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Smart Beta: Charles Stanley's top passive trades
by Emma Dunkley on Nov 28, 2012 at 00:01
John Fletcher, senior ETP (exchange traded products) analyst at Charles Stanley, reveals his top ETP trades and how he uses options to enhance income
What have been your best exchange-traded product (ETP) trades and investments?
I had a good iShares index-linked gilt product, which I had some time ago. It springs to mind, because it was when I was worried about inflation being a genie that could get out of the bottle.
The market thought the same and at the time, it was about right. I made 35% after a couple of years of holding it.
I had PHAU – ETFS Physical Gold. I never go for futures-based ETFs because of the issues of contango and backwardation.
It’s still being held, and it’s going well for lots of clients at Charles Stanley. I’m backing it for a lot of reasons: gold will likely go up and it’s never out of the press, for example.
There are analysts saying its target price is $2,600 an ounce, and there’s still some distance to go to hit this. I also got the timing almost exactly right in terms of getting in and out. From a tactical perspective, that has been interesting.
How do you go about selecting which ETPs to use?
At Charles Stanley we have changed internal protocols with regards to ETFs, so clients and brokers can now only buy off a preferred list and these are only London Stock Exchange-listed products.
SPDR is a relative newcomer to the LSE, but it is on the preferred list.