The FSA Spy market buzz – 07 December 2018

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Muzinich hires; Fidelity promotes; Eastspring adds to team, as does Janus Henderson; Pet ETFs; Fund selection difficulties; JO Hambro CM calls it as it is, and much more.

Whenever the doomsayers on Bloomberg or CNBC TV claim that financial Armageddon is just around the corner, and just at the moment there is no shortage (Brexit, trade wars, Italian debt, China slowdown, etc, etc), Spy takes inspiration from the fictional British prime minister (PM) in the film Love, Actually. In that perennial, if not slightly cheesy, Christmas classic, the PM narrates the opening scene about the arrivals hall at Heathrow Airport and how, despite thinking the world is a very gloomy place, the affection on display shows that love is actually all around, not hatred.

So, too, for Spy – when he is feeling a tad gloomy about the state of the markets – he walks two minutes from the FSA office in Hong Kong to Times Square. Away from the incessant talking heads, Spy gets reminded that the average person ignores the gyrations of the stock and bond markets, and carries on shopping. And in Times Square, they do shopping on a grand scale – day in, day out. Spy does not see looming economic disaster. Instead, he sees up-close-and-personal the strength of the Asian economy in microcosm. Bustling, hustling, adapting and growing, and certainly a million miles away from meltdown. Spy might make a new short film especially for the gloomsters: Shopping, Actually.

Spy has come across the news that Muzinich & Co has hired Alexis Ng to be its new country head in Singapore and managing director of its business across Asia Pacific. Alexis, previously held the role of head of distribution at Aberdeen, and before that was country head of First State Investments. New York-headquartered Muzinich has a reputation as a specialist credit manager and is celebrating its 30th anniversary this year. In what has been a rather tough year for credit; Muzinich’s Short Duration High Yield fund has returned about 2% year to date.

It seems there has been a change of senior role at Fidelity International in Singapore. Ben Waterhouse, who was country head and head of intermediary distribution for the international arm of the American giant, has taken on a new global role as at the beginning of December. According to Ben’s LinkedIn profile, he is now global head of intermediary distribution, digital wealth. Fidelity has been a trailblazer in certain markets with its direct-to-consumer and business-to-business digital solutions over the last 20 years. Fidelity’s American Growth Fund is up more than 3% this year.

Spy has learned that Glen Lee will be joining Eastspring in the new year. Spy had previously reported that he was stepping down from UBS and would be resurfacing soon, but his destination was unknown. Spy was intrigued to note that Eastspring in its outlook for 2019 believes ESG will be making more in roads as Millennials have a larger share of the global investment wallet. Spy could not agree more!

Janus Henderson is beefing up its multi-asset capabilities with a new hire in London. The Anglo-American asset manager has hired Michael Ho, who was previously the CIO for investment solutions at UBS. Michael will also be joining the firm’s investment committee when he joins in January. Janus Henderson has had multi-asset solutions for a while, however this new hire signals a greater push in this direction. JH’s Global Life Sciences fund has had a stellar year, up more than 13%.

Spy loves an investment thematic as much as the next pundit. This week, he spotted a new ETF by ProShares which is aiming to, eh, become man’s best friend, or so he assumes. The new ETF is focused on the pet-care sector; its ticker is, wait for it… PAWZ. Of course it is. The best anecdote from the promotional garb is that seven out of every 10 households in the US has a pet, more than the number who have children. Apparently, Fido, Mr Fluffy and Spot are being given increasingly luxurious food, bedding and health care. The pet-care industry is due to see more than $200bn in annual sales by 2025. Woof, woof!

If one wants proof of how unbelievably tricky the last three months have been for fund selectors in Asia, look no further than DBS. Spy ranked the best-performing funds over the last 3 months on DBS’ Singapore fund centre which has a total of 532 funds. In that list, out of the top 150 funds listed (which includes different currency and share classes) only a single fund was on DBS’ focus list: the Investec GSF Glbl Gold A Acc USD,which has jumped a very healthy 7.5%. Performance in the last quarter has come from sectors such as Latin America and Indonesia – not exactly mainstream offerings. One stand-out in DBS’ list is Franklin Templeton’s Global Total Return fund, which appears to be up more than 5% in almost any chosen currency.

Spy’s favourite quote of the week comes from a portfolio manager at JO Hambro Capital Management. Telling it like it is, Rachel Reutter was quoted by Financial News as saying: “The markets are bonkers. There’s material over-valuation everywhere we look. Corporate management teams are behaving so badly and there’s far too much debt throughout the whole system.” Rachel is blaming investment bankers for dangling too much debt in front of UK management teams which, like the fat kid in the candy store, they can’t seem to resist.

This is Spy’s last full column of the year. Next week will cover the annual best premiums from the industry. He therefore takes the opportunity to wish all his readers a Merry Christmas and a prosperous New Year.

Until 2019…

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