Internacional archivos - Page 214 of 531

Steve Drew (Janus Henderson Investors): “Argentina is Going to Be One of the Best Bond Markets in the Next Six Months”

According to Steve Drew, Portfolio Manager and Head of Emerging Markets Fixed Income at Janus Henderson Investors, the Emerging Market Corporate bond is an asset class that has been often overlooked and misunderstood, but this trend is distinctly changing. With about 15 years of history, this asset class sometimes behaves as a teenager, reacting with tantrums every now and then.

“This evolving asset class is growing rapidly and is now disrupting previous notions of how and where to earn income. With an investable universe of 2,149 billion of dollars, the JP Morgan CEMBI Broad Diversified Index is twice the size the of the JP Morgan EMBI Index, one of the most frequently used benchmarks for Emerging Market Sovereign bonds”, said Drew.

Over the past 10 years, the Emerging Market Corporate asset class has also doubled the annual growth rate of Emerging Market Sovereign bonds, 18% vs 9%. It now comprises 52 countries, 12 sectors and 645 unique issuers, set against 149 issuers for the EM Sovereign debt.

In Emerging Markets, corporate bonds have higher credit quality than sovereign bonds, the average credit rating of the JP Morgan CEMBI is BBB- and 59% of its universe is investment grade, whereas the JP Morgan EMBI has an average rating of BB+ and only 51% of its bonds are investment grade.

“There is one big market that dominates the issuance of Emerging Market Corporate debt, and that is China, who happens to be an investment grade country, and therefore, lot of the companies that issue debt in China are investment grade”, explained Steve Drew.

There are also some other characteristics that make EM Corporate debt attractive. Duration, a matter that is in every fixed income investors mind now that the Federal Reserve is hiking interest rates every three months, is lower in the EM Corporate debt than in most of other credit asset classes. For example, their benchmark duration is only 4.52 years, whereas EM Sovereign bond’s benchmark has a duration of 6.66 years, the US Aggregate Bond index has a duration of 6,36 and the Global Aggregate Bond index has a duration of 7.16 years.

Recently, emerging markets have grabbed the attention of news headlines, debt and currency crisis in Argentina and Turkey, elections in Mexico and Brazil or trade tensions in China have added uncertainty to the asset class. But, when volatility is translated across many issuers, there is less volatility in EM Corporate bonds than in EM Sovereign bonds. EM Corporate bonds have lower maximum drawdown and lower standard deviation than the EM Sovereign bonds, with -4,6% vs -6,6% (5 years trailing, as of 31 August 2018), and 4,2% vs 6,0% (3 years trailing, as of 31 August 2018), respectively.

EM Corporate bonds also have lower leverage than developed markets, both in investment grade and high yield asset classes, and their forecasted default rates for 2018 are expected to be lower than those of US High yield.

“Emerging Market Corporate bonds, as an asset class, has lower leverage, less or similar volatility, lower duration and is actually cheaper than other developed markets. So, what risks are the investors taking? They are taking the macro and geopolitical risks, and sometimes foreign exchange risks, even if the investors are buying a dollar denominated bond”, explained Drew.

“Lately, Emerging Markets have suffered a sell-off, but they had a fantastic performance in 2016 and 2017. In the last 16 years, the total return of JP Morgan CEMBI Broad Diversified, annualized, has been a 7%, only 90 basis points below US High Yield (measured by BofA Merrill Lynch U.S. High Yield Master), but being an investment grade asset class, having better credit quality, lower leverage and duration”, he added.

Where are EM Corporates headed?

Argentina, Turkey, Indonesia, South Africa, Brazil and Mexico have recently created some noise, but this noise is not necessarily related with the fundamentals of those countries, part of the uproar is strongly related to the Fed’s normalization of their monetary policy.

“In Emerging Markets, is very important to quantify how the macro, the geopolitical and foreign exchange risks are going to affect the country you are investing in. You should only invest when you get a green light in both the fundamentals and the macro. Back in 2014, US imposed new sanctions on Russia, a country that represents about 5% of the JP Morgan CEMBI Broad Diversified Index. Spreads widened 700 hundred points, but it was not a credit fundamental story, it was a macro story. So, we bought bonds issued by Gazprom, a company that has more cash than debt in its balance sheet and we knew it was a good investment. In 2015, all sectors in Brazil were trailing, whether it was a paper company, a petrochemical company or a protein producer, all companies traded at discount, without considering whether they were a good company or not, due to markets exposure to Lava Jato corruption case. For five months we were not invested in Brazil, the catalyst to go back and invest in the country was when we saw that Dilma Rousseff’s was going to be impeached, breaking the negative cycle.

In 2016, during US general election campaign, Trump threatened to build a wall on Mexico’s border and said that Mexicans would pay for it. If the US were to finally build that wall, the one company that would benefit from the construction would be CEMEX, which bonds were punished by the markets, trading at a discount of 10% to 20% for four weeks. When we saw the Mexican peso trading at 21 pesos against the dollar, we bought some more Mexican corporate debt, to see if we could take some foreign exchange translation risk”, said Drew.

Since the beginning of this year, US foreign policy has created some distortion in Emerging Markets, but fundamentals are still good. From a valuation perspective, countries like Argentina, are now looking attractive. “Argentina is going to be one of the best bond markets in the next six months. Some of the quality companies that we have invested in Argentina are trading at 15% to 16% discount, if they were in any other country or in any other jurisdiction in the world, they would be trading at half that spread. Some of the Argentinian companies that we have invested in are one to two time leveraged, and they are strategically important within their country, but they are cheap because their macro circumstances. Turkey, on the other hand, has 105 billion dollars in its banking system to roll over in the next six months. Erdogan has already said no to an IMF bailout package, making more complicated for bond holders to recover their investments. Some of the banks’ Tier 2 capital debt is already trading at 70 to 80 cents of a dollar, but we think some of this debt is already worth 0. That is why I think Turkey is to avoid”, concluded Drew.

Important Information

US Offshore

This document is intended solely for the use of professionals, defined as Eligible Counterparties or Professional Clients, and US Advisors to Non-US Investors and is not for general public distribution. We may record telephone calls for our mutual protection, to improve customer service and for regulatory record keeping purposes.
Issued in the UK by Janus Henderson Investors. Janus Henderson Investors is the name under which Janus Capital International Limited (reg no. 3594615), Henderson Global Investors Limited (reg. no. 906355), Henderson Investment Funds Limited (reg. no. 2678531), AlphaGen Capital Limited (reg. no. 962757) and Henderson Equity Partners Limited (reg. no.2606646) (each incorporated and registered in England and Wales with registered office at 201 Bishopsgate, London EC2M 3AE), are authorised and regulated by the Financial Conduct Authority to provide investment products and services. Henderson Secretarial Services Limited (incorporated and registered in England and Wales, registered no. 1471624, registered office 201 Bishopsgate, London EC2M 3AE) is the name under which company secretarial services are provided. All these companies are wholly owned subsidiaries of Janus Henderson Group plc (incorporated and registered in Jersey, registered no. 101484, registered office 47 Esplanade, St Helier, Jersey JE1 0BD).

We may record telephone calls for our mutual protection, to improve customer service and for regulatory record keeping purposes.

CASCAID Americas Receives the Support of the Alternative Investment Industry Through AltsMIA

| For Gabriela Huerta | 0 Comentarios

On November 6th the AltsMIA Investment Forum will gather the industry’s leading experts across the alternative investment spectrum, at an event that takes place at the JW Marriott in Miami.

Developed by CFA Society of Miami, CAIA Miami, Miami Finance Forum, and MarketsGroup, participants will profit from the insights from experts in private equity, venture capital, real estate, hedge funds, cryptocurrency, artificial intelligence and…. learn all about the CASCAID Americas initiative.

The organization has kindly provided us a booth where we will answer all the questions about how to join forces through CASCAID Americas to benefit The Seed School of Miami, our charity of choice for this edition. Member from this amazing school will be with us to give first-hand information about the school and its needs.

This is just another example of how the asset and wealth management community get together to change the world for the better. We would like to give our very special thanks to CASCAID Americas Ambassador Karim Aryeh, who has made this possible.

To help CASCAID Americas reach its US$150k goal please donate here.

Morgan Stanley Advisor Joins Bolton’s New York City Office

| For Gabriela Huerta | 0 Comentarios

Nicolas Schreiber has joined Bolton Global Capital‘s New York City office. Schreiber, formerly with Morgan Stanley, manages $180 million in client assets. His international clientele includes high net worth individuals and institutions based in the US, Europe and Latin America.

Schreiber began his career as a financial advisor with HSBC Private Bank in 2001 in Manhattan. Two years later, he moved to UBS International where he worked for 5 years until joining Smith Barney in 2008. Smith Barney was acquired by Morgan Stanley in 2009 where Schreiber has worked for the last 9 years before joining Bolton in October 2018. Custody of his client accounts will be through BNY Mellon Pershing.

Bolton recently opened an office on 5th Avenue in New York City to recruit Manhattan based advisors who wish to convert their practices to the independent business model. Since the financial crisis of 2008, several hundred teams have migrated their client accounts from the major banks and wirehouses to independent broker dealers and registered investment advisors like Bolton. Over this period, Bolton has recruited financial advisors with more than $5 billion in client assets from the major banks and wirehouses.

Bolton provides compliance, back office, and brand development support as well as the wealth management and trading technologies for its independent financial advisors. Under Bolton’s independent business model, advisors retain a much higher percentage of their fees and commissions and yet have access to all of the wealth management and trading capabilities offered by the largest firms.

Schreiber hold a bachelors degree in economics as well a CPA designation from the Catholic University in Argentina. He lives in Williamsburg in Brooklyn NY with his wife Florentine and two children Philippe and Melody.

“We are proud to have such a well respected professional affiliate with our company and look forward to supporting the continued growth of his wealth management business. Mr. Schreiber will operate under the trade name Nomad Advisors.” Said Bolton in a statement.

Emerging Markets’ Lost (Near) Decade

| For Gabriela Huerta | 0 Comentarios

Investors may be ready to abandon emerging markets, but the potential is there for a sizeable rebound. U.S. technology is once again ascendant. Since the fall of 2016, the S&P 500 Technology Sector Index is up nearly 70%; the tech sector now accounts for more than 25% of the S&P 500 market capitalization.

Despite the strength of the recent rally, tech enthusiasts will recall a long, long period of unpopularity. After peaking in early 2000, the tech sector lost more than 80% of its value. It then took 17 years until the sector reclaimed its 2000 peak. Investors in emerging market (EM) stocks should keep that history in mind as they go through a similar, albeit less prolonged drought. The MSCI Emerging Markets Index is trading at approximately the same level as it did in early 2010.

Value, or the lack thereof, played a part

Valuations in emerging markets never approached the Olympian heights that tech stocks traded at in the late 1990s. That said, valuations have played a part in emerging markets’ struggles.

Since coming out of their own financial crisis in late 1990s, emerging market stocks have tended to trade in a well-defined range versus developed markets: a 45% discount to a 10% premium (based on price-to-book). Periods when EM stocks traded at a premium, such as late 2007 and 2010, turned out to be market tops. Interestingly, EM’s recent 20% drop was not proceeded by egregious valuations. In January, EM stocks were trading at approximately 1.9 times x book, a 23% discount to the MSCI World Index.

Another bottom?

Following the recent correction, EM stocks are trading at levels that preceded previous rebounds. EM equities are trading at roughly 1.55 times price-to-book (P/B), the lowest since late 2016 and a 35% discount to developed markets. Price-to-earnings (P/E) measures paint a similar picture. Current valuations represent a 33% discount to developed markets. Today, countries from Russia to South Korea are trading at less than 10x earnings (see Chart 1).

Enlarge

Of course, valuations are never the complete story. In the short term, they might not even be that relevant. As I discussed back in August, an EM rebound probably requires two other components: a flat-to-cheaper dollar and signs of an economic rebound. On the former, emerging markets should be getting some relief as the dollar is now down nearly 3% from its August peak.

In terms of economic growth, the picture is more mixed. In late July it briefly looked like emerging market economies were growing faster than expectations. That rebound proved fleeting. Going forward, investors should focus on China, where efforts to accelerate the economy through monetary stimulus are accelerating. Typically, these efforts start to impact the real economy with a 1-2 quarter lag.

Continuing pressure on particular EM countries–notably Turkey and Argentina–are partially responsible for recent losses. Escalating trade frictions have not helped. Still, should the dollar remain stable and China begin to accelerate, valuations suggest the potential for a sizeable rebound.

Bottom Line

For investors who have given up on emerging markets, it may be worth recalling that nine years after peaking, U.S. technology stocks were still down nearly 80%. From there the sector began a rally that has lasted more than nine years and resulted in a gain of more than 500%.

Build on Insight, by BlackRock written by Russ Koesterich, CFA, is Portfolio Manager for the BGF Global Allocation Fund.

In Latin America and Iberia, for institutional investors and financial intermediaries only (not for public distribution). This material is for educational purposes only and does not constitute investment advice or an offer or solicitation to sell or a solicitation of an offer to buy any shares of any fund or security and it is your responsibility to inform yourself of, and to observe, all applicable laws and regulations of your relevant jurisdiction. If any funds are mentioned or inferred in this material, such funds may not been registered with the securities regulators of Argentina, Brazil, Chile, Colombia, Mexico, Panama, Peru, Portugal, Spain Uruguay or any other securities regulator in any Latin American or Iberian country and thus, may not be publicly offered in any such countries. The provision of investment management and investment advisory services is a regulated activity in Mexico thus is subject to strict rules. For more information on the Investment Advisory Services offered by BlackRock Mexico please refer to the Investment Services Guide available at www.blackrock.com/mx. The securities regulators of any country within Latin America or Iberia have not confirmed the accuracy of any information contained herein. No information discussed herein can be provided to the general public in Latin America or Iberia. The contents of this material are strictly confidential and must not be passed to any third party.

Investing involves risks, including possible loss of principal.
International investing involves risks, including risks related to foreign currency, limited liquidity, less government regulation and the possibility of substantial volatility due to adverse political, economic or other developments. These risks often are heightened for investments in emerging/developing markets or in concentrations of single countries.
This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of September 2018 and may change as subsequent conditions vary. The information and opinions contained in this post are derived from proprietary and nonproprietary sources deemed by BlackRock to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by BlackRock, its officers, employees or agents. This post may contain “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this post is at the sole discretion of the reader. Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.
©2018 BlackRock, Inc. All rights reserved. BLACKROCK is a registered trademark of BlackRock, Inc., or its subsidiaries in the United States and elsewhere. All other marks are the property of their respective owners.
USR0918U-610540-1900137

Dan Siluk (Janus Henderson Investors): “We Will Probably Look Back to US Treasuries when the Fed Announces They Have Reached their Neutral point”

| For Meritxell Sedo | 0 Comentarios

Borrowing Donald Trump’s electoral campaign slogan, Dan Siluk, co-manager of the Absolute Return Income strategy at Janus Henderson, explained at the Madrid Knowledge Exchange 2018 event that markets are at the beginning of a new cycle of quantitative tightening that will “make rates great again”.

In the past decade, the intervention of the three main central banks were able to save the global economy from the financial crisis, but at the same time there were some intended and unintended consequences. The balance sheets of the Federal Reserve, the European Central Bank and the Bank of Japan rose exponentially, substantially dampening the volatility in the markets.

The VIX index, who typically settled in the 20 – 30 points range over decades, in the last ten years traded in a very tight range, between 10 and 15 points. Any time there was a bout in volatility, the presidents of the central banks always came back to give an answer that reassured the markets. That’s what happened during the Greece and the Eurozone crisis in 2011-2012, when Mario Draghi pronounced his “Whatever it takes” speech, or in the “taper tantrum” episode, in the summer of 2013, when Ben Bernanke’ FOMC statement was interpreted by bond investors as a sell signal.

With a clear correlation between central banks’ balance sheet size and the value of global assets indices, there has been inflation in practically all the asset classes, something that has greatly favored passive investments, like ETFs and index funds.

“In the past decade, investors could do pretty well by simply earning the beta of the market. They could obtain an attractive performance regardless whether they owned rates or credits, just because rates were driven lower, and credit spreads were driven tighter. Any bouts of volatility were short lived, because central bankers were coming to the rescue. So as long as investors could ride through those periods of volatility their fixed income portfolios tended to do pretty well”, said Siluk.

However, consumer price inflation has barely appeared. Except for United States and United Kingdom, were inflation expectations are lower in the near future, is expected that there will be a real inflation growth in the rest of developed economies, that would be the case of the Eurozone and Japan. In the latter country, after decades of low growth, consumption and growth in wages is returning. While in the Eurozone, unemployment levels are declining in many of the member states. Also, the Asian region excluding Japan is contributing significantly to global inflation. The emerging consumer is one of the fastest growing segments of the global economy and lately is leading inflation.

According to Janus Henderson Investors’ portfolio manager, we are facing the beginning of a new cycle, in which the Federal Reserve is reducing its balance, the European Central Bank has reduced the volume of monthly of its program purchases, aiming to finalize it at the end of year. And, even the Bank of Japan, in the last two years has slowed its program of quantitative easing, sporadically decreasing its balance.

Upside risks to rates

In the US, the necessity of financing a swelling deficit has significantly increased the supply in Treasuries. This increase together with a decrease in foreign investors demand on Treasuries, mainly due to the higher cost of hedging the exposure to US dollars, has partially diminished the total demand for Treasuries.

“Fiscal expansions tend to generate high levels of inflation. Even when there is a strong dollar due to the diversion in monetary policies among developed economies. Trump’s administration has certainly a bias towards a weaker dollar, which is inflationary. All these factors support our vision that rates are going to climb, and curves are going to steepen, that does not necessarily mean that we are going to wake up one morning and see rates 25 or 50 basic points higher. Typically, what happens is that they try to trade in a range and when they break that range, the highest point of the range becomes the new support level. For quite few months of this year, we have seen these 2,70% -3,0% yield range in the US Treasury 10-year bond. We just broke the 3,0%, and at some point, this 3% becomes now the point that backs up a resistance level”, he said.

All these factors are pointing out that you need to be very nimble in fixed income management, specially in terms of asset allocation. Therefore, in this strategy, they favor a benchmark agnostic strategy.

“Benchmark indices normally have certain limitations. We need to be active and flexible, to invest anywhere around the globe. For example, today, rather than bear interest risk in US, which is rising rates, we are looking at commodity-producing countries, like Australia and New Zealand. Because China is slowing down, these economies have very high household debt to income ratios. Their banking costs are increasing. Local banks are rising mortgage rates, whereas central banks are on hold. So, the domestic banks are partially doing the job of the central banks, who are maintaining a dovish position. We rather have interest rate risk in countries that are dovish or on hold monetary policy”, he explained.

“We will probably look back to US Treasuries when the Fed announces they have reached their neutral point. The US is today the highest yield across the developed world. It is also a very steep curve in the front part of the curve. The 10-year Treasury bond yields are offering a spread of 20 basis points over the 2-year notes, so investors are not actually getting paid for the additional interest rate risk or duration risk. On the other hand, the front-end of the curve will be an even more attractive investment once the Fed will finish their hiking cycle”, he concluded.

Important Information:

US Offshore:

Janus Capital Management LLC actúa en calidad de asesor de inversiones. Janus, INTECH y Perkins son marcas registradas de Janus International Holding LLC. © 2018, Janus Henderson Investors. La denominación “Janus Henderson Investors” incluye a HGI Group Limited, Henderson Global Investors (Brand Management) Sarl y Janus International Holding LLC. Para obtener más información o localizar la información de contacto del representante de Janus Henderson Investors en su país, visite www.janushenderson.com.

Janus Henderson Investors is the name under which Janus Capital International Limited (reg no. 3594615), Henderson Global Investors Limited (reg. no. 906355), Henderson Investment Funds Limited (reg. no. 2678531), AlphaGen Capital Limited (reg. no. 962757), and Henderson Equity Partners Limited (reg. no.2606646), (each incorporated and registered in England and Wales with registered office 201 at Bishopsgate, London EC2M 3AE) are authorised and regulated by the Financial Conduct Authority to provide investment products and services.

It Is Possible We See A Correction in the US Markets with Potential for Increased Volatility Globally

| For Gabriela Huerta | 0 Comentarios

U.S. equities edged higher during September while posting the best quarterly performance since the 4Q of 2013. Stocks set another record high in late September as the market brushed off the escalating trade war, the undeterred Fed’s rising interest rate policy, and contentious midterm election uncertainties. Global investors continue to be impressed by America’s low tax rate induced economic strength, corporate profit growth, and less regulation. The consumer is doing well with rising wages, lots of jobs, and a record for household net worth and confidence. The U.S. equity market remains in the global sweet spot as the bull market that started in March of 2009 has moved higher and outperformed foreign markets. In Europe markets are worried about the Brexit stalemate and the bickering ECB.

We continue to view the investment backdrop through the lens of the four Ts. The first is Tariffs and we are not overly concerned about the current situation and expect the eventual long term outcome to be accretive to U.S. GDP growth. The second T relates to the U.S. 10-year Treasury note yield which is currently around 3 percent. Are current ‘EBITDA’ less capex multiples sustainable as interest rates rise? Taxes are next. The U.S. moved to a territorial tax system from a global system for corporations, which coupled with a 21% corporate tax rate provides a magnet for business to locate here. Another plus is the 100 percent write-off of capital expenditures for both new and used equipment which drives greater capital expenditures. The fourth T is Technology which creates ‘moats’ or barriers to entry around selective service companies.

In the U.S. political catalyst arena, mid-term elections will be held on Tues Nov 6, 2018. The outcome may be unexpected, as was the case in November 2016 when financial market volatility spiked.

On the global mergers and acquisitions front, activity reached $3.3 trillion in the third quarter, an increase of 37% compared to 2017. The current wave of deal activity is global, as evidenced by cross-border M&A activity that totaled $1.3 trillion in the first nine months of 2018, making it the strongest period for cross-border deal making since 2007. Energy & Power, Healthcare and Technology have been the most active sectors through the third quarter.

There were a number of positive developments in September including:

Sky plc (SKY LN-London) shares traded higher after the auction process for the British broadcaster resulted in a bid price of £17.28 cash per share by Comcast, or about £37 billion. The auction was mandated by UK regulators after a bidding war broke out between Comcast and Disney-backed Twenty-First Century Fox after Fox launched a deal to acquire Sky for £10.75 in December 2016.
Express Scripts (ESRX-NASDAQ) shares narrowed the discount to its deal price after the Department of Justice gave the green light to its proposed merger with Cigna. The companies are still awaiting approval from several state insurance departments and expect to close the deal in the fourth quarter.
Nevsun Resources (NSU CN-Toronto), a gold and copper mining company, agreed to be acquired under improved terms from Zijin Mining Group for C$6.00 cash per share, or about C$1.8 billion. Nevsun hired bankers to sell the company after Lundin Mining launched a bid to acquire the company for C$4.75 cash per share in July 2018.

Notable transactions announced in September included:

Integrated Device Technology, Inc. (IDTI-NASDAQ), which makes semiconductors and modules used in computers, networking and personal devices, agreed to be acquired by Renesas Electronics Corp for $49 cash per share, or about $6.5 billion.
LaSalle Hotel Properties (LHO-NYSE), an upscale lodging REIT, agreed to be acquired by Pebblebrook Hotel Trust under improved terms. In May, LaSalle agreed to be acquired by Blackstone for $33.50 cash per share. Subsequently. Blackstone walked from the transaction after LaSalle declared Pebblebrook’s offer superior. Terms of the deal with Pebblebrook allow LaSalle shareholders to elect either $37.80 cash or 0.92 shares of Pebblebrook common stock, subject to proration, or about $5 billion.
Ocean Rig UDW (ORIG-NASDAQ), an international offshore drilling contractor specializing in ultra-deepwater drilling, agreed to be acquired by Transocean for $12.75 cash and 1.6128 shares of Transocean common stock per share of ORIG, or about $3 billion.

Through this backdrop we continue to evaluate the possibly for a correction in the US markets with potential for increased volatility globally as a result of much of the ongoing developments both politically and economically.

Column by Gabelli Funds, written by Michael Gabelli

To access our proprietary value investment methodology, and dedicated merger arbitrage portfolio we offer the following UCITS Funds in each discipline:

GAMCO MERGER ARBITRAGE

GAMCO Merger Arbitrage UCITS Fund, launched in October 2011, is an open-end fund incorporated in Luxembourg and compliant with UCITS regulation. The team, dedicated strategy, and record dates back to 1985. The objective of the GAMCO Merger Arbitrage Fund is to achieve long-term capital growth by investing primarily in announced equity merger and acquisition transactions while maintaining a diversified portfolio. The Fund utilizes a highly specialized investment approach designed principally to profit from the successful completion of proposed mergers, takeovers, tender offers, leveraged buyouts and other types of corporate reorganizations. Analyzes and continuously monitors each pending transaction for potential risk, including: regulatory, terms, financing, and shareholder approval.

Merger investments are a highly liquid, non-market correlated, proven and consistent alternative to traditional fixed income and equity securities. Merger returns are dependent on deal spreads. Deal spreads are a function of time, deal risk premium, and interest rates. Returns are thus correlated to interest rate changes over the medium term and not the broader equity market. The prospect of rising rates would imply higher returns on mergers as spreads widen to compensate arbitrageurs. As bond markets decline (interest rates rise), merger returns should improve as capital allocation decisions adjust to the changes in the costs of capital.

Broad Market volatility can lead to widening of spreads in merger positions, coupled with our well-researched merger portfolios, offer the potential for enhanced IRRs through dynamic position sizing. Daily price volatility fluctuations coupled with less proprietary capital (the Volcker rule) in the U.S. have contributed to improving merger spreads and thus, overall returns. Thus our fund is well positioned as a cash substitute or fixed income alternative.

Our objectives are to compound and preserve wealth over time, while remaining non-correlated to the broad global markets. We created our first dedicated merger fund 32 years ago. Since then, our merger performance has grown client assets at an annualized rate of approximately 10.7% gross and 7.6% net since 1985. Today, we manage assets on behalf of institutional and high net worth clients globally in a variety of fund structures and mandates.

Class I USD – LU0687944552
Class I EUR – LU0687944396
Class A USD – LU0687943745
Class A EUR – LU0687943661
Class R USD – LU1453360825
Class R EUR – LU1453361476

GAMCO ALL CAP VALUE

The GAMCO All Cap Value UCITS Fund launched in May, 2015 utilizes Gabelli’s its proprietary PMV with a Catalyst™ investment methodology, which has been in place since 1977. The Fund seeks absolute returns through event driven value investing. Our methodology centers around fundamental, research-driven, value based investing with a focus on asset values, cash flows and identifiable catalysts to maximize returns independent of market direction. The fund draws on the experience of its global portfolio team and 35+ value research analysts.

GAMCO is an active, bottom-up, value investor, and seeks to achieve real capital appreciation (relative to inflation) over the long term regardless of market cycles. Our value-oriented stock selection process is based on the fundamental investment principles first articulated in 1934 by Graham and Dodd, the founders of modern security analysis, and further augmented by Mario Gabelli in 1977 with his introduction of the concepts of Private Market Value (PMV) with a Catalyst™ into equity analysis. PMV with a Catalyst™ is our unique research methodology that focuses on individual stock selection by identifying firms selling below intrinsic value with a reasonable probability of realizing their PMV’s which we define as the price a strategic or financial acquirer would be willing to pay for the entire enterprise. The fundamental valuation factors utilized to evaluate securities prior to inclusion/exclusion into the portfolio, our research driven approach views fundamental analysis as a three pronged approach: free cash flow (earnings before, interest, taxes, depreciation and amortization, or EBITDA, minus the capital expenditures necessary to grow/maintain the business); earnings per share trends; and private market value (PMV), which encompasses on and off balance sheet assets and liabilities. Our team arrives at a PMV valuation by a rigorous assessment of fundamentals from publicly available information and judgement gained from meeting management, covering all size companies globally and our comprehensive, accumulated knowledge of a variety of sectors. We then identify businesses for the portfolio possessing the proper margin of safety and research variables from our deep research universe.

Class I USD – LU1216601648
Class I EUR – LU1216601564
Class A USD – LU1216600913
Class A EUR – LU1216600673
Class R USD – LU1453359900
Class R EUR – LU1453360155

Disclaimer:
The information and any opinions have been obtained from or are based on sources believed to be reliable but accuracy cannot be guaranteed. No responsibility can be accepted for any consequential loss arising from the use of this information. The information is expressed at its date and is issued only to and directed only at those individuals who are permitted to receive such information in accordance with the applicable statutes. In some countries the distribution of this publication may be restricted. It is your responsibility to ﬁnd out what those restrictions are and observe them.

Some of the statements in this presentation may contain or be based on forward looking statements, forecasts, estimates, projections, targets, or prognosis (“forward looking statements”), which reﬂect the manager’s current view of future events, economic developments and ﬁnancial performance. Such forward looking statements are typically indicated by the use of words which express an estimate, expectation, belief, target or forecast. Such forward looking statements are based on an assessment of historical economic data, on the experience and current plans of the investment manager and/or certain advisors of the manager, and on the indicated sources. These forward looking statements contain no representation or warranty of whatever kind that such future events will occur or that they will occur as described herein, or that such results will be achieved by the fund or the investments of the fund, as the occurrence of these events and the results of the fund are subject to various risks and uncertainties. The actual portfolio, and thus results, of the fund may differ substantially from those assumed in the forward looking statements. The manager and its affiliates will not undertake to update or review the forward looking statements contained in this presentation, whether as result of new information or any future event or otherwise.

Ignacio de la Maza (Janus Henderson Investors): “A 280-Character Remark Can Now Start a Trade War”

| For Meritxell Sedo | 0 Comentarios

Last September 20^th, Janus Henderson Investors celebrated their Madrid Knowledge Exchange event at the Villa Magna Hotel, bringing together 129 investment professionals from Spain, Chile, Argentina, Uruguay and Miami. Ignacio de la Maza, Head of Continental Europe and Latin America, together with Roger Thompson, Chief Financial Officer, welcomed the attendees.

This year’s theme was “Disruption in Motion” or how to protect client’s investments and create chances for profiting in a world in motion in which changes are a constant. According to Ignacio de la Maza, investment managers at Janus Henderson Investors spend a lot of time assessing how changes and disruption may affect investments, asking themselves what changes could threaten companies’ profitability, what new competitors could emerge, and to what extent could their earnings be resilient to changes.

“Equity and fixed income managers have to worry about these previous questions. Many of the facts that affect equity markets have also implications for fixed income investors. A company needs to obtain any earnings to pay dividends, but it also needs to generate cash flows to pay their creditors. Changes at the regulatory level or a switch in monetary policy can also lead to big changes, in both the prices of bonds or the prospects for investors”, commented de la Maza.

“At Janus Henderson we believe technology and disruption go hand in hand, as Alison Porter, Portfolio Manager of our Global Technology strategy, is going to explain technological transformation and changes in product and services are redefining our economy. We all are familiar with Amazon and how they have transformed traditional retail sales. But behind the scene, their capabilities in cloud computing and artificial intelligence are reorganizing supply chain, labor market and transforming all places. Amazon has a market capital around 960 billion US dollars, its closest rival in cloud computing services is Microsoft, which is valued at 870 billion US dollar. Just think about it, this two companies have a combined market capitalization higher than the GDP of Spain”, he added.

“Among the line-up brought to the event, Hamish Chamberlayne, Portfolio Manager of our Global Equity ESG strategy, recognizes two major generational investment trends, both closely aligned with sustainability, one being the energy transition, explained as the conversion to a low-carbon economy, also called the digitalization of energy, and the second one being the often known as the fourth industrial revolution, where the world becomes a computer through internet of things and the digitalization of every process. There are also two megatrends are transforming the world in which we live in, the demographic growth, as population is increasing, and people are living longer lives, and climate change, both creating constrains in the availability of resources. In this sense, disruption can be a powerful tool for good, as it is disruptive to become more efficient, to save money to customers and to pollute less, improving a company brand perception and gaining customer base. As Hamish will explain, sustainable investing and making money are not mutually exclusive”.

The event also counted with the participation a guest speaker, Malcom Moore, Editor at the Financial Times, who talked about the scale of political disruption in recent years around the world.

“Disruption is not just happening at a localized level but reaching every corner of society. Political parties that have been in the system for decades are being beaten by new players. Populism is evident in both the left and the right parties, and we have seen this trend manifesting itself in more and more mercantilism economic policies. After several decades of globalization, we may have to get use to a more protectionist society. This may have major consequences for the supply chain, the labor market and for the profitability of international companies”.

“The best example of political disruption is, of course, Donald Trump, the President of USA, whose tweets may have seemed controversial, rude, or even amusing at times, but conveyed a power that has been multiplied by a thousand a hyperconnected world. A 280-character remark can now start a trade war, swift bond yields, and lift or sink a currency”, explained de la Maza.

The world is clearly changing, as an investment management firm, Janus Henderson has to predict the direction of changes and evolve with those changes. In the last decade, Janus Henderson has gone through acquisitions and mergers and expanded the range of products offered to investors. As an example, de la Maza mentioned that the firm now offers direct access to countries such as China, that are engaged in an economic growth revolution, where an economic expansion of 6% seems slow.

“Disruption also means that there will be losers and winners, several of our portfolio managers here today offer strategies that can take long and short approach to investing, which means investors can benefit from stock price moves in either direction. I am sure that today’s session will let you hear at first hand how investment experts are dealing with disruption and how you and your clients can embrace this disruption as a potential opportunity for investment”, concluded de la Maza, handing the floor over Roger Thompson.

About the merger

According to Thompson, the firm has been very busy internally since Janus Capital and Henderson Global Investors completed their merge in May 2017. “Over the last sixteen months, we have been working on bringing together the two business, making a great progress in their integration. The organization that we have put together has now 370 billion US dollars in assets under management and we currently employ around 2.000 people in 28 offices around the world. Our asset mix, which is similar to the asset mix of our industry, has about 50% of the assets in the US, about 33% in Europe and LatAm, and around 16% in Asia. Therefore, we believe we are well positioned to match the client needs around the world”, he stated.

“Why did we merge? First, we merged to be better positioned to serve clients around the world. We now provide a broader choice in investment propositions, some that you could see in the mix of portfolio managers and teams today, at the Madrid Knowledge Exchange event. In addition, there have been some structural changes, clients want fewer but deeper relationships with managers, and there have also been regulatory changes going on, making more difficult and more expensive to operate as a global manager. But we believe we are going to have a significant footprint around the world.

In the five largest markets, the US, the UK, Europe and LatAm, Japan and Australia, we have a real presence. We have over 200 investment professionals and around 330 distribution professionals”, he continued.

“I have talked a little bit about talent, I am delighted that we have been able to attract high quality talent through the merger in all areas. Paul Brito, who joined us in early September, is definitively the newest member of the team, a genuine Janus Henderson employee. But if you look at some others of our recent hires, -such as Dan Siluk, Global Head of Fixed Income, or Georgina Fogo, current Chief Risk Officer at Janus Henderson and former Global Head of Compliance Officer at BlackRock-, it is quite possible that all the talent hired by Janus Henderson would not have been able to join Janus Capital or Henderson Global.

Internally, we are working to complete our integration to unleash the power of the full potential that we have put together with Janus Henderson. We need to continue to evolve, as the market place, the clients and the financial intermediaries do evolve”, concluded Thompson.

Leading Manager Research Teams and Asset Managers Collaborate to Streamline, Digitize and Standardize Fund Due Diligence Processes

| For Gabriela Huerta | 0 Comentarios

Legacy processes for exchanging due diligence information are inefficient and expensive. They limit asset managers’ ability to thoroughly serve and engage dynamically with their clients. Forward-thinking Asset Managers and Manager Research Teams in the US collaborated on a new, digital investment due diligence solution called Door.

Due Diligence Questionnaires have long been the established method for Manager Research Teams to monitor their asset manager partners’ businesses and strategies to ensure there are no material changes that might adversely impact an investment proposition.
Word documents, Excel spreadsheets and PDFs are inefficient ways for Manager Research Teams to identify important changes. Fund analysts spend far too long reading the same information over and over hunting for change. Manager Research Teams also recognized that the vast majority of questions they ask are common. By creating common standards together, Manager Research Teams can focus on analysis rather than gathering and organizing information.

Asset Managers can now provide due diligence information to their clients in minutes rather than weeks. And Manager Research Teams are alerted to and can identify changes the moment they are made.

The Standard Questionnaire for 40 Act Funds was co-created by eight Asset Managers (such as Macquarie Investment Management, Eaton Vance, Franklin Templeton Investments and MFS) and ten Manager Research Teams. Door successfully launched with this core group in July. 40 Manager Research Teams are now registered to use Door in the US. Door launched a UCITS due diligence service late last year and is already working with 46 global Asset Managers and 160 Manager Research Teams internationally.
Door is provided to Manager Research Teams at no cost.

Todd Wilhelm, Senior Area Mutual Fund Research Analyst at Edward Jones, said: “One of the value propositions we provide in our manager research comes from our unique insights. The gathering and organizing of critical but commonly asked for information through proprietary DDQs is time consuming and may not differentiate that portion of our process from others. Using an industry-wide standardized format of these commonly asked questions allows my team to get the information more quickly and easily comparable. It allows us to make decisions more efficiently and identify important changes that may impact our investment thesis.”

Andrew Washburn, Chief Marketing Officer at MFS Investment Management, said: “We and our clients have common issues with fund due diligence. So, collaborating with them to solve these issues is an innovative approach. As a fast adopter of new technology solutions, we were an early supporter of Door. At MFS we are always seeking new ways to improve our clients’ experience. On Door, we can provide a faster and smoother flow of fund information to our clients.”

Stephen Beinhacker, Managing Director and Global Head of Manager Research at SEI Investments, observed: “Gathering and tracking manager-supplied information is a two-way bottleneck in the industry. For asset managers, responding to bespoke RFI/Ps from asset owners is time consuming and 80%+ of what is asked is the same basic information, even if worded differently. For asset owners, staying on top of initial and ongoing documentation is also time consuming, but more importantly, getting a similar set of information in the same format from multiple asset managers expedites comparability. Ultimately the ability to capture text and data in a common digital form will abet more advanced forms of manager due diligence that can leverage advanced mathematics, natural language processing and artificial intelligence.”

More information can also be found on the Door website.

As Much as 60% of all Benjamins Are Held by Foreigners

| For Gabriela Huerta | 0 Comentarios

Despite new technologies for electronic payments, cash has never been more popular. According to the Federal Reserve Bank of Richmond, over the last decade, dollars in circulation as a share of GDP have nearly doubled from 5 percent to 9 percent. Today there is 1.6 trillion dollars in cash in circulation, or roughly 4,800 dollars for every person in the United States.

In addition to being used for exchange, cash also acts as a store of value. Tim Sablik, staff writer at the Richmond Fed and author of the article Is Cash Still King? believes that “high-denomination notes are best suited for this purpose, so tracking their circulation can provide a sense of how important this aspect of cash is for explaining currency demand. In the United States, large-denomination notes seem to be driving the growth in cash. The $100 bill accounts for most of the total value of currency in circulation.”

Enlarge

Demand for $100 bills has significantly outpaced other denominations in terms of pure volume as well, averaging an annual growth rate in notes of nearly 8 percent since 1995 compared with 3 percent to 4 percent for most other notes. In fact, in 2017, the $100 bill surpassed the $1 bill as the most widely circulated U.S. note.

Enlarge

While some of this demand may come from domestic savers, researchers believe a significant share of $100 bills are traveling overseas. Ruth Judson, an economist at the Fed Board of Governors, mentions: “We think that the significance of foreign demand is unique to the dollar. Other currencies are also used outside their home countries, but as far as we can tell, the dollar has the largest share of notes held outside the country.” She has stimated that as much as 70 percent of U.S. dollars are held abroad. Additionally, Judson estimated that as much as 60 percent of all Benjamins are held by foreigners.

“Overseas demand for U.S. dollars is likely driven by its status as a safe asset,” says Judson. “Cash demand, especially from other countries, increases in times of political and financial crisis.” And U.S. Treasuries as well as dollars remain safe-haven assets in times of global distress, like the financial crisis of 2007-2008. For example, Judson found that while international demand for dollars began to decline in 2002 after the introduction of the euro, that trend reversed after the 2007-2008 crisis.

As Sablik states, crises prompt domestic households to seek the safety of currency as well, and with low inflation around the world, making holding cash low cost affair, more people, on and offshore, are turning to large-denomination banknotes to keep some of their wealth.

The European Edition of the Real Estate Investors Summit 2018 Will Take Place in London

| For Gabriela Huerta | 0 Comentarios

The European edition of the Real Estate Investors Summit 2018 will be taking place in November 19-20, at The Chelsea Harbour Hotel in London. The invitation-only event brings together leading investors and international fund managers and consultants for focused discussion of the key drivers shaping real estate asset allocations. The Summit offers intimate environment for a focused discussion of key new drivers of the industry.

The Real Estate Investors Summit attendees will include Senior Investment Executives responsible for Real Estate Investment Strategy and Allocation Decision-Making from the following types of investors:

Corporate & Public Pension Funds
Foundations & Endowments
Family Offices
Insurance Companies and more!

For more information or registrations, follow this link or contact Deborah Sacal.