Spy seems to have spent his last week delayed by planes, caught on trains or sitting in taxis clogged by nose-to-tail traffic (without a calming beer in sight). Spy has been dreaming, longingly, of a future where autonomous vehicles, planes and transporters remove the burden of crowded travel with its careless drivers and pilots who cause numberless delays. Of course, it is easy to wish away a thousand jobs that don’t affect oneself directly… More about that below.
News has reached Spy that Xi Yi, who has been in charge of fund sales at BMO Global Asset Management, is on the move. She is leaving the Canadian firm for new pastures. There is no news yet on where she is going, but Spy understands she is staying within the industry. No news of her replacement yet, either. BMO has launched a series of ETFs in the last few years and acquired one of Britain’s oldest investment trust firms, Foreign & Colonial in 2014.
Spy understands that Pinebridge has recently made a hire to boost its institutional sales in Hong Kong. Benjamin Tsui, who was at Amundi, is joining the firm. Pinebridge has made some big strides in the institutional space over the last few years. Spy reported last year that it had a sizeable mandate in Taiwan.
Meanwhile, CIMB-Principal Singapore has lost chief executive Ken Goh, who is joining Fullerton, Temasek’s wholly-owned asset manager, as the new head of equities. He’ll be based in Singapore. Fullerton has been steadily gaining third-party assets in the last decade as it comes out from its parent company’s shadow. There is no news of Ken’s replacement.
It had nearly bypassed Spy that Neuberger Berman has added to its private bank sales team in Hong Kong during May. Allen Chiu has joined the firm from Old Mutual Global Investors. This follows the news in April that Chestnut Luk, who had been doing a similar role, has stepped down from NB.
Pity the poor portfolio managers who have not managed to find a way to justify putting tech stocks into their funds. The gargantuan success being experienced by the top seven (Amazon, Apple, Facebook, Google, Microsoft, Alibaba and Tencent) has meant that without them returns may look a little light. Fully 40% of the top twenty most valuable stocks are now tech companies, with tech comprising all the top five. Two asset managers that are unlikely to be unhappy with this state of affairs must be T Rowe Price and Janus Henderson. Henderson’s tech fund is up a healthy 25% year to date; T Rowe Price’s is up an even more impressive 30%. Both of these are smashing the benchmark which is “only” up 20% YTD.
Ah, bull markets, we all love them, says Spy. Thanks to StockTwits we have some data on the length of equity bull markets and it seems the current expansion does not match the longest bull. Not yet, anyway. You have to look at the mighty run from 1990 to 2000 for that 117-month screamer. Still, the bears must be wondering when our current run, the 2nd longest in history, will curl up and hand back a big portion of the gain. Never has John Maynard Keynes’s pithy comment, “Markets can stay irrational longer than you can stay solvent” seem more apt.
Spy was a tad surprised to learn, through a very thoughtful blog post by Joseph Amato, CIO of equities at Neuberger Berman, that driving a truck is the most common job in 29 of America’s 50 states.
When one understands that, one can understand the fears over autonomous driving and technology massively disrupting the entire vehicle and transport industry. However, Joseph correctly states, “For equity investors, it’s easy to get caught up in these developments but also important to distinguish between the `story’ of a given stock or industry and the potential reality. Solar energy was widely touted in the 1970s but has only become economically viable in recent years. Certain technologies never catch on, and often early entrants fade when they are unable to execute on even the best ideas.” Nailed it.
Do you remember the Brazilian supermodel Gisele Bündchen saying in 2007 she no longer wanted to be paid in US dollars? Only euros were good enough for the Brazilian beauty. This was because, at the time, the dollar had been trading steadily weaker against the euro touching about $1.45. As it turns out, this happened to be something of a nadir for the greenback and it has recovered well against the euro over the last decade, currently trading at $1.12. Why is this important, you ask? Well, yesterday the venerable Financial Times ran a story that European footballers kicking their balls in the UK, so to speak, are demanding to be paid in euros and not the beaten-up British pound. When footballers and supermodels are making calls on a currency, Spy is willing to bet that is almost certainly a contrary indicator. Just sayin’.
If you are struggling to buy a 500 square foot apartment in the New Territories in Hong Kong, perhaps look away now. A new trend is emerging in global real estate known as the Giga-Mansion. Yes, dear readers, for the global 1%, a Mega-Mansion is simply not enough, let alone the decidedly pedestrian ‘Mansion’. According to a report in Britain’s Daily Telegraph, some of these houses are more than 100,000 square feet, cost $500m and feature such unlikely facilities as ‘casinos’, nightclubs and walls made of jellyfish tanks. Still, you could whip out the mah-jong table, dust off your mirror ball and put up a picture of koi swimming around and have nearly the same experience at 1/500th of the price…
Spy’s quote of the week comes from American economist Paul Samuelson. He observed that “Investing should be more like watching grass grow… If you want excitement, take $800 and go to Vegas.” True.
Spy’s photographs have spotted the Investec Zebra around Hong Kong as the South African asset manager promotes its Global Franchise fund that promises to invest in “quality businesses with long histories that have stood firm over the economic cycle”:
Until next week….