When many popular retail stocks are down more than 50 per cent on last year’s highs, the goodies  that some companies continue to provide may bring some comfort to long suffering shareholders.
 
Some companies will require you to spend a certain amount of money before granting a perk, while others require you to hold a  minimum number of shares.
 
Most shareholder perks attach to stocks in the retail and travel sectors. For example, Dobbies Garden Centres offer 10 per cent off garden products, while for those with a sweet tooth, 200 Thorntons shares will generate £34 worth of vouchers to be spent at the chocolate retailer. Marks & Spencer hands out vouchers.
 
Investors in Aga Foodservice Group must spend £500 or more in Aga, Fired Earth or Divertimenti shops before they qualify for a 10 per cent discount.
 
British Airways knocks 10 per cent off when investors book flights online, while Holidaybreak gives 10 per cent discounts on its holiday accommodation. Eurotunnel shareholders can obtain 30 per cent 
 off return fares when taking their car to the continent.
 
Elsewhere, bibliophiles can obtain 35 per cent off all books published by Bloomsbury Publishing. The Restaurant Group takes 25 per cent off the cost of a meal at Frankie & Benny’s, Chiquito, Garfunkel’s, Blubeckers and Edwinns restaurants.
 
But the catch is that some companies don’t offer these perks to shareholders who hold their stock in brokers’ nominee accounts, which will also affect most people who hold shares directly within ISAs.
 
This unfairness has long been a bugbear for private investors. But as most investment advisers regard shareholder perks as an anacronism and not a reason to invest in a particular share, there has been little incentive for a trade association, such as APCIMS to lobby against it.
 
Certainly, most shareholder perks attach to retail stocks, many of which have been severely hit by the economic downturn, so such goodies should not encourage you to invest, although they might tip the balance in favour of holding onto existing shares.
 
For more on shareholder perks, visit Hargreaves Lansdown’s guide to perks at: 
 
http://www.h-l.co.uk/shares_and_stock_markets/shareholder_perks/action/list.hl

It has been an extremely challenging year for fund managers to achieve positive returns,  with banking, real estate, builders and some retail stocks, having taken a hammering.  Many are down more than 50 per cent from their pre-credit crunch prices.

Even some ‘absolute return’ funds have had a torrid time. The concept of absolute return funds was launched with great fanfare in 2005 as the panacea to volatile investment markets, in that they aim to produce positive returns irrespective of market conditions.
 
Instead of comparing their returns to those of a relevant stockmarket index, absolute return funds  seek positive performance, period. 

Absolute return fund managers aim to do this by shorting stocks and using other derivative-based investment techniques which retail fund managers have been allowed to use since 2003.
 
The top three performing funds in the absolute return fund sector, for the year to 1 August 2008, were Blackrock UK Absolute Alpha (+11.8%),Threadneedle Absolute Return Bond (+7.9%) and JB BF Absolute Return PI fund (+5.2%).
 
The manager of the Blackrock fund, Mark Lyttleton, attributes his impressive performance to shorting  shares which he expected to plummet in price and an overweighting in mining stocks.
 
However, the results of the absolute return sector as a whole have been mixed. While the top performers mentioned above have cut the mustard, the sector’s average investment return was -1.4 per cent, albeit skewed by a disastrous performance by the UBS Absolute Return Bond fund which managed to fall a staggering -24.9 per cent.
 
Scottish Widows’ SWIP Absolute Return UK Equity fund fared a little better, but still produced a negative return of -7.2 per cent.
 
Elsewhere, of the top 10 retail investment funds across all sectors over the year to 1 August 2008, it is interesting to note that five are overseas bond funds (three from M&G, all producing in excess of +12.9%, Threadneedle European Bond (+12.7%) and Investec Emerging Market Debt (+16.9%).
 
Clearly, there are bargains to be had by savvy fund managers who are picking up high yielding corporate bonds which have been over-downgraded due to the credit crunch.
 
Other top 10 performing funds across all sectors over the last year include, unsurprisingly, those investing in commodities  (Marlborough ETF Commodity + 42.5%), First State Global Resources (+ 15.6%), Investec GB Energy (+ 13.8 per cent), and agriculture (Eclectica Agriculture +14.8%).
 
While investment in agriculture looks set to continue to be a winner given current global food shortages, gold and oil prices have been falling in recent weeks and equity markets remain extremely volatile.
 
With both the UK and US economies heading into recession and the global economy in hideous shape, it looks set to be another challenging year for fund managers seeking positive returns.
 
To view the top 10 unit trust tables for the major sectors visit:
http://www.defaqto.com/consumer/investments/unit-trust-sectors.aspx

Selftrade is the latest online broker to offer trailing stops - a share trading tool that offers a way to lock in profits in volatile markets.

Whereas with a traditional stop-loss, shares are sold if they fall to a fixed level, with a trailing stop, this trigger price ratchets up if a share rises.

The share is then automatically sold if the price falls back from its high by the specified margin - say, 5 per cent.

So if a share spikes up, but then reverses, you can get out with much of your initial profit still  intact. If, however, the price keeps rising, you stay invested.

As with its fixed stop-loss and similar limit orders, Selftrade is offering trailing stops to its clients at no extra cost to its normal, flat rate, dealing charge of £12.50.  The mechanism can be set up at current market prices or activated only if a share rises to a certain level of by a certain amount.

Stop-loss and limit orders are useful for locking into prices without having to continually monitor markets. Such orders can allow you to take advantage of short-term volatility - to pick up shares at a lower price or to sell at a higher price

But at times of high volatility, as now, a fixed stop-loss can quickly lose touch with market prices and therefore offers less protection.

A trailing stop, by contrast, makes it easier for you to capture upward momentum and protect profits. For instance, you could lock in short-term price rises in certain shares on the back of bid rumours.

Selftrade head of research, Stephen Barber, says: “Clearly, stop-losses, whether fixed or trailing, are particilarly useful for sophisticated investors in volatile markets but investors need to consider the likely behaviour of a share before setting a stop loss.”

Although many online brokers offer fixed stop-losses and limit orders, trailing stops are less common.  Others offering the facility include Barclays Stockbrokers.

For more visit the Defaqto Sharedealing centre:
http://www.defaqto.com/consumer/investments/share-dealing.aspx
http://www.selftrade.co.uk/services/personal-dealing/dealing-account.php
http://www.stockbrokers.barclays.co.uk/?

category=whatweoffer&usecase=landing125&WT.mc_id=953754600110185-2512495

Performance-related fees fail to deliver out performance and simply impose extra costs on investors, according to a recent report by Grant Thornton.

The accountancy firm found that more than 45 per cent of mainstream investment trusts - companies which invest in the shares of other companies -  now charge performance-related fees, whereby the investment manager is rewarded for beating a certain benchmark or increasing a trust’s net asset value.

This is an increase from 2000 when only one in three investment trusts levied performance charges.

Although fixed annual fees tend to be reduced when incentive fees are introduced, Grant Thornton found that on the whole, performance fees had led to higher fees overall.

In addition,  the report found that investors received nothing in return for paying higher investment fees, indicating investment managers fail to generate higher returns just because they are incentivised.

Pascal Dowling, publisher of Trustnet (www.trustnet.com) says: “Obviously these vehicles have a reputation for being cheaper overall than unit trusts, so it is a shame if they spoil the goodwill they’ve got by upping their fees without producing the returns that justify those fees. But the same applies to any investment vehicle.”

A representative sample of trusts analysed by Grant Thornton between 2003 and 2007 found that, on average, trusts without performance related fees had produced slightly higher returns than those that did have them.

 Grant Thornton concludes that “the principal effect of performance fees has been to increase financial returns to the management  companies.”

In addition, two thirds of performance fee structures did not involve a so-called ‘high water mark ‘ minimum level of attainment,  meaning that the manager could be paid extra simply for returning a trust to its high point prior to a slide in its net asset value.

The only benefit of performance related fees for investors which Grant Thornton could identify was that they tended to help with the retention of certain fund managers. But otherwise, the report makes disappointing reading and Grant Thornton urged investment trust boards to ask themselves why they maintained performance fees  when they were failing in their original aim.

For more on investment trusts’ performance figures visit:
http://www.find.co.uk/my_find/pic/tn_investment_trusts

Read our guide:
http://www.find.co.uk/investments/funds&trusts/investment_trusts_guide