TECH INVESTING COMES OF AGE
WHY DO FUND MANAGERS FAVOUR THE SICAV
TOP TEN MUST HAVE SMARTPHONES
InvestorInsight THE WORLD’S LARGEST INDEPENDENT FINANCIAL CONSULTANCY GROUP
THINK TECH Technology trends driving your investments
QUARTER I 2010
Meet the market. Heads on. To Jupiter, every market has opportunities. It’s down to the talent and skill of our fund managers to exploit them. So we attract and retain some of the best in the business. They tackle the markets ‘heads on’, looking beyond short-term price movements to seek long-term value. And they respond quickly to change.
recognised with over 200 industry awards*, including What Investment Awards Group of the Year 2009 and OBSR Outstanding Investment House Honour 2009. So meet today’s markets with a cool head. For more information please contact your adviser.
Our reputation for achieving outperformance, even during some of the most challenging markets known, has been
Past performance is not a guide to future performance. The value of investments can fall as well as rise.
Outstanding Investment House of the Year – OBSR Awards 2009
*Awarded to Jupiter Unit Trust Managers Limited in relation to UK unit trusts. Jupiter Asset Management Limited (JAM) is a subsidiary of Jupiter Investment Management Group (JIMG). JAM is authorised and regulated by the Financial Services Authority for business carried out in the UK. The FSA’s address is 25 The Colonnade, Canary Wharf, London, E14 5HS. JAM’s registered address is 1 Grosvenor Place, London SW1X 7JJ. Registered in England & Wales under reference 2036243 (JAM), and 00792030 (JIMG). The Group is collectively known as Jupiter.
CONTENTS
PLEASE READ THIS DISCLAIMER CAREFULLY BEFORE YOU PROCEED
UP FRONT
The information contained herein is proprietary to deVere and or its contents providers. This magazine is not to be disclosed to the public as a consumer advertisement. The information or any part thereof, may not be copied produced or redistributed without the express permission of a Director of the deVere Group. The content has been collated from what we believe to be reliable sources at the date of publication. However, we do not guarantee the reliability or completeness of any information provided in this magazine or in any hyperlink provided. The deVere Group, its directors, officers, managers, employees, agents, affiliates and/or subsidiaries accept no liability or responsibility for any errors, omissions, inaccuracies (including those caused by a third party) loss or risk, personal or otherwise which is incurred as a consequence directly or indirectly of the use of any information contained herein in this publication.
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The magazine may include facts, views, opinions and recommendations of individuals and organisations deemed of interest. deVere does not guarantee the accuracy, completeness, or otherwise endorse, these views, opinions or recommendations.
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deVere and Partners (UK) Ltd is authorised and regulated by the Financial Services Authority (469151). deVere Recruitment Ltd (503055) are an appointed representative of deVere and Partners (UK) Ltd. deVere and Partners Investment Services (Pty) Ltd is an Authorised Financial Services Provider in South Africa. deVere and Partners (Belgium) BVBA is authorised by the Banking Finance and Insurance Commission (CBFA) in Belgium and registered on the intermediaries register under number 61476, category insurance brokers. The following group of companies operate under the same license in Belgium: - deVere and Partners (Cyprus) - deVere and Partners (Belgium) Limited BVBA, succursale Luxembourg S.a.r.l. - deVere and Partners Spain, S.L.
Will the technology sector lead the way in 2010?
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WORLD REVIEW Regulatory updates from around the globe
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SPOTLIGHT A perfect combination of business and design, Apple’s top man: Steve Jobs
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COMPANY NEWS Update on deVere’s latest developments
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ASK THE EXPERTS Our experts reply to some of your most frequently asked questions
FEATURES
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PASS THE DUCHY BUT STOP FOR A SICAV Why new fund managers are opting for a Luxembourg-based SICAV
Readers are responsible for their own investment decisions and we would advise that they speak to their professional advisers prior to making these decisions. The companies below are part of the deVere Group:
TECHNOLOGY’S HIGH TIDE
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TECH INVESTING COMES OF AGE Has the technology industry grown wiser?
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NOW IS THE RIGHT TIME TO INVEST Don’t wait to invest, now is the time to get on the merry-go-round
CONTROL YOUR INVESTMENT FUTURE Generali takes a closer look at asset allocation
TIME OUT
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48 HOURS Moscow - What surprises does the capital of Russia, Moscow, a city of both Byzantine splendour and boldly Soviet architecture offer you
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SMART COMMUNICATION Top 10 must have smartphones for 2010
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VIEW FROM THE TOP A message from the deVere Group’s Chief Executive Officer
InvestorInsight QUARTER I 2010
www.devere-group.com www.investorinsight-online.com
DESIGN Ed Vickers www.edvickers.co.uk PRODUCTION deVere Group ADVERTISING Email advertising@devere-group.com
ast year we announced global strategic expansion plans which saw us open a series of offices and acquire a number of companies. We now have the right foundations in place and look forward to tackling a new year and seize fresh opportunities while we keep our clients best interests in mind.
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In this issue we are pleased to give you an insight into our company’s latest developments. We have recently introduced new designs for our corporate website and online fund trading platform. We hope the changes made will help improve the client experience. Additionally deVere and some of its key industry partners take a closer look at the technology sector which has led the way in recent months. We reveal who some of the biggest players are and how technology can help you with your investments. As a new year begins, we trust that the chosen theme for this issue of Investor Insight will provide you with inspiration for 2010. As always we would be pleased to receive your feedback or suggestions on topics which you would like to see covered in our future issues. Please write to us on investorinsight@devere-group.com. Best wishes for the new year.
InvestorInsight is published by the deVere Group. This publication may not, in whole or part, be lent, copied, photocopied, reproduced, translated or reduced to any electronic medium or machine readable form without the express written permission of the publisher.
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Nigel Green CEO
COMPANY NEWS
UP FRONT
deVere News The deVere Fund Platform provides clients access to more than 5,000 of the world’s best performing mutual funds.
deVere’s company website - www.devere-group.com now offers a fresher style and easier navigation than ever before.
deVere gets a new look on the web Websites have become more and more important in recent years to the extent that most people rely on them for everyday activities such as communicating with each other, shopping and work. Companies are increasingly focused on their customers’ online experience. The deVere Group is no different and recognises the importance of a well-presented and user friendly site. We are pleased to unveil the new look of our company website and online fund platform, aimed at improving our clients’ experience. deVere’s company website – www.devere-group.com now offers a fresher style and easier navigation than ever before. Information on our services and latest company and market news are readily available. Existing clients also have access to their own portal, where they can log in to their account and gain direct access to tools such as the fund platform and a currency converter. All our latest fund offers are
available on the portal, as well as Investor Insight magazine. Meanwhile, we have completely overhauled the deVere Fund Platform – www.deverefundplatform.com, which was first launched in January 2009. Today’s trading environment is evolving rapidly and after the recent financial turmoil, more people want to take control of their investments and are already seeing some impressive financial rewards. Some financial experts say that new products and lower charges are driving the surge in online trading. Technology has come a long way too; online investors now have access to detailed accounts, which include customised alerts, real-time information and online calculators. The deVere platform addresses this trend. We provide clients access to more than 5,000 of the world’s best performing mutual funds, thereby giving them ownership of their investment decisions. Simple to set up, simple
to manage and simple to maintain, the online platform is available at the click of a button and at no cost.
deVere sponsors Children in Need’s Charity Masquerade Ball in Geneva As part of the many activities led by deVere to raise money for charity, the Group was proud to sponsor Geneva’s appeal for Children in Need’s inaugural masquerade ball in October 2009. The event which took place in Geneva represented a unique opportunity for both parties to join forces in support of Clair Bois and Association Paidos in Geneva, and Children In Need UK. deVere will continue to assist Children in Need on future events throughout 2010.
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UP FRONT
TECHNOLOGY’S HIGH TIDE
By the end of 2009, the world economy seemed to be coming out of recession. Japan, France and Germany emerged from the gloom in quarter two of 2009, while the US started growing again in quarter three. China and India, meanwhile, have seen their economies return to levels of growth seen before the financial crisis and global economic downturn. Company results were better than expected in quarters two and three with 75% of S&P 500 companies beating analysts’ consensus expectations, sailing on a wave of cost-cutting measures. As a result, investor confidence came back. That’s been reflected in the stunning performance of world stock markets since March 2009 (earlier in emerging markets). 4
InvestorInsight QUARTER I 2010
One industry leading the way is technology. The rally in these stocks is down to a theory that the abrupt halt in corporate spending in 2008 will resume quickly again as the
financial crisis abates. Surprisingly robust earnings from companies including Apple, Google, IBM, Intel and Samsung Electronics have underlined this point.
TECHNOLOGY HIGH TIDE While the past nine months has seen an improvement in fortunes – for economies and companies alike – some experienced investors are sounding a note of caution. This recession has been unlike any other we have seen in most of our lifetimes. It’s by no means certain that the recovery will occur in a straight upwards line. It doesn’t always work like that.
A new hope Despite uncertainties in the market, the evidence of a revival towards the later part of 2009 has fed a more exciting expectation: a tide of innovation and new products could bring about broader economic growth in the US and elsewhere. This is being driven by several important trends. The first important driver of the next cycle of high-tech products will be cost control. Companies are taking all necessary measures to cut costs and make their operations more efficient. This continuing trend is prompting a further shift of production to lower-cost centres in Asia; not just China and India, but even lowercost production bases like Vietnam and Bangladesh. It is generally accepted that growth will be harder to come by, as the world economy recovers at a slower pace than we became accustomed to in the past decade. As a result, companies are moving into related markets in a hunt for new sources of growth, predominantly focusing on emerging markets. With high rates of economic growth and the need for infrastructure like telecoms networks and banking systems, countries such as China, India and Brazil are becoming increasingly important. In fact, technology research company IDC claims that over 50% of new technology spending in the next four years will come from emerging economies. The combined technology spending of China, Brazil and India in 2009 was expected to be $125 billion, only one-quarter of US spending. But by 2013, that spending is expected to grow by $72 billion, the same increase in dollar terms as that expected in the vastly bigger US market.
Lastly, the quest for lower costs is also leading to increased consolidation. Networking equipment-maker Cisco made two $3 billion acquisitions in October 2009, taking it into the video-conferencing and mobile-networking markets. Sun Microsystems, a leading server manufacturer recently sold out to softwaremaker Oracle. Xerox agreed to pay $6 billion for ACS, a services company, while Dell agreed to buy Perot Systems for $3.9 billion. Those deals come in the wake of Hewlett-Packard’s $13.9bn purchase of EDS in 2008 and reflect a trend among hardware companies to diversify into services. These deals are just the thin end of the wedge; expect more in the coming months.
Winners and losers The economic and financial crisis has, somewhat ironically, been a long-term positive for some companies. As a capitalintensive industry, the fact that it has become harder to raise money from financial markets means financial muscle, in addition to creativity and innovation, has become a key factor in the success of a company. This is leading to a polarisation in various subsectors of the tech world, with dominant winners and losers emerging in key product areas. Here are just five winners that we have spotted (please note that these comments should not be considered an invitation or recommendation to buy these stocks). Apple now operates more than 250 retail stores in nine countries and an online store. It is a dominant leader in smartphones, MP3 players and has a strong PC business. Its best-known products include ‘Mac’ computers, the iPod, the iPhone, as well as iTunes and iLife software. Its business tentacles are slowly reaching out into new subsectors of the consumer electronics industry with plans to enter the handheld gaming business. Google has been identified several times as Fortune Magazine’s number one Best Place to Work, and as the most powerful brand in the world. Web stats provider Alexa ranks
Google as the most visited website on the internet. Google started off life as a search engine, and built its empire around this. It also makes money from advertising related to e-mail, online mapping, office productivity, social networking, and videosharing services as well as selling advertising-free versions of the same technologies. Moving into Asia, Korea’s Samsung Electronics has become a global market leader in more than 60 products. These include semiconductors (DRAM, flash memory and hard drives), digital displays (LCD displays, plasma displays and OLED displays), home electronics (TVs, DVD players, Blu-ray players, home cinema systems), mobile phones, MP3 players, digital cameras, camcorders, PC monitors, laptops, CD and DVD drives, laser printers and a wide range of home appliances. Samsung Electronics reached annual sales of more than $100 billion for the first time in 2007. This achievement placed the company, along with Siemens and HewlettPackard, among the world’s top three companies in the electronics industry. Taiwan Semiconductor (TSMC) is the world’s largest independent semiconductor foundry. Although TSMC offers a variety of products, it is best known for its logic-chip products. Various fabless (companies without their own production facilities) high-tech companies such as Qualcomm, Altera and NVIDIA are customers of TSMC, while some fab-owning companies like Intel and AMD also outsource some production to TSMC. The financial crisis has improved the competitive advantage of TSMC as many of its Asian competitors have struggled financially. This has helped the company increase its market share and underpin the prices it can charge. ASM Lithography is a Dutch company and is the largest supplier in the world of photolithography systems for the semiconductor industry. The company makes machines for the production of integrated circuits, such as RAM and flash memory chips. Recent analyst research has InvestorInsight QUARTER I 2010
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UP FRONT estimated that ASML has an 18 months to two years advantage over its nearest rivals, providing a valuable competitive advantage.
Using technology to invest The internet has opened up the world of investment to a new dimension. Electronic trading has become the norm, with very few ‘open outcry’ stock exchanges left in the world: the commodities exchange in Chicago is one such example. The advantages of electronic trading to investment banks and stockbrokers are pretty obvious: speed, efficiency of pricing and liquidity. A natural extension to this has been the spread of trading platforms to individual investors. Just like institutions, retail investors now have real-time access to trading individual stocks, funds and derivatives. As growing numbers of investors do their own share-buying, this
TECHNOLOGY HIGH TIDE has heaped pressure on traditional stockbrokers, who have historically relied upon old-world media to buy and sell shares for their clients. They have had to move to offer value-added services like research and discretionary portfolio management – essentially running a portfolio of stocks on your behalf. Online platforms can be categorised into three main areas. Some platforms offer trading of individual stocks and shares in a wide range of world stock markets. Others market services selling derivative-style products such as CFDs (contracts for difference), futures and spread betting. These are essentially a way of gearing up your investment in a particular market and are higher-risk approaches. The availability of certain services depends on your jurisdiction. For example, spread betting is not permitted in the US as it is deemed to be gambling.
The third access point to the financial markets is fund platforms. Also known as fund supermarkets, these are secure websites that allow investors to pick and choose from a range of mutual funds and build their own portfolios. Some platforms simply offer as many funds as they can find and leave it to the investor to trawl through thousands of funds using search tools to narrow down their choice of funds. Other platforms try to add value by offering a more restricted range of funds. Often known as a ‘guided range’ the platform manager continuously researches and monitors the constantly growing universe of mutual funds to find the best in each sector. In addition to online platforms, some fund managers also use technology to manage their funds. These are known as trend funds and take the human emotion out of investing, a regular failing of many investors, even professionals.
Why invest in a trend fund? In light of the recent economic downturn, some traditional fund managers have failed to act on time and limit their investors’ exposure to market volatility. Trend funds provide a favourable alternative to fund managers and have proved to deliver substantial and consistent gains in the last seven years despite market changes. Trend funds are automated third party software programs that have gathered a large amount of data and identified market trends. These computer-based programs react based on live streaming data they receive. Trades in trend funds are 100% computer generated, with no human intervention. Additionally, performance has virtually no correlation to traditional markets and returns can be made in rising, falling or even level markets. Trend funds are appealing to investors for a number of reasons including: • They are regulated funds • They are listed on EU Stock Exchanges • They have a strong historic performance with opportunity for continued year-on-year growth • They provide access to some high-performing long-term strategies, which may otherwise be difficult to invest in Diversified trend funds are fully automated trading programs that invest into a number of different funds, thereby aiming to achieve solid capital gains over the medium to long term, despite changing markets. The Valais Diversified Fund, provided by Swiss-based Valais Investment Management SarL, is one such fund, which exploits particular characteristics of price behaviour to capture market trends. Comprising of the QIM fund, the Tulip fund and the IQS fund, it has shown up to 32% return in a year and delivered consistent gains in the last seven years.
For more information or advice, please contact one of our experienced financial consultants now on investorinsight@devere-group.com
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Simple to set up, simple to maintain....
....and simple to manage...
....your online investments at the click of a button
The deVere Fund Platform offers you access to more than 5,000 of the world’s best performing mutual funds, giving you ownership of your investment decisions. The platform is provided by the deVere Group, the world’s largest independent financial consultancy group.
Disclaimer: Disclaimer: UK:: TThe Platform Platform promoted UK he P latfform cannot be b promoted promoted in the UK as normal normal best advice/suitability advice/suitability rules apply. applyy. EEA: TThe he P latfform can only be pr omoted sale life Platform promoted professional in cconjunction onjunction with the sa ale of a lif e assurance assurance bond wrapper. wrapp per. Switzerland: Switzerland: TThe he P latform can n only be pr omoted tto o pr offessiona essional al and investors. Platform Kong.. institutional in vestors. Hong Ho ong Kong: The The P latfform cannot be e sold to to clients clients rresident esident in Hong K Kong
UP FRONT
WORLD REVIEW Regulatory updates from around the globe IRELAND In Ireland, the Economic and Social Research Institute recently announced a proposal to cut pension tax relief from 41% to 33%.
UNITED STATES A big change is scheduled to hit the US retirement planning landscape in 2010. Under current law, you’re only eligible to convert from a traditional IRA (pay contributions before tax) to a Roth IRA (after tax) if your adjustable gross income is $100,000 or less. However, starting in 2010, the $100,000 limit disappears. The advantage of a Roth IRA? Even though you have to pay taxes on the initial contribution, all the growth of that contribution is free from any future taxes. Considering the fact that the bulk of the funds in your IRA account will be from the growth of, and interest paid on, your investments you will end up avoiding taxes on the majority of your retirement savings.
MEXICO In September 2009, the Mexican President submitted to Congress the 2010 economic bill, which contains proposals to amend the tax laws. The tax proposals include increasing the corporate and maximum individual income tax rate from 28% to 30%, eliminating the flat tax “loss credit” against income tax due in the same fiscal year; increasing the tax on cash deposits and lowering the exemption cap and introducing a new contribution similar to value added tax (VAT) to combat poverty that would tax all activities at a 2% rate. In addition they plan to significantly increase the excise tax on specific goods and services.
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WORLD REVIEW
UNITED KINGDOM Britons who claim to have moved overseas could find themselves back in the clutches of the taxman if they have kept a car, a mobile phone number or even a golf club membership in the UK. A new HM Revenue & Customs unit is to probe the lifestyles of those who claim to have moved to the Channel Islands, Monaco and other tax havens. Businessmen commuting to London from tax havens are expected to face particular scrutiny.
SINGAPORE Singapore has amended its tax rates for individuals. A one-off Personal Income Tax rebate of 20% is being introduced for residents, up to a cap of S$2,000, for the tax payable for 2009. Also, there will now be no Income Tax payable on residential properties sold after 1 January 2010, provided you have not sold any other property in the previous four years.
ISRAEL Good news for Israeli tax payers. Tax rates are being cut significantly in 2010. Depending on your salary, the lowest rate of income tax is being cut from 32% to 25% in 2010. The highest rate is set to come down from 49% to 44%. Corporation tax is also on the way down, from 26% to 25%.
AUSTRALIA Australia has agreed further tax cuts for the coming year (2010/2011). There is an A$2000 jump in the 15 cent threshold, up from A$35,000 and a decrease of 1 cent for every dollar earned between A$80,000 and A$180,000.
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UP FRONT
SPOTLIGHT
STEVE JOBS Steve Jobs is the driving force behind the iconic range of Apple products that have become so popular worldwide. He has even become a cult figure in the tech world, a rare status for a businessman in any industry. Jobs dropped out of college (Reed College, Portland) after just one semester. However, the early seeds of his future career were sown attending seminars at Hewlett Packard during his college days. Along with co-founder Steve Wozniak, Jobs set up Apple Computer in the late 1970s. They soon after launched one of the first commercially successful computers. Despite some moderate success, Apple remained a smaller rival to IBM and tensions mounted among the management team. After a dispute over the company’s direction with Apple’s directors, Jobs resigned from Apple in 1985. He immediately founded NeXT, a company specializing in building computer platforms for higher-education organisations and businesses. In an extraordinary twist of fate, NeXT was bought by Apple Computer in 1997, bringing Jobs back to the company he cofounded and had left 12 years previously. This period marked the rebirth of Apple. It is his second spell at Apple that has made Jobs an iconic figure in the world of business and youth culture. The introduction of the stylish iMac was the first of the products we have come to know for their appealing design and powerful branding. It also began Apple’s surge to become one of America’s leading corporations. The introduction of the iPod portable music player came next, with the iTunes digital music software, and the iTunes Store. The company then entered the cellular phone business in 2007 with the iPhone, a touch-screen cell phone. Recently, Apple has flagged its next move into handheld gaming devices. Nintendo and Sony should watch out. Jobs’ business career has contributed greatly to the aura surrounding this individualistic Silicon Valley entrepreneur, emphasising the importance of design and understanding the crucial role aesthetics play in selling to consumers. His work driving forward the development of both functional and elegant products has brought a devoted following. 10
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The idiosyncrasies of Apple’s products should perhaps not come as a surprise. The man himself has led an interesting life – not your typical businessman. Jobs spent time at a Buddhist retreat as a young man and returned to the US in full Buddhist garb; in fact, his marriage to Laurene Powell in 1991 was presided over by a Zen Buddhist monk. In the 1980s, he bought an apartment in The San Remo, a luxury co-operative apartment building in New York City. This reflected Jobs’ politically progressive reputation and his larger-than-life reputation; his neighbours included Demi Moore, Steven Spielberg, Steve Martin, and Princess Yasmin Aga Khan. Jobs was named Fortune Magazine’s Most Powerful Businessman of 2007. Indeed, many business commentators refer to his aggressive and demanding personality. Fortune also reported that he “is considered one of Silicon Valley's leading egomaniacs”. Meanwhile, a former colleague once said that Jobs “would have made an excellent king of France”. In mid-January 2009, Jobs took a five-month leave of absence from Apple to undergo a liver transplant following a battle with cancer. However, he has returned once again to the company he founded, left and rejoined, seemingly full of energy.
ASK THE EXPERTS
Q&A
Ask the Experts
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The financial world is complex – and getting more so every year. We regularly get questions from our clients, both those taking their first steps towards financial freedom as well as more experienced investors. Here is a selection of the most common ones, and our experts replies. Q
Is online trading safe?
A
In today’s trading environment, online platforms use very sophisticated tools that ensure client privacy and confidentiality. They feature various types of security measures, including passwords and personal identification numbers. Additionally, investors should make sure that the platform they are trading on is using high-end encryption. A 128-bit algorithm is the encryption level used by most online platforms and is one of the highest levels of security available.
Q
What are the benefits of trading online?
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These days, many people are relying on technology to deal with their investments. Online trading often offers a cheaper and quicker option compared to traditional methods of investment. Fees are usually lower and certain platforms now offer a broad range of products. Additionally, investors can trade in their own time, from home or at work, at the click of a button.
Q
What are the advantages of a mutual fund?
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Mutual funds have always been a popular investment choice for investors. Their simplicity and other attributes provide great benefits to investors with limited knowledge, time or money. By purchasing a mutual fund, you instantly diversify your portfolio’s asset allocation without the need for a large amount of money needed to create an individual portfolio. Another advantage of mutual funds is the ability to get in and out relatively easily. Generally you are able to sell your mutual funds in a short period of time, without much difference between the sale price and the latest market value.
Please keep your questions coming. We will do our best to answer them and publish the most frequent in future issues. Email us on investorinsight@devere-group.com or contact your local deVere consultant directly.
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FEATURES
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ASSET ALLOCATION
CONTROL YOUR INVESTMENT FUTURE With a wide range of investment types available, having the correct mix in your portfolio to suit your individual circumstances and the current global climate is key to successful investing. Nick Griffin, Generali International’s Sales Director looks at asset allocation and how investment managers can help you make the most of your money The concept of asset allocation is by no means a new investment philosophy. In fact its roots go back 2,000 years when ancient and sacred texts laid down guidance for individuals in the protection of their assets and capital. According to the Talmud, a central text of Rabbinic Judaism, an individual should invest one third of his or her money in land, one third in common stocks and one third in cash. A sound starting point perhaps, but today when looking at asset allocation we have a wider range of assets to consider when formulating an investment strategy to suit our individual circumstances, goals and attitude to risk. There are different types of asset class, ranging from deposits which generally produce a low risk return and are predominantly linked to inflation, through to other classes such as property and equities and to hedge funds where returns are often independent of general market movements. Holding different asset classes in your portfolio gives you the advantage of diversification. As not all asset classes move in harmony, poor performance in some parts of a portfolio won’t have a disproportionate impact on overall performance, as others will perform better in the same market environment. Changing the balance of your portfolio can create opportunities to make additional gains by being in the right asset type at the right time. This might mean benefiting from a rise in bond values as interest rates fall, investing more heavily in
equities in times of economic growth or, conversely, when the economy appears to be on the downturn, adding hedge funds that aim to make gains as stock markets fall. In some cases, investors believe that, over time, you can successfully predict market movements and profit from selling existing investments and buying them back when prices are lower. While this sounds fine in theory, ‘market timing’ becomes more of a gamble than a legitimate investment strategy and history shows that trying to time the market more often than not results in poorer returns than if you had stayed invested. With some of the greatest gains coming directly on the back of bear markets, it is not always easy to predict the best time to buy back the investments and you could miss out on the market upturn. A more sensible option, perhaps, may be to make your strategic asset allocation decisions and stick to them until your circumstances change. Of course, selecting the correct mix of asset classes is not the be all and end all of successful investing. Due consideration needs to also be given to how you split the investments by geographical region and industry sector. Clearly this is a dynamic investment process and one that you may want to discuss with your Financial Adviser. Further still, there is the selection of specific equities, funds and other assets, a job also most likely to be taken by the investment managers of the funds you are holding. At the end of the day, you, your financial adviser and the investment managers all have a part to play and need to regularly review overall investment balance. Similarly, as markets
evolve and your personal goals and circumstances change, it is important that you maintain a suitably balanced portfolio – one that is not correctly balanced may not deliver maximum return. Having the right mix of stocks, bonds and cash and other categories such as commodities, property, currencies and hedge funds is essential for successful wealth accumulation. That is why meeting regularly with your Financial Adviser is so important as they can help you determine an asset allocation that is appropriate for you.
Keeping control • Holding a diverse selection of asset types reduces risk and provides growth opportunities • The exact split will depend on your circumstances, goals and attitude to risk • Trying to time the market and buy low and sell high could lead to missing out on market upturns Nick Griffin is Sales Director at Generali International. www.generali-gi.com
Generali International Limited is a Licensed Insurer under the Insurance Business (Bailiwick of Guernsey) Law 2002 (as amended) and is regulated by the Guernsey Financial Services Commission.
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FEATURES
PASS THE DUCHY – BUT STOP FOR A SICAV New funds are opting for the Luxembourg SICAV structure to source scarce liquidity Shayla Walmsley reports With some large pension funds negotiating over recapitalisation of existing funds, it’s unsurprising that others should look for a structure they can trust – and that won’t cost them in future – when they consider investing in a new one. So it’s equally unsurprising that many fund managers are opting to create a Luxembourg-based société d’investissement à capitale variable (SICAV). Yet it isn’t the SICAV that makes Luxembourg a European centre for real estate funds, it’s the recently modified special investment fund (SIF). The difference? A SICAV has a corporate structure. Now within the rubric of UCITs products designed for investment in alternatives, the SIF doesn’t. In a recent presentation, Ernst & Young’s Mike Hornsby pointed out that the majority of new property funds were SIFs, including all 23 real estate funds launched from Luxembourg in 2008. The data reflected, he said, “the popularity of this regime for real estate fund promoters for a ‘lightly regulated’ onshore investment fund vehicle for all types of alternative investment funds”. Marc Cottino, a partner with M&A Investors, describes the SIF structure – which can be set up as a SICAV – as “nowadays the most advanced and soft tool in Europe – maybe in the world finance scenario”. In May M&A Investors announced that it had begun 14
InvestorInsight QUARTER I 2010
fundraising among institutional investors for a private equity real estate SICAV–SIF with a target of €100m and a first closing of €50m. The opportunistic fund will target relatively small assets valued at between €10m–€20m – around 60% in distressed real estate and residential and commercial in Central and Eastern Europe, the balance in mainly residential developments and renewable energy infrastructure in North Africa. Not that the SICAV structure comes risk-free. The Commission de Surveillance du Secteur Financier (CSSF), Luxembourg’s financial services regulator, has estimated the direct impact of the Madoff affair on Luxembourgbased funds at €1.7bn, and in March 2009 it announced the withdrawal from the official list of one of Madoff’s casualties: the Luxembourg Investment Fund, a SICAV. Nor does the structure come cost-free. A SICAV’s income and gains are not subject to corporate income tax, municipal business tax or net wealth tax in Luxembourg. Nor are distributions to shareholders or capital gains realised by the shareholders on their shares subject to withholding tax. But investors are subject to an annual subscription tax. Even so, if this is the moment for the taxneutral, transparent structure, a structure that allows crossborder targeting of liquidity is all
the more timely. “Liquid investors are reluctant to invest,” says Ruekel. “For funds where the fundraising has not yet been done, there will be problems. Products have been put on hold. Within real estate, people are waiting and observing the market carefully. My guess is that in Q4 we will see movement.” Getting liquid investors to invest again is the point, and the SICAV offers a structure that allows fund managers to target new groups of investors – both to source liquidity from investors in multiple countries and, in turn, to distribute the fund across European borders. “The market is tough but wise,” says Cottino. “Investors are at the window evaluating new investment opportunities. Get ready today for a second round to be well positioned tomorrow. Our strategy is to beat the clock.” If that’s why fund managers favour the SICAV, are there advantages to investors in the fund? In blunt terms, do pension fund investors care either way? Yes, says Danny Latham, European head of infrastructure
SICAV FUNDS
Luxembourg holds attractions for multinational fund managers
investment at First State Investors. “The fact that we have such an open-ended structure in place [in the European Diversified Infrastructure SICAV] allows for better alignment between the long-term liabilities of investors and the long-term infrastructure asset characteristics that the fund may hold,” he says. “In other words, this fund structure benefits from positioning itself as an attractive investment partner to key stakeholders such as pension fund trustees. Luxembourg is also a jurisdiction that is well understood by and familiar to our global client base.”
similar structures exist in France, Italy and, notably, Belgium? “In each European country there is a different way to structure funds,” says Ruekel. “Luxembourg attracts multinational fund managers – those trying to sell to investors in more than one country. The SICAV is a flexible structure that can easily adapt to managers’ needs. If they target groups and they’re unsuccessful because of the market, they can enlarge the target population.”
Similarly, Nordic pension funds favour SICAVs because, as Christian SchjødtEriksen, manager of Aberdeen’s pan-Nordic property SICAV, points out, there exist reasonable tax treaties between the Nordic countries and Luxembourg. The fact that it is a regulated and widely used structure familiar to institutional investors, with an EU jurisdiction, are additional plus points.
Often, the preference for a SICAV over another structure is purely cultural. France and Germany have tended towards the lower-cost fonds commun de placement (FCP) structure, which has no corporate structure, rather than the SICAV. In March, Warburg–Henderson managing director Henning Klöppelt suggested in this magazine that the German Spezialfond was “more than holding its own” against the SICAV, not only among domestic investors but internationally.
So much for the structure. But why Luxembourg – especially when putatively
Even if you limit the comparison to SICAV structures aimed at international investors,
most agree that until Belgium can compete with Luxembourg in terms of tax stability, it will never compete with it as an alternative location. The advantage for Luxembourg is that its tax treatments are predictable – in contrast to Belgium, mooted as an alternative SICAV centre. “Belgium, because of its double taxation treaties, is potentially more attractive,” says Diana Mackay, managing director of FERI Fund Management Information. “But it’s difficult when the Belgian government is inclined to make radical changes to the tax laws retrospectively and with little notice. Tax stability is such an important part of the Luxembourg economy that the government will do nothing to jeopardise that status. It’s a more reliable location as a result.”
You can see this and other related articles at IPE’s website www.ipe.com/realestate Registration is free and the latest bulletins are mailed weekly in the publication’s newsletter.
InvestorInsight QUARTER I 2010
15
FEATURES
TECH INVESTING COMES OF AGE It is now 40 years since the internet was invented and 15 years since the worldwide web became part of everyday life. In that time we have seen an extraordinary revolution in the way companies do business and how they reach their customers. Such a vision was the basis for the dotcom boom that gripped the late 1990s. The approaching “data wave” would sweep away the old bricks and mortar world and the stalwart blue-chip companies with it. The stars of the future would be the Microsofts and AOLs, not the oil majors or the pharmaceutical companies. Suddenly start-up tech companies were everywhere, watching their profitless shares soar to P/E multiples of hundreds of times. 16
InvestorInsight QUARTER I 2010
Across the world, stock exchanges created special offshoots for these new companies from the Neuer Markt in Germany to the Nouveau Marché in France. But as the new millennium opened, the market came to its senses and realised that not every tech business would be a success. The previously beloved dotcoms became pariahs. Their massively-overinflated share prices crashed to earth and millions of investors carried away by the hype found themselves nursing heavy losses. So great was the destruction that tech shares remained a blot on investors’ psyche for years to come. As a result they are still universally under-owned. But as the internet crept further into people’s
lives through the rise of email and eventually social networking sites, “oldstyle” retailers began to see its advantages. Nowadays few retail businesses are taken seriously unless they have a website or means of purchasing their goods and services online. At the same time, there has been a substantial rise in computer-based fraud, creating a further industry to combat it. Not all companies have successfully adapted to the changes brought about by the internet. Media companies in particular have struggled to capture revenue online from a generation which has grown up with the assumption that content is free. Advertisers have also seen their audiences dispersed across this vast medium.
TECH INVESTING
However, those companies that have been successful such as Amazon and Google have done so by grabbing a dominant share of their respective markets. Amazon is now the largest retailer of books in the world, as well as offering goods of every kind. In October 2009, its share price reached the peak last seen at the height of the dotcom boom, after its sales grew 28% in the previous quarter. Despite the economic slowdown, consumers are still buying its Kindle e-book reader, showing that the product cycle can continue to drive sales. Business spending on IT has yet to recover, but consumers still hanker after the latest digital gadgets. For example, thanks to the success of its iPhone, Apple became the US’s fourth largest company in October 2009, ahead of traditional names such as JP Morgan. In the current environment, many investors are looking at US tech stocks because of the weak dollar. In 2009, Microsoft shares hit their lowest level in decades, despite having $30 billion dollars in net cash on its balance sheet. Since then, Microsoft has performed well on the back of the better economic
outlook, but the stock still looks undervalued to some given its earnings prospects. The company has just launched its new operating system, Windows 7. It aims to eliminate many of the problems of its predecessor Vista and does not require new hardware to install. This and a new corporate PC upgrade cycle should boost Microsoft’s sales even in a weak economic environment. Another stock that has attracted investor attention recently is the UK’s biggest software company Sage. A world leader in accounting, payroll and healthcare IT, the company has produced one of the best sets of accounts in the FTSE 100 in recent months. Thanks to the harsh experience of the tech bust, many companies in this sector entered this latest recession in a relatively strong position, with robust balance sheets and focused growth strategies. Given the ongoing replacement cycles and the billions of new consumers in emerging markets, the future looks relatively bright for the technology sector over the long term. If economic growth remains anaemic, certain
stocks in this sector could be reasonably defensive for investors focused on steady growth and reliable dividends.
Jupiter Unit Trust Managers Limited (JUTM) and Jupiter Asset Management Limited (JAM) are both authorised and regulated by the Financial Services Authority and their registered address is 1 Grosvenor Place London SW1X 7JJ. They are both subsidiaries of Jupiter Investment Management Group Limited and the group is collectively known as "Jupiter”. The above commentary represents the views of the Fund Manager at the time of preparation and may be subject to change and this is particularly likely during periods of rapidly changing market circumstances. His or her views are not necessarily those of Jupiter and should not be interpreted as investment advice. Every effort is made to ensure the accuracy of any information provided but no assurances or warranties are given.
InvestorInsight QUARTER I 2010
17
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INVEST NOW
FEATURES
NOW IS THE RIGHT TIME TO INVEST By Martin Gordensen Analysts over the years have come up with a variety of complicated formulae to determine when would be the right time to get into the investment market. To get some perspective on this it may be useful to look at the UK and American market performance over the last 20 years. (See graph 1). During this period there have been several events that have drastically affected the markets, for instance Black Monday in 1987, the currency meltdown in late 1992-93, 9/11 in 2001 and, of course, our most recent global recession which started in 2008.
In 1987 there was a strong bear market but most investors waited until almost the peak of the market to commit their money and then panicked when the markets fell and sold at almost the bottom. Ironically had they waited, the markets recovered their losses within 18 months.
people who should have known better. At its height in 2001, the FTSE 100 peaked at just over 6900 points and also reached 6750 in October 2007. However, as a contrast, it bottomed out at just over 3500 in early March 2009. It’s a real rollercoaster of a ride. But it always has been and always will be.
In the UK during the first half of 1993, with the FTSE at around 2900 by July and having fallen from around 3400 points over a period of six months, a meeting in a top UK investment company asked the question “Will the FTSE ever reach 3500 in our working lifetime?”. Panic stations! This is somewhat short-sighted for a group of
Other figures below show the impact of major events on the US stock market. (See table 1). However, they also demonstrate that an event that may seem like a catastrophe today soon changes into a positive performance. Thus, even the most dire circumstances tend
Graph 1: UK and US Market Performance over the last 20 years 9/11
ERM UK Currency Crisis 1992
Market Crash 1987
Chernobyl Nuclear Plant Disaster 1986
Asian Stock Market Crisis 1997
Formation of the European Union 1993
Gulf War Ultimatum 1990
4,000
3,000
Internet Drives Nasdaq to 5,000 2000
Establishment of the European Central Bank 1998
Maastricht Treaty 1992
Barak Obama Inauguration
Enron Scandal 2001
Introduction of the Euro 2002
EU Grows to 24 members 2004
Subprime Rattles Markets 2007 Collapse of some of Wall Street’s Largest Names 2008
War in Iraq 2003
$150,000
Docking of Mir and Atlantis 1995
Gorbachev Coup 1991
Microsoft Launches Windows Iran/Iraq 1985 Conflict Escalates 1984
Argentinian Crisis 2002
World Trade Centre Bombing 1993
Berlin Wall Dismantled 1989
$105,945 $100,000
War in Bosnia 1994
$76,758 $50,000
$33,414
$10,000 5 Year Returns 1984-1988: 15.3% 1984 1985 1986 1987 1988 EQUITIES 6.2% 31.8% 18.7% 5.2% 16.6% BONDS 15.1% 22.1% 15.3% 2.8% 7.9% CASH 10.2% 7.9% 6.2% 6.0% 7.0%
1989 31.7% 14.5% 8.5%
1989 - 1993: 14.6% 1990 1991 1992 -3.1% 30.5% 7.7% 9.0% 16.0% 7.4% 7.9% 5.6% 3.5%
1993 10.1% 9.7% 3.1%
1994 - 1998: 24.0% 1994 1995 1996 1997 1.3% 37.6% 22.9% 33.4% -2.9% 18.5% 3.6% 9.7% 4.4% 5.7% 5.2% 5.3%
1999 - 2003: -0.6% 1998 1999 2000 2001 2002 2003 28.6% 21.0% -9.1% -11.9% -22.1% 28.6% 8.7% -0.8% 11.6% 8.4% 10.3% 4.1% 5.0% 4.8% 6.1% 3.5% 1.6% 1.0%
2004 10.9% 4.3% 1.4%
2004 - 2008: 2.2% 2005 2006 2007 4.9% 15.8% 5.5% 2.4% 4.3% 7.0% 3.2% 4.9% 4.5%
2008 2009 -37.0% 3.2% 5.2% 1.9% 1.4% 0.1%
InvestorInsight QUARTER I 2010 1989-1993: 14.6%
19
FEATURES Table 1: Historical Events: their impact on the US stock market EVENT
DATE
RESPONSE
Pearl Harbour*
December 1941
Korean War
June 1950
JFK Assassination
November 1963
Arab Oil Embargo
October 1973
USSR in Afghanistan
December 1979
1987 Financial Panic
October 1987
Gulf War
After 4 mths
-6.5%
-9.6%*
-12.0%
+19.2%
-2.9%
+15.1%
-17.9%
+7.2%
-2.2%
+6.8%
-34.2%
+15.0%
December 1990
-4.3%
+18.7%
ERM Currency Crisis
September 1992
-6.0%
+9.2%
Far East Contagion
October 1997
-12.4%
+25.0%
Russia/LTCM Crisis
August 1998
-11.3%
+33.7%
World Trade Centre
September 2001
DOW
-14.3%
+5.9%
Nasdaq
-11.6%
+22.5%
*(The market rose by 8% during the year following Pearl Harbour) to only affect markets for a limited period of time.
few key days your overall return can be significantly reduced. (Table 2).
However, just as the sharp falls in world markets are mainly over relatively short periods of time, the periods of best gain also occur over short periods. These times of gain seem to fall just before or after significant falls in markets, so any investor who only tries to be in the market at the right time can often miss the key periods of market gain.
These figures show annualised total returns, from 30 September 1993 – 30 September 2008.
Fidelity International, one of the world’s largest fund management companies, reviewed the returns from the US, the UK and other main world stock markets from 1993 to 2008. This research shows that if you are not invested in the market for even a
They demonstrate that missing just the best ten days (i.e. less than one day a year over the chosen period) reduced the return for the US and UK markets by around 42% and 48% respectively. The effect is even more significant for other markets; where returns even turn negative if the best 40 days are missed. If it were possible to be exactly correct on when to be in the market, returns could be
maximised. Of course, the chance of achieving this by moving in and out of the market at the right time is remote and the reality is that most successful individuals who have the resources to invest are unlikely to have the time, inclination or expertise to continually review markets to be invested at the right times. In fact it is time not timing that is the key to successful investing. A different approach would be to ignore the risks involved in timing your investments correctly and consider three different scenarios: 1. Investing each year at the market high point
Table 2: Annualised total returns, from 30 September 1993 - 30th September 2008 MARKET
INDEX
STAY FULLY INVESTED
BEST 10 DAYS MISSED
BEST 40 DAYS MISSED
UK USA Germany France Hong Kong
FTSE All-Share (£) S&P 500 (USD) DAX 30 (EUR) CAC 40 (EUR) Hang Seng (HKD)
6.82 8.39 7.70 7.25 9.47
3.57 4.92 3.05 2.74 2.74
-2.51 -2.21 -5.82 -5.27 -7.41
All figures show annualised total returns taken from 15 year periods, starting each consecutive month, from 30.09.93 to 30.09.08 in local currency terms. Source Datastream as at 30.09.08. Basis: bid-bid with net income reinvested. These returns do not take into account initial fees 20
InvestorInsight QUARTER I 2010
INVEST NOW
Delay now and you could miss the next big increase. If you don’t get on the merry-go-round you will never get a ride.
2. Investing each year at a random date 3. Investing each year at the market low point These figures are based on the annualised total returns for the 30 years to 1 January 2004 in local currency terms and they were calculated using MSCI country indices. They show that choosing the perfect date to invest actually makes very little difference to overall performance over the same period. Therefore, investors can sleep soundly knowing that they don’t have to worry about investing at the right time. Even investors who have consistently invested on the worst day possible for 30 years have still enjoyed a significant return. So what is the solution? In short, it doesn’t matter when you invest – you just need to be invested! Just ensure that you take good professional advice and choose your areas of investment carefully to match your own
circumstances and match them to the level of risk that you are comfortable with. Delay now and you could miss the next big increase. If you don’t get on the merry-goround you will never get a ride. Of course you may, with advice, want to switch it from time to time between markets or invest in a wider spread of investments, but leaving your money invested in the market means you will always be there to take advantage of the upturn, whenever it happens. In March 2009, James Bartholomew wrote in the Daily Telegraph - “My view is simple; shares are extremely good value, but it is impossible to know when the turn will come. When it does arrive, from this low valuation, it will be one of the most stunning bull markets any of us has experienced.” Since last March, the stock markets have indeed staged a stunning recovery. The FTSE 100
gained some 1700 points and the Dow Jones 3400 points over the same period. Both represent approximately 50% gain in eight months. Trying to second guess the market is difficult enough for the experts. Adopting the do-it-yourself route can often end up expensive; in some cases you may never recover any losses you make using this method. There are two things that make money: time invested in the market and good investment advice. So seek good advice, get your money invested and leave it invested. In other words the right time to invest is now!
For more information or advice please contact us on investorinsight@devere-group.com
InvestorInsight QUARTER I 2010
21
TIME OUT
MOSCOW Moscow, the capital of Russia, is a city of both Byzantine splendour and boldly Soviet architecture. On one hand, visitors can enjoy the ornate churches, beautiful neo-classical homes and the impressive architecture of the sixteenth century. On the other hand, you can immerse yourself in the history associated with the massive concrete slabs and high-rise apartments of the Stalinist era. Why? Moscow was the remote and inaccessible headquarters of the Soviet Union for decades. But now a holiday in Moscow is a great choice for those whose imagination is captured by life behind the iron curtain. Besides the 'must see' sights like the Kremlin and Bolshoi, Moscow has numerous other interesting attractions. However, most visitors who travel to Moscow get the most out of just strolling around its main neighbourhoods, seeking out points of interest and admiring the many newly-restored churches.
When? The best time to go on holiday to Moscow is during the northern hemisphere’s summer months, from May until late August, which is the peak tourist season. However, more adventurous tourists would rather visit Moscow in the cold winter months when the city is often covered in snow.
Who for? A holiday in Moscow is for anyone who enjoys seeing some of the world's iconic buildings and sights, and is interested in exploring the soul of Russia.
Touch down Domodedovo International Airport is the 22
InvestorInsight QUARTER I 2010
newest and largest airport, and is 22 miles (35km) from the city centre. The older airport, Sheremetyevo International Airport is 16 miles (26km) from the centre.
listen to government announcements or witness executions, the latter especially common during the reign of Ivan the Terrible.
Attractions
Moscow's oldest theatre, the Bolshoi, dates from 1824 and is Russia's most famous theatre, with its world-renowned opera and ballet companies in residence. Completely rebuilt after a fire in 1856, the grand building is a masterpiece of Russian neoclassicism, including an eight-columned entrance porch topped by a horse-drawn chariot of Apollo, patron of the arts. www.bolshoi.ru/en
Both iconic landmarks, the Kremlin and St Basil’s Cathedral are not to be missed. The oldest part of Moscow, dating back to the city's foundation in 1147 is situated at the very heart of the city on top of a hill. The Kremlin (www.kremlin.museum.ru) is a fortress surrounded by a thick red wall peppered with 20 towers. The multicoloured domes of St Basil's Cathedral are the most famous image of Russia, a striking design that was commissioned by Ivan the Terrible to commemorate his victorious military campaign against the Tartar Mongols at Kazan in 1552. Legend has it that Ivan was so overwhelmed by its beauty that he had the architect blinded to prevent him from creating anything to rival it. Opening times: Daily except Tuesdays between 11am and 5.30pm. Red Square is another must when sightseeing in Moscow. This dramatic open cobbled space in the centre of the city was originally its marketplace. It served as a public gathering place to celebrate festivals,
The Tretyakov Gallery houses some of the great masterpieces of traditional Russian art from before the Revolution and has the world's finest collection of Russian icons from the 11th to the 17th centuries. The gallery's collection of paintings, graphics and sculptures covers Russian art from the 18th to the 20th century. www.tretyakovgallery.ru
Fashionable dining BON, by Novikov & Starck, is a curiously trendy establishment, best described as Mafia chic, and usually attracts Moscow's hippest crowd. While the decoration looks like a villain’s lair from a batman film,
48 HOURS complete with machine gun lamps and decorative gloomy knick-knacks, the menu has reliable favourites such as pasta, seafood and grilled meats, all prepared by some of the city's finest chefs. Address: Yakimanskaya Embankment 4 E-mail: info@bonmoscow.ru Telephone: +7 495 737 8008 Café Pushkin offers, arguably, the most exquisite dining in Moscow. The restaurant on the so-called 'library' level is the place to see and be-seen in. Open 24 hours a day, seven days a week, the food is fantastic whether you're having pancakes for breakfast, delicious sturgeon for dinner or a meaty steak halfway through a night out. Address: 26a Tverskoi bulvat, Tverskaya Telephone: +7 495 229 5590
Trendy shopping Shopping in Moscow is surprisingly rewarding. This previously deprived nation loves shopping and Moscow's city centre has numerous malls and upmarket boutiques, offering all the big brand names and some pricey local produce. The GUM building in Red Square hosts Hugo Boss, Dior and Calvin Klein. Tverskaya Ulitsa, running north from the Red Square, is Moscow's most trendy shopping street.
Souvenir shopping Izmailovskii Park has a market at the weekends, selling traditional Russian arts and crafts (such as nesting dolls) as souvenirs.
Caviar and fine vodka shopping Eliseev Gastronome was a palace in the 1880s and retains many of its original features, such as curling marble pillars and candelabras. But it is now an exclusive supermarket where visitors may find the finest Russian vodka or caviar. Shops are generally open Monday to Saturday from 9am to 6pm. Some larger retailers stay open until 8pm and many smaller shops are closed between 1pm and 3pm. Ensure that all necessary export permits are in order and beware of purchasing illegally manufactured/pirated goods.
Ostentatious nightlife Moscow's notorious nightlife features an amazing selection of bars, clubs and concert venues. The most popular party scenes can generally be found in and around Kitai Gorod, Arbat and Garden Ring. Visit Kalina Bar to sip a cocktail whilst enjoying a magnificent view of the city from the 21st floor. This elegant and stylish venue is the ideal place to start off your night in splendour. If you want to be seen at one of Moscow’s most recently opened high-end clubs, head to Club Famous, an exclusive nightclub where the affluent clientele dances the night away to the latest dance and house hits. Rai which translates into “heaven” is another opulent nightclub located on the grounds of what used to be a Soviet-era Red October chocolate factory.
Luzhniki Stadium hosts massive international music concerts, while Hermitage Garden is good for open-air performances, contemporary electronic concerts and also has the Novaya Opera Theatre and an ice-skating rink.
Local customs Photography of anything to do with the military, strategic sites, or the airport, is prohibited. It is impolite to refuse alcohol, food and gifts. In Russian Orthodox churches, women are advised to wear skirts and cover their heads with a scarf. It is a legal requirement for visitors to carry passports for identification; copies are not sufficient.
Buzzing city Life in Moscow is never boring. The best thing about it is that the city is growing fast and opening up. Unlike more established, ‘mature’ countries, where change only happens slowly, in Moscow, things visibly change from month to month. As more and more expatriates move to Moscow, the expat infrastructure is becoming far more robust. Content provided by www.wordtravels.com Copyright © 2009 Globe Media Ltd. All rights reserved.
A glimpse into Moscow’s economy After Russian stocks fell to record low valuations in late 2008 and early 2009, and the economy suffered a severe recession, rising energy prices in 2009 have seen investor confidence return. With oil being by far Russia’s main export, when oil prices rise, so does the Russian market. As a result, the Moscow stock exchange has been one of the best performing markets in the world this year. Foreign Direct Investment (FDI) inflows into Russia have continued to increase steadily over the last few years due to an expanding domestic economy, valuable human capital and natural resources, and political stability. Regulations and constraints on foreign businesses are improving. However, there are still many restrictions for foreign involvement in the Russian economy, not least the banking sector, natural monopolies, nuclear energy and the space industry. Interestingly, less than 20 years after the Soviet Union collapsed, Russia is on the verge of becoming one of the most lucrative consumer-goods markets worldwide. Foreign consumer goods producers such as Nestlé, Kraft, Unilever and PepsiCo are so confident in Russia’s future that they have been eager to buy Russian brands.
InvestorInsight QUARTER I 2010
23
TOP TEN SMARTPHONES
TIME OUT
SMART COMMUNICATION 1
Apple iPhone 3GS
We all recognise the distinct look of the Apple iPhone by now. The iPhone 3G S is twice as fast as its predecessor and the 3.0 software keeps it miles ahead of its competitors. The battery life is extended too for those chatting away hours at a time.
2
RIM BlackBerry Bold 9700
The RIM BlackBerry Bold 9700 is the quintessential modern BlackBerry. It offers more power and an even sleeker design than its predecessor. The browser still needs improvement in order to be optimal but all other features are top notch.
3
HTC Touch Pro2
6
Palm Pre
Aimed at gadget lovers rather than business professionals, Palm has developed a strong operating system that not only rivals the competition but also sets a new standard in the way smartphones handle tasks and manage information.
7
Motorola Droid
Putting aside minor design issues and multimedia problems, the Motorola Droid is the fastest and most powerful Google Android device to date. It fully embraces the openness of the Android platform and equips customers with a device that rivals other touch-screen smartphones on the market.
8
The HTC Touch Pro2 was possibly the most anticipated Windows Mobile device of all time. It marks the return of the tilting screen made popular by the HTC TyTN II and the addition of some new technologies which should appease business professionals.
An excellent-quality smartphone equipped with a large stunning display, a spacious sliding QWERTY keyboard, a sturdy sliding mechanism and tilt hinge, and a clear speakerphone.
4
9
Sony Ericsson Android Xperia X10
HTC Hero
Nokia N97
The Android has amazing speed in executing programs. It also has an 8MP camera with LED flash, autofocus and automated face tagging. This means that every photo which is taken of a person will be found and sorted, rather than the photographer having to manually point out each instance.
The Nokia N97 is the tip of the spear in Nokia's smartphone line-up. It is the most-powerful, smartest and fully featured phone in the company’s range. This smartphone, laid out to be a mini UMPC, has a slide-out screen, a full QWERTY keyboard, 8GB of internal memory and a 5MP camera.
5
10
Samsung Galaxy Spica
Also known as Galaxy Lite, this phone has an excellent 1500mAh battery and makes it easy to watch highquality videos without file format issues. It is also equipped with Android 1.5, a 3.2-inch HVGA touch screen and a 3.2MP camera and a stunning amoled (active-matrix organic light-emitting diode) capacitive touch screen. 24
Top Ten Must Have Smartphones for 2010
InvestorInsight QUARTER I 2010
Vertu Constellation F Ayxta
This luxury phone offers features such as City Brief, which provides tips on restaurants, exhibitions and shopping. Made from materials including stainless steel, ceramic, leather and sapphire crystal, this high-end phone is a must have for fashionistas.
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KAMPALA
MOZAMBIQUE
MUSCAT Villa 263, Way 3304, Madinat Sultan Qaboos Muscat, Sultanate of Oman P.O. Box 810 PC 115 oman@devere-group.com
PAFOS 5 Michalaki Christodoulou Street Office 203, Pafos 8020 Cyprus pafos@devere-group.com
PRAGUE 2nd Floor, No. 15, Vaclavske Nam 66 110.00 Praha 1 Czech Republic prague@devere-group.com
SAIGON
Adam House Room B4 Plot 11 Portal Avenue Kampala, Uganda uganda@ia-int.com
Bitexco Building 10th Floor 19-25 Nguyen Hue Street Dist 1, Ho Chi Minh City Vietnam vietnam@devere-group.com
KNIGHTSBRIDGE
SHANGHAI
6th Floor, 21 Knightsbridge Westminster,London SW1X 7LY, United Kingdom uk@devere-group.com
Suite 1906, Tian An Centre 338 Nanjing West Road Shanghai PR China 200003 shanghai@devere-group.com
KUALA LUMPUR
TOKYO
Suite 29-01, 29th Floor Menara Keck Seng, 203 Jalan Bukit Bintang 55100 Kuala Lumpur Malaysia malaysia@devere-group.com
Azabu East Building, 4th Floor 1-25-5 Higashi Azabu, Minato-ku Tokyo, 106-0044, Japan tokyo@devere-group.com
LIMASSOL
WARSAW
Anthemidos 9B Panthea Limassol 4007 Cyprus cyprus@devere-group.com
Office 222, Atrium International Business Center Al. Jan Pawla II 23 00-854 Warsaw poland@devere-group.com
414 Emarat Atrium Building Sheikh Zayed Road PO Box 75464, Dubai UAE dubai@pic-uae.com
LUXEMBOURG
ZURICH
6th Floor, 23 Rue Aldringen L-1118 Luxembourg luxembourg@devere-group.com
DURBAN
MADRID
SeeWurfel Nr. 2 Geschoss 2 Seefeldstrasse 281 Zurich 8008 Switzerland zurich@devere-group.com
BRUSSELS Park Hill - Building A Mommaertslaan 18 B - 2nd floor 1831 Diegem Belgium brussels@devere-group.com
CAIRO 25A Road 84 Maadi 11431 Cairo, Egypt cairo@devere-group.com
CAPE TOWN 2nd Floor Block A, 7 West Quay Road V&A Waterfront Cape Town 8001 South Africa capetown@devere-group.com
DUBAI
Unit 7B No. 4 The Crescent West Way Office Park Westville 3630 Durban South Africa durban@devere-group.com
Calle Calendula 93 Miniparc III Edif E El Soto de la Moraleja Carretera de Burgos Alcobendas 28109 Madrid Spain madrid@devere-group.com
FRANKFURT
MEXICO
Schillerstrasse 14 60313 Frankfurt am Main Germany frankfurt@devere-group.com
Gral. Manuel Avila Camacho 76/803 Col Lomas de Chapultepec Mexico D.F 11000 Mexico mexico@devere-group.com
OFFICES OPENING SOON ATHENS athens@devere-group.com
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