With Football World Cup fever back, eyes are turning to Russia for a summer of enthusiasm, heart wrenching emotions and ultimately… much ado about nothing. Spy will avoid making too many predictions, although if you were unlucky enough to pick England in the office sweepstakes, Spy would advise writing that modest investment down to zero. Gallons of ink will be spent writing about every match, every little intrigue will be scrutinised in detail and minor scandals will be covered in a depth that implies they actually mean something. All the pomp and ceremony won’t be able to hide the fact that emerging markets, including Russia, are having one of their periodic debt meltdowns. Spy will be taking a peek at the matches from time to time, but he can assure loyal readers that he won’t be touching a drop of the main beer sponsor’s brew, if Budweiser can even be described as a beer…
Spy has been roving Thailand this week and heard the news that Kittikun Tanaratpattanakit, formerly senior data analyst at Morningstar’s Thailand office, has moved to the fund selection side. He is now head of product strategy at Kasikorn. Spy understands that Kittikun has yet to be replaced at Morningstar and the data company is actively looking for a replacement.
Earlier this week, Spy was chatting to a rather prominent fund selector in Asia, who has a reputation —which he freely acknowledges — of being rather tough on fund sales people, investment directors and portfolio managers themselves. (Conversely, on more than one occasion, Spy has heard less printable epithets than ‘tough’ used about this rather important decision maker.) Spy asked him if he was a ‘cynic’ and the man in question had a story to share. He said that he was once in a meeting with a rather illustrious fund group and their portfolio manager, examining a performance chart of the PM’s equity fund. The PM explained in detail why the fund had performed in a certain way in each period. He gave solid reasons for the ups and equally solid reasons for the downs. Apparently the explanations given were credible; they certainly all sounded perfectly plausible. After about half an hour of this, the portfolio manager suddenly frowned, went white and then admitted he had just realised the performance graph they were studying was in fact printed upside down! The PM then proceeded, without missing a beat, to give a slightly different explanation for the ups and downs, because, of course, they now occurred in different months… “You might think I am a cynic,” the fund selector said, “but don’t tell me the asset management community is not full of BS, especially the equity guys…” When you put it like that, thought Spy, the fellow has a point…
Last week, Spy cautioned foreign investors in China that they have to get used to the vagaries of the attitude of local Chinese investors, who make up a majority of stock market participants on the mainland. Nothing illustrates this more than a story covered by Caixin Global this week. Apparently investors pushed up the stock price of Air China this week on the back of absolutely no news whatsoever, other than the fact that the North Korean leader, Kim Jong Un, flew a plane provided by Air China to his summit with Donald Trump in Singapore. Spy has heard worse reasons for buying a stock — the dot-com bubble had plenty — but this still made him smile. Anyone who thinks one need not get help from a professional asset manager to navigate these choppy A-share waters must be mad, ponders Spy. Talking of Trump and Kim, Spy notes they used the Capella Hotel on Sentosa for their historic get together. This was the venue of Fund Selector Asia’s first ever forum and the rest is history…
Argentina may be experiencing another debt crisis and Turkey’s lira may be in free-fall, but there is one emerging market success story that looks surprisingly robust. That is, if you were lucky enough to be an investor with JP Morgan Asset Management. In the last six months, JP Morgan’s Emerging Middle East Equity Fund is up a whopping 17%. Where has the performance come from? Saudi Arabia. The fund has more than 65% of assets invested in the desert kingdom. With the oil price flirting with $80, it seems it is not just women who are driving forward in Saudi now, but share prices too. Just don’t mention the opening match of the World Cup, says Spy.
Let’s play an after dinner game. You must choose the investment that has performed best since its IPO in the steamy summer of 2004. Would you pick Google (now: Alphabet) or would you choose Domino’s Pizza? Spy would bet 100 bucks that most people would say Google. As the ever informative Charlie Bilello points out, fatty carbohydrates kick tech’s ass. Spy’s advice: don’t always run with the crowd. Well, if you eat too much of Domino’s product, you won’t be up for much running anyway, guesses Spy.
It was inevitable, thinks Spy. An ETF has been launched that only targets battery metals and materials. The story of the last few years, “the electrification” of the car industry, has been so well telegraphed that it simply had to happen. The new fund launched this month, the Amplify Advanced Battery Metals and Materials ETF, is listed on the NYSE under the ticker BATT. Get it??
Have you heard the one about the cryptocurrency fund that is doing very well? No? Neither did Spy. Spy does not mean to be smug, but having endured countless boasts from new bitcoin millionaires last year, he is wryly and with some interest observing a market that is in full retreat.
Spy’s band of trusty photographers have come across several new adverts in Hong Kong this week. First up is AB with a new campaign about its Emerging Markets Multi-Asset Portfolio.
And the Chinese manager Bosera is pushing their Bosera-Orient Sun Rise Greater China Bond Fund.
Until next week…
P.S. Spy wishes all his readers in Singapore a very happy Hari Raya.
