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Five insights in five minutes

Festive Five in Five: return envy, quiz, turkey, movies, shopping
17 December 2021

    Dear readers
    This is our last Five in Five of the year. We’re back on January 14. Many thanks again for all your support, feedback, and topic suggestions. Stay in touch and wishing you a festive break and happy and prosperous 2022. Stuart, Seb, Travis, Kelvin & Dupe.

    Return envy

    Okay so you’ve unwrapped some American stock indices that are up by a quarter and thanked grandma for knitting you a selection of low-yielding eurozone bonds…again. Your small bag of chocolate bitcoins (exactly twice as yummy as last Christmas day) is eaten. On balance, a satisfying year. But then your family begins to open its presents. Oh dear. Back from her gap-year travels, sis has shares from Mongolia and Vietnam that have doubled in dollar terms. Big-bro was given model cars from Ford and Tata motors. They are up 150 per cent, five times the performance of your battery-driven Tesla toy. Even dad, usually hard to please, is thrilled with his Exotic Equity Gift-Set from mum. It contains Czech, Estonia, Kazakhstan, Iceland, Israel, Ghana, Lebanon, Sri Lanka and Bulgaria among other treats – the exchanges of which are all between 30 and 60 per cent higher since January. In greenbacks! Still, it’s not the season to complain. But you promise to be more adventurous with your investment shopping next year.

    Conversation starter for… frontier markets, emerging equities, Asia equities, Asia small caps

    Return envy   For illustrative purpose only. 

    Christmas quiz

    2021 will be remembered as the Year of Responsible Investment, but alternatives and Asia also featured strongly. These topics have been at the forefront of our 230 notes this year in Five in Five. But have you been an attentive reader? Below are ten statements. Which did we write? A tee-shirt for the first correct response via email. (1) Pre-pandemic, aeroplanes were producing more carbon emissions than Germany (2) ESG ETFs are forecast to reach $1.5 trillion by 2025 (3) Nigeria is emerging as a fintech hub (4) Medical debt is the cause of more than 60 per cent of US personal bankruptcies (5) The ‘greenium’ of developed equities is negative (6) Between now and 2025, around 40 per cent of new private investments in Europe would be ESG-committed (7) Gabon sequesters more than 100 million tonnes of carbon annually (8) 70 per cent of the major innovations over the past two centuries have occurred during equity bubbles (9) Vietnam exports have tripled versus 2010 (10) Ben Affleck’s reconnection with J-Lo is “beautiful”.

    Conversation starter for… ESG, alternative investments, Asia equities and fixed income

    Christmas quiz   For illustrative purpose only. 

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    Turkey (not a note about inflation)

    With Christmas only a few sleeps away, many readers are dreaming of their festive meals next week. Thrill-seekers among us may have left food shopping to the last minute. But many had theirs prepped months in advance, with October sales of frozen turkeys (a western Christmas staple) up more than 400 per cent year on year at a popular UK retailer. Whether you’ll be tucking into a bucket of KFC in Japan, pozole in Mexico or Hangikjöt in Iceland for the holidays – which traditional protein is greenest? According to the Environmental Working Group based in America, fan favourite turkey has among the lowest carbon footprint of traditional holiday proteins. For every kilo of turkey consumed, 11 kilos of carbon dioxide are emitted. This is more than 70 per cent less than lamb and 60 per cent less than beef, but still comes second to good ol’ chicken as shown in the chart below. So for the environmentally conscious meat eaters: winner winner chicken/turkey Christmas dinner!

    Conversation starter for… ESG, sustainable strategies, low-carbon funds

    Turkey (not a note about inflation)   For illustrative purpose only. 

    Coming to America

    Americans may prefer their turkey at Thanksgiving rather than Christmas, but a holiday season movie is tradition the world over. The film industry is thankful amidst the return of blockbuster releases. Crime fighting car enthusiasts, superheroes and 007 lifted US box office receipts by 2,000 and 700 per cent in the past two quarters, compared with a year ago. Global ticket sales surpassed 2021’s total back in August. But the comforts of home also won out, with some major films released straight to streaming platforms – Scarlett Johansson even sued Disney over the financial ramifications. However we watch, indie film makers must tire of a handful of movies hogging the wealth. Yet the situation pales next to stock markets. Since 1990, less than 1.5 per cent of firms accounted for all net wealth creation globally when discounting stocks that underperformed one-month US treasury bills, which was most. The takeaway? Avoiding losers and picking tomorrow’s stock winners can generate wealth the likes of the fictional prince from Zamunda.

    Conversation starter for… US equities, global equities

    Coming to America   For illustrative purpose only. 

    A gift for retailers

    What do we do more than eating and watching films this time of year? The answer is whipping out our credit cards to buy presents for our loved ones. As we all know, two giant American credit card companies have long stood tall in the retail payment industry, like a pair of California redwoods. With their combined revenue and income up 12 and 16 per cent year-on-year, it’s surprising to see their share prices declining some 15 per cent from mid-year peaks. Perhaps Visa’s recent spat with Amazon over processing fees has signalled to investors that the two are not the only game in town anymore. They won’t be pulp anytime soon, however. Rather they will need to adapt to a competitive landscape as alternative digital options pop up like mushrooms -- such as a certain payment app developed by your favourite bank! A fitting Christmas gift for everyone.

    Conversation starter for… Digital economy

    A gift for retailers   For illustrative purpose only. 


     


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