There is an old joke about consultants taking your watch and then telling you the time. Spy was reminded of this quip over his morning double espresso when he saw an advert for EY. The advert has a couple of green saplings and the line: “Asset managers should integrate ESG considerations into investment decisions, and meet the demands by developing new products and service.” Well, no sh*t Sherlock. It is 2021 and ESG, impact, and SRI have been buzzing for at least five years. The UN PRI was founded in 2005, for goodness sake! In Spy’s humble opinion, the smartest asset managers have already adopted ESG and are looking beyond that for the next thing. If that dull advice is all you are going to get from an expensive consultant, keep your watch on your own arm, and your purse firmly in your handbag, recommends Spy.
EFG Bank in Hong Kong has added an industry veteran to its team. Timothy Lo, has joined the business as vice chairman. Lo was formerly the deputy CEO of CA Indosuez in Hong Kong and managing director of CIC before its merger with CA Indosuez. He has also had stints at BNP Paribas and HSBC during his long banking career.
News reaches Spy that BNY Mellon IM has had a change in its Hong Kong marketing team. Lizzie Gerard has stepped down as vice president of Apac marketing. She had been with the firm for nearly seven years, with most of that tenure in London before moving to Asia. Spy has no news on her replacement. In March, BNY Mellon hired Dominic Wong from Fidelity to be head of intermediary distribution in Greater China. The firm has had success in the last 12 months with its Mobility Innovation Fund, which is up 52%.
Spy commented a few months ago that the “base effect’ in March meant most funds had very flattering comparisons, year-on-year. It is now nearly mid-June and the annual comparisons remain surprisingly strong. Looking at Standard Chartered’s fund select list (focus funds), all but two of their 195 strategies on the list are positive. Allianz’s Flexi Asia Bond (SGD) and AB’s American Income (EUR) are both just below par over one year, and every single other strategy is up. The best performer happens to be another Allianz fund, its Global Artificial Intelligence strategy, which is up 71%. Spy does suspect, from here on, however, the comparisons are likely to get a lot more challenging.
It’s summer. JP Morgan Private Bank always releases its summer book list at this time of the year. As usual, it is a thought-provoking shelf that has little to do with finance. Spy was attracted to My Shanghai: Recipes and stories from a city on the water, by Betty Liu. “Family, culture and memory inspired My Shanghai, Betty Liu’s modern take on the centuries-old cuisine from this vibrant, food-rich Chinese city. Through over 100 recipes categorized by season and accompanied by stories, photographs and cultural touchpoints, Liu encourages home chefs to experience her family’s city from their own kitchens.” Spy’s mouth is watering already. If you are not a gourmand, try No One Succeeds Alone, by Robert Reffkin. Sound advice from one of America’s youngest black CEOs.
Everyone loves choice. Choice implies competition and that usually means better prices for buyers. In investing, choice is now through the roof, but that does not mean things are necessarily cheap. Global investable assets have reached $250trn according to a new report by BCG. That does not include the $235trn that is held in real estate. The total all-time wealth is up by 8.3% over the last year. Capital poured into equities and investment funds, up a healthy 11.5% in the last twelve months. The report is particularly bullish on Asia, with financial asset growth expected to exceed real asset growth. “Investment funds will become the fastest-growing financial asset class, with a projected compound annual growth rate of 11.6% through to 2025.” The pandemic has been very good to some: 6,000 people were added to the $100m net worth category, according to BCG.
Is Singapore going to make its Variable Capital Company (VCC) framework even more attractive to single family offices. Apparently a review is currently underway in the Lion City that may allow single family offices to take more risk utilising the VCC structure. Spy tips his hat to Singapore; no other country on earth is making itself as attractive to very rich individuals. Fact.
Sign of the times, wonders Spy? Webull, a Changsha, China-headquartered brokerage company may launch an IPO, hoping to raise between $300m and $400m. The firm was started by an alum of Alibaba, Wang Anquan and has apparently asked Goldman Sachs to explore the idea. Spy would caution investors a tad. WeWork turned out to be We-Make-Heavy-Losses, in reality. Webull may just arrive on the market when stocks may experience a touch of “Webear” instead.
If you are currently unemployed, on sabbatical, taking a break and think the job market in Hong Kong and Singapore looks quiet, perhaps try the USA. There are currently 9.29m job openings in America. This is the highest number ever recorded, apparently. The US re-opening after Covid has led to a dramatic shortage of labour and rocketing wages.
There is something almost cultish about the latest ETF launch spotted by Spy this week. Defiance ETFs is offering the Defiance Hotel, Airline and Cruise ETF with the ticker CRUZ. If you think that soon we will all be travelling, boating and vacationing in style and want the easiest way to play that trade, perhaps the ETF makes a whole lot of sense. This launch, however, comes on the back of the week that British Airways returned thousands of staff back to furlough as travel remains difficult for most of the world, with governments proving very reluctant to open their borders – even to the vaccinated. Betting on a travel upsurge is not cheap: the fund is charging 0.45%.
Spy spotted an advert targeting consumers in Singapore by FSSA Investment Managers. The manager is promoting Asia and emerging markets with the subtlest of designs.
Until next week…
