Posted inFSA Spy

The FSA Spy market buzz – 14 July 2017

DBS hires; BNY Mellon IM adds; UBS and Maria; new funds on FSM One; searching for assets; top 400 managers; ETF hype and reality, and much more...

Spy thinks that the debate in Asia between the asset management industry and the distribution industry about AMC fee splits is beginning to resemble the neurotic couple in Woody Allen’s classic comedy film Annie Hall. In a scene that has gone down in cinema history, the protagonists are at their respective counselors, complaining about their sex life. “How often do you have sex?” he is asked. “Hardly ever, about three times a week,” comes the reply. The same question posed to her yields the response: “Constantly; about three times a week.” Same number (or, in this case, percentage), very different points of view…

Spy has been wondering where Jason Yeo, formerly a fund selector at ABN Amro in Singapore, would turn up. This week the answer was provided. It seems that DBS has snapped up the experienced fund analyst and is going to add him to their team. DBS’s wealth assets have blossomed in the last decade as the bank has become one of the largest wealth managers in Asia with about $180bn in assets under management or advice.

News has reached Spy that Freda Amir is joining BNY Mellon in its Hong Kong office to support wholesale and institutional marketing in the region. BNY Mellon IM runs a multi-boutique model with Insight Investment, Newton Investment Management and Mellon Capital as its most high-profile managers.

So, UBS has decided to put Maria Sharapova on its Wealth Management Advisory Board for Women. Spy can’t help but applaud the notion of more women involved in, and exposed to, sophisticated wealth planning. However, of all the people to choose, Spy is not sure a convicted drug cheat sends the right message. There are so many other women who excel without the need for artificial enhancement, that the decision seems a little short-sighted of the Swiss giant. Perhaps, UBS was just a little peeved that Credit Suisse is already a sponsor of Mr. I-Can’t-Do-Anything-Wrong-And-Am-Just-Physically-Perfect Roger Federer?

Looking to see what asset managers are pushing in the Singapore retail market, Spy spotted some new funds that have been launched in July onto FSM One, iFast’s consumer platform. Janus Henderson has added a clutch of funds including real estate, Asian bonds, Indian fixed income and RMB fixed income. Natixis has added a US equities fund managed by its affiliate, Harris Associates. Finally, Aberdeen has added their Aussie Dollar Income Bond Fund, which is a brand new launch. No doubt Singaporeans with kids at university down under will see its appeal.

Google, Google on the wall, who is the most searched of them all? Spy has been whiling a few hours away playing with Google’s fabulous service Trends. This tool allows one to compare different search terms and their relative popularity across regions, among other data analysis. Spy picked a few asset managers, at random, to compare their search popularity: Schroders, Fidelity Investments and Allianz GI. Spy further narrowed the search category classification to “finance” and defined a 5-year period for accuracy. Unsurprisingly, Fidelity is the clear leader when using the worldwide universe, with Allianz GI and Schroders second and third, respectively.

However, do the search for Hong Kong and Singapore individually, and a very different result emerges. In Hong Kong, Allianz GI comes out on top, Schroders second and Fidelity in the third place. In Singapore it is Schroders who is the leader, followed by Fidelity and Allianz. Spy is hard pressed not to concur that these results fairly represent the current relative brand strength of these particular managers. Release your inner geek, and do your own searches here

Spy stumbled across a fascinating bit of research by IPE listing the top 400 asset managers. Those 400 (bar 3) all manage at least 6 billion euros of AUM with a whopping cumulative total of more than 63 trillion EUR in AUM. While it is no surprise that the UK and the US dominate the global funds industry with more than half of the firms listed, Spy was surprised to discover that only nine Japanese firms and only five Chinese firms make the list.

No doubt the ETF hype machine has most of the market believing every ETF launch is a large success. Not so quick, says Spy. On the 24 July, SSGA will close 19 of its ETFs in the US that have not reached critical mass. SSGA is not alone: Deutsche X-Trackers is due to pull eight ETFs from the Singapore Stock Exchange between now and the end of August. Meanwhile, Samsung Asset Management has recently pulled four of its leveraged and inverse ETFs from the Hong Kong market, less than a year since launch. The headline inflow numbers for ETFs hide an extraordinary amount of poor asset gathering by exotic or under-marketed funds.

Spy’s quote of the week comes from Peter Lynch, Fidelity Investments’ legendary manager of the Magellan Fund from 1977 to 1990 who consistently delivered twice the S&P return. “In this business, if you’re good, you’re right six times out of ten. You’re never going to be right nine times out of ten.” Never a truer word spoken.

Spy’s photographers have been dodging the traffic to bring you news of several new campaigns that have kicked off in Hong Kong and Singapore.

Axa Investment Managers is highlighting the fact that fixed income is changing – it is giving short duration a big push on the trams in Hong Kong. The same campaign has been spotted on various media in Singapore.

Meanwhile in the Lion City, one of Singapore’s stalwarts, UOB Asset Management is trumpeting their own fixed income skills.

 Until next week…

Part of the Mark Allen Group.