Looking through the pouring rain in Hong Kong this week, Spy sipped a martini as dirty as the Fragrant Harbour and contemplated the silliness of the markets. By the end of the third quarter, the best performing asset class globally was US Dollars sitting in dull bank accounts. The perennial gloom and jitters had taken over and some “experts” were calling for a new bear market collapse. On 30 September, the FTSE 100 hit an intra-day low of 5,909 but by 7 October had rallied to an intra day high of 6,396; an 8.2% rally in just five trading days! Experts eh, who can trust them?
Spy notes that large Canadian asset manager, RBC Investment Management has hired Ken Tam as MD and head of Asia from Deutsche Asset & Wealth Management as it beefs up its Asian business. Ken will be based in RBC’s HK office helping to market their Luxembourg range of SICAVs. The industry veteran is joining at a time of intense competition in Hong Kong retail asset management, but with RBC GAM’s C$380bn of assets, he will no doubt have support from head office in the fight ahead.
Spy has noted for a while that Thailand is the hottest cross-border market for funds in south-east Asia. Proof emerged this week, when Spy heard that State Street Global Advisors has joined the $1 billon dollar club in the Land of Smiles. Cerulli reports that SSGA has amassed more than one yard in Thailand AUM, joining Blackrock and a few others in a an elite club of managers doing well there.
Spy loves a good boxing match as much as anyone else, so he is delighted to see two Swiss heavyweights on opposite sides of the ring. In the red corner, UBS has made a call to buy Japanese equities, while in the blue corner Julius Baer has made a sell call. Julius Baer has been joined in its bearish tone by StanChart who are also underweight Japan equity in their current asset allocation. Spy marks the Nikkei at 17,388 at the end of September and will report back in January with popcorn in hand.
Just as Goldman Sachs, HSBC GAM and others are putting more emphasis into their smart beta range of ETFs, Spy notes that Swiss manager GAM is pulling the plug on their actively managed exchange traded funds. Citing limited scale and poor education of distributors, Swiss & Global, GAM’s subsidiary, is returning to traditional methods of fund distribution. That echoes with what Spy has heard: ETFs of all flavours have really struggled to gain traction in Asia as distributors prefer the juicier fees on traditional funds.
Spy feels just a hint of pain for Pimco. It does not matter how much they seem to tell the market that performance is getting better, the Total Return Bond Fund keeps bleeding. Another $2.3bn in assets walked out the door in September, following a $1.8bn in August. That makes it 29 months in a row of redemptions. And now news has broken that Bill Gross is suing his old firm for $200m with squalid claims he was barred from the firm’s offices and an unpaid $80m quarterly bonus among other grievances.
Has DBS’s wealth management marketing team been reading Spy and his regular complaints about pitiful incentives to invest? Spy notes a moderately more exciting offer for their wealth platform this week. DBS wants $1.5m and they are offering 120,000 airmiles and a stay at a W hotel worldwide in return. I suppose that beats the night at the Hyatt.
Spy’s band of photographers have noticed a flurry of asset management advert campaigns appearing in the autumn rush.
Outdoor adverts spotted in Hong Kong include:
And this ad from Standard Life Investments which has also been seen on trams:
Meanwhile in Singapore, NNIP is in the “Let’s influence UBS spot” under one Raffles Quay: