House News
We welcome Stacey Barron back from her six-month maternity leave – bringing our staff complement back to full steam ahead with all four fully qualified financial advisors on board as we navigate the way forward, ably assisted by our admin team. In a little over a year, we will celebrate another milestone when our firm completes 30 years of providing financial advisory services to our clients, many of whom have journeyed with us since our inception in October 1996.
London Investment Conference
I had the privilege of attending a weeklong investment conference in London in late June 2025. I dutifully took a South African heatwave with me to add some sizzle to an already feverish period in the Global markets (temperatures reached 34.7 degrees centigrade in central London). Each weekday, from Monday through to Friday, was filled with live seminars run by a variety of different leading World experts on central issues that will have an impact on future investment returns. The Trump induced helter-skelter in Global economies was at the forefront of many of the discussions. The consensus was that the USA economy would, contrary to their President’s assertions, take strain over the next 5 years or so, while other economies in Europe and Asia would fare a lot better.
The role of Artificial Intelligence [“AI”] was discussed at some length by one presenter. All fund management companies are making use of AI in their investment processes. However, all indicated that AI was a very useful tool in consuming vast amounts of data and distilling it for human consideration. The presenter that dealt in detail with their deployment of AI demonstrated how the speed with which AI systems could identify potential investment opportunities had assisted them in gaining early access to exciting companies that they would probably not have discovered until many months later. Not all of the AI identified opportunities were considered investible – but the accuracy of the “intelligence” being applied was continuing to improve with more and more credible results. I have emphasised the word “intelligence” because “artificial intelligence” is widely considered a misnomer by many experts in the field. It is not truly “intelligent” in the human sense, but rather a sophisticated form of data processing and pattern recognition. There are many excellent articles that examine AI in depth and explain clearly why AI is a misnomer – consult Dr Google for some additional bedside reading [way better than counting sheep!]’
Formula for investment success
While we do not deploy our own in-house AI system, we [and hence our clients] do enjoy the benefits of its use within the investment industry. In particular, our use of Morningstar Direct in the selection of unit trust/ mutual funds for inclusion in client strategies has benefitted materially from the responsible way in which they are engaging with AI. The website link provided above will take you to a detailed article on their deployment of AI published by them in July this year.
Nolan, our inhouse IT expert, has built and continues to refine algorithms that we run against the data that Morningstar gives us access to. That enables us to identify funds which are highly rated by Morningstar [three stars or more] and have delivered consistent “net of cost” returns to investors within the many available risk categories over periods of time ranging from 10 years down to the last 6 months. Instead of relying on marketing material from fund companies we use validated data from Morningstar to measure the success and consistency of fund managers.
Having identified and ranked the funds available to clients – the “secret sauce” is in blending different funds with different investment styles within each risk category and deploying them in our investment strategies for clients. In that way we partner with each of our clients on the journey forward with their success aligned with ours. We must grow their portfolios in order to grow our business.
We continue to monitor every fund in which our clients hold investments and will contact the fund managers where we see under or over performance relative to their peer funds. We are not quick to jump ship when these performance issues arise – but will monitor carefully, evaluate the explanations from the fund managers affected and swap out only when it is clear that a recovery back to peer level performance is unlikely.
We appeal to those of our clients receiving portfolio reviews with this newsletter to moderate their expectations for future performances. We are enjoying really high fund returns in the past one year, three year and several five year periods. On the local stock market front this has been because of the almost 5 year period of under-performance between 2015 and 2020 – then the Covid low in 2020 compared to the high’s of 2025. The same can be said for the offshore investments coming off the low base in 2020 [for the 5 year period] and then the Ukraine dip in August 2022 for the three year period.
We are here to guide our clients through the volatility ahead of us all. Please don’t hesitate to contact us if you are uncomfortable, fearful or would just enjoy to drop in for a proper cup of coffee and a chat.
Warm regards,
John & The Finlaw Team
Finlaw Consulting
