Foto: Alberto Carrasco, Flickr, Creative Commons. Thomson Reuters lanza una estrategia que combina los modelos de búsqueda de alfa en renta variable de StarMine
Thomson Reuters has announced the release of the StarMine Combined Alpha Model (CAM), a model that combines all the available StarMine equity alpha models into one comprehensive and powerful alpha-generating signal. The weights assigned to each model vary by region. Thus, StarMine CAM recognizes the fact that some regions, such as the US and Japan, are more value focused while in Developed Europe and Asia ex-Japan momentum plays a larger role. The model intelligently handles missing data and makes use of all available StarMine alpha models for a given security.
StarMine CAM provides investment managers with a resourceful factor to help create market-beating portfolios – a factor that distils an enormous quantity of data down to a single score for 30,000 stocks globally every day.
“Clients often ask us ‘what is the best way to combine the StarMine signals?’ We now have our best answer to that question – use StarMine Combined Alpha,” said Dr. George Bonne, director of quantitative research at Thomson Reuters.
Over the last ten years, StarMine has created a number of quantitative equity alpha models to help take advantage of observed market anomalies and human behaviours. Every StarMine model is based on strong economic intuition and supported by a plethora of academic research as well as StarMine’s own rigorous research, backtests and robustness testing. The StarMine models used in StarMine CAM are Analyst Revisions, Relative Valuation, Intrinsic Valuation, Price Momentum, Earnings Quality, Smart Holdings, Insider Filings (US only), and Short Interest (US only). StarMine CAM is StarMine’s best performing alpha model to date.
“We are delighted to be able to combine our content to create a solution that simplifies our clients’ daily tasks in support of their global businesses,” said Debra Walton, chief content officer at Thomson Reuters. “This represents another step forward in our ongoing commitment to connect and enable the global financial community by harnessing our data and analytics in new ways that add greater value.”
StarMine CAM is currently available through Thomson Reuters Eikon, the premier desktop platform for financial professionals, and will be available as a datafeed through DataScope Select in the near future. Thomson Reuters DataScope Select is the strategic data delivery platform for non-streaming content globally. The platform is a full cross-asset offering with intelligently linked data for all Thomson Reuters DataScope content including reference data, corporate actions, legal entity data, end-of-day/intra-day pricing and evaluated pricing services.
CC-BY-SA-2.0, FlickrMauricio Rivero - Foto cedida. Mauricio Rivero se incorpora como socio a Cantor & Webb
Mauricio D. Rivero is joining Cantor & Webb P.A. from private practice. With his addition the firm expands its international tax and estate planning capabilities for international private clients.
Mr. Rivero brings more than 20 years of experience in international tax, business succession planning, probate and trust litigation, U.S. tax compliance and tax controversy work. He assists many international families and businesses with developing strategies to address both inbound and outbound U.S. tax issues with techniques such as U.S. income tax treaty planning and cross-border mergers and acquisitions. He counsels U.S. individuals and companies with regard to their operations abroad as well as foreign individuals and companies with operations in the United States. Mauricio has a great deal of experience creating individualized pre-immigration plans for high net worth foreign individuals seeking to relocate to the United States.
Mauricio said, “I hope to help expand the firm’s already distinguished profile in Latin America and Europe through my experience in the areas of international tax planning, tax compliance and international private wealth services. I look forward to working with my colleagues to provide top quality legal service to our clients and further cement our status as the go-to firm for international private clients.”
After earning a Bachelor of Arts in English and History from Florida International University in 1991, Mauricio spent ten years working for the Internal Revenue Service as a Revenue Agent where he gained significant experience handling a variety of complex tax matters for the Internal Revenue Service including both domestic and international tax issues. Mauricio went on to earn his Juris Doctor from the College of Law at Florida International University in 2005 and has been in private practice ever since.
Born in New Jersey and raised in Miami, Mr. Rivero was admitted to The Florida Bar in 2006. Mauricio was ranked as a Rising Star by Super Lawyers 2015 and listed as a Legal Elite by Florida Trends 2014.
According to ETFGI’s analysis there was US$2.971 trillion invested in the 5,823 ETFs/ETPs listed globally at the end of Q2 2015, assets were down slightly from their record high of US$3.015 trillion at the end of May 2015, while assets in the global hedge fund industry, according to a new report published by Hedge Fund Research HFR, reached a new record high of US$2.969 trillion invested in 8,497 hedge funds, which is US$2 billion smaller than the assets in the global ETF/ETP industry.
This is a significant achievement for the global ETF/ETP industry, which just celebrated its 25th anniversary on March 9th while the hedge fund industry has existed for 66 years. The ETF/ETP industry have been gaining on the assets invested in the hedge fund industry, more notably since the financial crisis in 2008.
In Q1 2015 the performance of the HFRI Fund Weighted Composite Index was 2.3%, which is only 1.3% higher than the 1% return of the S&P 500 Index. Many investors have been disappointed with the performance of hedge funds over the past few years as the HFRI Fund Weighted Composite Index has delivered returns significantly below the returns of the S&P 500 Index, according to S&P Dow Jones.
With the positive performance of equity markets many investors have been happy with index returns and fees. This situation has benefited ETFs/ETPs, which offer an enormous toolbox of index exposures to various markets and asset classes, including hedge fund indices and some active and smart beta exposures.
The ETF structure offers intraday liquidity, transparency, small minimum investment sizes and at costs that are lower than many other investment products, including futures in many cases. According to our research the asset-weighted average annual cost for ETFs/ETPs is 31 basis points or less than one third of a percent, while fees charged by the majority of hedge funds are 2% of assets and 20% of profits.
Accordingly, net inflows into ETFs/ETPs have been significantly higher than net inflows into hedge funds over the past few years. In the first half of 2015, net inflows into hedge funds globally were US$39.7 billion, while net inflows into ETFs/ETPs globally were US$152.3 billion over the same period.
Capital Group has announced that it plans to launch a fund aimed at European investors. The company will be making one of its global equity strategies from the US simultaneously available to European and Asian investors, pending regulatory approval, later this year.
The new fund, New Perspectives, will be a Luxembourg-domiciled fund (UCITS) and will follow the same unconstrained, global investment approach as in the US. Like the original which launched in 1973, the New Perspectives fund will focus on global blue chips.
Having recognised the continuing evolution of global companies over many decades, the Capital Group New Perspective strategy focuses on blue-chip companies that are well-positioned to take advantage of global secular trends with the potential to develop into leading multinationals. These companies typically have the added experience of working in multiple currencies, regulatory and political regimes and economies.
The new fund will be managed by the same investment team who runs the New Perspective strategy in the US.
Grant Leon, Managing Director, Financial Intermediaries, Europe, said: “US investors have had access to New Perspective Fund for many years and we are excited to bring this strategy to European clients. The launch of the New Perspective strategy will complement our drive to grow our European Financial Intermediary business and epitomises our focus on delivering superior, consistent long-term investment results.”
Stephen Gosztony, Managing Director, Institutional, UK and Ireland, said: “This launch demonstrates our continued focus on making it as simple as possible for our clients in Europe to access the very best of Capital Group’s capabilities. The European institutional market is a core market for Capital Group and we are particularly pleased that investors in the region will be able to benefit from a strategy with such a strong heritage which complements our existing fund range. We believe that the long term aims of the strategy further align our interests with the needs of our clients across the European market.”
Henderson Group Plc published its Interim Results for the six months ended 30 June 2015 on 30 July 2015. By the end of this period, its assets under management had experienced a growth of 10%; ending the first half of this year with GBP 82.1 billion under management.
Its net inflows in these past six months totaled GBP 5.6 billion. This new record on net inflows is attributed to the consistently strong investment performance, as 83% of funds are outperforming relevant metrics over the past three years.
Andrew Formica, Chief Executive of Henderson, said: “We are very pleased to have delivered another six months of record net inflows, built on consistently strong investment performance for our clients which highlights the strength of our active approach”. These new net inflows represent an annualized net new money growth of 14% in the period.
Back in April, Henderson Global Investors announced the sale of its 40% stake in TH Real Estate, to CREF for GBP 80 million, and the transaction was closed in June. Apart from this divestiture, new acquisitions were announced in June, to accelerate the presence of Henderson Global Investors in Australia. Formica added: “During the period, we continued to deliver on our strategy and attracted inflows from an increasingly global client base and product line. The acquisitions of Perennial Fixed Interest, Perennial Growth Management and 90 West will accelerate the growth of our Australian business and firmly establish our presence in this important market.”
In its latest interim business update, Henderson Global Investors, announced an underlying profit before tax from continuing operations of GBP 117.4, which represents a 29% increase compared to last year figure. Its underlying continuing diluted EPS rose to 8.9 p, from 6.8 p last June 2014; and its interim dividend rose from 2.60p per share last year to 3.10p.
Henderson Global Investors also announced a share buyback program to be initiated in the second half of 2015, with shares to the value of GBP 25.0 million to be purchased by year end. Finalizing its press release, Andrew Formica stated “We remain relatively positive on the market outlook, but are conscious that lingering investor caution during the northern hemisphere summer could affect flows across the industry in the third quarter. Nevertheless, Henderson remains well positioned. With strong sales momentum, increased brand recognition, excellent investment performance and disciplined investment in new initiatives.”
CC-BY-SA-2.0, FlickrPhoto: dpitmedia, Flickr, Creative Commons. A Bipolar Economy in USA: Strong Consumer Economy vs Weak Industrial Economy
Janet Yellen and her colleagues at the U.S. Federal Reserve (Fed) will spend the coming weeks and months contemplating the timing of an increase in short-term interest rates. While a cynic might describe the Fed’s behavior as “reactionary,” the Fed itself prefers the term “data-dependent.” As the Fed monitors incoming data, it will be searching for signs of the overall strength of the economy and any associated inflationary pressures. In so doing, the Fed is likely to find a two-speed economy, with the general health of the U.S. consumer improving rapidly, while the industrial side of the economy continues to struggle, says Eaton Vance in a report.
Part of the explanation for this seeming disconnect in economic data lies with energy prices. Over the past 12 months, the price of a barrel of oil has fallen 43%, from $105 to $60. This has led to a drop in average U.S. gasoline prices from approximately $3.70/gallon to $2.75/ gallon. With more money in their pockets, U.S. consumers (at least those who drive) are apparently feeling somewhat better about things. Accordingly, the University of Michigan Consumer Sentiment Index recently neared its five-year high.
While the collapse in oil prices has been good news for the consumer, it’s bad news for many industrial companies. Oil and gas is an important end market for capital goods and equipment manufacturers. “We have been struck by how rapidly the energy sector cut expenses at the beginning of 2015. North American exploration and production companies tell us they have cut capital spending by roughly 35% this year. This has had a ripple effect throughout the supply chain, well beyond the direct exposure of oil and gas equipment. The softness in the industrial part of the economy has begun to manifest itself in the form of lower utilization rates at U.S. factories”.
Aside from lower energy prices, another big reason for the greater optimism on the part of many consumers is the recent improvement on the jobs front. After topping 10% in 2009, the U.S. unemployment rate has steadily fallen since then and is now at what many would consider a more “normal” level – 5.3% as of June 2015. Perhaps even more telling is that wage growth has finally begun to pick up after years of stagnation.
Bringing it back to equities
Understanding the relative health of different segments of the economy is important, but for equity investors, the key question is always, “What’s not priced in?” Looking at the trailing 12-month performance of the consumer discretionary and industrials sectors within the S&P 500 Index, it seems clear that the U.S. equity market has begun to figure things out, as consumer discretionary stocks have handily outperformed industrials over the past several months.
“This divergence of performance between the two sectors has led to widening valuation differentials: Consumer discretionary stocks were recently valued at 19.5x forward EPS estimates, whereas industrials stocks were only valued at 16.3x. In the Eaton Vance Large-Cap Value strategy, we have recently been cutting back our consumer discretionary exposure and have been adding to industrials. Meanwhile, in our growth strategies, we have recently had underweight positions in industrials. Our growth team has continued to be optimistic about the outlook for companies that it believes to be benefiting from strong, secular growth trends in the areas of consumer, technology and health care, among others”.
Regardless of where there may (or may not) be opportunities in today’s equity market, their view remains that true bargains are far from plentiful. However, that could change in the months ahead. “In the interim, we continue to believe investors should selectively favor shares of companies with skilled management teams that allocate capital well”.
CC-BY-SA-2.0, FlickrPhoto: Jeckman, Flickr, Creative Commons. Edmond de Rothschild Group Opens a Branch in Zurich
Present in Switzerland since 1965, Edmond de Rothschild has further expanded its operations by opening an office in Zurich on 1 July this year. The Group is thus strengthening its offering of private banking and asset management services for German-speaking and international clients.
The Zurich agency marks the Group’s fifth location in Switzerland in addition to Geneva, Lausanne, Lugano and Fribourg.
“Switzerland is our foremost market in terms of assets under management and client numbers. While traditionally we have concentrated on the French-speaking area and Ticino, we are now determined to grow in the German region where we perceive real market demand,” said Emmanuel Fievet, CEO of Edmond de Rothschild (Suisse) SA.
The Zurich agency activities
Edmond de Rothschild boasts a full private banking offering that ranges from investment solutions, portfolio management and risk analysis and control to wealth engineering, corporate finance and access to exclusive opportunities. The Group provides each client with tailored services. “Our approach is based on catering to clients’ individual needs and taking account of their individual risk profiles. What makes us stand out is the power of our brand, the experience of our teams and the quality of our management,” Fievet emphasised.
In asset management the Edmond de Rothschild Group aims to grow its institutional business, mainly with pension funds, vested benefits institutions and insurance companies. It also wants to expand the external distribution of its investment funds. “We have a broad range of products and solutions that can be accessed by all Swiss investors and are capable of meeting their expectations and requirements. In addition we have a line of real estate funds that features the Swiss market and that clients in Zurich have owned shares in since 2012,” said Christian Lorenz, Chairman of the Executive Committee of Edmond de Rothschild Asset Management (Suisse) SA.
Foto cedida. Susan M. Brengle estará al frente de la división de negocio institucional en América del Norte para Eaton Vance
Eaton Vance Management announced that Susan M. Brengle has been promoted to Managing Director, Institutional, reporting to Matthew J. Witkos, President, Eaton Vance Distributors, Inc. Effective immediately, Ms. Brengle will oversee institutional business development, consultant relations and relationship management efforts in the U.S. and Canada for Eaton Vance Management. She will continue to direct institutional relationship management efforts outside the U.S.; Ms. Brengle will also be responsible for overseeing institutional business activities in the U.S. for Hexavest, Inc., an Eaton Vance-affiliated investment manager based in Montreal.
Ms. Brengle joined Eaton Vance in 2006 to lead relationship management across the institutional market for pension plan, insurance, corporate, healthcare, endowment and foundation clients in North America, Asia and Europe. Until 2010, she was also responsible for institutional product management.
Prior to joining Eaton Vance, Ms. Brengle spent 19 years at MFS Investment Management in a number of roles, including international business director, senior relationship manager and equity product specialist. She also served as a member of the institutional management committee. She is a graduate of the University of Vermont with a B.A. in economics.
“Sue’s proven knowledge of our clients’ needs and Eaton Vance’s investment capabilities has enabled her to build a world-class client service effort and institutional platform at Eaton Vance,” said Mr. Witkos. “She knows the marketplace, understands client and consultant priorities, and is committed to further developing our ability to anticipate and respond as the markets evolve.”
Eaton Vance has expanded its institutional capabilities in recent years by strengthening the consultant relations function and further building out its product offerings, including the recent addition of multi-sector bond and emerging market debt capabilities.
Photo: Day Donaldson. Rate Hike in the US: the Arguments and the Effect
There are clear indications that the Federal Reserve is going to raise interest rates for the first time in more than nine years this September. Kommer van Trigt, manager of the Rorento Total Return Bond Fund, looks at the arguments for and the likely effects of a rate hike.
The Fed is on course to raise rates in the autumn. In mid-June, Fed chair Janet Yellen stated that thanks to the strengthening economy there is room to raise the federal funds rate. This official interbank rate currently stands at an all-time low of 0.125%. She also made it known that in future rates would rise less rapidly than the Fed had originally anticipated.
In a normal cycle, rising inflation and the threat of an overheated economy resulting from too high a growth rate often trigger an interest rate hike. At the moment this is certainly not the case. In the last three years, core inflation in the US has fluctuated between the one and two percent level and since 2010, economic growth has moved in a bandwidth of one to three percent.
In previous cycles, economic growth was around four percent at the point when the Fed implemented a first rate hike. On the basis of those figures, a rate hike seems by no means a necessity. That makes you wonder why Yellen alludes with such certainty to a rate hike after the next Fed meeting in mid-September.
Building up weapon reserves
“One important reason for a rate hike is that the central bank want to build up its weapon reserves for the future”, explains Van Trigt. “If the US economy falls into recession, there is currently no room whatsoever for a further rate cut. The Fed wants to ensure that it does not have to rely on taking a whole range of unorthodox steps in such a scenario.
What Yellen also wants to prevent is a repeat of the so-called ‘Taper Tantrum’ of 2013, when a wave of selling engulfed the bond market after former Fed chair Ben Bernanke alluded to higher rates. “There is a much better chance that financial market stability will remain intact if the increase in interest rates takes place gradually, and if the market is made aware of the Fed’s plans”, explains Van Trigt to clarify this second argument for raising rates without it being economically necessary to do so.
In such a scenario, fixed income markets at least have plenty of time to come to terms with the idea of a rate hike and up to now the central bank has been pretty successful in managing market expectations. According to Van Trigt, this scenario is not without its dangers, however: “A rate hike is approaching, but the market is only pricing in a minimal rise of 12.5 basis points in September and 25 basis points in the months that follow. If these rate hike steps occur earlier than planned this could have a major impact on the prices of short-dated paper.”
Vulnerable market segments
The approaching rate hike in the US is the reason why we have reduced Rorento’s exposure to those segments of the bond market where this can hit hardest. “The fund is still invested in US bonds, but its interest rate sensitivity (duration) for bonds with a maturity of seven years or less has been brought back to zero”, says Van Trigt. Another part of the bond market that is vulnerable to rising US rates is emerging market debt.
There are better prospects for short-dated Australian bonds, given that the central bank there is still busy cutting rates. “By cutting back the duration for short-dated US paper and overweighting Australian bonds, we have ensured that Rorento is as well-positioned as it can be to cope with any negative effects of rising rates in the US”, summarizes Van Trigt.
CC-BY-SA-2.0, Flickr. Adrien Pichoud Appointed New Chief Economist at SYZ Asset Management
SYZ Asset Management has announced the appointment of Adrien Pichoud as Chief Economist. Adrien Pichoud is also a member of the Strategy Committee, which defines the Group’s investment policy. Under the direction of Fabrizio Quirighetti, Chief Investment Officer of SYZ Asset Management, Adrien Pichoud also assumes the function of co-manager of the OYSTER European Fixed Income and OYSTER USD Bonds funds.
Adrien Pichoud joined the SYZ Group in 2010 as an economist. Prior to that, he spent seven years as an economist in a brokerage firm in Paris. He holds a master’s degree in finance from the University of Grenoble (France) and a BA in Economics from the University of Sussex (UK). Adrien Pichoud is a well-known commentator in the Swiss investment media to which he frequently contributes.
“Adrien Pichoud’s skills as an economist greatly contribute to the quality of our investment strategy and the performance of our bond and multi-asset funds. This promotion demonstrates a strong internal progression confirmed by results,” commented Katia Coudray, CEO of SYZ Asset Management.
In addition, Adrien Pichoud is a member of the management team of the OYSTER Multi-Asset Absolute Return EUR and OYSTER Absolute Return GBP funds as well as other multi-asset funds and institutional mandates in absolute return strategies.
