Category: Investment Software/Services

ShareScope (and Sharepad) Portfolio Management Changes

I have been using a product called ShareScope from Ionic for many years – first purchased in 2014. This is a PC based product that enables me to record the transactions in the multiple portfolios I manage, which are on multiple different stockbroker platforms. It provides market pricing and performance information plus reports of dividends that should have been received on both individual portfolios and also as a “consolidated” view across all my portfolios. It is therefore invaluable for recording and checking transactions in addition to the spreadsheets I use to record cash and trading transactions.

But a recent announcement from Ionic tells me that after 27 years the software is approaching its “end of life” so all ShareScope users will be forced to move to newer software called SharePad during 2026 which runs as a web platform when “legacy” ShareScope will be decommissioned. SharePad will also be renamed ShareScope just to confuse people.

I have already moved my portfolios over to SharePad so are running the older software and the new in parallel. SharePad seems to provide most of the functionality I need with some minor exceptions (such as recording unlisted shares and a global view of dividends received to avoid the need to step through multiple portfolios). ShareScope allowed for configuration of reports and setting of “Alarms” on news which are not automatically transferred when importing portfolios from the older product so there is some work yet to be done. There is good support and advice from Ionic when needed and more improvements are planned.

It is annoying to have to relearn a new software product at my advanced age but it is not unexpected that such an event would take place so I will accept  it was time to revise/replace the software. After 27 years it must be getting difficult to maintain.

Any investors with multiple and large portfolios running on different platforms will find a product like ShareScope/SharePad quite essential and I can recommend them. Good services with reliable and accurate data over many years, although I do use other products also to provide financial analyses.  

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

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Platform Costs

The AIC has published a useful table of the comparable costs of various investment platforms. See https://www.theaic.co.uk/aic/news/press-releases/aic-updates-platform-comparison-tables-to-help-investment-trust-investors

But as they warn, although cost is very important: “Cost is not the only factor investment trust investors need to consider. They should think about the level of service they require, which accounts they need, and even more fundamentally, whether it’s possible to access all the trusts they want on the platform. We hope our platform comparison tables are useful to investors and advisers in making this important decision.”

Personally I would not touch any platform that does not provide an easy mechanism to vote my shares. But the AIC cost table is a good starting point for research.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson  )

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FCA Challenges Cash Interest Charges

The Financial Conduct Authority (FCA) has published a letter sent to platform operators that manage ISA and SIPP funds. They say: “The amount of interest earned by some firms has increased as rates have risen. The FCA recently surveyed 42 firms and found the majority retain some of the interest earned on these cash balances, which may not reasonably reflect the cost to firms of managing the cash. Many also charge a fee to customers for the cash they hold, known as “double dipping”.

As both a customer of a well-known SIPP manager (AJ Bell) and a shareholder in the company that is hardly news to me. Interest on client cash holdings has been a major positive contributor to the profits of investment platforms as they typically pay less interest to the clients than they can obtain from depositing the cash in a bank.

At least that may be true now but a year or two back they were getting minimal interest on deposits and paying little or nothing to clients on their cash holdings.

The FCA seem to be saying that this source of profit is unreasonable and should not be used to cover more than basic operating costs but I am not sure that is entirely sensible. There are a lot of costs involved in operating an investment platform which have to be covered somehow. If not from the “cash margin” then what from?

The key issue is whether the charges applied are fair and apparent to customers, i.e. are they transparent and easily comparable across platforms? They certainly are not at present.

See the FCA announcement here:  https://www.fca.org.uk/news/press-releases/fca-writes-firms-about-treatment-retained-interest-customers-cash-balances

The AJ Bell share price has fallen by over 8% today at the time of writing.

Postscript: No doubt in response to the FCA announcement but probably under consideration for some time, AJ Bell have announced a reduction in charges and higher interest on cash deposits. See https://www.londonstockexchange.com/news-article/AJB/statement-re-pricing-changes/16249079

Roger Lawson (Twitter https://twitter.com/RogerWLawson  )

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FCA on Getting to the Gamers

On Friday the Financial Conduct Authority (FCA) published a fascinating article on the views of people on the risks of investment offers under the title “Getting to the Gamers”. It included these comments:

“Consumers can now easily invest in high-risk investments. Some of these promotions use popular ‘gamification’ techniques to encourage people to participate. Gamification uses elements of game playing, like score-keeping, competition and league tables, to encourage people to take part. High-risk investments can be a valid part of well diversified portfolios, but we are concerned that many investors don’t recognise all the risks involved”; and:

“First, we had to find out more about these investors, what attracts them to these offers and where they see them. Our research found they tend to be aged 18-40 and are often driven by emotional and social factors. They enjoy the ‘thrill’ and feeling of ‘being an investor’. 78% said they relied on their gut instincts to tell them when to buy and sell. 

But nearly half of them – 45% – didn’t realise that losing money was a potential risk of investing, and over 60% relied on social media when researching investments. They were also disproportionately attracted to offers and platforms that used gamification”.

See FCA article here: https://www.fca.org.uk/about/getting-gamers

Comment: it is certainly plain to see that in the last few years a lot of new investors have been attracted into stock market investment. They have never been through a bear market and their perceptions of risk are therefore inadequate.

What can the FCA or anyone else do about this? Encouraging investors to get some experience before making big bets on shares is one thing to do and more education before they even start to invest are surely the things to look at. Some education should be a pre-requisite before being allowed to invest in the stock market.

Warnings about reading or listening to social media posts on investment topics would also not go amiss and tougher regulation in general of investment web sites would help.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson )

Lessons from Ed Croft from the NAPS Portfolio

Last week I watched a webinar from Ed Croft of Stockopedia on the results of the NAPS portfolio he has been running for the last 8 years, and the lessons to be learned from it.

The NAPS portfolio is so named because it is based on a “no admin portfolio system” using a ranking system to select stocks based on the three main factors of quality, value and momentum. I am a Stockopedia subscriber but I do not follow the NAPS system religiously.

How did Ed’s portfolio perform last year? In summary a return of -15% although it produced +28% in the prior year. The system does tend to focus on growth stocks like my own portfolio whereas the market preferred lumbering value stocks last year. The average over the last 8 years puts it well ahead of the FTSE AllShare though.

There is much you can learn from Ed if you watch the webinar here: https://event.webinarjam.com/replay/47/ylknwbq0i8wt00otwlz

He does an interesting analysis of the benefits of diversification. He says “holding 20+ stocks in a 90+ranked portfolio reduces the risk of outlier downside performance and increases the probability of holding big winners”. I always knew that a large portfolio was beneficial!

Roger Lawson (Twitter: https://twitter.com/RogerWLawson )

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Platform Improvements at Interactive Investor – Aren’t They Annoying!

Is it not very annoying when a software platform redesigns the user interface and screws it up! That is what has just been done by Interactive Investor (II).

They not only expect us to learn our way around a new system, for no obvious benefit to us the users, but have missed out on some important functionality. For example, the “voting mailbox” accessible from the Portfolio screen does not work. In addition when transactions are completed not all the information on costs is reported which I need to enter into my portfolio system.

More clicks are required to move around the site, for no purpose. There are probably other defects I have not even mentioned.

This is an abortion in essence and I think they should revert to the previous software version as clearly this one has not been adequately tested.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson )

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A Bumper Edition of Investors Chronicle

Over the Christmas period we were treated to a bumper edition of the Investors’ Chronicle. And I have to say that this magazine has improved of late under the editorship of Rosie Carr. Whether she has a bigger budget or is just picking better writers I do not know but she certainly deserved the job after working for the magazine for many years.

I’ll pick out a couple of interesting articles from the latest edition:

“What does it cost to be an effective private investor” by Stephen Clapham. He comments that “private investors are, in my experience, not nearly willing enough to invest in tools and education to improve the performance of their portfolios”. I would agree with that. They tend to rely on broker/platform recommendations, newspaper articles, or tips from bulletin boards instead of doing their own research using the tools that are available.

Stephen mentions services such as SharePad, Stockopedia, VectorVest and Sentieo. I am not familiar with the last two but I use both SharePad/Sharescope and Stockopedia as they provide slightly different functionality. Plus I use spreadsheets to record all transactions and dividends and to monitor cash. This enables me to manage several different portfolios held with multiple platforms/brokers comprising 80 different stock holdings with some ease. I have been doing this since my portfolios were much smaller and less complex so I would recommend such an approach even to those who are starting to invest in equities.

As the article mentions, half the members of ShareSoc have a portfolio of over £1m and may be representative of private investors so they may be making profits of well over £50,000 per year from their investments, particularly of late. A few hundred pounds per year to help them manage their portfolios and do research should not be rejected if it helps them to improve their portfolio returns by just a fraction of one percent, which it should surely do.

Altogether the article is a good summary of what a private investor should be using in terms of services to help them.

The other interesting article is entitled “The Generation Game” by Philip Ryland. It highlights the declining performance of UK stock markets since the 2008-09 financial crisis. He shows graphically how the FTSE-100 has fallen way behind the S&P 500 and the MSCI World Index. It makes for pretty depressing reading if you have been mainly investing in UK large cap stocks in the FTSE-100.

It reinforces the message that if you want a decent return from your equity investments you need to include overseas markets in your holdings and small and mid-cap companies in the UK. That is what has worked in the last few years and I expect it to continue to be the case.

Why? Because the growth is present in those companies while the FTSE-100 is dominated by dinosaurs with no growth. Technology stocks are where growth is now present when there are few in the FTSE-100. In fact the market cap of Apple now exceeds the whole of the FTSE-100.

The UK has become particularly unattractive for technology stock listings due to excessive regulation and over-arching corporate governance rules that divert management time. Meanwhile the UK economic environment still relies a great deal on cheap labour provided often by immigrants while our education system fails to encourage technical skills.

The Government has taken some steps to tackle these issues but not nearly enough while politicians have spent time on divisive arguments about how to deal with the Covid epidemic and about trivia such as Christmas parties and redecoration of the Prime Ministers apartment.

There are of course bright spots in this economic gloom and generalising about the state of the country is always going to lead to mistaken conclusions. We are probably no worse than most countries if you examine their politics and the UK economy does seem to be relatively healthy.

But the key message is that if you want to make real money investing in equities you need to be selective and not just follow the crowd, i.e. don’t just rely on index trackers.

Those are my thoughts for investment in the New Year.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson  )

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Interactive Investor Acquired

Interactive Investor have announced that they are being acquired by Abrdn, reportedly for £1.5 billion. Interactive Investor have been providing a popular and low-cost share dealing platform for private investors and have been owned by JC Flowers recently. Interactive acquired The Share Centre a few months back and now have about 400,000 clients.

At least it looks like Interactive Investor clients won’t have to learn their way around a new platform as there is a commitment to keep the business as a separate operating entity with existing management and the same pricing while Abrdn have relatively few direct retail clients. Abrdn are a large fund manager though so no doubt we will see the Interactive Investor platform promoting their funds in due course. But any changes might be of concern to existing Interactive clients.

The comment published in the FT is relevant: “The most successful platforms in recent years have been those independently owned, said David McCann, analyst at Numis. He said creeping bureaucracy, lack of management focus and the worst sin of trying to cross-sell products from the parent group to platform customers amount to very real risks for the success of the tie-up”.

That pretty much sums up my view of the likely benefits or disbenefits of this merger although clearly Abrdn have larger financial resources that might help Interactive Investor in an increasingly competitive platform world. But will large company management really understand the needs of retail investors?

Roger Lawson (Twitter: https://twitter.com/RogerWLawson  )

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Investor Meet Company, Fevertree, Closet Trackers, Politics and the Environment

I recently came across a company called “Investor Meet Company” (see https://www.investormeetcompany.com/ ). They claim to enable individual investors to meet with company directors over the internet, i.e. via a digital web cast. The service is free to investors but there is a small charge to companies who take part.

The company was formed in 2018 by two founders, Marc Downes and Paul Brotherhood, who seem to have lengthy financial backgrounds and the web site looks professional. However, their contract terms are over complex and their privacy policy likewise so I am not rushing to sign up. They also invite you to provide details of companies you are interested in, which may be your holdings, which is not ideal. But if any readers have experience of this service, please let me know.

I mentioned Fevertree (FEVR) in my last blog post and Phil Oakley’s review of the business. Today the company issued a trading statement which was positive – it mentions “acceleration in key growth markets of the US and Europe in the second half”, but UK performance seems to be mixed. Growth in the USA is now expected to be c. 34% which is ahead of previous expectations. But the overall revenue forecast of £266 to £268 million is less than the previous consensus brokers’ forecast. The share price is up 7.8% today though. I may have to look at this business again because US growth is key to the share valuation.

The Financial Conduct Authority (FCA) have fined Janus Henderson £1.9 million for running two funds as “closet trackers”, i.e. actually closely tracking an index while charging high fees that are more normal for actively managed funds. This apparently was particularly obnoxious because they did not tell the investors in the funds that they were switched to a passive approach in 2011. The funds affected were Henderson Japan Enhanced Equity and Henderson North American Enhanced Equity. Investors have been paid compensation. Investors in funds need to be very wary that the fund managers of actively managed funds are actually putting in the effort and not sitting back and being a pseudo index tracker while charging high fees.

I watched some of the debate last night between Johnson and Corbyn but as it was so trivial in content I turned it off fairly quickly. I can imagine a lot of people did. The programme producer and compere can be mostly blamed for allowing such bland questions to which one could guess the responses and allowing evasions and irrelevant interruptions. The format of the US presidential debates is so much better.

Rather surprisingly I received a flyer in the post yesterday from an organisation called “Tactical Vote”. If I go to their web site it advises me that the best choice for me is to vote Labour in the Bromley and Chislehurst Constituency. The flyer makes it clear that their agenda is to keep the Conservatives out! But I suspect that they won’t get far in my constituency as Bob Neil had a 10,000 majority last time. If anyone was to switch it might be more likely be to the Brexit Party or the Liberal Democrats but there is not even a Brexit candidate standing so far as I can see. I am all in favour of “tactical voting” in some constituencies but we really need reform of the political system so that we have better representation. A transferable second vote system as we have for London Mayor is relatively simple. Tactical Vote seem to be pursuing a false agenda though; they should call themselves the “Labour Vote Promoters”.

One of the hot political issues, at least so far as the minority parties are concerned as the major parties are more focused on Brexit, the NHS and give-aways in the current General Election is the environment, i.e. how we become carbon neutral by 2050 or a date of your choice. Even the Conservatives wish us all to be driving electric cars, changing our home heating system and changing our way of life in other ways to avoid disastrous climate change. There was an interesting article in today’s Financial Times showing how this is quite pointless because China will soon be emitting more carbon from burning coal than the whole of the EU. They are expanding the number of coal power stations and the result will be to offset global progress in reducing emissions. In 2017 China produced 27% of world CO2 emissions, while the UK produced 1.2%. China’s emissions have been rising while the UK’s are falling so any extreme efforts by the UK are not likely to have much impact on the world scene.

However if you want to save the world and cut your heating bills (the latter is a more practical objective) I suggest looking at product called Radbot from Vestemi. The company was founded by a long-standing business contact of mine. It’s basically an intelligent radiator valve that monitors when a room is occupied and adapts to your usage.

Apart from that point, I consider there is so much misinformation being spread around about climate change and the impact of CO2 emissions that it is impossible to comment on the subject intelligently enough to refute much of the nonsense in a short blog article. But I do think it might be helpful to reduce the population of the UK which is just getting too damn crowded and leading to housing shortages, congestion on the roads and in public transport and other ills. That would be a better way of reducing emissions.

Part of the problem is that the NHS has become very good at keeping people alive despite what some politicians believe, while immigration has boosted numbers as well. You can see this in the latest forecasts for London’s population which is likely to grow by 18% to 10.4 million by 2041. See https://data.london.gov.uk/dataset/projections-documentation for more details.

Those are the issues politicians should be talking about.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson )

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RNS Announcement Emails, Mello Presentation and NHS Politics

Many private investors like me have been using a service from Investegate to deliver new RNS announcements via email. But recently, and not for the first time, delivery of such announcements has been delayed, or they have not been delivered at all. This can be positively dangerous – for example I only realised that I had missed seeing one after the share price of a company I held rose sharply. Missing bad news can be even more traumatic.

After complaining to Investegate and getting no response I decided to change to another service. The London Stock Exchange offer a similar free service (see https://www.londonstockexchange.com under Email Alerts). It appears to work reliably so I recommend it.

Many readers will be aware of the Mello events that attract many private investors to company presentations and for networking. Mello London is a 2-day event in Chiswick on the 12th and 13th of November (see: https://melloevents.com/event/ ). I will be giving a talk on Business Perspective Investing based on my recently published book on the Tuesday at 12.55pm. So please come along and learn more about why financial analysis is not the most important aspect of selecting companies in which to invest.

I note that the NHS is likely to be a political football in the coming General Election. As a heavy user of the NHS for the last 30 years during which it has kept me alive, I consider this is a grave mistake. The NHS is not a perfect service and could do with some more money as the UK spends relatively less on healthcare in comparison with other countries. But the service has improved enormously over the last 30 years regardless of the political party or parties that were in power. One of the most damaging aspects has been constant change and reorganisation driven by political dictates and concerns to improve efficiency. It’s also been slow to adopt new technology such as IT software because it is so monolithic and bureaucratic a body. When it did commit to a major IT project for patient records and associated systems it wasted £10 billion or more on an ultimately abandoned project. More diversity and local decision making are needed in the NHS. But I see no chance of it being threatened by any trade deal with the USA or by our exit from the EU.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson )

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