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The FSA Spy market buzz – 06 December 2019

Schroders loses, Blackrock hires; FSM One and Black Friday; Smart vehicle ETF; Discretionary progress; Bill Gates and impact; UBS and 2020; Ads return on buses and trams and much more!

The calm that emerged in Hong Kong after the recent elections was all too good too last it seems. The stand-off between protestors and the government goes on and on and on like an Akira Kurosawa movie. (Spy has not seen seven samurai stalking the streets in Causeway Bay, but it would not surprise him one bit, in these bizarre times.) The constant refrain Spy now encounters at dinners and meetings, is, “I am looking at moving to our Singapore / Tokyo / Taiwan office”. Who knows how many of these relocations will really take place, wonders Spy. One thing is for certain, however: the longer this goes on, the harder it will be to persuade good staff to move to Hong Kong. And that will be a real shame.

Spy has it on good authority that Showbhik Kalra has decided to step down from Schroders in Singapore. Showbhik has held the title of head of intermediary business & product in Asia-Pacific at the British asset manager for the last six-a-half years. Spy understands Showbhik is not joining another asset manager but rather a fintech or similar firm. According to Spy’s source, Showbhik’s roles are not being replaced, rather his duties being taken on by existing team members. Schroders’ Long Dated Corproate Bond Fund is up nearly 20% over the last year.

News reaches Spy that Blackrock has pinched a senior distribution executive from UBS. Clarabelle Ho, who was until recently director of fund distribution at UBS in Singapore, has taken on a similar role at the American giant after six-and-a-half years. Spy has no news on who has replaced Clarabelle at UBS. Blackrock has had success with its Gold and General Fund, which is up 34% over the last year.

Last week, it seemed, the entire world held Black Friday, copying the day after Thanksgiving in the US, which marks the traditional start of the Christmas season. Retailers fall over themselves to discount products so that indebted consumers spend money they don’t have, on products they don’t need, filling garbage bins with detritus that we don’t have space for. It seems the fund industry is not immune. FSM One in Singapore had a rather interesting take. They have posited that, in fact, Asian equities are already on “discount” because they are so undervalued and therefore investors should be stocking up. The firm offered the measliest incentive – an extra $10 worth of units for every $10,000 invested in selected funds as part of the promotion. 0.1% is not exactly a game changer, but Spy will concede that this promo won’t add a single extra bottle of plastic to our dying oceans. The funds that were on promo are:

  • Aberdeen Standard SICAV I – China A Share Equity A Acc USD
  • Allianz Hong Kong Equity AT Acc SGD
  • CIMB-Principal ASEAN Total Return Fund Class SGD
  • Fidelity China Focus A-SGD
  • Schroder Asian Growth Dis SGD

Another week, another thematic smart transportation ETF comes to market. So why bother mentioning it, Spy, you ask. Aside from the unwieldy fund name Guinness Atkinson Asset Management SmartETFs Smart Transportation & Technology ETF, and the silly double emphasis on “smart”, the observant investor will spot that it is not a blind, index following, benchmark hugging, garden variety ETF but instead, an active one. It is part of a growing tsunami of active ETFs coming to market offering cheap(ish), active solutions for every possible idea. The fund is focusing on autonomous and electric vehicles and associated technology and has a maximum of 35 stocks, equally weighted. The fund trades under the ticker, MOTO on the NYSE ARCA platform.

Five years is a long time in wealth management. What is the key change that Spy has noticed? Discretionary mandates. Five years ago, most banks seemed resigned to the fact that Asian investors wanted control and would not allow their wealth managers to manage their money on a discretionary basis. Now, take a look at the websites of Julius Baer, Schroders and Bank of Singapore, to name just three prominent managers, and what does one see? Discretionary solutions are front and centre of their wealth offering. Spy does not need to look very far to see the discretionary solutions trend in Asia developing before our very eyes. The big advantage? Well on the one hand, lesser known funds have a much better chance of adoption, as DPMs are not as obsessed by brand as their advisory counterparts. On the other hand, however, expect to see ETFs play a larger role in wealth management portfolios…

Bill Gates recently threw a delightful little hand grenade into the woke, sustainable, ESG, responsible investment community by stating that various campaigns to persuade investors to avoid stocks that pollute the most had, probably, reduced global emissions by a big fat zero. He argues that investors are much better off investing in companies that will actually help reduce emissions and make cleaner products with innovative technologies. Spy would imagine that shouty, self-righteous, grubby looking activists would find it so much harder on Twitter, Instagram and Tik Tok to get their desired attention if they were promoting something positive rather than denigrating something negative. Don’t expect Bill’s wise words to have much affect any time soon at Extinction Rebellion.

Already asset managers are beginning to look to their 2020 predictions. Spy can just see strategists and CIOs pondering their crystal balls as they look to the year ahead (BTW, FSA will be publishing a compendium of asset manager outlooks for 2020 in January). First out of the blocks is UBS, which has also been asking investors what they think. By far the most encouraging stat from their global investors survey is that 52% are “not sure if now is a good time to invest”. It is when 80%-90% of investors think it is a good time to invest that Spy starts worrying that a crash is then, surely, around the corner.


The unrest has calmed down in Hong Kong and almost like flowers emerging in spring rains, asset management campaigns have bloomed on the streets. Spy’s photographers have spotted numerous outdoor campaigns this week.

First up, Schroders is out promoting its Global Credit Income Fund on the sides of busses:



Spy waits for one bus and two come along at the same time. AB is promoting its income strategies on one side:



Finally, Charles Schwab, fresh from buying TD Ameritrade, is out on trams reminding everyone that you can buy ETFs for $0:



Until next week…

Part of Mark Allen.