Monthly Archives

August 2021

Employee Spotlight – Gemma McShane

Each fortnight we will be spotlighting a member of the team so that you can get to know the people behind the Pacem brand. This week we feature Operations Manger, Gemma McShane, who has been a core member of the team since 2015. Gemma joined the team as a placement student, before completing her degree in Finance & Investment Analysis achieving a First-Class Honours. Gemma completed her Level 4 Diploma in Financial Planning in 2018 and is now responsible for the smooth daily operations of Pacem.

Gemma tells us a bit more about herself below.

Your Name:
Gemma McShane

Your Role:
Operations Manager

How long have you been with Pacem?
6 Years in April past

What does your day-to-day role entail?
My role entails helping with the smooth daily operations of the business; preparing and presenting team meetings, supporting the team with any queries they may have on processes or procedures, attending interviews, helping with induction & training plans for new team members, preparing for management meetings and overseeing ongoing projects. Every day is different – which is why I enjoy my role so much.  

How would you describe yourself in three words?
Organised, diligent & a control-freak! (I sound delightful!)

Tell us something that might surprise us about you…
I’m due my first baby in October – counting down the weeks now!

What do you like most about your job?
The team and the culture within Pacem – every team member is very approachable, which makes working with them very easy!

If you won the lottery, what is the first thing you would do?
Give half of it to charity & split the rest between our immediate families… after we build our dream home of course!

What would you do (for a career) if you weren’t doing this?
I would love to be an Interior Designer – I would need to scrub up on my skills first!

Favourite food
Italian… pizza/pasta

What interests/hobbies do you have outside of work
Having overnight stays at the Galgorm (too often some might say) & attending weddings of family & friends. I also enjoy minding our two-year old nephew – he likes to keep us busy and helps us focus on the more important things in life.

Preferences and their tradeoffs

Investing is all about tradeoffs. Each choice made is paired with an implicit decision not to do some alternative; the ‘opportunity cost’. For example, by investing solely in a basket of UK companies one accepts the risk of losing out if the UK market struggles relative to the rest of the world, and vice-versa. An investment portfolio could be constructed to reflect other preferences, such as the appetite to have exposure to certain companies or industries, adopt a specific level of equity or fixed income risk, or attempt to adjust the average fee paid to managers, to name a few. Choices come with consequences.

Recently, insight provided by Hargreaves Lansdown – the UK’s largest fund platform managing around £120bn[1] – and Interactive Investor – the UK’s largest flat-fee platform[2] – shed some light on the preferences of younger investors coming to market[3].

“The younger generation want things they are passionate about, that they can engage with, that resonate with their particular desires and preferences, whatever those may be. They want things they can be passionate about.”

The data suggest that younger investors have tended to invest in companies they feel strongly about, a standout theme being the electric car industry at present through firms such as Tesla and NIO. Gavin Corr, head of manager selection and due diligence services at Morningstar, went on to say:

“The younger generation will not be happy in a multi-asset balanced 60/40 portfolio, sitting alongside another million other investors that are profiled exactly the same way. This democratisation or mass customisation is coming”
Gavin Corr, Morningstar[4]

The challenge is that preferences naturally come with their own tradeoffs. This is crucial to remember. To avoid a traditional balanced portfolio and instead own a portfolio of ‘clean energy’ firms, perhaps with electric cars, wind turbines and solar energy as themes, one must accept that they own a highly concentrated portfolio of stocks with low levels of diversification, large sector biases and likely with high management costs. This is likely to negatively impact returns in the medium to longer term.

The aim of this short note is not to suggest that these preferences are wrong, in fact investors may benefit from an ‘emotional dividend’ to compensate investors and make the tradeoffs worthwhile[5]. This emotional dividend, however, is rewarded at the cost of actual investment returns and investors may not realise the magnitude of this cost.

A key pillar of our investment philosophy is to accept that capital markets do a good job of pricing securities and therefore markets are difficult to beat. The table below demonstrates this belief by comparing a simple two-fund developed equity and bond portfolio[6] against the cohort of managers running ‘balanced’ portfolios Corr (2021) referred to. Each of the other managers in the figure will have had their own preferences, which evidently come with consequences.

Figure 1: Multi-asset peer group performance – 10 years to Jul-21

Morningstar Direct © All rights reserved. Morningstar category: EAA Fund GBP Moderate Allocation.

The tradeoffs are well demonstrated in the chart above. A traditional 60/40 portfolio holds up exceptionally well. Only 3 of the 116 funds in the sample provided a superior return to the 60/40 ‘balanced’ portfolio, that is without accounting for any funds that may have closed in the last 10-years! Investors who wish to express their preferences in portfolios should be aware they are at a high risk of market underperformance. Sticking to sound, well researched investment principles is key to a successful outcome.

[1] Money to the Masses (2021)…

[2] FT Adviser (2020)…

[3] Citywire (2021) Everything you need to know about young investors.…

[4] Citywire (2021) Morningstar: Impersonal 60/40 portfolio won’t impress young clients.…

[5] Rational Reminder Podcast (2021) Episode 156: Climate Change vs. The Stock Market.

[6] Portfolio: 60% Vanguard Global Stock Index, 40% Dimensional Global Short-dated Bond. Rebalanced annually.

Coronavirus Job Retention Scheme (CJRS) – update

The CJRS has been extended until 30 September 2021. From 1 July 2021, the government will pay 70% of wages up to a maximum cap of £2,187.50 for the hours the employee is on furlough.

Employers will top up employees’ wages to make sure they receive 80% of wages (up to £2,500) in total for the hours the employee is on furlough. The caps are proportional to the hours not worked.

From 1 August 2021, the government will pay 60% of wages for furlough employees up to £1,875. From 1 July 2021, employers will top up employees’ wages to make sure they receive 80% of wages (up to £2,500).

See: Check if you can claim for your employees’ wages through the Coronavirus Job Retention Scheme – GOV.UK (

 Self-Employment Income Support Scheme (SEISS)

HMRC have provided a new video about the SEISS fifth grant.

Work out your turnover so you can claim the fifth SEISS grant

The introduction to the guidance has been edited to explain that you would need to tell HMRC about your turnover if you traded in 2019 to 2020 as well as any of the other tax years listed. The section ‘How to work out your April 2020 to April 2021 turnover’ has been updated with examples of start dates you can use.

See: Work out your turnover so you can claim the fifth SEISS grant – GOV.UK (