t understand, and that don’t meet your investment needs.
This is where a model portfolio service (MPS) can help.
A model portfolio is a pre-constructed collection of investment assets – such as equities, bonds, mutual funds and cash – designed to achieve specific financial goals, and to align to a specific risk level.
In many cases, model portfolios are constructed by teams of investment managers who use their knowledge, experience and research to decide the best way to allocate assets. Portfolio managers are then given discretionary permissions that allow them to rebalance the portfolios on a regular basis in order to maintain alignment to the target asset allocation and adjust positioning in response to changes in market conditions.
Portfolios can be built to achieve a range of different objectives, including long-term growth, capital preservation, income generation and/ or sustainability related goals. Furthermore, portfolios will generally be available at a range of different risk levels, ensuring investors across the risk spectrum have access to robust investment solutions.
At Fairstone, we run a model portfolio service (MPS) comprising a broad range of solutions, each designed to meet a different set of financial objectives.
For example, our Flagship Portfolios are well-diversified portfolios designed for steady long-term growth or income while our Responsible Portfolios are designed for investors who want to avoid some of the more controversial sectors, while focusing on companies that have better societal and environmental footprints.
Opting to invest in an MPS can offer a number of benefits, including:
1. Simplified decision making – instead of researching and selecting individual investments, investors and financial advisers can instead access the expertise of investment professionals by putting money into ready-made portfolios that align with pre-stated objectives.
2. Alignment to risk – model portfolios are generally built to span the risk spectrum, meaning investors can choose a solution that matches their appetite for risk and investment time horizon.
3. Diversification – model portfolios are built to spread risk across various asset classes and sectors, as well as different geographic regions. This helps to reduce exposure to any single market, ultimately reducing overall portfolio volatility and boosting the opportunity for growth.
4. Ongoing management – MPS solutions are built to be updated and rebalanced on a regular basis, giving investors the peace of mind that their holdings will always be aligned to market conditions and their agreed risk level.
5. Improved consistency – when markets are volatile, an MPS can help you plot a consistent investment course, keeping a focus on long-term outcomes rather than short-term fears.
6. Cost efficiency – by pooling assets, model portfolio managers are able to leverage scale to drive down the cost of underlying investments, allowing investors access high quality solutions at attractive prices.
An independent financial adviser will be able to talk you through Fairstone’s suite of model portfolios and provide informed advice on the best fit for your overall financial goals, taking into account factors such as your appetite for risk, your retirement plans, personal goals and overall circumstances.
Our financial advisers are also in regular contact with portfolio managers and have access to a wide range of collateral covering market movements and portfolio changes – all of which can help you stay engaged with your investments and aware of how your assets are being adjusted to adapt to shifting global markets.
A model portfolio can provide a cost-effective and efficient way to invest, matching your risk appetite with your financial goals.
Consulting a financial adviser can help you decide whether an MPS suits your needs and which one offers the best fit for you.
If you’re thinking of investing in an MPS, talk to an adviser today.
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It is important to note that as with all investments, the value of money invested in a model portfolio can go down as well as up and you may not get back the full amount you invested. Past performance is also not a reliable indicator of future performance. This article is for informational purposes only and does not constitute financial, tax, or legal advice. Tax treatment depends on individual circumstances and may change. Always seek professional advice before making financial decisions.
When investments are mentioned, people often think that just means stocks, bonds or cash.
However, there are investments which fall outside these categories which can form part of a portfolio: alternative investments.
Here we take a look at what alternative investments are, how they can help with your investment planning and how getting the right advice can assist you on your alternative investment journey.
Alternative investments are financial assets outside of conventional stocks, bonds, mutual funds, exchange-traded funds and cash.
Examples of alternative investments include private equity or venture capital, hedge funds, art and antiques, commodities, and derivatives contracts. Real estate is also often classified as an alternative investment.
Depending on the individual investment and on individual circumstances, alternative investments have the potential to offer a degree of protection from market-driven volatility and some possible growth opportunities.
If used carefully, they can help to further diversify an investment portfolio, making it potentially less susceptible to sudden shocks.
For example, gold has been seen as something of a ‘safe haven’ for investors for many years, particularly during times of uncertainty.
While past performance is not a reliable indication of future performance, it is a fact that the price of gold has risen considerably over the past five years, from £1,420 an ounce in July 2020 to £2,421 an ounce in June 2025, as shown in this chart from gold.co.uk
Of course, other assets have also increased in value over the same time period, but gold has proved to be a resilient asset for many years, particularly during times of high inflation.
Infrastructure investments are currently rising in popularity and prominence with government spending in the UK and abroad on large-scale projects on the increase.
This can be in the form of direct investments in investment trusts who own infrastructure assets such as airports and ports or via tracker funds which focus on the infrastructure sector.
In the case of the Fairstone Nova model portfolio range, this includes investment in infrastructure owners as part of the diversified portfolios on offer.
Real estate is also a popular form of alternative investment, whether that is via direct stakes in property developments or via investments in real estate funds or real estate owners.
Risks associated with alternative investments follow a broadly similar pattern to risks with conventional investments: prices can go down as well as up, past performance is no indication of future performance and you may not get back the full amount you invested.
As with conventional investments, alternative investments offer varying levels of risk and reward.
In the case of investments in some physical assets – such as art or antiques – added to the risk of fluctuating asset prices are the risks of veracity (is the piece of art you have invested in genuine?) and liquidity (you will need to find a buyer for the asset you own in order to realise a return on your investment).
Alternative investments are not something for the beginner.
As with any form of investment, you should regard investments in alternatives as long-term and ensure they fit in with your overall attitude to risk and your financial circumstances.
Consulting a financial adviser will help you get your investment planning in line with your approach to risk and your overall financial goals. This will help you to see whether alternative investments could form a useful part of your portfolio and, if so, how best to incorporate them.
At Fairstone, our advice offering includes alternative investments in the context of managed investment funds, though we do not undertake transactions in alternative investments directly.
Alternative investments can help to create a diversified investment portfolio that is less susceptible to economic and stock market volatility.
A financial adviser can assist you in deciding whether such investments are right for you and your family.
If you’re considering alternative investments, talk to an adviser today.
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This article is for informational purposes only and does not constitute financial, tax, or legal advice. Tax treatment depends on individual circumstances and may change. Always seek professional advice before making financial decisions.
ESG has become something of a buzzword in investment circles in recent years, but what is ESG investing, how does it work and could it be something for you to consider?
Here we break down the basics, give some examples of ESG investments and look at factors to take into account if you’re thinking about allocating some, or all, of your capital towards investments that are aligned with strong ESG principles.
Environmental, Social and Governance investing, or ESG investing, relates to a segment of the investment universe where fund managers carry out additional research to understand the environmental, social and governance risks associated with a given company.
‘Responsible’ companies are then seen as those who seek to reduce these risks, minimising their negative environmental and social footprints, and running their businesses in an accountable, open and transparent way.
Investments in companies or organisations such as these expanded swiftly through the early 2020s, reaching an estimated £22.05 trillion in 2022, according to the Global Sustainable Investment Alliance.
More recently, investment research specialist Morningstar has mapped out flows of money into and out of global sustainable funds as follows:
It is important to note early on that there are no universally recognised criteria which define precisely what is or isn’t an ESG investment.
Furthermore, the term ‘ESG’ is also frequently interchanged with terms such as ‘responsible’, ‘sustainable’ or ‘ethical’, making it challenging for the would-be ESG investor to know whether or not a solution really meets their needs.
Here in the UK, the FCA have tried to combat this with the introduction of the Sustainability Disclosure Requirements (SDR), which require UK domiciled funds to meet certain criteria before they can use terms such as ‘sustainable’ or ‘impact’ in their name.
Yet even with the regulations in place, it is still not simple for an investor to be sure that a given investment solution will meet their individual ESG needs – particularly if UK domiciled funds are combined with overseas funds and packaged in to ready-made-portfolio solutions, which do not come under the remit of the previously mentioned naming rules.
As a result, if you are considering ESG investments, it is always a good idea to speak to your financial adviser and look carefully into the detail of any investment solutions that your money is going into, to check that they align with your personal responsible investment needs.
While investors can buy stocks and shares of individual companies that follow strong ESG principles, the simplest route for would-be ESG investors to take is to invest via a ready-made portfolio solution – or MPS – that aligns to your risk profile.
While these portfolios do not need to align with the FCA’s SDR naming rules, they do have to meet a set of stringent anti-greenwashing rules, which means they cannot claim to do anything that cannot be substantiated.
If an MPS claims to exclude producers of tobacco products, these exclusions have to be in place, with data to back up the claim. Likewise, if an MPS claims to invest in clean energy solutions, the data has to be there to verifying that it does, in fact, invest in clean energy solutions.
At Fairstone, we operate a suite of what we call Responsible portfolios.
These are designed for investors who wish to avoid investing in certain areas, while focusing on companies with a positive societal and environmental footprint.
Here’s how our Responsible portfolios line up:
This is an active global multi-asset portfolio range aligned with Fairstone’s responsible investment framework, that combines negative screening (filtering out companies that sit within some of the more controversial sectors), carbon reductions, and positive change.
Our responsible investment framework is supported by two of the leading authorities in ESG investment research – Morningstar and MSCI – allowing us to validate our responsible investment claims and ensure the third-party funds we buy into remain aligned with our process.
The portfolio range uses macroeconomic insights from fund manager JP Morgan to drive long term asset allocation, with shorter term, tactical adjustments made by the Fairstone Asset Allocation Committee. This ensures the portfolios are always positioned in an appropriate way, given the macroeconomic backdrop, while also maintaining their responsible investment objectives.
This portfolio range operates under the same responsible investment framework as the Responsible Active range and follows the same active asset allocation process.
However, where the Responsible Active range uses actively managed third-party funds, the Responsible Passive range invests only in passive third-party funds, which are aimed at tracking specific market indices rather than trying to outperform them.
Both the Responsible Active and Responsible Passive portfolio ranges offer models designed to suit a variety of risk profiles, from lower risk to higher risk.
There has been a lot of commentary, particularly in recent times, about whether it is possible to make a profit while staying true to your responsible investment principles.
Some observers claim that, with opposition to the pursuit of Net Zero hardening in some parts of the world, investments in companies which are focused on cutting carbon emissions could underperform in the future. Likewise, there are risks associated with reducing your investment universe through the implementation of strict, sector level exclusions.
However, others say that companies which are well managed, transparent and consider opportunities and risks around ESG issues carefully are more likely to thrive and could outperform rivals in the future.
As with the definition of what is and what isn’t an ESG investment, there is no clear answer on whether doing good for people and the planet will be better for your bank balance in the long run.
It is up to you as an individual investor as to how you would wish to balance your financial goals with your responsible investment goals.
While you might be filled with passion for doing good with your investments, it is very important to make sure you are doing the right thing for yourself and your family too.
A financial adviser will help you to put potential ESG investments into the context of your overall goals and ensure that where you are thinking of putting your money tallies with your approach to risk and your financial situation.
ESG investing offers the potential to create financial returns and positive environmental and social outcomes, but do your research to ensure that where you are putting your money matches your aspirations.
Taking expert financial advice can help with this process and enable you to understand the potential risks and rewards.
If you’re considering investing in ESG companies, get in touch with a financial adviser today.
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It is important to note that with these portfolios, as with all investments, the value of investments and the income from them can go down as well as up and that you may get back less than the amount you invested.
This article is for informational purposes only and does not constitute financial, tax, or legal advice. Tax treatment depends on individual circumstances and may change. Always seek professional advice before making financial decisions.
In times of market decline, it’s easy to fall into the trap of reacting impulsively. However, it’s important to remember that successful investing is about playing the long game not making knee-jerk reactions to short-term market fluctuations. By staying committed to a long-term strategy, you’re more likely to achieve your financial goals, rather than chasing quick profits that are often elusive.
The secret to long-term success lies in sticking to a well-thought-out strategy, which is far more effective than chasing short-term profits that often lead to disappointment. Let’s explore why maintaining a long-term approach is crucial for achieving your financial objectives.
When markets fall, it’s natural to feel the urge to “do something”, whether it’s selling off assets or trying to time the market. The idea of quick profits and instant gratification can be very appealing, especially when you see a sudden dip in prices. Some investors may attempt to buy and sell based on predictions of short-term market movements, believing they can beat the market by making the right moves at the right times.
However, market timing, which involves buying and selling based on predictions of market direction, is often a strategy fraught with risk. Numerous studies show that this approach tends to yield suboptimal results in the long run, as accurately predicting the market is nearly impossible.
The core of market timing revolves around predicting price movements and making decisions based on those predictions, whether to buy when you think prices will rise or sell when you anticipate a decline. The goal is to capitalise on these forecasts to generate short-term profits. However, the challenge lies in the unpredictable nature of the market.
Markets are influenced by a wide range of factors, from economic indicators to geopolitical events, making it incredibly difficult to predict short-term movements. For those trying to time the market, two correct decisions are needed: when to exit and when to re-enter. Getting either of these wrong can lead to significant financial losses. And remember, even the most experienced investors can’t consistently predict market movements.
For example, sheltering in cash can be tempting after economic and geopolitical shocks but history suggests this is rarely a good idea. When looking at a select number of shocks since 1990, a 60/40 portfolio of stocks and bonds has outperformed cash 80% of the time over a 1-year horizon, and always over a three-year timeframe:
Instead of trying to time the market, focus on strategies that embrace long-term growth and consistent investing. One of the most effective methods is pound cost averaging, which involves investing a fixed amount regularly, regardless of market conditions. This strategy smooths out the volatility by investing consistently over time, rather than attempting to catch the “perfect” moment.
For example, instead of investing a lump sum all at once, you might decide to invest a fixed amount each month, say £1,000. This reduces the risk of buying during an inflated market and allows you to benefit from purchasing more shares when prices are lower. It’s an approach that minimises the emotional side of investing especially during market downturns.
While it’s tempting to react to market dips, the key to long-term investing success is consistency. Pound cost averaging enables you to weather short-term market fluctuations by focusing on regular contributions over time, instead of worrying about when to buy or sell. Over the long term, this approach allows you to accumulate more assets at lower prices during market downturns.
And while this method doesn’t guarantee a profit, it does tend to mitigate the risk of emotional decisions and knee-jerk reactions. By focusing on time in the market, you let the power of compound growth and consistent investment work for you.
In conclusion, when the market dips, remember that your best option is often to stay steady and let your investments grow over time. Stick with your plan, resist the urge to act impulsively, and enjoy the benefits of consistent, patient investing.
If you’re looking to revisit your financial plan or explore new investment opportunities, we’re here to guide you.
Our team can offer personalised advice and insights tailored to your unique circumstances, helping you navigate uncertainty with confidence.
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THE VALUE OF YOUR INVESTMENTS (AND ANY INCOME FROM THEM) CAN GO DOWN AS WELL AS UP, WHICH WOULD HAVE AN IMPACT ON THE LEVEL OF PENSION BENEFITS AVAILABLE.
If you want to build a solid, robust investment portfolio that can withstand market volatility and deliver long-term growth, diversification is a must in building a strong, resilient investment portfolio. Diversification is a key strategy to protect your investments from market volatility and set yourself up for long-term growth.
The secret to achieving lasting success lies in balancing risk and opportunity through a well-diversified approach. Let’s dive into why diversification is essential for your financial future and how you can implement it effectively in your investment strategy.
Diversification involves spreading your investments across various asset classes, industries, and geographical regions. This approach helps reduce risk by ensuring that no single downturn will severely impact your entire portfolio. The core idea is simple: don’t put all your eggs in one basket.
For example, if you only invest in one stock or asset class, like equities, any negative market movement could have a major impact on your wealth. However, by diversifying into multiple asset type such as stocks, bonds, real estate, and commodities, you create a more resilient portfolio. Different assets often perform differently during market changes, ensuring your overall financial health is better protected.
In today’s volatile investment climate, diversification acts as a buffer against unpredictable market shifts. Economic events, government policy changes, or fluctuations in interest rates can all cause specific sectors or asset classes to perform poorly. But a diversified portfolio spreads these risks across various areas.
For instance, when stock markets experience downturns, bonds can provide a stabilising effect. Likewise, investing in international markets or alternative assets like gold can provide a cushion when other parts of your portfolio are underperforming. By spreading your investments, you can weather storms more effectively and minimise the chance of significant financial loss.
While risk management is one of the primary advantages, diversification also plays a pivotal role in maximising long-term returns. By gaining exposure to different asset classes, you increase the likelihood of capturing growth opportunities across sectors.
Consider the following: equities might offer high growth potential but come with more risk, while bonds are less volatile and provide stability. A balanced mix of both allows you to manage risk while still positioning yourself for potential growth. Additionally, as different industries thrive at different times, your diversified portfolio enables you to capitalise on opportunities across the economy. A diversified approach ensures you’re positioned to benefit from multiple sectors’ successes.
The proverbial ‘patchwork quilt’ chart below neatly illustrates the importance of diversification. It shows the returns of various assets classes and that of a representative diversified portfolio over the last 10 years, with the penultimate column being their respective annualised 10-year returns.
There is huge variation in winners and losers in any discrete year, but interestingly the well-diversified portfolio, including stocks, bonds and some other asset classes, has returned around 7% per year over this time period. While the risk of loss is still an unavoidable part of investing, the diversified portfolio has also provided a much smoother ride for investors than investing in equities alone, as shown by its position in the chart’s volatility column
A diversified investment strategy must be tailored to each individual’s financial goals, time horizon, and risk tolerance. Every investor’s situation is different. What works for one person may not work for another. Some may prefer a more aggressive investment strategy with a focus on equities, while others might want greater stability with more bonds or cash.
Regular portfolio reviews and adjustments are crucial for staying on track toward your financial goals. Major life events, such as changes in income, family obligations, or retirement plans, may require modifications to your portfolio’s allocation. This is where professional advice becomes invaluable.
So, the key things to remember are :
Diversification isn’t just a buzzword; it’s a critical strategy for managing risk and achieving financial success over the long term. By diversifying your investments across various asset classes, sectors, and geographical regions, you create a more resilient portfolio while increasing the likelihood of growth.
If you’re unsure whether your portfolio is well-diversified, or if you need guidance on creating a strategy that aligns with your financial goals, don’t hesitate to reach out for professional advice. As your trusted independent financial adviser, Fairstone is here to help you create a portfolio that can stand the test of time and help you reach your financial aspirations.
Remember, the secret to successful investing is not just about identifying the right opportunities it’s about ensuring that your portfolio is strategically designed to navigate the inevitable ups and downs of the market. Diversification is the proven strategy that can help you do just that!
If you’re looking to diversify your investments, talk to a financial adviser today.
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THE VALUE OF YOUR INVESTMENTS (AND ANY INCOME FROM THEM) CAN GO DOWN AS WELL AS UP, WHICH WOULD HAVE AN IMPACT ON THE LEVEL OF PENSION BENEFITS AVAILABLE.
The purpose of this blog is to provide you with clarity amid the recent turbulence in global markets, triggered by the US administration’s actions. These market shifts affect not only businesses and trade but also have a direct impact on your personal financial landscape, from pensions to mortgages, inflation to taxes. The secret to navigating this uncertainty and emerging stronger lies in maintaining a long-term perspective. Rather than reacting impulsively, it’s about sticking to a strategy grounded in diversification, smart planning, and patience. Let’s explore what’s happening and how you can position yourself for long-term success.
There’s no sugar-coating, global markets took a hit in response to the tariffs. But if you’re investing for the long term, market volatility isn’t something to fear, it’s something to expect.
That’s why the timeless investing principles of time in the market and diversification matter more than ever.
Trying to time the market, buying low and selling high with perfect precision, is extremely difficult, even for professionals. Instead, history shows that staying invested through market ups and downs gives you a much better chance of long-term success. Missing just a few of the market’s best days can significantly reduce returns.
Just as important is diversification. Spreading your investments across regions, industries, and asset types helps cushion your portfolio against shocks in any one area. It’s your best defence against the unexpected and trade tariffs certainly count as that.
For pension investors, the recent volatility may feel unsettling. But reacting impulsively by cutting contributions or changing strategy could lock in losses and harm your future retirement income.
If you’re nearing retirement, it might be wise to delay taking income via drawdown until markets stabilise. Alternatively, more people may consider annuities, especially while rates remain attractive. Right now, a 65-year-old with a £100,000 pension could secure up to £7,685 a year from a level annuity with a five-year guarantee.
Just remember annuities are usually fixed for life, so it’s crucial to weigh all options before committing.
If you’re already in retirement using drawdown, consider a natural yield approach—only withdrawing income generated by your investments. And to weather short-term storms, hold one to three years’ worth of essential expenses in an easy-access account.
It’s tough to predict how tariffs will ultimately affect inflation. On one hand, companies may raise prices to offset higher costs. On the other, we might see price wars as firms compete for access to the US market or UK consumers could benefit from surplus goods diverted from the US.
This inflation uncertainty complicates things for the Bank of England. For now, markets expect further interest rate cuts to support economic growth, which could be good news for borrowers.
What about mortgages? If you’re due to remortgage, it’s worth locking in a deal early. Rates may fall further but if they rise, you’ll be glad you secured a lower rate now.
Could taxes go up? If growth slows due to global uncertainty, the government may be forced to find ways to raise revenue especially come Autumn Budget season. That’s why now is a great time to take advantage of existing tax wrappers like ISAs and pensions, which can help protect more of your money from future tax changes.
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THE VALUE OF YOUR INVESTMENTS (AND ANY INCOME FROM THEM) CAN GO DOWN AS WELL AS UP, WHICH WOULD HAVE AN IMPACT ON THE LEVEL OF PENSION BENEFITS AVAILABLE.
In a recent move that has heightened global trade tensions, the US administration announced a series of sweeping reciprocal tariffs. In response, China has introduced a 34% blanket tariff on all US imports starting April 10, alongside export restrictions on critical rare earth materials and sanctions targeting key US defence and technology firms.
The purpose of this blog is to help you navigate the recent surge in global trade tensions and understand the long-term impact of these events on your financial strategy. These trade moves could have a ripple effect on markets, impacting everything from stock prices to supply chains, but the key to weathering this uncertainty lies in staying focused on your long-term goals. Remember, the secret to long-term success in investing isn’t about trying to time the market, it’s about time in the market. Despite the noise, sticking to a consistent strategy is what will ultimately drive your success.
Markets can, and do, experience periods of downturns. These moments may feel unsettling, but they’re typically short-lived. The most effective approach is to stay committed to your investment strategy, even when markets are turbulent.
History has consistently shown that drawdowns are entirely normal in any given year, and that markets recover and often bounce back just as sharply as they fall. Trying to time the market by selling in a panic or holding off on new investments until things “settle down” can significantly impact your long-term financial returns.
In the chart below looking at the UK FTSE All-Share index over a near-40 year period, the red dots represent the maximum intra-year equity decline in every calendar year, or the difference between the highest and lowest point reached by the market in those 12 months, while the grey bars represent the full year’s return. While market pullbacks are a normal part of investing, history shows that in most years, markets still finish in positive territory. Double-digit declines may occur, but they’re often followed by strong recoveries. Rather than trying to predict short-term dips, investors should stay focused on long-term goals.
An analysis of stock market returns over a 20-year time period shows the power of remaining invested and not trying to time the market. Using data from the US S&P 500 market, the chart below shows the enormous cost of missing just a handful of the best trading days over the period, which encompasses the global financial crisis, Covid and numerous other notable market events.
Whilst the chart below illustrates values in US dollars, the same principles apply to pounds sterling. If you were to invest £10,000 in the S&P 500 in 2004 and stay fully invested through to the middle of 2024, you would have over £70,000. However, if you missed just the 10 best trading sessions, you would be left with under £35,000. The reason? Market timing is incredibly difficult. Over the last 20 years, seven of the 10 best days occurred within 15 days of the 10 worst days.
One of the smartest strategies for managing risk is diversification. Spreading your investments across various asset classes, sectors, and global markets. A well-diversified portfolio acts as a cushion during volatile periods, with strong-performing assets often helping to offset areas of your portfolio that are not delivering as strong rewards.
This balanced approach allows investors to ride out market fluctuations while still being positioned for long-term growth.
The evidence is clear: staying invested through the ups and downs of the market leads to stronger outcomes over time. Long-term investing rewards patience, discipline, and consistency. It also allows you to take advantage of powerful benefits such as compounding, tax efficiencies, and the natural rebound of economies.
It’s perfectly reasonable to keep some cash on hand for short-term needs. But for your longer-term goals, whether it’s retirement, buying a home, or leaving a legacy, the best approach is to remain invested in a strategy that aligns with your personal risk profile and objectives.
As this final chart shows, using representative data from US markets that read across directly to UK investors, while markets can always have a bad day, week, month or even a bad year, history suggests investors are much less likely to suffer losses over longer periods. It’s important to keep a long-term perspective. Investors should not necessarily expect the same rates of return in the future as we have seen in the past, but a diversified blend of stocks and bonds has not suffered a negative return over any 10-year rolling period historically, despite the great swings in annual returns we have seen since 1950:
Attempting to predict market movements often leads to missed opportunities. Staying consistently invested allows you to benefit from long-term growth and recovery periods.
Market downturns are inevitable, but history shows they are usually short-lived. Maintaining your investment strategy during turbulent times is more effective than reacting emotionally.
Even missing a few top-performing days can drastically reduce long-term returns. A disciplined, stay-the-course approach typically outperforms panic selling.
A well-diversified portfolio across asset classes, sectors, and regions—mitigates risk and provides stability during market swings.
Sticking with your investment plan through economic cycles harnesses the power of compounding and positions you for greater financial security over time.
If you’re looking to revisit your financial plan or explore new investment opportunities, we’re here to guide you. Our team can offer personalised advice and insights tailored to your unique circumstances, helping you navigate uncertainty with confidence.
THE VALUE OF YOUR INVESTMENTS (AND ANY INCOME FROM THEM) CAN GO DOWN AS WELL AS UP, WHICH WOULD HAVE AN IMPACT ON THE LEVEL OF PENSION BENEFITS AVAILABLE.
