This week Spy, over several glasses of Hibiki Harmony, was chatting to a professor at a leading business school who is conducting the most fascinating large scale research (not quite complete or published yet) into financial deal-making. It turns out that if one is doing a deal with somebody from their own cultural and economic background the buyer will, on average, pay a higher premium for the transaction. However, they will, in turn, be less tolerant if the deal sours and make the seller pay much stiffer penalties. In contrast, if someone is from a different economic and cultural background, one pay will less of a premium for a deal but also be less stringent on the terms and penalties. This research, once peer-reviewed will surely intrigue asset manager HR departments who contemplate in agonising detail the nationality of their multinational sales teams, thinks Spy.
Spy had confirmation this week that Patrick Corfe, former marketing director in Asia-Pacific at Aberdeen Standard, has stepped down from the company after many years. Spy is unsure whether Patrick is intending to stay in the industry. Aberdeen Standard is still in the process of merging its two businesses together. The Aberdeen Global Brazil Equity Fund has been a star performer for the Scottish firm, delivering nearly 40% over the last year.
Spy notes that Citi Private Bank has made a change to its head of fund selection role. Adam Proctor, who took over the role from Roger Bacon in Hong Kong last year, is taking on a new global market role for Singapore, New Zealand and Australia but based in Singapore. Spy understands his fund and product selection role is currently vacant. As the PB has usually relied on Paul Hodes’s consumer bank teams in the past for research support, Spy would imagine there is no real hurry to fill the role. There is a more detailed story on Adam’s new position, here.
Spy solved a minor mystery in asset management marketing this week. Tze Hui Cheam, who had been marketing manager for JP Morgan Asset Management in Southeast Asia until late 2017, has reappeared. Tze Hui has moved to ING Wholesale Banking in Singapore in a marketing role. Not that you would be able to tell that from her Linkedin profile – which, as of this morning, still states JP Morgan AM as her employer. The tyranny of the public profile. Modern curses, etc!
Spy keeps tabs on the public list of fund suppliers to various distributors, if it’s available. UOB, is one such bank that provides a list for its personal customers. You can see it here. The funny thing is, in the last few years that list has not changed one bit. The 20 asset managers listed have remained identical, despite the fact that new entrants have become fully authorised in the market. Does this mean UOB has taken on zero new providers or their IT team did not get the memo? Answers on a postcard, please.
You will probably have to be deaf, dumb, blind and living in a bunker to have not heard about Amazon’s stellar performance of late, making Jeff Bezos the world’s richest man. What seldom makes the headlines is which other investors are also enjoying the ride. Spy dug into Amazon’s shareholding list and found a few familiar names. Unsurprisingly, ETF giant, Vanguard is listed as the largest institutional investor by Morningstar. Number two and three spots are held by the far more actively-minded asset managers, Fidelity and T Rowe Price – holding more than 7% of the stock between them. So, when you see another blow-out headline on Amazon’s roaring sales and profits, take a peek at your Fidelity and T Rowe funds too; they may just give you a reason to smile.
This past week a 10-year treasury yield spike caused some minor volatility in equity markets. The Dow Jones managed to move a few hundred points in either direction – apparently the “biggest move since mid 2016”. If you had the misfortune to be tuned into Bloomberg TV or CNBC, breathless, highly manicured, coiffured and sartorially-elegant commentators were doing their best to claim some excitement had finally appeared on the trading floor. The truth is more prosaic: steadily rising markets with miniscule volatility has been profitable but dull as dishwater for traders. A 300 point move in the Dow when it was at 7,000 meant something, at 26,000, not so much. Still, be careful for what you wish for, thinks Spy.
Spy spotted a new video from Citibank this week with Paul Hodes chatting to Patti Williams, an associate professor at Wharton School of Business. She was looking at investor psychology and makes the following point: “In the short term, people regret the things they have done, but in the longer term they regret the things they have not done.” Never a truer word spoken about investing or life in general, reckons Spy.
The SFC in the US has been very reluctant to authorise an ETF that invests in cryptocurrencies despite other world regulators giving the go-ahead. Instead, ETFs have been popping up that claim to invest in blockchain companies and its technologies. For example, Innovation Shares’ NextGen Protocol ETF launched two days ago. Spy strongly suspects that Innovation’s marketing team are hoping that regular investors have not worked out that blockchain does not equal Bitcoin. Why is that you ask? The symbol they chose for their NASDAQ listing, that’s why. Yup, that would be KOIN. Just sayin’.
Talking of cryptocurrencies, they don’t seem to have had much love of late. Bitcoin itself is down a whopping 55% over the last month. Spy could have told you that peak crypto mania has hit, though. It was this picture that that rather sealed it for Spy. Eh, pay bananas, get monkeys?
The asset management industry is filled with very smart people who are told all the time they are very smart people and that often leads to a reluctance to talk about failures. For Spy’s money, though, he loves a portfolio manager who talks frankly about the things they got wrong, as well their successes. In this, Spy is filled with admiration for Jack Ma, who is on record as saying, “Today, people write about the successful stories of Alibaba. And I really don’t think we were so smart, we made so many mistakes and we were so stupid at times. So, someday, the book I personally really will want to write about is Alibaba’s 1001 mistakes. These are the things people should remember and people should learn.” Wise words indeed.
Bank of China asset management has a new advert out in Hong Kong. Despite looking like a promo for a big fruit salad, the company is really promoting its “all weather” funds:
Until next week…
