A Review of 2011 and a look forward

Date: Wednesday 1st February 2012

Publication: Cyprus Living

Last year proved to be a rollercoaster ride for investors particularly in the latter half. In equity markets the year ended (12 months to 13^th January 2012) negatively for most markets with the US bucking the trend with a 6.3% rise on the DJIA and the S & P 500 barely scraping into the black with a 0.9% rise. The FTSE 100 fell 6% in the year with utilities, healthcare and consumer goods and services defying the general consensus to return a profit.  As is to be expected, European markets suffered greatly in 2011 with France CAC 40 down 20.3% and Germany DAX down 12.5%. Emerging markets all experienced double digit falls in 2011.  Commodities produced a mixed bag of results with gold (one of our longer term holdings) rising 20%.  Brent Crude rose 14%. Agriculture or soft commodities were poor performers apart from cattle and hogs.

Alternative investments outperform the market again 

Yet again, the student accommodation sector continues to produce excellent returns of over 10% in Sterling and slightly less for Euro. Other alternative investment funds such as UK Recycling and Legal Financing have also returned around 10% for the year.

A very popular investment in 2011 was a one year product with a fixed interest of 7% in Sterling and 6% in Euro. With no entry or exit costs, a commitment of only one year and interest distributed quarterly or annually, it has proved a huge success again with those seeking a regular and/or fixed income from their savings. Rates have since come down to 6% (sterling) but savers can still lock in at this attractive rate for another full year. 

High Income Capital Protected Notes and Capital Protected Autocall notes are a mainstay of our client portfolios. These either pay a fixed level of interest which is distributed quarterly or instead pay out on the observation date or anniversary if certain parameters are met. During the year, we launched 36 different notes - all of which are either actively paying income or retain their capital protection feature. Available in sterling, euro and US Dollar, these have been a huge success for clients requiring additional income to supplement their pension. 

As an example, one of our current offerings is linked to gold and silver as follows :-

• Fixed income of 13% p.a., paid quarterly. If the underlyings (two holdings in both gold and silver) are above 75% of their initial levels at quarterly observation dates.
• Maturity occurs when the price of the underlyings is higher than their initial levels (observed quarterly)
• Minimum term is three months and maximum term is four years
• Available in Euro, Sterling and US Dollar
• Capital protected so long as the underlying funds have not fallen by 50% at maturity.
• Protection provided by Royal Bank of Canada.

Looking forward, we remain cautious for 2012. With a spread of alternative asset classes, capital protected structured notes, gold and cash we believe our clients' portfolios will be able to produce both income and capital gains again in the coming year above the rate of inflation. 

For further information about any of the above or if you wish to discuss your financial requirements please contact me or one of our qualified advisors. 

Mark Hollingsworth, Director, Hollingsworth International Financial Services Ltd

Tel:      +357 99066840, +356 21316298

e-mail: info@hollingsworth-int.com

Website:  www.hollingsworth.eu.com

Authorised by the Malta Financial Services Authority to provide investment services, license IS/32457