Citywire printed articles sponsored by:
View the article online at http://citywire.co.uk/wealth-manager/article/a653542
Scottish Oriental's Rippingall keeps watchful eye on inflation
by Sarah Miloudi on Jan 29, 2013 at 09:39
Scottish Oriental manager Susie Rippingall is keeping a close eye on the risk of inflation.
After a dramatic rise in the minimum wage, Rippingall fears 'short term disruptions' could get in the way of increasing consumer demand, triggering a spike in the cost of goods and services.
Most at risk is South East Asia, while the likes of Taiwan and Korea may be more protected, while China sits 'half way in between', the respected Asia manager said.
'Where I see the risks [are] wage inflation, there's been quite dramatic increases in minimum wage,' Rippingall said.
As workers earn more, the Rippingall said higher wages have the obvious impact on consumption habits, pushing up demand for staples like noodles as well as luxury big ticket buys like cars and motorbikes.
But while this trend is positive and will help keep demand buoyant, meeting Asia's increased appetite could prove problematic.
'If the world can gradually increase its production of grain, sugar, soy and rice that is fine, but if short-term disruptions come through - weather related or anything else - inflation kicks off quite quickly,' Rippingall argued.
She added: 'If inflation builds up, central banks will be looking to move to raise interest rates, but they would much rather, as they have done in the past, follow the US.'
From April, Rippingall (pictured) will retire as manager of the £243 million investment trust, a move which will see Angus Tulloch return to the vehicle, with Wee-Li Hee and Scot McNab serving as co-managers.
Rippingall said that part of the transition process will see Scottish Oriental brought more into the 'First State fold' and for the first time it will be included in the investment house's asset allocation meetings.
Throughout her tenure, Rippingall has generated strong long term risk-adjusted returns and grown her portfolio's net asset value (NAV) by 104.2% over the five years ended in December. Over the same stretch, the MSCI Asia ex Japan Index rose 23.2% and its smaller companies index by 19.5%.
News sponsored by:
The Citywire guide to investment trusts
Investment trusts have proved to be a highly effective way to invest in the market. Citywire has interviewed the experts to find out more.
Today's top headlines
More about this:
Look up the shares
Look up the fund managers
On the road
J.P. Morgan Elect on investment growth, income and cash. More information on J.P. Morgan investment trusts.
on Dec 06, 2013 at 11:00