magazine archive

magazine archive

Your Questions Answered

What can you learn from the correlation matrix in a portfolio X-ray report?

Thursday 16 Jul 2020

Could you explain the correlation matrix on a portfolio X-ray analysis tool? It has no meaning for me, so I am unaware if it provides any useful information. Charles Gibbs Senior reporter , Martin Gamble replies Imagine the shares and funds in your portfolio as magnets, attracting and repelling...

Why are AIM stocks so volatile and what role do market makers play?

Thursday 16 Jul 2020

The fluctuation in share prices for AIM stocks can be extreme; can you explain how the market works and the role of the market makers in setting prices? David Deputy Editor, Tom Sieber replies Investors in smaller companies are often frustrated about their inability to buy and sell as many shares...

What happens to shares in a company which enters administration?

Thursday 09 Jul 2020

If a company goes into administration, have shareholders lost everything? How long on average does it take to find out, what market if any exists if the listing is suspended and can retail investors access such a market? Finally, what are the implications with HMRC? Robert Deputy Editor, Tom Sieber...

Is there an equally-weighted market index?

Thursday 09 Jul 2020

Most if not all indices used to track market performance seem to be capital weighted, i.e. shares with the largest capitalisation have a greater effect on performance than the shares in the index with smaller capital value. Given that most private investors will tend to spread investments roughly...

How to tell if your ETF is physical or synthetic

Thursday 02 Jul 2020

Some ETFs have physical underlying holdings, which is safer for the investor, whereas some are derivative instruments where you take the credit risk of the underlying issuer (eg UBS, Citibank). Is there an easy way to differentiate between the two types; for instance, is it clearly stated on their...

What are the tax implications for ETFs compared to mutual funds?

Thursday 25 Jun 2020

I am considering an ETF to track the US market and intend to hold it outside an ISA. I am a basic rate taxpayer and UK resident. Also, I have been looking at passive vehicles to track index linked bonds. Are there tax implications that would lead me to me favour simple UK-based open-ended funds in...

Why is it still hard to take part in placings despite more retail investor offers?

Thursday 18 Jun 2020

I’ve seen several companies let retail investors take part in their fundraising but all the new shares are gone by the time I found out. Shouldn’t my ISA provider give me plenty of notice about these opportunities? Malcolm, Kent Senior reporter Ian Conway replies: Shares has received numerous...

Which should I choose, tracker funds or ETFs?

Thursday 11 Jun 2020

I’m fairly new to investing and have been looking to gain low-cost exposure to stocks. With this in mind could you explain which are the better option, ETFs or tracker funds? Michael Reporter Yoosof Farah replies: On the surface they may seem like the same thing, but index tracker funds and...

What can I learn from the X-ray return analysis chart?

Thursday 04 Jun 2020

I have a SIPP with AJ Bell. When I run an X-ray of my portfolio I have a return analysis chart that appears. The only thing I know about it is that ideally the numbered circles should be to the right of the vertical line and above the horizontal line. Apart from that I don’t know much else. Would...

I need help understanding share price movements on ex-dividend day

Thursday 28 May 2020

I’m puzzled by the reaction to a share price when it goes ex-dividend. By paying a dividend, cash of a certain amount per share is paid out by the company and leaves the balance sheet. This should mean the company’s share price, and its market value, reduce by an equivalent amount, but that does...