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The FSA Spy market buzz – 20 July 2018

American Century hires; Morningstar adds; DBS turns 50; Thoughts on FAANGs and FAAMGs; Utrade goes Robo; Pimco is architectural; other advertising and much more.
The FSA Spy market buzz - 06 April 2018

Most sensible people have snuck off on holiday this week. Bali, Paris and Hokkaido have all been mentioned to Spy in the last week by luckier people than him. Whilst they are enjoying their Pina Coladas forgetting about work, Spy is observing a complete car crash take place in the commodity world. Copper has fallen 18% to a one-year low with platinum, lumber and a host of other commodities also deciding to jump out of bed with a tumble. Is this the start of something more sinister? Who knows? Thinner volumes in summer may be all the explanation required. Nothing to see here, move along, move along. However, Spy knows that most economists like to refer copper as “Dr Copper” for he, or she, is meant to be particularly good and telling the future. Let’s hope that 18% plunge is not a sign of things to come in the rest of the market.

News reaches Spy that Christopher Chen has joined American Century Investments as senior investment director in July. Previously, Chris was a client portfolio manager for Baring Asset Management in Asia and held a similar position at Mirae Investments prior to that. American Century has had a great year with its Focused Dynamic Growth Fund – up a healthy 33% over the last year. Unsurprisingly, the fund has some well-known tech stocks in its top 10, Amazon being its largest holding.

For asset managers in Thailand, they have a new person to impress at Morningstar. The fund ratings company has appointed Chayanee Juengmanon as senior research analyst. Chayanee was formerly an investment analyst at SCB Securities in Bangkok. There is no word yet from her former colleagues who has replaced her at SCB. Thailand has a rapidly growing fund market for both local and international funds and is expected to grow even more when the new Asian Fund Passport scheme kicks off next year.

It was hard to miss the fact that DBS is 50 years old this year if you were in Hong Kong this week. The Singapore powerhouse has decided to celebrate its half century by giving everyone who wants to, a free ride on the Star Ferries that trundle between Central and Tsim Sha Tsui and Wan Chai on August the 18th.  This all coincides with a new brand promise that you will “Bank less, live more” with the bank. All Spy can say, is Bravo to that!



Since only five tech stocks (Amazon, Apple, Facebook, Netflix and Alphabet) have delivered most of the return in the S&P 500 over the last year, it is hard to see how many equity funds could have outperformed without having them in the portfolio somewhere, thinks Spy. Do not be surprised if funds that have no right holding those particular companies are currently bending their rules to sneak them in. Spy is old enough (and ugly enough) to remember the bubble which saw commodity funds buying “” and value funds buying online retailer “” and more egregious covenant breaches. Only the clinically insane would think Amazon and have anything remotely in common. However, the fact remains, from an asset allocation point of view – it is always worth checking that funds do what they say they are going to do – and if they are not, ask them why!

Speaking of the FAANGs, this extraordinary chart has been making the rounds. It shows that the five (well, Microsoft gets into this one instead of Netflix, so I guess it is technically the FAAMGs) are worth more than the bottom 282 S&P 500 stocks. We often hear about inequality amongst people, it seems it is true of companies, too.



Another week, another robo-adviser is advertising. Spy’s photographers in Singapore spotted this new advert from UTRADE, the brokerage service of UOB KayHian. The service appears to be a classic hybrid robo-adviser: online risk discovery questionnaire with real people making asset allocation decisions in the background on a six-month basis. Intriguingly, the service only appears to include ETFs, not active mutual funds:



Also in Singapore, Pimco has branched out with an architectural theme. Everyone seems to be an architect these days. We used to have software engineers, now we have software architects. Spy even heard a chef describe himself as “cuisine architect” during a trip to Tokyo. At least in finance there is justification, after all, we do “build portfolios”:



In Hong Kong, you may not be able to afford to rent a home, but you can’t get away from Private Banking adverts either. One of Spy’s regular readers sent in this picture of an advert for Bank of Singapore on Instagram. Yes, BOS is on Instagram. The strap line says, “Protecting your next generation, protecting your wealth”.



Until next week…





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