Why investors should consider US equity income in a portfolio
In this interview, James Yardley speaks with Fiona Harris, investment specialist for the JPM US...
At the beginning of the summer, Hasbro released a new, cashless Monopoly, which features a voice-activated banker whose dulcet tones are broadcast from a top hat-shaped smart speaker in the middle of the board.
I love Monopoly – actually, I love all games – and the introduction of a cashless Monopoly got me thinking about a TED talk by Adam Carroll, a financial educator and speaker, who spoke about how he used the game of Monopoly to teach his kids about money.
Each of his children had a different playing style: his daughter, 11, used luck to guide her – think Chance and Community Chest. His youngest son, 7, bought everything he landed on without exception (that’s me btw), and his middle son, 9, was strategic – he went after railroads, utilities and big pay days (Mayfair).
When Adam noticed they were playing with their own ‘rules’ like buying each other out of jail and lending each other money to buy properties so everyone could keep playing, he thought: “What if they’re playing this way because the money isn’t real?” So the next weekend, Adam went to the bank and took out $10,000 in cash and got his family together for a new game of Monopoly…
Two of his three kids played differently; his youngest carefully calculated his next turn before buying a property, and his middle son no longer bought Mayfair and Park Lane, but instead, put hotels immediately on Coventry and Leicester Square. When Adam asked him why, he said: “Dad, they’re just more affordable properties.’ He got it. Yet the eldest of Adam’s children – his daughter – still played the luck ‘strategy’ – and she was the first one to go bankrupt.
Maybe if they’d have played the newest edition of Monopoly — Ms. Monopoly — things would have ended differently?
“Through the introduction of Ms. Monopoly we want to recognise and celebrate the many contributions women have made to our society and continue to make on a daily basis.” — Jen Boswinkel, Senior Director of Global Brand Strategy and Marketing, Hasbro
Ms. Monopoly has been referred to as ‘the first game where women make more than men.’ In this new game, women get a head start: female players receive an additional $400 at the beginning of the game; they also receive an additional $40 each time they pass ‘Go’ on the board; and, instead of properties, players collect inventions made by women.
Ms. Monopoly – the niece of the elder Mr. Monopoly and a “self-made investment guru,” – hopes to start the conversation for younger girls specifically surrounding the gender pay gap.
And Hasbro isn’t the only one targeting women – in the words of Charlene Cranny, campaign director for “Who Fund the World” presented by Good Money Week (5-11 October): “When I started working on this campaign to help financially empower women by encouraging them to invest, I hadn’t fully appreciated just how little we women talk about money.”*
Baby boomers are the wealthiest generation in history, yet over the next 30 years, an estimated £5.5 trillion is due to be passed on between generations in the UK**. That’s a big shift of money for those not talking about it or turned off by investing – and exactly why we started FundCalibre’s millennial series. Additional research has showed that 60% of the disposable wealth in the US, and similarly in the UK, will be in female hands in the next 10 years*.
A Barclays study of 2,800 Smart Investor customers over a three-year period shows that female investors actually achieved annual returns that were, on average, 1.8% higher than men*.
Women are generally more patient when it comes to managing wealth and often look towards the long term. So I put this to the test: I looked at Elite Rated female fund managers or lead managers, if part of a team, that have been running their fund for over 10 years and have outperformed their sector during that time.
A Moxie Future survey found that 83%* of women care where their money is invested. Women possess a nature tendency to want to invest in ways that benefit other people – not just themselves. Lesley has run the ASI UK Ethical Equity fund since June 2004 – an opportunity she jumped at because of her belief that companies can ‘do better’. She puts ethics at the heart of her investment strategy and has outperformed the IA UK All Companies sector average by 29.5%*** over her tenure.
Ainslie just recently marked 10 years on this fund after being appointed co-manager of Janus Henderson UK Property back in May 2009. The fund, which invest in commercial buildings in the UK, has outperformed the IA UK Direct Property sector by 9.7%^ since Ainslie started working on the portfolio.
Clare Hart has a wealth of experience having worked at J.P. Morgan since 1999. She’s been lead manager of the JPM US Equity Income fund since December 2008, outperforming the IA North America sector by 7.8%^^ during that time.
Although a few months short of her ten year anniversary on the fund, since April 2010 when Chisako started managing AXA Framlington Japan, she’s outperformed the IA Japan sector by 41%^^^ – definitely something worth noting. Get to learn more about the fund and investment trends in Japan in our investing on the go podcast with Chisako.
*A woman’s guide to investing, Good Money Week 2019
**The great wealth transfer report, Octopus investments, 2019
***FE Analytics, total returns sterling 1 June 2004 to 16 September 2019
^FE Analytics, total returns sterling 4 May 2009 to 16 September 2019
^^FE Analytics, total returns sterling 15 December 2008 to16 September 2019
^^^FE Analytics, total returns sterling 16 April 2010 to 16 September 2019