Spy was reminded of the power of marketing this week at a Beaujolais Nouveau party in Central. For the uninitiated, Beaujolais Nouveau, is very young wine sold only 6-8 weeks after harvest. In other words, wine so young it would need training wheels on its tricycle. The bottles are usually decorated in zany colours and the “race” to bring these wines to market by the third Thursday of November is all part of the fun. From its humble beginnings as a marketing idea when maturation length rules where relaxed in the 1950s, Beaujolais Nouveau has become a global marketing phenomenon, much copied by other wine regions. In asset management, could something similarly snappy be tried to cut through to Asian investors obsessed with buying their latest condo? Spy has in mind an industry-wide annual “best ideas” launch day… suggestions on a post card, please.
News reaches Spy that Janus Henderson has added to its intermediary sales team in Singapore with the hire of Darius Ang in October. Darius joins the team headed by Ming Wong. Previously Darius was with Invesco for nearly three years, according to his LinkedIn profile. Janus Henderson has plenty to smile about, not least of all their veteran global technology fund’s performance, which is up 48% this year.
HSBC is losing one of its PR people. Andy Chan, who has been a comms manager for HSBC Global Asset Management, is stepping down from the firm but staying in the industry. Spy understands Andy will begin his new, undisclosed role in early December.
How quickly is asset management morphing into a technology-first industry? With Blackrock having lead the charge, others are following suit. Your Spy has overheard that China’s Noah Holdings, an asset and wealth manager listed on the NYSE, is about to hire a chief technology officer. At this point, all Spy can say is that the CTO candidate is from a huge well-known US tech firm. Noah, which has overseas offices in the US, Canada and Sydney to address the Chinese community, apparently sees the integration of technology in asset and wealth management as a priority. Spy suspects this won’t be the last announcement made in this direction.
If you happen to come across a serious wine drinker, you know the sort of fellow I mean: chinless, a faint dribble glistening at the side of mouth, some red stains on his shirt, he will probably talk with misty-eyed wonder about the 2015 vintage for “right bank” Bordeaux. Yes, it was the year the gods smiled on the southwest corner of France. The Pomerols and St Emillions were, according to one critic, “Rich, ripe, fleshy, opulent and decadent”. The kinds of adjectives that get the cork dorks over-excited and auction houses eyeing fat wallets and fatter commissions. In asset management, mutual fund sales people are probably going to refer to 2017 in similar terms. Everywhere Spy looks, there is stunning return number after stunning return number. This week’s glory comes from the top ten Asia-Pacific ex-Japan equity funds over last year (listed on Trustnet.HK). Anything less than a 42% return over the last year and you don’t even crack the top 10!
|Fund Name||1 Year Return %|
|Baring Eastern Trust A Acc GBP||51.8|
|Baring Asia Growth NAV USD||51.7|
|JPMorgan Asia Growth NAV||51.3|
|Schroder ISF Asian Opportunities A Acc NAV USD||50|
|Pictet Asian Equities Ex Japan P USD||47.6|
|AB (HK) Asia Ex-Japan Equity Portfolio A H||45.2|
|JPMorgan Eastern NAV||44.2|
|Mirae Asset Asia Sector Leader Equity A USD||43.5|
|Investec Asia Pacific Equity C Inc USD||43.2|
|Mirae Asset Asia Pacific Equity A Non Distributing USD||42.5|
A tiny word of caution from Spy, though: 2016 proved more of a vinegar than vintage year for Bordeaux. Just sayin’.
Do Singaporean Central Provident Fund investors get a raw deal from the limitations imposed by the CPF Board? In one way it does appear so: that of choice. Singapore has 33 “authorised” asset managers who are able to provide funds to the CPF investors. And yet, only 82 funds are currently available according to the latest data published by CPF. This contrasts with the more than 500 funds available to MPF investors in Hong Kong. Perhaps 82 is sufficient choice for most investors, but Spy can’t help but think it would help the local industry grow more rapidly if the broader public was educated about a wider range of strategies.
Spy marvels at the asset management industry that regularly comes up with new ways to play “ideas”. From casual party talk about something, it seems it won’t be long before a fund is launched to capitalise on the ideas and allow investors to speculate. Proshares has launched a new ETF that captures the spirit of the times perfectly – a sort of inverse Amazon. The fund is called, ProShares Decline of the Retail Store ETF (EMTY). As their blurb puts it, the “ETF is designed to allow investors to benefit from the potential on-going erosion of value of retailers that rely principally on in-store sales.” Proshares points out that “Over 30 major retailers have declared bankruptcy over the past three years, nearly two-thirds of those in 2017.” Ouch.
In the hunt for things that have not done well in the last few years, there appears to be only one asset class that stands out – precious metals, including gold. This week, Spy noted that Schroders also seems to have noticed the anomaly. In one of their “60 Second Videos” portfolio manager Mark Lacey, points out that gold represents only 2% of the holdings in ETFs when it was nearly 10% as recently as five years ago. With Jerome Powell, the new Fed chair nominee, likely to keep rates low to suit Donald Trump’s property portfolio, perhaps this time-honoured inflation hedge is a little buy?
Fans of the business cartoon, Dilbert, may recall the title of one of Scott Adams’ annual cartoon collections, “Words you don’t want to hear on your performance review: `Coot, Feral, Squirrelly’”. Spy imagines the people of Italy and long suffering investors in that quixotic economy may be paraphrasing Adams this week: “Words you don’t want to hear from your finance minister: `strangely optimistic’”. In contrast to the peculiar optimism expressed by Signor Pier Carlo Padoan, European Commission vice-president Jyrki Katainen said far more prosaically “Italy’s accounts are not improving.” Anyone naïve enough to think Italy’s banking woes are behind them should have a little lie down, thinks Spy. If you are looking for some volatility in 2018, get yourself a nice pizza and some Italian high yield. With so many European funds having done well of late, you might like to peek under the hood for some Latin horrors.
The outdoor campaigns from asset managers in Hong Kong just keep coming. This week Spy’s photographers spotted this new campaign from AB. The New York firm is promoting its emerging markets multi-asset portfolio:
Until next week…