The FSA Spy market buzz – 22 February 2019

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BEA Union hires, so does T Rowe Price; changes at Value Partners and FE; LGT goes to Thailand; Standard Chartered’s fund portal; Beating the marketing; Europe and Japan; Biscuits from Robeco and much more.

The FSA Spy market buzz - 06 April 2018

It seems the multi-asset concept is spreading, and far beyond the asset management world, too. Spy’s favourite new venue in Asia is trying very hard to pull off the magic trick of being two things at once. This establishment (sadly it is in Singapore, not here in Hong Kong) is a two-in-one idea that combines the best of coffee with the best of a bar. The place, during the day, is named “Free the Robot” and it serves the very best espressos — but after 4.30pm renames itself “Bitters & Love”, serving great cocktails. The owners have managed to get the atmosphere just right: bright enough to be an independent roastery, moody enough to be the kind of place you would actually want to drink in after work. All too often venues like this don’t pull off the magic – either too much coffee or too much bar. Rather like, in Spy’s humble opinion, a whole bunch of multi-asset funds. Too many M-A funds are either too bond-like or too equity-like and seldom get the balance just right. No one said it was easy.

News reaches Spy that BEA Union Investment in Hong Kong has appointed a new head of marketing. Patience Chan has joined the firm to oversee both marketing and communications and is reporting to both Alex Lee, chief marketing officer, and Rex Lo, managing director of business development. Patience is a highly experienced marketer and communications specialist with previous roles at Allianz, Allianz Global Investors, Euler Hermes and Coface. BEA Union has had success in the last 12 months with its Asia Pacific Investment Grade Bond Fund, which is up 3.1%.

T Rowe Price has pinched from Invesco’s marketing department by hiring Joey Yeung, understands Spy. Joey was head of strategic marketing, Asia ex-Japan, at Invesco. Joey is reporting in to Marieta Olivari, head of marketing in Asia-Pacific. T Rowe continues to have success with its US equity funds. Its Large Cap Growth Equity is up 8.6% over the last year and its US Blue Chip Equity is just behind that at 7.3%.

Value Partners has lost managing director, Eric Poon. Spy understands that Eric has recently left the business. Spy has no news on where Eric is heading to or who will be replacing him. Eric has held previous roles at Barings, UBP, Blackrock and Goldman Sachs. In another move at VP, Spy heard that Nelly Poon (no relation) has also left the firm to join Pimco’s marketing department. Value Partners’ China A-share fund has had a stellar six months, racing up nearly 11%.

There is a changing of the guard at financial data firm, FE. Spy understands that long-standing Asia head, Michael Li, is stepping down from the business. FE, which has a new private equity owner, is also in transition. Some of FE’s operations are being combined with Fundinfo. Spy understands that Philip Portmann will be in charge of the combined Asia operation, although he will be based in London.

The rush to Thailand continues. LGT Private Bank has announced it has gone onshore in the Land of Smiles, joining European players Credit Suisse, Julius Baer and others. Spy is not surprised. The market is becoming one of the largest wealth centres in the region, it has a more buoyant stock market than Southeast Asian competitor Singapore, and has positive government policy behind it. It is a market impossible to ignore, for all the right reasons.

Spy noticed that Standard Chartered has relatively recently revamped its fund portal. This rather clean new design shows prominently how many funds are currently available to their clients. The bank has 685 funds listed, of which 128 are on their “Select” list. They also specifically pull out the top 15 performers over the last year.  In Spy’s opinion, they are playing well to classic investor psychology. Investors would rather invest in funds that have already done well than take the plunge on those that have gone through a weak period. Mean reversion, would, of course, suggest that those 15 are unlikely to again be the best performers over the following one-year period…

Spy has been reading a book by William Poundstone, “Fortune’s Formula”, about two Bell Labs scientists, Claude Shannon and John Kelly, who in the 1950s developed a formula to beat casinos. They soon applied their thinking to the stock market and controversially, albeit successfully, made a pile a money exploiting the insider’s edge on Wall Street. Shannon, for one, thought it was possible to “beat” the stock market and Poundstone’s eloquent tome is convincing – but Spy has a rather large caveat: these two chaps were large brain boxes and that, as Robert Frost might have said, made all the difference. Amateurs need not apply.

In 1980 a band called The Vapors sang a cheesy song, “Turning Japanese”. Spy wonders whether our European friends are feeling like it has become the soundtrack of their life. Markets are not currently expecting the ECB to hike rates until June 2020. At that point, the market would have had 6 years of negative interest rates. Any wonder “the hunt for yield” cliché goes on and on and on….

Investment Engineers or Masterchefs? That is the question. Spy and his colleagues received this tin of biccies from Robeco which received general acclaim. For the record, Spy never wants to discourage deliveries of biscuits, pastries, cake, wine, beer or whisky. All, most welcome!

 

 

Until next week…

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