Spy had the privilege to chat with an equity portfolio manager who is retiring in June after a 57-year career in London and New York. His verdict on the current state of the market was a litany of old man’s lament. “Craziest markets I have ever seen and that includes the dot.com bubble and burst and the mega inflation of the 1970s”, this charming old boy said to Spy (over a traditional telephone, not Zoom.) He was in no doubt that the current valuations won’t last, “but I have seen so many bears in my career get crushed waiting for bubbles to burst, that it can be a mug’s game too.” His pithy advice, “Just keep looking for companies that make things people have to buy often and let the market worry about itself.”
News reaches Spy that Krungsri Bank in Thailand has a major change to its fund selection team. The Thai bank has pinched Chaikaseam Vadhanasiripong from Manulife Asset Management where he was previously chief distribution officer. He was also previously head of distribution at Aberdeen Asset Management in Bangkok. Sadly, for most Hong Kong and Singapore-based fund distributors, visiting Thailand is still all-but-impossible and the closest they will get is via Zoom, which does not satisfy the mango sticky rice habit.
It has been Earth Day this week and every manager under the sun has been sharing stories, insights and videos about how Green they, or want to be or, perhaps, even will be. Spy must be honest, after a while, it all starts to blur into a haze of chlorophyll noise. However, hat tip to Vontobel Asset Management. In a striking video they put out in moody black and white, with sonorous music, they threw up a fact that actually prompted Spy to go hunting across the net for more information. The Swiss asset manager had the line, “Feeling thirsty?…. Drink the sea”. The thematic manager referenced a new technology developed in Australia that converts seawater to drinking water in just 30 minutes, and the clincher, it uses sunlight to finish the process. Spy will drink to that, Earth Day or not.
Base effect. Got to love it. If there is a better time to sell funds, Spy can’t think of it. Since the markets were in the severe doldrums this time last year, one-year performance figures are now looking truly fantastic. Spy rummaged through OCBC’s Focus Funds on its platform. What do you know! Of the 80 listed, a lively 77 are positive for the last 12 months. The best performer? OCBC’s own in-house Lion Global Disruptive Innovation strategy, which is up 72.5%.
And, talking of focus funds. Spy feels a tad for Standard Chartered. Looking at their unit trust selector, the best performer on their list is the exceptional, BNP Paribas Funds Energy Transition strategy, which has more than doubled in the last 12 months. It is up a whopping 217%, stellar even taking into account that base effect mentioned above. Since most investors seem to buy what is already up, frustrations galore: the fund is closed for subscription! Still, knowing asset management, another very similar fund will surely be available, sooner or later to fill the closed gap.
Downunder, Perpetual, one of Australia’s largest listed asset managers, reported third-quarter results this morning. If they in any way reflect the broader asset management industry, it is mixed news. AuM rose nearly 7% in the last quarter and assets reached A$95.3bn ($73.65bn). Interestingly, though, a fair amount of the gain was simply markets being kind. Net outflows were actually $A892m but the rising market helped a gain of A$5.3bn. Flattering if one only takes the headline numbers. Investors seem quite happy though, Perpetual’s shares are up 25% since November.
You may be going back to the office. You may not. But one company that wants that building, when you do, to be a lot greener, is Invesco. The US manager has just launched a Green Building ETF with the ticker GBLD. The first-of-its-kind ETF is investing in buildings that are efficient and environmentally friendly. The fund is also investing in the entire value chain that goes into making buildings greener – so builders, designers, materials etc, also get a look in. The real question is: is this merely a different way of selling real estate with a delightful ESG label? Most developed governments are demanding higher green standards in buildings anyway…Spy imagines it will be hard to buy a REIT of a new property that is not bright green, by default.
Have we seen peak-crypto? Certainly, Bitcoin is having a breather below $50,000 but it was not so much that of a pullback as the Dogecoin news that got Spy thinking. Dogecoin, a joke crypto, with unlimited supply was valued at more than Ford Motor Company this week. Ford is worth $47bn, has $3.5bn in annual revenue, sold 4.2m cars in 2020 and employs 186,000 people. Dogecoin has 43 employees, no discernible revenue and is mostly used for digital tipping. Call Spy cynical…
So close but so far. Singapore called off the travel bubble with Hong Kong at the last minute this week. For residents of both cities, this was another blow to the return to normality and a dash to Spy’s laksa deprivation that goes on and on.
Spy’s quote of the week comes via Anthony Doyle of Fidelity International. “I tell people investing should be dull. It shouldn’t be exciting. Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.” This was said by Paul Samuelson who was the Nobel Prize Laureate for Economics in 1970. Spy reckons, this, eh, noble advice, is going to be laughed out of town by the Reddit / Robinhood / crypto crowd.
Until next week…
