Posted inNewsFSA Spy

The FSA Spy market buzz – 24 November 2017

Purple AM launch; OCBC does well; Warning from Guggenheim; Javelin does start-ups; Saxo and Blackrock; Boring websites; Crypto funds; pithy quotes; advertising from Allianz GI and much more.

Your humble Spy is wallowing in bed this morning, having eaten far too much turkey last night. The annual binge that is Thanksgiving allows already indulgent Americans (and Yankee wannabes), to indulge even further in the name of gratitude. In all fairness, apart from having a president who is a bit of a turkey, 2017 has provided much to be grateful for: Record high stock markets, buoyant economic growth, rising property prices and healthy fund flows…what is not to like? Today is traditionally “Black Friday” when retailers discount goods to hungover shoppers. That excuse for a much-hyped, but usually bargain-less, day of sales has crept into Hong Kong of late. Spy notes this promo excuse has not really arrived in the local fund world, though. Spy has not spotted a single wealth management group offering any screaming discounts. A trick missed or, perhaps, memories are associating today with 1987’s horrific ‘Black Monday’, a day that investors would not want to see repeated annually.

Word reaches Spy of an interesting new launch. Global private wealth manager, The Fry Group, has launched a new discretionary wealth service called Purple Asset Management, based in Singapore. This new multi-manager DFM will not only provide Fry’s existing Singapore and Hong Kong clients with investment solutions, but also provide its services to other wealth providers in the region. The business is being managed by a Standard Life alumnus, Alan Scrimger, who was head of My Folio in the UK and head of third-party manager research. Spy senses a heating up of competition in the DFM space. Schroders Private Wealth, formerly, Cazenove, is also offering its DFM solution to other wealth managers in the region. Watch this space.

It has been a good year to be a client of most wealth managers, thinks Spy, but surely clients of OCBC wealth must be particularly happy. According to OCBC’s wealth app, of all 88 funds on its target / conviction list, only one fund is negative over the last year. The other 87 are all up and some have done very well indeed. The leading fund is run by in-house manager, Lion Global. The Lion Global Japan Growth Fund is up 33.36% over the last year. Spy notes, however, investors many have needed some patience. The fund is up only 34.4% over three years. Timing is everything, as the saying goes.

Singapore’s reputation as private equity/start-up hub has always been a bit hit and miss. Spy has heard many a complaint from investors in Asia that “unless it is property related, it is hard to raise start-up money in the region”. It thus came as a pleasant surprise to see that Javelin Wealth, the discretionary manager in the Lion City headed by Stephen Davies, has created a fund that invests in Asian start-ups. Javelin runs the Javelin Startup-O Victory Fund SPC, which invests in the winners of the “Fasttrack” competitions run by Startup-O. It seems most winners, so far, are tech-orientated and that no doubt appeals to the more adventurous investors around.

Spy has discovered that Saxo Capital Markets, the global equity broker, with offerings in Hong Kong and Singapore, has introduced a new balanced portfolio service for its clients provided and managed by Blackrock. Naturally, these balanced portfolios are all comprised of iShares ETFs. Spy was intrigued to see the target returns…moderate is considered 7-10%.

  • Defensive portfolio – a cautious investment portfolio looking to maximise expected returns for an expected risk level of approximately 4% to 6% p.a.
  • Moderate portfolio – a more moderate investment portfolio looking to maximise expected returns for an expected risk level of approximately 7% to 10% p.a.
  • Aggressive Portfolio – looking to maximise expected returns for an expected risk level of approximately 9% to 12% p.a.

Spy is wondering whether there is an unspoken competition taking place between Asian wealth managers to produce the most boring website. Surveying the wealth management landscape, one would think it is still 2003 for most companies. With a few notable exceptions, most wealth manager websites provide almost no personality, are long on platitudes and short on insight. Spy was playing an imaginary game of corporate bingo and it did not take long to fill up the card. Bland claims of “putting you first”, “personalised service”, “dedicated relationship manager”, “global insights”, “best of breed” etc, pepper the sites like some out of control weed. It comes as no surprise that consumers find it so hard to differentiate between the offerings. Just sayin’.

He won’t be listened to, of course, but some wise words were issued this week by the CIO of Guggenheim Partners. Scott Minerd, tweeted, “Everything is liquid until you NEED to sell. Plan accordingly.” No matter how accurate the truth of a pithy statement like this, investors will think the Goldilocks environment will continue forever and will almost certainly do the opposite, pouring more cash in, thinks Spy.

It had to happen, of course. A fund of funds has been launched that invests in blockchain/cryptocurrency funds. Block Asset Management, based in Luxembourg, is offering the new fund, which will invest “in a carefully selected portfolio of blockchain/cryptocurrency investment funds, which apply a variety of strategies within the sector and have a combined AUM of over $500m.” In the press release seen by Spy, the firm breathlessly claims, “The team includes world renowned crypto expert Timothy Enneking who has been managing crypto assets since 2013.” It is hard to get to get excited about a four-year investment track record, in the least tested, most volatile asset class around…

With the bitcoin debate raging all around, Spy has heard every possible interpretation of crypto investors. They are apparently: geniuses, chancers, lucky fools. Take your pick. One sceptic this week, with regards to crypto buyers, said “Don’t worry a fool and his money are soon parted” to which he received the snappy reply, “As Gordon Gecko said, ‘A fool and his money are lucky enough to get together in the first place’”.

Julius Baer recently hosted its annual conference for external asset managers. The Swiss wealth manager had the great British Explorer, Sir Ranulph Fiennes, as a guest speaker who gave out 10 top tips to be an explorer, one of which seemed very apt for bond managers: “As the leader of the expedition, I am to blame if I’m not ready for very bad weather at all times. You have to think pessimistically.” Well, quite.

Spy’s photographers have spotted a new campaign in Singapore from Allianz Global Investors. If anyone thinks the high yield party is coming to an end, AGI did not get the memo:



Spy’s agile, beady-eyed monitors were quick to snap a new Pictet campaign on a bus as it roared by in Hong Kong. The firm is promoting its Strategic Income Fund:


Until next week…

Part of the Mark Allen Group.