The FSA Spy market buzz – 15 March 2019

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M&G hires, so does Schroders; Aviva Investors gets responsible; Money radio; Negative fee ETFs; Frontier investing; Wine funds; advertising from PIMCO and Aberdeen and much more.

The FSA Spy market buzz - 06 April 2018

Spy has had a reprieve from the young children of his relatives and their fairy tales. He is back to the more enjoyable world of sampling craft beer, exchanging gossip and musing over China and America’s attempts to find a trade deal. The overwhelming sense Spy has of the market is that it is stuck in waiting mode. Investors waiting for clarity on trade and Brexit. Bankers waiting for investors and asset managers waiting for bankers. The need to do something is sadly lacking. And, so, we all wait. A faint whiff of boredom pervades, as people have the same conversations and it all feels a tad circular. If you are looking to Spy for an answer, you are unlikely to find any pearls of wisdom. All he will do is remind all and sundry that timing the market is also a fool’s game because one almost inevitably misses the big jump when it does arrive like a thief in the night.

News reaches Spy that M&G has appointed a new head of marketing for Asia-Pacific, based in Hong Kong. The British firm has recently hired Patricia Lai, who previously held marketing roles at Alliance Bernstein and Pinebridge. M&G offers both wholesale and institutional products in Asia. On the corporate front, M&G has been merged with Prudential in the UK to form M&G Prudential and has integrated its respective investment capabilities. It was announced in early March that Jack Daniels (a name of which Spy thoroughly approves) will take the role of CIO in the company’s merged asset management function. M&G has had huge success in the last year with its Listed Infrastructure Fund, which in British sterling terms, is up a whopping 19%.

Schroders has added to its Asia content marketing team with the hire of James Lewis-Williams. James has recently the joined the firm in Singapore. He previously held roles with Columbia Threadneedle in Asia and PM Capital in Australia. This hire does not surprise Spy one bit as content marketing continues its rise. Firms are working very hard to help clients understand their investment processes better. Schroders has had success in the last year with its Global Cities Real Estate Fund, up a healthy 8.5%.

Following a trend of deepening the pool of talent focusing on ESG capability, Spy spotted the news that Aviva Investors has hired a new head of responsible investing research. Paul LaCoursiere, who was formerly the firm’s global head of corporate research, has taken on the new role in London. If anyone thinks that this trend is merely an industry fad, these kinds of senior hires, which are happening across the industry, should disabuse cynics of that notion, thinks Spy. Aviva Investors has had success in the last year with its US Equity Income Fund, which is up about 8%.

It is a cliché that people love making money in Asia. In Spy’s humble opinion, the route to wealth has often been perceived in the region as property first … second … third and then, perhaps, think about where else you might stash the remainder. For someone who believes in global investing and that each asset class has a role to play in a sensible wealth strategy, this has been perceived as myopic by your humble Spy. A new development in Singapore has caught Spy’s eye – a radio station targeting investments in general: MoneyFm. SPH Holdings has launched a new station dedicated to talking about money. If this plays any role in helping Singaporeans think beyond property, Spy welcomes the move.

 

 

We have had negative interest rates. Now, for the first time, we have a “negative fee” ETF. Yes, you read that correctly. Salt Financial a firm with a two-year track record, filed this week to launch a fund that “pays investors” to invest with it. This rather eye-catching story does, in Spy’s opinion have more than a touch of marketing glitter about it. For every $1,000 invested, the company will pay the investor 50 US cents. Once the fund reaches $100m the cash back is then capped, and the cumulative benefits will be shared with investors. Spy reckons this is merely a way of shifting the marketing costs to the investors in the short term. Still, it is hard not to be impressed with the chutzpah of the young firm.

In the realms of “frontier investing”, Spy has heard plenty of swaggering claims by portfolio managers a bit too addled by the local moonshine consumed on their research trips. Usually, it has been highly exotic bonds which have tempted this high risk, high reward crowd. Soon, it seems, the equity guys will get a new frontier playground, too. Myanmar has announced that foreigners are going to be able to buy up to 35% of a stock on the local bourse, which currently has a mighty 5 listings. Myanmar will join Laos and Cambodia in the “elite club” of new Asian local markets, hoping to emulate Vietnam’s success. Don’t expect much liquidity though, warns Spy. If Singapore, with its deep financial markets can barely raise a stock trading heartbeat, we are not exactly talking a new Wall Street here, but, perhaps an improvement on the Burma Road?

The news confirmed this week what a number of commentators, Spy included, have suspected for a while. Aberdeen Standard has ditched its joint-CEO structure. Martin Gilbert has climbed off the pedestal leaving Keith Skeoch in charge. The only surprise to Spy was that it took so long.

Spy received a rather breathless press release this week from a wine fund that claims to be revolutionising wine investment. Vinito claimed to have raised €250,000 for its “From Bordeaux with Love” fund. €250k is nothing to be sniffed at, Spy agrees, but it must make Cult Wines, which now has more than £100m in wine strategies for its clients, think “welcome to the party, chaps”. Wine, like art, watches, cars and other specialist alternative assets, has done rather well for investors over the last 20 years, yielding about 8% according to one of Spy’s sources. The key, something Spy would probably fail to do, however, is to remember to not drink the stock. Cheers!

Asset management advertising is ramping up outdoors. Spy’s trusty band of photographers have been out snapping away.

Pimco is back at the tram stop in Central HK promoting its brand as a supportive partner for new challenges and opportunities:

 

 

Aberdeen Standard Investments is out in Singapore’s Raffles Place with a branding campaign, shunning any specific capability:

 

 

In Hong Kong, financial adviser and wealth manager Convoy is back in the MTR. After a series of scandals, Spy is not absolutely convinced the boat was the best choice of image to rebuilding trust but what does he know?

 

 

Until next week…

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