And so the tedious, crass, pugnacious, at times idiotic and farcical US presidential election is nearly upon us. Trump versus Biden, or Offensive versus Senile, as it is more commonly known in Spy’s household will be done and dusted on Tuesday. More ink has been spilt about this election than is necessary and Spy’s loyal readers hardly need more waffle. Save to say this: if anyone is naïve enough to think that a Biden win is suddenly going to make the US a multi-lateralist’s paradise, Spy suspects they are in for some serious disappointment. The US’s obsession with China’s containment was set in motion long before Trump and will outlive his time in office whether it is now or in or four years’ time. Spy expects only the tone of the words to change, not the direction. Spy will merely be drinking a toast to the fact the US electoral cycle is over for another four years. Cheers!
There have been relatively new funds put up onto the FSMone platform in the last few months, notes Spy. This month, Aberdeen Standard has added its Global Dynamic Dividend strategy. This is a new fund which the firm has recently launched – it is offered in SGD hedged and US dollar versions. Alliance Bernstein has also added an SGD-hedged share class to its flagship American Income Portfolio. The message is very loud and very clear, for Singapore retail, not offering an SGD -hedged share class is now unthinkable, reckons Spy.
The equity team, in particular, at Standard Chartered fund selection may be forgiven for doing a little lap of honour as we drift into the final stretch of the year. Spy had a peek at their focus, or Select Funds, again this week. Of the top five performing equity funds over the last year on their platform, three were on Select. JP Morgan Asset Management’s China A Share Opportunities, up 53%, Franklin Technology, up 54% and Allianz Global Artificial Intelligence up a whopping 64%. Between the allocation and fixed income sectors, however, only one leading fund was on Select: the BlackRock China Bond Fund – up nearly 6%. Select Funds make up about 26% of their overall funds on the platform.
Some interesting lines have come out of the markets this week. Spy was particularly interested in the comments of James de Uphaugh, chief investment officer at boutique investment firm, Majedie. He currently manages the Edinburgh Investment Trust. James said, of companies operating in the Covid era, “We talk a lot about Darwinism. I genuinely think Darwinism is an understatement — this is going to be Darwinism on steroids.” Adapt at extreme pace or die is the era’s mantra and those companies with their heads in the sand may well find themselves six feet under. Indeed.
For tech investors, and that seems to be just about everyone these days, yesterday was the quarter’s Big Day. Amazon, Apple, Facebook and Alphabet all reported their quarterly results. The four made bucket loads of cash, again. Here are a few things to ponder: Apple revenue was up just 1% in the past year. It’s stock, by contrast is up 92%. Facebook claimed that it had 2.74 billion active users in the last month. With a global population of 7.8 billion, that would imply about 35% of the world uses Facebook. Bear in mind, Facebook is banned in China thus excluding its giant population from those figures. Amazon’s revenues were up a very healthy 37% over the past year. This is its 76th consecutive quarter of double-digit year-on-year growth. The company now has 1.12 million employees. (Singapore, by contrast, has about 3.8 million workers). As for Google, the firm claimed that “Google Search and Google Maps now display information about more than 2 million businesses worldwide that offer contactless delivery or curbside pick-up.” Relentless capitalism in action.
Whilst the US election will get more than its fair share of coverage next week, Spy imagines that people in Asia will be far more interested in the event taking place next Thursday. Yes, the Ant Financial IPO is also upon us. With the Shanghai retail leg of the bookbuild being 872 times oversubscribed, the firm is due to raise a record $34bn from investors. Those hoping for a giant pop in the shares playing with leveraged money will be watching the unicorn’s debut with an excitement Happy Valley can only dream of.
The US has just reported its best quarterly GDP percentage improvement. Whilst that was no shock because of the circumstances, phenomenally, personal consumption increased by an annualised 40.6% in the third quarter. The largest rise on record. Ever. If you give Americans free money, they will spend it; it seems saving does not seem to enter their spendthrift heads. Whilst that is great for corporates, Spy does wonder what a rainy day must actually look like for Americans to think, “You know what, I will just forgo the 65-inch plasma and save a little for a change.” Clearly, a global pandemic and the worst recession on record, is not it.
Spy loved this and doubts it has ever been disproven, “Remember, that investing has nothing to do with your feelings. It has everything to do with monetising other people’s feelings.” This was said this week by Keith McCullough, CEO of Hedgeye Risk Management.
Spy seldom hears asset managers get excited about new regulations – unless it is the compliance department’s annual Christmas party. He suspects that in boardrooms across the region, this cartoon from The New Yorker will resonate.
Until next week…
