Enjoy the Pictures of the Fundraising Gala to Support Surfside Collapse Residents

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. Carrusel

Many relevant players of Miami´s financial industry raised $ 75,000 to help those affected by the collapse of the Surfside condominium in Champlain Towers South through the GEM foundation.

During the event, which took place on September 9th at the Rusty Pelican, Michael Capponi, GEM’s President, explained to the presents about the foundation’s work.

Zulia Taub, a survivor of the collapse, also spoke.

The initial goal was $ 50,000, but with the effort of 20 firms, which supported with Diamond, Gold and Silver sponsorship, it was possible to reach 75,000.

Diamond:  Funds Society, MFS, Ninety One
Gold:         AXA Investment Managers, BNY Mellon Investment Management, Bolton Global Capital, Brown Advisory, Insigneo, Janus Henderson Investors, Jupiter Asset 
Management, Schroders, Thornburg Investment Management
Silver:       RWC, Natixis Investment Management, Manulife Investment Management y Franklin Templeton.

In addition, the event wouldn’t have been possible without the collaboration of José Corena, Richard Garland, Jimmy Ly and Blanca Durán from Día Libre Viajes.

Moreover, the organization has created an account in gofundme platform as a new donation channel.

 

iM Global Partner Acquires 42% of Asset Preservation Advisors

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Pixabay CC0 Public DomainAutor: Free-Photos.. iM Global Partner se hace con el 42% de Asset Preservation Advisor para acelerar su expansión en EE.UU y Europa

iM Global Partner has announced the acquisition of a strategic non-controlling stake of 42% in Asset Preservation Advisors (APA), an independent investment advisor specializing in managing high quality tax-exempt and taxable municipal bond portfolios for registered investment advisors, family wealth offices, financial advisors and institutional clients.

The asset manager has highlighted that this transaction will grow its US-based product offering and accelerate its expansion, also across Europe. Through this new partnership APA joins iM Global Partner’s extensive global asset management and distribution network, while ensuring its long-term independence for decades to come.

“We are excited to partner with APA. With 4.8 billion dollars in assets under management, APA now ranks as the fourth largest independent municipal bond specialist in the US. iM Global Partner’s success in attracting new Partners is due to its values of integrity and support for entrepreneurialism which ensure that each partner retains its autonomy and independent value proposition combined with iM Global Partner’s worldwide distribution network”, said Philippe Couvrecelle, CEO and Founder of the firm.

This is the 8th partnership that iM Global Partner has taken on in six years and is the second US partner in 2021. In July, iM Global Partner acquired a 45% stake in Richard Bernstein Advisors, a New York-based asset allocation specialist. In March this year, the firm also announced it would expand its US distribution efforts with the full acquisition and integration of California-based wealth and asset management boutique Litman Gregory.

Kevin Woods, co-CEO and CIO of APA commented that they see “an incredible opportunity” in this partnership to help continue their “strong growth” and build on their leading presence as an independent Municipal bond specialist. “iM Global Partners offered APA a unique opportunity to continue our mission to provide excellence to our clients in the same way we have for more than thirty years, and now for decades to come”, he added.

Meanwhile, Jeff Seeley, Deputy CEO, US Chief Operating Officer & Head of US Distribution of iM Global Partner pointed out that given APA’s “exceptional reputation, competitive long-term performance and growing US distribution”, they believe the firm is uniquely positioned to capitalize on the increasing investment opportunities in the municipal segment, as US clients continue to seek attractive tax-exempt strategies. “Through our partnership, iM Global Partner is adding a new range of excellent strategies to our growing and diverse fixed income product set”, he concluded.

The firm has explained that this latest strategic partnership reinforces its commitment to the US market and is yet another example of its rapid expansion. In this sense, its assets under management have grown from 7 billion dollars at end 2018 to 37 billion today, more than 400% growth in just 3 years.

Regarding the details of the financial transaction, Berkshire Global Advisors acted as financial advisor for APA and Taylor English Duma acted as legal counsel. For iM Global Partner, Oppenheimer & Co. Inc. acted as financial advisor and Seward & Kissel acted as legal counsel.

 

Canada’s CI Financial Opens its U.S. Headquarters in Miami

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Captura de Pantalla 2021-09-15 a la(s) 16
. Pexels

CI Financial, a diversified global asset and wealth management company based in Toronto, has announced in a press release the establishment of its U.S. headquarters in Miami. Located in the city’s Brickell district, the office will oversee the continued development of CI Private Wealth, the brand name for its U.S. platform.

The addition of a headquarters in Florida “follows CI’s rapid wealth management expansion in the U.S.”, with the company agreeing to acquire 21 registered investment advisor firms in 19 months since rolling out a new corporate strategy.

During this period, its U.S. assets have reached 73 billion dollars and its total assets globally have grown to 254 billion dollars, up from 131 billion only 18 months ago. The asset manager has highlighted that this makes them “one of the fastest-growing asset and wealth management companies globally”.

“Miami is an incredible place to establish our U.S. headquarters and support our fast-growing U.S. business. It serves as the next logical step for our expansion plans as we work to build the leading high-net-worth wealth management platform in the country. In addition, Miami is a vibrant, multicultural city that offers a deep talent pool, an attractive location for recruiting and a very business-friendly environment”, said Kurt MacAlpine, Chief Executive Officer of CI Financial.

The office will be home to the firm’s U.S. operations and the primary location for its U.S. leadership team but its executive officers will divide their time between Miami and Toronto. CI expects to expand its presence in Miami over time as it continues to execute against its U.S. corporate strategy.

The Historic Bell of Columbus’s Santa Maria Flagship is for Sale in Miami

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Coinciding with Hispanic Heritage Month, the bell of the Santa Maria, the flagship that led Christopher Columbus’s expedition to the Americas in 1492, is up for sale in Miami. This is the only existing artifact related to the historic voyage to America and will be auctioned privately.

Discovered by the Italian naval officer and diver Roberto Mazzara in 1994 in the shores of North Portugal, the bell is considered to be at the center of an epic story filled with treasure hunting, political intrigue, and historical mystery. “Growing up with documentaries by Jaques Cousteau, I have always loved the mysteries of the seas and being a professional diver, I was able to join these two passions when the hunt for this bell was first presented to me almost 30 years ago. The auction will be a wonderful opportunity to give collectors a chance to own a unique piece of history,” said Mazzara, former officer of the Italian navy and expert in sub aquatic rescues.

The chemical and metallographic analysis of the University of Zaragoza, the archives of Indias in Seville and Simancas, and the documents that point to the Casa de la Contratación del Rey (a state entity that controlled and recorded from 1503 through the 18th century all maritime traffic between Spain and the Indies) all coincide on the origin of the bell. There is no doubt as to the authenticity of this historic gem weighing just under 31 pounds and just under 10 inches in diameter.

After the kidnapping of the bell and several legal battles, a Spanish court restored the bell to its rightful owner, Mazzara. Although the bell is considered to be “priceless”, as there is no comparable historical artifact available, it is estimated to be worth at least 100 million dollars by appraisers at Sotheby’s and Christie’s.

The bell is making its debut after being kept safe in an undisclosed location in Miami since 2006. Mazzara is making this historical object, the heart and soul of the Santa Maria, available to the collectors in a private auction.

Robeco Bolsters its Sustainable Investment Teams with Portfolio Managers and Seven Analysts

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Roman Robeco
Foto cedidaRoman Boner, gestor de cartera principal de la estrategia RobecoSAM Smart Energy.. Robeco refuerza sus equipos de inversión temática sostenible con un gestor principal y siete analistas de renta variable

Robeco has strengthened its sustainable themes investment teams with the addition of eight professionals. In a press release, the asset manager has announced the appointment of Roman Boner as lead Portfolio Manager of the RobecoSAM Smart Energy strategy. The teams will be further reinforced by seven equity analysts over the coming months.

Our Trends & Thematic investment offering has seen strong growth, and our dedication, ambition and commitment allows us to attract the best world-class professionals. The capability is now stronger than ever before and we will keep adding investment professionals to further strengthen our teams in order to help achieving our clients’ financial and sustainability goals”, said Mark van der Kroft, CIO Fundamental and Quant Equity at Robeco.

David Hrdina, Chair of the Executive Committee at Robeco Switzerland, commented that with these appointments they are sending “a strong signal” to their clients and the market that Robeco Switzerland is “the center for Sustainable Thematic Asset Management, which can attract top-tier professionals”. “We made an important step in further bolstering the investment engine in Zurich. But this step was not the last one”, he added.

Based in Zurich, Boner is an experienced thematic investment manager. He joins Robeco from Woodman Asset Management, where he built up its impact offering. Previously he was Senior Portfolio Manager at Swisscanto, where he was responsible for managing different sustainable/thematic global equity funds and co-managed sustainable multi-asset funds. He also held various positions at UBS Global Asset Management, including Portfolio Manager focused on thematic sustainable equity strategies.

Besides, Pieter Busscher has been appointed lead Portfolio Manager of the RobecoSAM Smart Mobility strategy, having served as Deputy Portfolio Manager of this strategy since its launch in 2018. He has been with the firm since 2007 and is also the lead Portfolio Manager of the RobecoSAM Smart Materials Strategy.

Robeco’s deep bench of thematic investment professionals is further enhanced by the appointments of analysts Michael Studer, Mutlu Gundogan, Sanaa Hakim, Clément ChambouliveAlyssa Cornuz, Simone Pozzi, and Diego Salvador Barrero.

Studer will be named Senior Equity Analyst focusing on Technology. He will also be the Deputy Portfolio Manager for the Smart Energy strategy. He joins from Acoro AM, where he was an investment manager, and has 13 years’ experience as an equity analyst/investment manager, working at Julius Baer and Bank J. Safra Sarasin and other firms.

Gundogan, CFA, will join as Senior Analyst from ABN AMRO – ODDO BHF, where he was Senior Equity Analyst covering the Chemicals sector. He will focus on the Materials sector and brings over 17 years’ experience as a financial analyst. As for Hakim, she will be appointed Senior Equity Analyst for Energy Efficiency & Renewables. With 6 years of experience as an investment analyst, she joins from Independent Franchise Partners and previously she was at Capital Group.

Chamboulive will join as Senior Analyst, also focusing on the Technology sector and its role in the electrification of the transport system. He worked at 2Xideas and prior to that at Baillie Gifford, and has 7 years’ experience as an Investment Analyst. Meanwhile, Cornuz, CFA, will be named Equity Analyst for the RobecoSAM Sustainable Healthy Living Equities strategy, with a focus on Consumer-related sectors. She joins from Credit Suisse and has five years’ experience as an equity and fund analyst. Previously she was at Nordea, where she was a fundamental equity analyst for thematic funds, fully integrating ESG aspects.

Furthermore, Pozzi will become Equity Analyst focusing on Industrial Automation and Process Technologies. He joins from Alantra, where he was an equity analyst and has more than six years of experience. Lastly, Salvador Barrero, CFA, has been appointed Equity Analyst for the Energy Distribution & Renewables team. He joins from BBVA AM in Spain, where he was an ESG equity portfolio manager. He has ten years’ experience as an equity analyst/portfolio manager, working at Aviva and other firms.

ESG in Practice Series: Mayssa Al Midani on Engagement in the Nutrition Strategy

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Al Midani Pictet Asset Management(2)

As active managers, Pictet Asset Management can collaborate with portfolio companies to trigger positive change. Mayssa Al Midani, Senior Investment Manager in the Thematic Equities team, shares her perspective on environmental and social engagement with food companies.

Can you tell us about your active engagement in nutrition?

We invest in firms that help address global food challenges, ensure the sustainability of the food chain and provide access to quality food necessary for health and growth. A key feature of our investment process is engagement: we work closely with the firms we invest in to improve their performance across environmental, social and governance factors.

To help us maintain a constructive dialogue with the firms we have stakes in, in 2018 we established a partnership with the Access to Nutrition Initiative (ATNI), a body which evaluates the world’s 25 largest food and beverage companies based on their contribution to ending malnutrition in all of its forms. Companies are assessed on the nutritional value of their products, their commitment to providing affordable nutrition and the responsibility of their marketing practices.

This year we are taking part as active investors in a collaborative engagement with three companies in our portfolio. 

With other investors, we are writing to these companies, bringing to their attention the specific improvements ATNI research suggests they need to make. We have set a deadline for them to respond. Once we receive their answers, we’ll hold calls with the companies to discuss their responses.

We are only able to engage with Nestlé, Danone and China Mengniu since all other companies in the ATNI index aren’t even in our portfolio because they don’t meet what we call our ‘purity’ threshold, or the percentage of their revenues exposed to nutritious foods. Our definition of nutritious foods is based on what leading health and environmental NGOs classify as foods that optimise both human and planetary health.

Partnering with other asset managers representing several trillions of assets under management gives much more weight to our actions

What are the themes of your engagement with companies in the Nutrition portfolio?

Our objective is to encourage companies to grow the share of healthy products in their portfolio, increase affordability and accessibility for all consumers regardless of income levels, adopt best practice when it comes to the responsible marketing of products to children and commit to front-of-pack nutritional labelling.

We single out the products that do not fit our definition of healthy nutrition and then urge companies to either reformulate them to make them healthier (reduce sugar, fat, salt content, or enrich them with micronutrients), or divest these categories.

We also look closely at how food is marketed. For example, when it comes to the marketing of breastmilk substitutes, we have been calling on companies to comply with the World Health Organisation code for healthy marketing of such products. They may be the only viable nutritional substitute when mothers are unable to breastfeed but they must not be marketed too aggressively so exclusive breastfeeding remains a priority.

We also request that companies link these nutritional objectives to management compensation, which is a powerful way of aligning management interests with positive nutritional impact and ensuring that companies are serious about making these changes.

Pictet AM

How did you choose this initiative ?

There is only so much we can achieve as a single entity.

Partnering with other asset managers representing several trillions of assets under management gives much more weight to our actions. 

Within Pictet, what was initially an asset management initiative has broadened to our private banking arm, Pictet Wealth Management, making Pictet Group as a whole a signatory and supporter of this engagement.

Sustainable nutrition is an area of strategic importance for the Pictet Group – which is already active in the field of nutrition and water through the Pictet Group Foundation – that’s why we feel it makes sense to pursue a collaborative engagement at the group level and to partner with other investors to magnify our impact.

Have you noticed a change in how companies respond to engagement in the past few years?

Food and beverage manufacturers are paying greater attention to the topic of nutrition, for a number of reasons. 

Minimising the impact of their activities on society and the environment has become a business imperative. 

Public interest in health and sustainability has become so widespread it is something companies can no longer ignore. Millenials and Gen-z consumers are more health conscious and increasingly want to align their purchases with their values. They want healthy, nutritious food that is responsibly produced, and are willing to pay a price premium for this. 

It has also become crucial to investors that the companies they invest in meet certain standards. More and more investment managers include ESG factors in their investment process. Regulation such as the EU’s SFDR mandating greater transparency on the sustainability profiles of investment funds will only accelerate that trend.

Public interest in health and sustainability has become so widespread it is something companies can no longer ignore

What has been the effect of Covid-19?

COVID-19 has shed light on the link between poor diets and vulnerability to infectious disease. In particular, studies have shown a strong link between obesity and COVID-19. Governments like the UK have started to implement policies targeting malnutrition as a response to the pandemic. This heightened awareness of the importance of healthy diets is fueling the growth of the functional foods markets (e.g. probiotics, supplements) and that of healthy alternatives such as plant-based foods.

Another effect of the pandemic has been to highlight the threat to food security caused by disruptions in complex global supply chains. In response, we are seeing the food industry investing heavily in a wide range of high-tech solutions, many of which are geared to strengthening supply chains, raising production standards and reducing food waste.

To help us better understand these trends, our portfolio managers draw on the support of a dedicated advisory board, whose members are experts from different areas of the food industry. Among them is a medical practitioner whose research activities focus on the  link between non-communicable diseases such as obesity and diabetes and nutrition. Another is a food scientist, formerly the head of innovation, technology and R&D at Nestlé. They bring a different, science-based perspective and help ensure that our investment theme remains relevant.

To find out more about our collaborative initiatives and our corporate engagement, read our Responsible investment report.

 

Discover more about Pictet Asset Management’s  long expertise in thematic investing.

 

Information, opinions and estimates contained in this document reflect a judgment at the original date of publication and are subject to risks and uncertainties that could cause actual results to differ materially from those presented herein.

Important notes

This material is for distribution to professional investors only. However it is not intended for distribution to any person or entity who is a citizen or resident of any locality, state, country or other jurisdiction where such distribution, publication, or use would be contrary to law or regulation.

The information and data presented in this document are not to be considered as an offer or sollicitation to buy, sell or subscribe to any securities or financial instruments or services.  

Information used in the preparation of this document is based upon sources believed to be reliable, but no representation or warranty is given as to the accuracy or completeness of those sources. Any opinion, estimate or forecast may be changed at any time without prior warning.  Investors should read the prospectus or offering memorandum before investing in any Pictet managed funds. Tax treatment depends on the individual circumstances of each investor and may be subject to change in the future.  Past performance is not a guide to future performance.  The value of investments and the income from them can fall as well as rise and is not guaranteed.  You may not get back the amount originally invested. 

This document has been issued in Switzerland by Pictet Asset Management SA and in the rest of the world by Pictet Asset Management (Europe) SA, and may not be reproduced or distributed, either in part or in full, without their prior authorisation.

For US investors, Shares sold in the United States or to US Persons will only be sold in private placements to accredited investors pursuant to exemptions from SEC registration under the Section 4(2) and Regulation D private placement exemptions under the 1933 Act and qualified clients as defined under the 1940 Act. The Shares of the Pictet funds have not been registered under the 1933 Act and may not, except in transactions which do not violate United States securities laws, be directly or indirectly offered or sold in the United States or to any US Person. The Management Fund Companies of the Pictet Group will not be registered under the 1940 Act.

Pictet Asset Management (USA) Corp (“Pictet AM USA Corp”) is responsible for effecting solicitation in the United States to promote the portfolio management services of Pictet Asset Management Limited (“Pictet AM Ltd”), Pictet Asset Management (Singapore) Pte Ltd (“PAM S”) and Pictet Asset Management SA (“Pictet AM SA”). Pictet AM (USA) Corp is registered as an SEC Investment Adviser and its activities are conducted in full compliance with SEC rules applicable to the marketing of affiliate entities as prescribed in the Adviser Act of 1940 ref.17CFR275.206(4)-3.

Pictet Asset Management Inc. (Pictet AM Inc) is responsible for effecting solicitation in Canada to promote the portfolio management services of Pictet Asset Management Limited (Pictet AM Ltd) and Pictet Asset Management SA (Pictet AM SA).

In Canada Pictet AM Inc is registered as Portfolio Manager authorized to conduct marketing activities on behalf of Pictet AM Ltd and Pictet AM SA.

Pictet Asset Management: Dealing with Delta

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Luca Paolini Pictet AM

Economic growth has clearly slowed in recent months thanks in large part to the spread of the particularly infectious Delta variant of Covid. Still, with monetary stimulus in plentiful supply and vaccination rates holding firm, this dip could prove to be temporary. 

Whether inflation will be transient is not so clear, however. So far, much of the increase in inflation results from distortions caused by changing consumer behaviour – a narrow group of items such as used cars and holiday accommodation accounts for most of the price increases seen in recent months – and base effects. A concern, though, is that price pressures are starting to seep into other areas, like services.

Pictet AM

Making matters more complicated, policymakers aren’t giving particularly clear signals.

The heated inflation debate taking place within the US Federal Reserve’s ranks has spilled out into the open, and investors are still waiting for an indication of when the central bank will start to wind down its USD120 billion monthly asset purchase programme or how long the process might take.

There are other risks for investors to consider. 

While developed economies have started to get a grip on the pandemic, signs that outbreaks are possible despite mass vaccination programmes stand as a warning for what might happen this winter in the US and Europe. Meanwhile, regions that had previously been largely unaffected by Covid – like Southeast Asia – are bearing the brunt of the current wave.

An additional worry is China. Covid-driven lockdowns, a tightening of credit supply earlier this year and Beijing’s regulatory and market reforms have all dampened growth and raised uncertainty for the business community. A big puzzle facing the Chinese government is why households are spending so little and how to get them spending more. Taking all this into account, we have chosen to reduce exposure to some cyclical stocks (Japan) but maintain our overall neutral stance on all major asset classes. 

Our business cycle analysis offers up a mixed picture. We are now less positive on the UK, Switzerland and Europe outside of the euro zone. However, we believe that weakness in the US is likely to be transitory, driven by a resurgence of the virus, which will merely postpone the pickup in consumption rather than undermine the underlying strength of the recovery.

In light of weakness in US consumption and construction we have lowered our GDP growth forecast for this year to 6.5 per cent from 7 per cent, but continue to expect a robust expansion of some 5.3 per cent for 2022.

The euro zone, meanwhile, has offered positive surprises. The leading indicator is very strong. Online indicators show that mobility is back above pre-pandemic levels, which suggests that Europeans have learned to live with Covid.

Pictet AM

Our liquidity indicators show that Chinese credit growth peaked last autumn and then started to contract four months ago. This means that even though the People’s Bank of China’s recently cut its bank reserve requirement ratio, the lagged effects from prior tightening will linger for the rest of the year.

That said, global liquidity conditions in the coming months will be primarily determined by the pace of monetary tightening in the US. The major risk is that the US tightens too much too soon. For now, though, liquidity conditions worldwide remain supportive for riskier asset classes, with central banks still more generous than they were in the months following the global financial crisis a decade ago, while private liquidity creation in the form of loans remains at about its long run average.

Our valuation indicators show that even though global bonds have become expensive, particularly US Treasuries and euro zone bonds, equities are more expensive still. 

If liquidity conditions turn negative – in other words, if the rate of money supply expansion falls below the nominal rate of GDP growth – then global stocks’ price to earnings ratios will come under pressure. That’s especially true because P/E ratios are very high for this stage of the cycle relative to earnings growth (see Fig. 2) – our models suggest these ratios will contract 5 to 10 per cent by the year end.

Our technical indicators show that equity sentiment remains neutral across all regions, while strong short-term trends support bonds. By contrast, a sharp loss of momentum is weighing on commodities.

Separately, investor risk appetite has pulled back from euphoric levels in mid-May across asset classes.

 

Opinion written by Luca PaoliniPictet Asset Management’s Chief Strategist

 

Discover Pictet Asset Management’s macro and asset allocation views.

 

Information, opinions and estimates contained in this document reflect a judgment at the original date of publication and are subject to risks and uncertainties that could cause actual results to differ materially from those presented herein.

Important notes

This material is for distribution to professional investors only. However it is not intended for distribution to any person or entity who is a citizen or resident of any locality, state, country or other jurisdiction where such distribution, publication, or use would be contrary to law or regulation.

The information and data presented in this document are not to be considered as an offer or sollicitation to buy, sell or subscribe to any securities or financial instruments or services.  

Information used in the preparation of this document is based upon sources believed to be reliable, but no representation or warranty is given as to the accuracy or completeness of those sources. Any opinion, estimate or forecast may be changed at any time without prior warning.  Investors should read the prospectus or offering memorandum before investing in any Pictet managed funds. Tax treatment depends on the individual circumstances of each investor and may be subject to change in the future.  Past performance is not a guide to future performance.  The value of investments and the income from them can fall as well as rise and is not guaranteed.  You may not get back the amount originally invested. 

This document has been issued in Switzerland by Pictet Asset Management SA and in the rest of the world by Pictet Asset Management (Europe) SA, and may not be reproduced or distributed, either in part or in full, without their prior authorisation.

For US investors, Shares sold in the United States or to US Persons will only be sold in private placements to accredited investors pursuant to exemptions from SEC registration under the Section 4(2) and Regulation D private placement exemptions under the 1933 Act and qualified clients as defined under the 1940 Act. The Shares of the Pictet funds have not been registered under the 1933 Act and may not, except in transactions which do not violate United States securities laws, be directly or indirectly offered or sold in the United States or to any US Person. The Management Fund Companies of the Pictet Group will not be registered under the 1940 Act.

Pictet Asset Management (USA) Corp (“Pictet AM USA Corp”) is responsible for effecting solicitation in the United States to promote the portfolio management services of Pictet Asset Management Limited (“Pictet AM Ltd”), Pictet Asset Management (Singapore) Pte Ltd (“PAM S”) and Pictet Asset Management SA (“Pictet AM SA”). Pictet AM (USA) Corp is registered as an SEC Investment Adviser and its activities are conducted in full compliance with SEC rules applicable to the marketing of affiliate entities as prescribed in the Adviser Act of 1940 ref.17CFR275.206(4)-3.

Pictet Asset Management Inc. (Pictet AM Inc) is responsible for effecting solicitation in Canada to promote the portfolio management services of Pictet Asset Management Limited (Pictet AM Ltd) and Pictet Asset Management SA (Pictet AM SA).

In Canada Pictet AM Inc is registered as Portfolio Manager authorized to conduct marketing activities on behalf of Pictet AM Ltd and Pictet AM SA.

 

Smart Beta ETFs Are Gaining Traction with European Private Banks

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Pixabay CC0 Public Domain. Los fondos ETFs con estrategias smart beta ganan atractivo entre los clientes de la banca privada europea

Nearly half (46%) of the European private banks and independent wealth managers expect demand for smart beta exchange-traded funds (ETFs) to increase over the next 24 months, according to the latest issue of “The Cerulli Edge-Europe Edition“, a survey by Cerulli Associates.

“Forty-four percent of the respondents to our research expect passive ETF demand to increase over the next two years,” says Fabrizio Zumbo, associate director, European asset and wealth management research at the firm. Besides, the research indicates that European private banks’ average portfolio allocation to ETFs is set to increase from 18% in 2020 to 25.7% by 2022 and that specific sector/country exposure is by far the most important consideration for these institutions when evaluating ETFs.

According to Zumbo, there have been some interesting developments away from the mainstream asset classes. For example, some notable differences emerged when Cerulli asked European private banks and independent wealth managers to identify what they expect to be the most in-demand passive fund strategies and exposures. “EUR bonds were the clear winner among private banks, with almost half as many references again as USD bonds. In contrast, wealth managers expect other bond strategies to be most popular, with little to choose between their expectations for thematic, corporate, and emerging market bonds”, he reveals.

The research also shows that the COVID-19 pandemic-related market turmoil provided a significant stress test of the resilience of bond ETFs and their success triggered interest from investors who had not previously considered using ETFs in fixed income. In addition, a combination of regulatory tailwinds and unprecedented client demand has led to a surge in ESG investing.

“ETFs are also becoming an area of innovation in investment strategies, with thematic approaches that focus on sustainable food sources or specific climate change criteria, for example, being released in ETF format by default”, concludes Cerulli.

Companies with Stand-Alone ESG Committees Have Higher Sustainability Scores

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Pixabay CC0 Public DomainImagen de Gerd Altmann. NN IP

A joint study by NN Investment Partners (NN IP) and governance services provider Glass Lewis reveals that companies with stand-alone ESG committees do tend to have higher ESG scores. According to the asset manager, this is reflected in its proprietary ESG Lens.

The research shows that companies with this supervisory structure account for the highest proportion (28%) of firms in the top quartile of ESG Lens scores and have above-median ESG Lens scores generally. Although those with ‘below board’ committee oversight of sustainability also have 28% in the top quartile, this category only accounts for 15% of second quartile performers versus 36% for stand-alone committees. Overall, the highest proportion of above-median ESG Lens scores are registered at companies with specialized committees -whether at or below board level- to oversee sustainability performance. 

Firms with other types of oversight structures and their percentage representation in the top quartile include: combined board committee (16%); whole board (13%); and not disclosed (16%). 

Besides, those located in Europe and the United States, which have more developed extra-financial reporting expectations and obligations, tend to have stand-alone board level ESG committees (26% and 28% respectively). However, while the quality of disclosure is strong in Europe, the same cannot be said for the US, where many companies appear to have taken a “legal minimum” approach to disclosure. The relatively weak reporting requirements in the United States versus Europe may explain the differences in disclosure quality.

Supervisory structures by regions

NN IP

 

Stand-alone committees are most prevalent in the energy sector (44%), followed by materials (37%), financials and consumer staples (both 29%), utilities (21%), industrials (19%), consumer discretionary (13%) and healthcare (10%).

“How much oversight boards provide on sustainability varies and may often be quite limited. The decision to adopt stand-alone or combined board-level ESG committees remains voluntary but is influenced both internally, such as having a company culture that values sustainability, and externally by factors such as stakeholder and regulatory pressures. Given these committees are voluntary, they could be viewed as signalling a company’s heightened focus on the strategic performance of ESG, but this may only reflect a superficial commitment”, commented Adrie Heinsbroek, Chief Sustainability Officer at NN IP.

He believes that in terms of external factors, while recommendations, soft law, and shareholder expectations can influence companies into setting up committee oversight of sustainability and ESG issues, mandatory extra-financial disclosure requirements have a more direct and material impact on the presence of defined oversight structures: “European companies, for example, which are affected currently by the greatest regulatory pressure to report extra-financial information, are the most likely to have some form of ESG committee in place, while companies in the energy sector may have more stand-alone or combined committees due to greater scrutiny of environmental issues, most notably climate change”.

Heinsbroek pointed out that the research findings “once again” show the important effect of companies having ESG in focus, and the impact on their ESG performance. “As active investors, we continue to engage with companies to put this on their radar and exert our influence by having discussions on this topic”, he concluded.

You can find the full report by NN IP/Glass Lewis that explores the links between ESG supervision and performance here.

Nordea Asset Management Will Open an ESG Hub in Singapore

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Pixabay CC0 Public Domain. Nordea Asset Management abrirá un centro ESG en Singapur

Nordea Asset Management (NAM) has announced this week its plans to open an ESG hub in Singapore by the end of the year in response to its “growth and successes” in the region. In a press release, the asset manager has revealed that this is a strategic decision to establish its first ESG hub outside of its Nordic headquarters.

In this sense, they believe that the hub will allow them to be closer to clients in Asia-Pacific and better understand how companies are embracing sustainability in the region. “NAM is pleased to establish an ESG hub in Singapore, which will enable us to enhance our local servicing, ESG capabilities, investment platform and distribution reach in the region. Sustainability issues have gained significant interest in Asia in recent years, and investors are increasingly asking for ESG solutions. The time is right to meet that demand,” says Nils Bolmstrand, CEO of Nordea Asset Management.

The asset manager has explained that Singapore is an attractive choice for its first overseas ESG hub due to its stable investment environment and the government’s commitment to tackle the problems of carbon emissions and embrace the doctrines of sustainable finance. In its view, Singapore’s Green Finance Action Plan, launched in 2019, marks “a significant step in the country’s transition towards a sustainable future”.

NAM’s new ESG hub will supplement its local Singapore distribution office, established in 2013, and will be fully integrated with NAM’s ESG-focused internal investment boutiques as well as NAM’s award-winning Responsible Investments team. The plan is to start implementing the hub in the latter part of 2021.