Amundi continues to develop its ETF, Indexing and Smart Beta, which are major components of the Group’s strategy. In this context, Fannie Wurtz is appointed Managing Director of the ETF, Indexing and Smart Beta business line under the supervision of Valérie Baudson, member of Amundi’s Executive Committee.
Fannie Wurtz is Managing Director of ETF & Indexing Sales at Amundi. Prior to joining Amundi in February 2012, she was responsible for ETF Institutional Sales and Amundi ETF business development with French & Swiss institutional clients at CA Cheuvreux from 2008.
In addition, the Board of Directors of CPR Asset Management has appointed Amundi’s Valerie Baudson as CEO of the company. CPR Asset Management is a subsidiary of Amundi which manages, in particular, thematic equities with close to €38bn in assets under management.
The CPR Asset Management Board of Directors has also promoted Emmanuelle Court and Arnaud Faller, respectively, to Deputy CEO heading business development and Deputy CEO heading investments. Nadine Lamotte has been confirmed as Chief Operating Officer responsible for Administration and Finance. The above named make up the Management Committee which also includes Gilles Cutaya, Head of Marketing and Communication.
CC-BY-SA-2.0, FlickrPhoto: Jason Kotik, senior investment manager, North American Equities at Aberdeen Asset Management . Jason Kotik will talk US Small Caps at the Fund Selector Summit in Miami
Jason Kotik, senior investment manager, North American Equities at Aberdeen Asset Management is set to discuss smaller companies investing when he takes part in the upcoming Fund Selector Summit Miami 2016 on the 28th and 29th of April.
As a manager, Aberdeen has been harnessing big ideas in the North American smaller company space for years. The companies may be small, but they believe they have the potential to pack a punch for long-term investors, especially those willing to dig deep.
The conference, aimed at leading funds selectors and investors from the US-Offshore business, will be held at the Ritz-Carlton Key Biscayne. The event-a joint venture between Open Door Media, owner of InvestmentEurope, and Fund Society- will provide an opportunity to hear the view of several managers on the current state of the industry.
Kotik, Aberdeen senior investment manager and member of Aberdeen’s North American Equity Team, will speak about how to find such opportunities, including reasons why the current period offers opportunity to invest in small-cap equities.
Kotik’s responisbilities include co-management of client portfolios at Aberdeen, which he joined in 2007 following the acquisition of Nationwide Financial Services. Previously, he worked at Allied Investment Advisors and T. Rowe Price. He graduated from the University of Delaware and earned an MBA from Johns Hopkins University. He is a CFA charterholder.
You can find all the information about the Fund Selector Miami Summit 2016, aimed at leading fund selectors and investors from the US-Offshore business, through this link.
Photo: DanNguyen, Flickr, Creative Commons. Nordea Asset Management Expands its Active U.S. Fixed Income Offering with U.S Core Plus Bond Fund
Nordea Asset Management (NAM) announces that it has launched on April 4, 2016 the Nordea 1 – US Core Plus Bond Fund, provides investors active, diversified investment across the different sectors of the U.S. bond market. The investment objective of the Fund is to maximise total return over a full market cycle through income generation and price appreciation.
DoubleLine Capital LP (DoubleLine) is the sub-manager of the Fund. With this new offering, NAM broadens its partnership with DoubleLine, which as the sub-manager has provided investment services to the Nordea 1 – US Total Return Fund since its launch in 2012.
While the core of the portfolio consists of Investment-Grade U.S. debt instruments (covered by the Barclays Capital U.S. Aggregate Index), the “Plus” in the Fund name indicates that the investment universe expands beyond the traditional benchmark sectors to areas such as High Yield, USD-denominated Emerging Market Debt and non-Agency mortgage-backed securities.
“The design and flexibility of the Fund allows it to take advantage of areas of the market which DoubleLine believes offer attractive risk-adjusted return opportunities,” says Christophe Girondel, Global Head of Institutional and Wholesale Distribution. “We believe that the Fund forms an important addition to our current range of U.S. Fixed Income solutions, one of the major asset classes in any well diversified portfolio,” he adds.
The launch fully leverages Nordea’s multi-boutique approach and capabilities. This new fund complements the existing U.S. Fixed Income range of the Luxembourg-domiciled Nordea 1 SICAV, currently comprising a Low Duration US High Yield Bond fund, a US Corporate Bond fund, a US High Yield Bond fund, a North American High Yield Bond fund and a US Total Return Bond fund.
DoubleLine is an independent, employee-owned money management firm based in Los Angeles, California, U.S.A. Led by Chief Executive Officer and Chief Investment Officer Jeffrey Gundlach, the firm is widely recognised for its expertise and strong track record in active fixed income management. DoubleLine has been managing a similar strategy to the Nordea 1-US Core Plus Bond Fund since 2010.
DoubleLine’s investment philosophy is to build portfolios designed to outperform under a range of market scenarios by shunning away from unidirectional bets. The Fund achieves this through top-down active management of exposure to specific market segments combined with bottom-up security selection.
CC-BY-SA-2.0, FlickrPhoto: Matthias Born, senior portfolio manager, European Equities at Allianz Global Investors. Allianz GI’s Matthias Born is attending the Fund Selector Summit
Matthias Born, senior portfolio manager, European Equities at Allianz Global Investors will be discussing structural growth investing at the upcoming Fund Selector Summit Miami 2016, taking place 28-29 April.
Born, who is lead portfolio manager on the Allianz Europe Equity Growth Select fund, will outline how a high conviction strategy can focus on the most attractive structural growth ideas. His fund has been designed to benefit from bottom-up stock selection, through which weights on individual stocks are based on conviction levels across growth, quality and valuation criteria.
The conference, aimed at leading funds selectors and investors from the US-Offshore business, will be held at the Ritz-Carlton Key Biscayne. The event-a joint venture between Open Door Media, owner of InvestmentEurope, and Fund Society- will provide an opportunity to hear the view of several managers on the current state of the industry.
Born was appointed co-leader of the Investment Style Team Growth in 2009. Since then he has been lead portfolio manager of the funds and mandates of the strategy Euroland Equity Growth and Continental Europe Growth.
Before joining Allianz GI he worked for the Middle Market Group (Global Corporate Finance) at Dresdner Bank. In 2001, he graduated in Business Administration from the University of Würzburg with a master’s degree.
You can find all the information about the Fund Selector Miami Summit 2016, aimed at leading fund selectors and investors from the US-Offshore business, through this link.
Photo: Mike Gibb, co-head Global Wealth Management Distribution at Legg Mason Global Asset Management. Mike Gibb, co-head Global Wealth Management Distribution at Legg Mason Global Asset Management, will join the Fund Selector Summit Miami
Mike Gibb, equity specialist, co-head Global Wealth Management Distribution at Legg Mason Global Asset Management will join the upcoming Funds Society Fund Selector Summit Miami 2016, which takes place on the 28th and 29th of April.
The conference, aimed at leading funds selectors and investors from the US-Offshore business, will be held at the Ritz-Carlton Key Biscayne. The event-a joint venture between Open Door Media, owner of InvestmentEurope, and Fund Society- will provide an opportunity to hear the view of several managers on the current state of the industry.
Focusing on European long/short equity opportunities, Gibb, who is also an equity product specialist of Martin Currie, a Legg Mason affiliate, will look to outline how combining bottom up stockpicking with a macro overlay can generate alpha and deliver absolute returns in variable market conditions.
Before his previous role managing relationship and wealth mangement opportunities, Gibb was a client services director covering an institutional client base across regions. He has also been a hedge fund salesman with responsibility for investors in Europe and Asia. Before joining Martin Currie in 2005, Gibb was at Credit Suisse First Boston as a director and equity saleman for five years.
He was also an equity research salesman at Salomon Smith Barney for four years and before that a Far East equities fund manager for Gartmore and Scottish Amicable in 1990-1995. He is an associate of the UK Society of Investment Professionals (Asip) and a member of the CFA Society of the UK and has attained the Fundamentals of Alternative Investments certificate from CAIA . He graduated with an MA (Hons) in economic science from The University of Aberdeen.
CC-BY-SA-2.0, FlickrPhoto: The Tax Haven. The Earnings Season in the US Adds Pressure To Financial Markets
As we approach the start of the Q1 earnings season in the US, financial markets experienced renewed pressures. During the last week, the MSCI world was down 1%, with EMU and Japanese equities underperforming US equities. Commodities were also down but interestingly this had limited implications on US high yield and EM.
This was detrimental for hedge funds with the Lyxor index down 0.7% during the last week. CTAs again outperformed, driven by the performance of the fixed income, energy and FX clusters. Long positions on the JPY vs USD were also rewarding (see chart) as a result of the continued depreciation of the USD.
“The minutes of the 15-16 March FOMC meeting reminded investors that the dovish stance of the Fed is not so consensual within the voting members of the Committee but this had little impact on the currency. It is actually a well known fact that Yellen had to deal with hawkish regional Fed presidents in 2016. The good news is that she has managed to control the hawks so far”, explain the Lyxor AM team head by Jeanne Asseraf-Bitton, Global Head of Cross Asset Research.
Overall, Lyxor AM are upgrading CTAs, from neutral to slight overweight. “After the market rally in March and ahead of the US earnings season, their defensive portfolio appears to be a good hedge against any disappointment. Meanwhile, their long stance on US fixed income is less aggressive and with 10-Treasury yields near the bottom of the range of the past three years, it seems adequate. They have also reduced their shorts on energy, which is a positive development as the USD depreciation implies upside risks on the asset class”, says the research.
With regards to Event-Driven, Merger Arbitrage funds suffered due to the Pfizer/ Allergan deal break. It followed the announcement of new Treasury rules to discourage tax inversion deals. The Lyxor Merger Arbitrage index is down 1.9% this week. A number of funds were involved in the deal: Merger Arbitrage managers had set up the spread (long Allergan/ short Pfizer), while Special Situation managers held either long positions in Allergan, Pfizer or both, explaining why they outperformed. “We maintain the slight overweight stance on Merger Arbitrage. The exposure of the strategy on inversion deals is marginal today, hence limiting contagion risks to the rest of the portfolios”, concludes.
Central banks usually target inflation, and for most central banks the target is headline inflation. But if a central bank actually tried to target headline inflation they would be changing rates every few months, and quite possibly changing direction each time. Both oil and food prices are very volatile and can have a big impact on inflation from one month to the next. Just think of what monetary policy would have looked like if central banks had tried to compensate for the fluctuations in oil prices over the last couple of years. And in any case, monetary policy has little impact on energy prices; monetary policy would just force the rest of the economy to compensate.
So central banks effectively target core inflation, because it is so much more stable. Markets, of course, are fully aware that core inflation is more stable and, for this reason, it does not take much of a surprise in the core inflation data to trigger an aggressive reaction.
Markets are quite good at understanding movements in core inflation that are driven by the economic cycle or consumer expectations. But there is one rarely considered factor that can cause quite significant inflation volatility: seasonality.
Inflation is meant to be an accurate measure of what the consumer pays for a certain basket of goods and services. If the prices of many consumer goods or services like clothes or airline fares, for instance, are affected by seasonal sales and public holidays then the consumer price index calculated on those prices should also mirror those seasonal swings.
The impact of seasonality on the price of goods and services can be quite substantial. For instance, the price of clothes or airplane tickets can move as much as 20% during sales and in the subsequent re-pricing. And this can have a relevant impact on the aggregate core price index.
Since we usually express inflation as the percentage change in the price of a basket of goods and services relative to a year ago, then in principle discounts during sales should have little effect on inflation. If sales take place every year on a given month then there should be little impact: prices drop this year but they also dropped last year, and the effects cancel out.
Although true in theory, this argument clashes with the crude reality that seasonality might not be constant over time and can change dramatically over the years. The Eurozone provides the best example of this. In fact, seasonal factors (i.e. the contribution to monthly changes in consumer prices due to seasonality) have changed radically since the introduction of the Euro (chart 1). Around a decade and a half ago, January sales would negatively impact core prices by just over 0.5% while July summer sales had almost no impact. This contribution has increased over time to about -2% for January sales and almost -1% for summer sales.
By construction, seasonal factors have to total zero over a year. This means more aggressive sales in January will also imply a more aggressive re-pricing over the following months (such as February and March). This can, and has, increased the volatility of core inflation through the year.
This dramatic change in the seasonal pattern is much more visible in the Eurozone than in other developed economies like the US and UK, where inflation tends to have a much more stable seasonality. So, what could have caused such an evolution in the seasonal pattern of Eurozone core inflation?
There are a few reasons. The first is more a technical than an economic reason and it relates to improvements in the statistical methodology used to account for seasonal sales and discounts.
Seasonal sales are not a recent phenomenon. However, in most countries they were not included in the calculation of inflation until it was decided to create a measure of Eurozone inflation based on a common methodology, the so called Harmonised Index of Consumer Prices. This meant most European countries had to modify their methodology for surveying prices and calculating inflation. Furthermore, not all the statistical offices of the different countries decided to introduce the new methodological improvements at the same time. As a result, it looks as if in the Eurozone seasonal sales have only become more popular recently, whereas it may be that they are simply being measured more accurately.
While this explanation is possibly responsible for most of the intensification in the seasonal pattern, there are also other economic factors at play, such as competition. The internet not only created an alternative means of purchasing goods and services it, also allowed consumers to compare prices among different shops and providers. This has probably led to more aggressive competition during sales. At the same time, the prolonged period of economic crisis in the Eurozone could have forced shops and firms to be more competitive during sale periods since people were not willing to spend that much. This cyclical component could partially explain the reversal in the seasonal pattern that seems to be taking place at the beginning of 2016.
If core inflation has become more volatile over the course of the year because of the change in seasonality, it has also become more difficult to forecast given that neither statistical models nor economic judgement can easily cope with such changes in the seasonal pattern. This also means the change in the seasonal pattern might have created a seasonality in market surprises for core inflation (the actual reading relative to consensus expectations) (see chart 2), and potentially on market reactions too.
The evidence suggests this is the case. Since 2004 core inflation has always surprised markets on the downside in January, July and November. Interestingly, it seems that over time, markets have accounted for more aggressive sales in January since the surprise has decreased over time. Conversely, markets have regularly underestimated core inflation in March and to a lesser extent in September.
The efficient markets hypothesis tells us that this should not really be happening. If there is a persistent seasonal bias in the data, the market should be capturing it. Perhaps market economists are not as good at capturing systematic patterns as the market is. But at least they do seem to be learning: economists are overestimating Eurozone inflation by far less in January than before, despite the increase in seasonality. The market (and especially economists) may not be as quick as the efficient markets hypothesis would suggest, but eventually they manage to discount the patterns. Or in this case, to discount, rather than miscount, the discounting.
Joshua McCallum is Head of Fixed Income Economics UBS Asset Management and Gianluca Moretti is Fixed Income Economist UBS Asset Management.
CC-BY-SA-2.0, FlickrPhoto: US Lipper Awards 2016. Five Columbia Funds Earn Lipper Fund Awards
Five Columbia funds have received 2016 Lipper Fund Awards as top-performing mutual funds in their respective Lipper classifications for the period ending December 31, 2015:
Columbia Select Large-Cap Value Fund (R5 shares): Large-Cap Value Funds classification (290 funds) – 10 years
Columbia Greater China Fund (Z shares): China Region Funds classification (26 funds) – 10 years
Columbia Global Equity Value Fund (I shares): Global Large-Cap Value Funds classification (39 funds) – 3 years
Columbia Contrarian Core Fund (Z shares): Large-Cap Core Funds classification (499 funds) – 10 years
Columbia AMT-Free California Intermediate Muni Bond Fund (Z shares): California Intermediate Municipal Debt Funds classification (30 funds) – 10 years
The U.S. Lipper Fund Awards recognize funds for their consistently strong risk-adjusted three-, five-, and 10- year performance, relative to their peers, based on Lipper’s proprietary performance-based methodology.
“We are pleased to have five funds recognized by Lipper for their consistent, risk adjusted performance,” said Colin Moore, Global Chief Investment Officer. “Our priority is to deliver consistent investment returns for our clients through superior research and capital allocation within and across our strategies and with a deep understanding of their investment needs.”
This is the fifth consecutive year that Columbia Select Large-Cap Value Fund has earned a Lipper Award in the Large-Cap Value category. The fund received the award for 10-year performance in 2015 (90 funds), 10- year performance in 2014 (84 funds), for 5-year and 10-year performance in 2013 (102 funds and 84 funds), and for 5-year performance in 2012 (402 funds).
CC-BY-SA-2.0, FlickrPhoto: Moyan Brenn. PineBridge Investments Completes Fundraising for Structured Capital Partners III, L.P.
PineBridge Investments, the global multi-asset class investment manager, has announced the final close for PineBridge Structured Capital Partners III, L.P. (together with parallel partnerships, the “Fund”).
PineBridge completed the fundraising in March with US $600 million of aggregate capital commitments, surpassing its planned target amount of US $500 million. The Fund will invest in junior capital securities including mezzanine debt and structured equity issued by privately-owned middle- market companies across all sectors in North America.
F.T. Chong, Managing Director and Head of PineBridge Structured Capital, stated, “We are committed to being reliable and flexible providers of junior capital to middle market companies. We are pleased with the positive reception for our Fund. Most of the Limited Partners from our prior fund have signed up for this Fund and new investors include major institutions in the US as well as Europe, the Middle-East and Asia.”
CC-BY-SA-2.0, FlickrPhoto: Billie Ward. China: Real or Imagined Economic Improvement?
The ‘lower for longer’ environment that we are experiencing has required central banks to adopt some extraordinary measures. Most recently the Bank of Japan adopted negative interest rates and the European Central Bank pulled multiple levers including cutting the depo rate by 0.1%, increasing quantitative easing and opening it up to non-financial corporate bonds, as well as introducing a new series of four-year targeted long-term refinancing operations (TLTROs). These measures, along with an upswing in corporate profitability and growing signs of stability in credit markets, have helped provide a backdrop against which risk assets look more benign. They have certainly resulted in a wild ride for banks.
Our view is that, in Europe at least, the ECB measures are probably a net positive for bank earnings and banking pressures should diminish from here; but market sentiment is still ‘see-sawing’ between confidence that central banks absolutely have enough in their policy toolkits to avert deflationary pressures and stimulate growth, and fears that those toolkits do not have a lot left in them – as seen by initial reactions to the ECB closing the door on further rate cuts.
In the US, a host of market participants had been circulating expectations that the US could be heading into recession this year, but economic data has begun to turn, with very strong US employment data in particular coming hot on the heels of other economic surprises, helping to ease financial conditions. But we must bring China in here. As China-watchers, we are trying to interpret whether the recent improvement in sentiment is backed up by real or imagined economic improvement. Clearly, none of the structural issues we have identified previously appears to have been addressed: the central bank is targeting a 6-6.5% growth rate this year and the liquidity taps have been turned on but, ultimately, we believe China is experiencing a cyclical rather than a structural improvement as the PBoC tries to ease the pace at which economic growth decelerates. For the US, the key question is one of divergence: is the Fed able to adopt monetary policy that diverges from ECB and Bank of Japan actions and operates independently of spillover pressure from the China slowdown? We believe the US dollar is ready for another leg-up, but it needs a catalyst such as the Fed raising rates – that may not happen until June.
Brexit uncertainties persist. The online polls seem unambiguously to be coming out in favour of leave, whereas the phone polls are unambiguously favouring remain – by a wide margin. Central establishment figures have entrenched themselves on both sides of the debate but this has not lessened the uncertainty, that is only intensifying as we move closer to the 23 June referendum. Sterling has been the main mover in this, with market forecasts indicating 1.50 against the dollar is the appropriate valuation for remain and 1.20 an appropriate valuation for leave. As the polls change, so Sterling gets battered about. How markets change in the run-up to the referendum will be interesting. The uncertainty is putting ever more distance between the Bank of England moving interest rates – despite relatively good labour market numbers – with our valuation research indicating the first rate rise in April 2019, though some analysts have pushed that back to 2020.
Mark Burgess is CIO EMEA and Global Head of Equities at Columbia Threadneedle.
