“That way, when we come to make a decision about client portfolios, we never have to say well is it worth doing because it is going to cost x? There are always some costs that we can’t control, so we do have to take things like stamp duty and the general cost of adding or removing units in a fund into consideration, but that is relatively minor, unlike commission.”
Investments
From an investment point of view, Gardner says the firm has been looking intently at emerging markets of late, because most in the market are worried that a rise in US interest rates will be bad for emerging markets.
Apart from a position in the HSBC GIF India Equity Fund, which it purchased shortly after the election, for, Gardner says, “all the standard reasons” Gardner says he is looking at a number of other opportunities within the sector.
“Overall I think a hike in US rates will be bad for emerging markets, but you have to divide out the various regions, because not everything will be affected equally. Iran is a good example, we have been looking around for Iranian funds and, we haven’t found many yet. But, I think it is a very interesting country, it is probably the most westernised of the Middle Eastern countries, apart from Dubai, and you could see a very quick turnaround in psychology in Iran if the nuclear deal and the lifting of sanctions come through.”
Nigeria, is another country on which Gardner is keeping a close eye, as the recent election there is evidence that the population wants to stamp out corruption, and the new government looks more favourable for the economy going forward. But, he said, he is yet to buy in.
On the other side, he said, the firm has also been considering shorting China. “There is a lot going on there. We are not sure exactly what is going to happen, but there does seem to be the possibility for bubbles to develop very quickly,” he said.
