Spy was providing much needed liquid support and sustenance to a Europe-based asset management sales head this week. This typically bright-eyed and bushy-tailed man had just endured a hectic “back-to-back” week of meeting after meeting. However, it was not fatigue that had this fellow down and out; after all he runs a marathon every quarter. No, it was the dawning realisation that when the tier 1 banks say “the AMC split is 60/40” in their favour, they actually mean it. Spy was consoling the poor man in the fashion he knows best: large quantities of alcohol. Spy tried his best, “Look on the bright side…at least we don’t have MIFID II in Asia.” “Yet”, replied Spy’s miserable companion.
News reaches Spy that Premia Partners, the HK-based smart beta ETF provider, has appointed Terry Tsang as chief investment strategist. Terry formerly had roles with Commerzbank and RBS and is expected to add “structured solution” capability to the product range. Premia runs 4 smart beta ETFs focusing on Asia and China, including an Asia Innovative Technology Fund and all of them are listed on the Hong Kong Stock Exchange.
EFA Group, the independent asset manager in Singapore, has recently hired Kaia Parv as investment officer for its multi-strategy team. Kaia was previously with Bank of America Merrill Lynch. EFA has expertise in alternative debt and, within the multi-strategy team, runs bespoke discretionary portfolios and fund of funds for HNWIs and families.
Spy has spoken to a number of retail bank wealth heads this week. Currently, it seem there is only one game in town – multi-asset. For all the talk of different asset classes on the provider side of the fence, Spy got the overwhelming impression that it was only multi-asset that was being pushed, being talked about, being distributed and being selected by the retail banks. If pressed, they might talk about Asian fixed income but it is not long before multi-asset pops up again…
Pictet Asset Management, which already has a reputation for designing winning thematics, is at it again, reckons Spy. The Swiss manager has launched a Smart City Fund which is designed to capitalise on the transformation of running cities. As people stream into cities all over the world, more creative solutions are going to be needed to make them keep functioning, or at least try to keep functioning. Smart city technology, for example, could include sensors that are embedded in roads to help improve congestion. (Jakarta springs to mind for Spy, although it may take more than a sensor or two to improve their problems!) The fund is global and invests in companies in China and emerging markets.
The next time you are tempted to buy the advice of a very large investment bank, just remember this: Barclays Bank, the venerable British behemoth thought it was a good idea to sell BGI and iShares to Blackrock during the Great Financial Crisis and also decided to buy the North American arm of bankrupt Lehman Brothers. Spy is not convinced that was the best swap ever. Hindsight is, of course, a wonderful thing, acknowledges Spy. However, ten years after the crisis nadir, Blackrock, which is now managing about $6.3trn, should be given a hat tip for making one of the best deals of the century in Spy’s humble opinion.
Spy’s colleagues have been running Alternatives Forums this week in Hong Kong and Singapore. That means fund selectors and analysts have been gathering to hear about non-mainstream strategies. As usual, Fund Selector Asia has been polling the attendees. In Hong Kong, just over half of attendees expect the S&P 500 to keep grinding higher. Meanwhile, in Singapore, nearly 70% thought the S&P had more to run. Yet, here was the kicker – fully 75% of respondents in Singapore and an astonishing 87% were neutral or downright bearish on the global economy for the next 12 months. Disconnect for sure thinks, Spy.
Speaking of the Alternatives Forum, one of the presenters from specialist aviation thematic, The Aeronautics Fund, CEO Laurent Biousse, revealed that the waiting time to buy a brand new Airbus A320 is now nine years, despite the fact that the Airbus is producing nearly two A320s every single day. That’s right – if you have the $99m in cash to match the list price, to acquire a brand new Airbus A320 the company will merely tell you to give them 10% and then you may as well take a very long holiday and come back in 2027. If one had any doubts that air travel is only going to grow, especially here in Asia, think again.
So we have a bull market. It is the longest one in history. It has been running for nearly 3,500 days. Old Mutual Global Investors whipped out this snappy infographic which tells the one story that matters, though. The dot.com run still whips the bull run competition in total return – a tasty 417% versus a mere 328%. Eh, length isn’t everything?
Chinese tech champion, Alibaba, has its loyal, almost fanatical supporters both at home and abroad. That is not to say everyone is convinced about the tech giant’s rise and rise. On Wolfstreet, a website that takes a cynical look at company reporting and opines against Wall Street lackeys and their sycophancy, a recent article had this to say about Alibaba and its quarterly results: “Alibaba the goofiest, most convoluted, opaque, mismanaged accounting mess and business structure in history. That, unfortunately, is the half-trillion dollar “best-case” scenario.” Ouch.
Spy’s photographer’s have spotted a new campaign in Singapore. Eastspring is out on taxis promoting their Asian Low Volatility Equity Fund. The campaign is pushing a “smoother ride”. This idea works in Singapore where cars usually have a road license for just ten years and then get sent elsewhere when the COE is up. Here in Hong Kong, the taxi rides are anything but smooth, if Spy’s clapped out ride to the office is anything to go by.
Meanwhile in Hong Kong, Fidelity is back at billboards that show a new branding campaign with a distinctly local flavour:
Until next week…
