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National Heroes Day Banking Hours

Butterfield will be closed on Monday, 20 June, 2022 for National Heroes Day. To access your accounts, please use our Butterfield Online, ATM and mobile banking services.



Our Banking Centres will re-open on Tuesday, 21 June, 2022 from 9:00 a.m. – 4:00 p.m.

We have moved! Our new address is: PO Box 250, IFC6, IFC Jersey, St Helier, Jersey, JE4 5PU.

 

Please be advised our EUR & USD Notice account rates have been updated. To view our rates please click here.

Butterfield will be closed on Monday, 13 November, for the Remembrance Day public holiday. Our Banking Centres will reopen on Tuesday, 14 November, at 9 a.m. To access your accounts, please use Butterfield Online and our ATM network.

Old Sterling Banknotes – removed from circulation on 1 October 2022.

Please be advised that as of Saturday, 1 October 2022, Butterfield will not accept old paper sterling notes for banking deposits or transactions as they will no longer be legal tender. The official last day of use is Friday, 30 September 2022.

Butterfield clients are encouraged to deposit old notes or swap them out for the new polymer ones at any Butterfield Banking Centre before Saturday, 1 October 2022. From this date, only polymer sterling banknotes will be accepted.

We will be closed on Monday, 23 January 2023 for National Heroes Day. Our Midtown Plaza Banking Centre will be this Saturday from 9:00 a.m. until 12:00 p.m. and otherwise all Banking Centres will reopen on Tuesday, 24 January 2023, with normal operating hours of 9:00 a.m. - 4:00 p.m. You can continue to access your accounts during the public holiday by using our Butterfield Online, ATM and mobile banking devices.

Please be advised our General Terms and Conditions have been updated in reference to a new clause 11.3.  Please click here to view the full document.

Holiday Banking Hours:

Butterfield will be closed from 2 p.m. on Friday 23 December and will reopen 9 a.m. Wednesday 28 December, 2022.

We will close again from 4 p.m. on Friday 30 December, 2022 and will reopen 9 a.m. Tuesday 3 January, 2023.

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Update on Saturday Banking: Saturday Banking will be temporarily suspended as we allow time for annual training and infrastructure investment initiatives. To access your accounts, please use our Butterfield Online, ATM and mobile banking services. Saturday Banking hours will resume as normal on March 4th.

Please be aware that we will be carrying out work on our technology systems from 6 pm on Friday, 6 October. Butterfield Online and Saturday Banking will be unavailable this weekend. All services are expected to resume as normal on Monday, 9 October. 

Butterfield will be closed on Monday, 2 September 2024, for the Labour Day public holiday. To access your accounts, please use Butterfield Online and our ATM network.

Our Banking Centres will re-open on Tuesday, 3 September 2024, from 9:00 a.m. - 4:00 p.m.

Butterfield will be closed on Monday, 17 June 2024 for the King’s Birthday public holiday. To access your accounts, please use Butterfield Online and our ATM network.

Our Banking Centres will re-open on Tuesday, 18 May 2024 from 9:00 a.m. - 4:00 p.m.

Update on Saturday Banking: We are pleased to announce the return of Saturday Banking. Our Front Street Banking Centre will be open from 10:00 a.m. to 3:00 p.m. every Saturday for you to take care of your personal banking needs.

Update on Saturday Banking: Saturday Banking will be temporarily suspended effective 15 July 2023, as we allow time for annual training and infrastructure investment initiatives. We will advise when Saturday Banking services have resumed. To access your accounts, please use Butterfield Online and our ATM network. We apologise for any inconvenience caused.

Hurricane Lee Advisory: Please be advised that our offices and Banking Centres in Bermuda will be open for business from 12:00 p.m. to 4:00 p.m. today.

The ATMs at Collector’s Hill, Modern Mart, Somerset MarketPlace and Somerset Banking Centre are back in service and Saturday banking will be available tomorrow at Front Street from 10:00 a.m. to 3 p.m. 

We are pleased to report the issue with debit card settlements has been fixed for the vast majority of accounts impacted, and we are working to correct the few outstanding. If you still see an issue with your account and you require access to blocked funds immediately, please contact the call centre.

Please be advised that our Banking Centres will be closing at 2:00 p.m. on Friday, 6 October. Butterfield Online will also be unavailable this weekend from 4:00 p.m. on Friday, 6 October until Monday, 9 October at 9:00 a.m. as part of a scheduled systems update.

Our Island Saver Instant Access account now has a reduced minimum of £10,000. Click here for more details

Our Fee Schedule has been updated, effective Friday, 1 March 2024. For full details, please review the Fee Schedule here

 

Butterfield will be closed on Monday, 17 June 2024 for the National Heroes Day public holiday. To access your accounts, please use Butterfield Online and our ATM network.
All Banking Centres will reopen on Tuesday, 18 June 2024, with our normal operating hours of 9:00 a.m. - 4:00 p.m.

Our Schedule of Charges for Personal and Corporate Banking services have been updated, effective Tuesday, 2 January 2024. For full details, please review the Schedule of Charges documents in our website footer below. 

Our Schedule of Charges for Personal and Corporate Banking services have been updated, effective Tuesday, 2 January 2024. For full details, please review the Schedule of Charges documents in our website footer below. 

Please be advised our EUR & USD Notice account rates have been updated. To view our rates please click here.

Investment Views

June 2024
Strategy

Concentration Conundrum

  • US equity markets have become very concentrated
  • Artificial Intelligence (AI) has been a strong driver
  • Concentration is a reflection of success but comes with risks

          

Over the past year, the concentration of the US equity market is a theme that has dominated investor conversations. The weighting of the top 10 stocks in the S&P 500 has reached 35%, which is a multi-decade high and has eclipsed the 27% reached in 2000. We have written extensively about the seven stocks dubbed the “Magnificent 7”. They are not all in the official Technology sector, but technology is a strong theme across the group. The seven stocks are Alphabet (Google), Amazon, Apple, Microsoft, Meta (Facebook), Nvidia and Tesla. The group had a difficult 2022 as many were beneficiaries of the pandemic (for example work from home and e-commerce) and the cycle turned in favour of value stocks as interest rates went up.

The group then bounced back with a vengeance and outperformed significantly in 2023. This was helped in large part by AI, which has been a theme of all seven companies to varying degrees. Nvidia has been the most direct beneficiary from selling the semiconductors enabling AI tasks. Microsoft has also been a direct beneficiary through ownership of OpenAI. Microsoft, Amazon and Google have also benefitted though their public cloud operations.

There is a great deal of excitement in the economic and investment industry around the potential of AI. Companies are also discussing AI on their earnings calls and the potential ways in which it can help drive efficiencies. The opportunities are clear and span a wide range of industries. However, financial markets have a tendency to extrapolate themes too optimistically and hype takes over, which can drive valuations to unrealistic levels. This creates a conundrum for investors. The concentrated nature of the equity market makes it very difficult to outperform without owning these stocks at least close to benchmark weight. Furthermore, with such elevated concentration, some mandates may not even be able to “overweight” these stocks due to risk management around sizing positions in portfolios.

While the concentration of the market intuitively means increased risk, there are mitigating factors. On the one hand, concentration means more exposure to company specific risk. With Microsoft, Apple and Nvidia accounting for 20.8% of the S&P 500, passive investors by definition have meaningful exposure to the corporate governance of these three companies. Fortunately, these three companies have some of the world’s most impressive management teams. Corporate governance at other large cap names, such as Meta (lack of shareholder voting power) and Tesla (questions around board oversight) have been problematic, but these are smaller weights in the index. Meta has managed to navigate a changing environment well, for example pivoting focus from Metaverse to AI.

On the other hand, the concentration is arguably beneficial from a shareholder perspective. These large cap companies have significant economies of scale and almost quasi-monopoly or duopoly status in some cases. These companies are also highly profitable and can borrow at cheaper rates than small businesses, allowing them to acquire smaller competitors. This has helped to limit competition, which in turn has drawn greater regulatory scrutiny.

The market concentration is somewhat concerning from a top-down perspective. Valuations have climbed and themes tend to be cyclical, which suggests that caution is warranted. From a bottom-up perspective, these are great companies and investors need to own them. While the top 10 stocks accounts for 35% of the S&P, they also account for a significant 27% of earnings. Our exposure varies based on the mandate, but overall, these stocks are well represented in portfolios which has been a driver of performance.

Fixed Income

Resilient Markets Amidst Diverging Economic Data

  • Credit spreads rise suggesting caution
  • Mixed macro data: US weak, Europe and UK stronger
  • Bond yields diverged; cautious on US rates, favourable for the Euro

          

The month of May proved to be rewarding for risk assets as equities rallied. However, this did not translate into broad gains in credit spreads, with US high yield spreads rising 8 basis points (bps) on average. This is a potential cause for concern in terms of the sustainability of further outsized moves. Global macroeconomic data continued to prove resilient, although, weakness is visible in most regions apart from Europe and the UK, with data especially in the UK positively surprising expectations.

Canadian and US government bond yields fell, with US five-year Treasuries declining 21bps to 4.51%. The Bank of Canada is expected to lower base rates in June and US economic data showed signs of weakness. Weak non-farm payroll, unemployment claims, ISM manufacturing and sentiment data add to growing evidence that the US employment market may have reached a turning point. However, sticky inflation and still buoyant services spending are injecting a large amount of uncertainty into the base rate outlook over the next 12 months. The market is currently priced for 46bps of US base rate cuts. Although the Bank of Canada is expected to be dovish, the stronger than expected unemployment rate adds a degree of caution which for now is offset by weaker than expected Q1 GDP and retail sales data.

Outside of North America, with economic data improving and progress on inflation slowing, European and UK government bond yields diverged and underperformed their US counterparts. This helped to strengthen the euro and sterling, mitigating some of the impact from a total return perspective. Election risks remain a factor to consider with a UK general election on 4 July and European elections also taking place. That said, the positive re-rating of the economic outlook has been the dominant factor for bond and currency investors, especially relative to the US and the expectation that the ECB will lower base rates next month, has not dampened demand for exposure to the euro – rate cuts are deemed supportive for growth with inflation much more contained than in the US.

Although broad commodity markets edged upwards, there has been significant divergence with lumber and oil falling, large rises in US natural gas prices, and copper and gold prices have been flat. As a result, few clues can be gained this month from commodities as to the path of global growth. The good news is that with the imminent start of base rate cutting cycles across the major economic regions, the global outlook is likely to improve and is favourable to further gains in risk assets. Unfortunately, the Federal Reserve is likely to be late to the party and refrain from lowering base rates until September at the earliest. With US employment data at a crucial juncture and inflation still sticky, the dual mandate will be thoroughly tested over the coming months.

Portfolio positioning continues to remain neutral short dated US duration as we await evidence that the US economy has peaked. This continues to be elusive despite spiking consumer delinquency rates across almost all types of borrowing. Longer-term bond exposure is vulnerable to rising term premiums, although lower fixed income volatility has helped to supress this recently. Weaker US bond auctions as well as rising European and Japanese bond yields add another layer of risk and place a floor below yields for now. Within multi-currency mandates, exposure to the euro, sterling and Swiss franc has been increased at the expense of the US dollar. We also remain underweight the Japanese yen despite action from the Bank of Japan given disappointing macro data. Corporate credit spreads look set to remain tight for some time as global growth remains stable, but there will likely be better opportunities to add exposure here in the future so we continue to avoid risk with sectors and companies that are susceptible to a US recession.

Equities

Nvidia, Utilities, and the Broadening AI Trade

  • Markets recover from April weakness
  • Utilities benefit from AI enthusiasm
  • Nvidia well ahead in winner-takes-all market

          

The MSCI World delivered the best monthly performance since December last year, returning 4.5% in May. However, this was on the heels of a 3.7% sell off in April, leaving us relatively unchanged for the second quarter.

Most sectors performed as you would expect in a “risk on” environment, except for the Utilities sector which was one of the best performing sectors in the month. Looking at quarter-to-date returns gives us a clearer picture of recent trends. The best performing sector over the last two months has been the Utilities sector which returned 8.7% and outperformed the MSCI World Index by 8.1%. Utilities have outperformed lately as the “generative AI is energy intensive” narrative gained traction. A large amount of power is required to run and train AI models with both mutual funds and hedge funds buying into this narrative and increasing exposure to the sector. The Real Estate sector, which is normally fairly correlated with Utilities due to its sensitivity to interest rates, was one of the worse performing sectors over this period, indicating that the Utilities sector is currently being driven by the broadening AI trade rather than the change in yields.

The worst performing sector this quarter was the Consumer Discretionary sector as cracks continue to appear in consumer spending. Consumption patterns vary depending on income levels. Low to middle income consumers are being squeezed by inflation, whereas middle to high income consumers continue to spend. That said, consumers are increasingly making value-driven decisions and choosing to trade down to price-competitive retailers. As a result, discount and off-price retailers have seen an increase in traffic and are better positioned in this economic environment.

The equal weight S&P 500 lagged the S&P 500 quarter to date as some of the largest S&P 500 stocks, notably Apple and Nvidia, performed strongly. Apple announced better than feared Greater China revenue on the back of iPhone growth and boosted its dividends and share buybacks program. Investors are getting excited about the company’s next iPhone cycle as Apple prepares to release an iPhone with AI functionality.

Nvidia powered through $1,000 after releasing another set of strong numbers which were better than expected. The share price closed up 9% on the day returning 27% in May. Nvidia’s continued success suggests that semiconductors are a winner-takes-all market. AMD, which is the runner up, has had little impact on the former’s success. In 2023 Nvidia returned 239% while AMD returned 128%. Year to date Nvidia is up 160% while AMD is up only 9%. Despite these moves, Nvidia and AMD trade on relatively similar Price to Earnings multiples and Nvidia is rolling out new chips at a blistering pace, protecting their first to market moat.

Nvidia’s meteoric rise is incredible. A few years ago, it was a mid-sized company designing graphics cards, whereas today the market capitalisation of Nvidia is among the top three largest companies in the world. Nvidia recently announced a 10-for-1 stock split to increase liquidity for retail investors and its employees. Historical data suggests that the share price of companies that announce stock splits outperform in the week of the announcement but show no real pattern on the date of the stock split and subsequent weeks. In terms of liquidity, in most cases, apart from the increase in trading volumes around the announcement date, the long-term liquidity benefits are questionable.