Barend Fruithof is to join the Executive Board of Bank Julius Baer and become the new Region Head Switzerland with effect from 1 October 2015. He succeeds Giovanni Flury, who will switch to the Executive Board of Julius Baer Group as of 1 January 2016.
Additionally, Barend Fruithof will be responsible for Julius Baer’s Global Custody business. He has a successful track record in the Swiss financial industry stretching back over 20 years, with his most recent position being at Credit Suisse, where he has been Head Corporate Clients from 2008 and member of the Private Banking & Wealth Management Committee from 2011. Prior to this, he was CFO and member of the Executive Board of the Raiffeisen Group during five years. As of 1992, he spent eight years at Zürcher Kantonalbank. Set to join the Bank on 1 September 2015, Barend Fruithof will bring extensive experience not only in banking and client business but also in finance, IT and operations. He holds a degree in Business Economics from the former KLZ business school in Zurich and an Executive MBA from the University of St. Gallen.
After 30 years in the financial industry, Giovanni M.S. Flury, currently Region Head Switzerland at Bank Julius Baer, will switch to the Executive Board of Julius Baer Group Ltd. effective from 1 January 2016, where he will contribute his wealth of expertise in private banking. He will be involved in various strategic projects. Additionally, he will continue serving as a member of the Board of Directors of Milan-based Kairos Investment Management SpA, the strategic partnership in which Julius Baer currently holds a 19.9% stake. He will also remain a board member of the Julius Baer Foundation.
Boris F.J. Collardi, Chief Executive Officer of Julius Baer Group, says: “In Barend Fruithof, we have succeeded in recruiting a seasoned banking expert with an in-depth knowledge of Switzerland, an outstanding track record and extensive management experience. This makes him the ideal person to spearhead the continued expansion of Julius Baer’s activities in its key home market of Switzerland.”
Boris F.J. Collardi adds: “Since 2005, Giovanni Flury has given vital support to Julius Baer in several capacities, also as Region Head Switzerland since 2013. In this role, he proved very successful in strengthening the various regions of the Swiss market as a single entity and in significantly improving our strategy, structures and financial results. We are pleased that we will still be able to count on his wide-ranging experience in wealth management.”
Generali Real Estate (GRE), the real estate asset manager of the Generali Group, announces the creation of two new functions and the hiring of Anthony Butler as its Head of Corporate Finance.
Butler joins GRE after a significant experience with several major real estate institutional investors such as TIAA Henderson, MGPA and RREEF. In his new role, the Hong Kong-born British manager will focus on coordinating and developing GRE’s sourcing capabilities as well as financially structuring the main real estate transactions. He will also be in charge of monitoring the indirect real estate investments of the Group.
The second new function has been entrusted to Cristiano Stampa, who has been working for Generali since 2003. As GRE’s Head of Fund Management and International Investments, Stampa will coordinate the investment strategies proposed to the Group insurance companies, the commercial real estate lending activity and the cross border fund management.
Three other long term Generali professionals have also been assigned to senior-level management roles.
Davy Gomes, who joined GRE in 2009 as the Head of Corporate Strategic Planning & Finance, is the new Chief Financial Officer, while the French branch is now directed by Sebastien Pezet, who took over from the recently retired Philippe Brion. Alberto Agazzi, within the Group since 2005 and former Head of GRE real estate services in Italy, will run GRE’s Italian operations as CEO and Managing Director of GRE SGR S.p.A.
Christian Delaire, CEO of Generali Real Estate, said: “These moves mark a significant step forward for our company, which now counts on a best-in-class management team. By hiring Anthony we have added a talented professional with an outstanding international experience, while with Cristiano, Davy, Alberto and Sebastien we already had the four best possible options within our ranks. As we keep diversifying our portfolio and rolling out a global investment program, their broad knowledge of the business and the markets will play a key role in achieving these goals.”
The five managers will also sit in the Generali Real Estate Steering Committee, together with CEO Christian Delaire, Head of German branch Martin Schramm and Head of Human Resources Anna Manto.
New research from global analytics firm Cerulli Associates finds that expanded advice and service offerings are essential to sustained success for wealth managers in the United States.
“One of the most common issues facing wealth management providers is devising a targeted marketing strategy to grow their business,” explains Scott Smith, director at Cerulli. “Investor willingness to pay for advice continues to climb, as does households interest in receiving more financial advice.”
Cerulli believes that pairing a human element with technology solutions will maximize addressable marketshare of financial service providers by broadening the scope of their advice.
Investors widely prefer providers that can address the entirety of their financial advice needs. In many cases, traditional providers have already moved to embrace the idea of “advice beyond investing” and are now making firm-wide efforts to encourage their advisors to adopt this approach.
By creating an ongoing goal-based dialogue with clients, providers are better able to identify product placement opportunities that will legitimately increase the long-term outcomes of the client, and not just the provider.
Julius Baer announced on the presentation of 2015 half-year results that it has agreed to acquire, for an undisclosed amount, 40% of NSC Asesores, S.A. de C.V. (NSC), the largest independent financial advisory firm in Mexico. NSC, which is based in Mexico City, manages assets of close to US$ 3 billion and has enjoyed strong growth in the past years. The acquisition would mark Julius Baer’s entry in the second largest wealth management market in Latin America.
NSC specialises in discretionary portfolio management and advisory services for high net worth individuals, based on independent and unbiased advice, which makes it a particularly good cultural fit. The company was founded in 1989 and is currently led by its 12 partners, of whom Claudio Núñez acts as CEO and Mariví Esteve as CFO & Head of Strategic Planning. It employs a total staff of 46.
The current management team will continue to run the business independently with the existing staff and pursue the same client-focused strategy. Julius Baer will be represented on the Board of Directors of NSC by two members. Both parties are confident that the future close cooperation will add further growth momentum to NSC’s business development.
The stock market falls in June illustrate the extent to which the financial markets are becoming increasingly dependent on political decisions while at the same time reflecting economic reality less and less. This is the view of Guy Wagner, Chief Investment Officer at Banque de Luxembourg, and his team, published in their monthly analysis, ‘Highlights’.
The lack of agreement between Greece and its creditors hung over the stock markets in June. The S&P 500 in the United States, the Stoxx 600 in Europe, the Topix in Japan and the MSCI Emerging Markets all fell. “The market falls illustrate just how dependent the financial markets have become on political decisions even though these are increasingly divorced from economic reality,” says Guy Wagner, Chief Investment Officer at Banque de Luxembourg and Managing Director of BLI – Banque de Luxembourg Investments. “Provided the political blackmail strategies like those we saw in the negotiations between Greece and its creditors do not lead to a general destabilisation of the financial system, investors are likely to continue to favour equities due to the lack of prospects of an increase in yields on the bond and money markets.”
Static global economic situation
The global economic situation is fairly static, with no major signs of picking up or slowing down. In the United States, activity is getting back to normal after a weak start to the year. In Europe, the economic situation is improving slightly due to the weak euro, albeit without any sign of a significant recovery. In Japan, the economy is continuing to mark time. In emerging markets, there is continuing fragility in several of the major economies, such as China, Brazil and Russia.
Eurozone inflation should stay in positive territory in the coming months
With the stabilisation of oil prices, inflation rates have consolidated at low levels. In the United States, inflation edged up from -0.2% in April to 0% in May. In the eurozone, the inflation rate remained in positive territory, at 0.2% in June compared to 0.3% in May. “Unless oil prices drop back, eurozone inflation should stay in positive territory in the coming months,” says Guy Wagner.
Core eurozone countries’ long rates still unattractive
The upturn in long rates that began at the end of April continued in June. The rise in bond yields affected the peripheral countries rather than the core eurozone countries due to the uncertainty over the situation in Greece. Over the whole month, the 10-year government bond yield rose in Germany, Italy, Spain and the United States. “Despite the rise, the long rates of core eurozone countries are still unattractive. In industrialised countries, US government bond yields are the only valid alternative given that they still have potential to appreciate if deflationary pressures set in,” suggests the Luxembourg economist.
Markets no longer worried by Greece’s possible exit from the eurozone
Despite the uncertainties over Greece, the euro firmed slightly in June. Greece’s possible exit from the eurozone no longer seems to concern the markets unduly, given that there is only a low risk of contagion to other peripheral countries. And given the last news and the deal with Europe. According to Guy Wagner: “Despite the recent stabilisation of the euro, the dollar’s upward trend that began in May 2014 is set to continue as long as a US interest rate hike in the second half of the year remains the most likely scenario.”
Old Mutual Global Investors announces that, subject to shareholder approval, the US $212m Old Mutual Asian Equity Fund managed by Josh Crabb, Head of Asian Equities, will evolve into an equity income generating strategy.
With a target date of 30 July 2015, the Fund will be renamed the Old Mutual Asian Equity Income Fund.
The Fund, which has been managed by Crabb since October 2014, is a sub-fund of the Dublin domiciled Old Mutual Global Investors Series plc umbrella fund. It is managed by Crabb and his team, who are based in Old Mutual Global Investors’ Hong Kong office. Since Josh took over as manager, the Fund has been in the first quartile of its peer group and has delivered 4.18% above the index (MSCI AC Asia Pacific ex Japan) ².
The Fund’s investment objective is evolving based on client demand and the change of name reflects this. The Fund aims to deliver a total return for investors, with a focus on income, as well as capital growth. It will invest in companies from across the market cap spectrum and will aim to pay an above market yield from across the economic cycle.
Old Mutual Global Investors believes this development will benefit clients as they will be able to access the region’s growing dividend stream as well as obtaining above average earnings per share growth. Studies show that the Asia Pacific region over a ten-year cumulative period has paid consistently higher dividends as a percentage of total returns than both the US and Europe, as well as delivering overall higher total shareholder returns.
Crabb has an investment career spanning over 18 years, which includes a proven track record of managing Asian income funds.
Josh Crabb comments: “As the worldwide population ages, the search for income, and in particular equity income, is at the top of the investment agenda. By evolving the Old Mutual Asian Equity Fund into an income fund we are aiming to meet the demands of those investors who look to receive an inflation-proofed income, without sacrificing their capital growth.
According to the latest research from global analytics firm Cerulli Associates, anticipated reforms in Mexico have created opportunities for international asset managers. These findings and more are from Latin American Distribution Dynamics 2015: Economic Challenges at Home Forcing Global Investment Approach, a just-released report developed in partnership between Cerulli Associates and Latin Asset Management.
The Mexican mutual fund industry’s assets under management (AUM) grew by 10% in 2014, marking its third double-digit rise in three years.
The combined AUM of the Afore and mutual fund industries in Mexico stood at over US$277 billion as of year-end 2014, which puts Mexico in the second spot, behind Brazil, in terms of total AUM for locally regulated companies. Yet most market participants acknowledge that AUM should be much, much larger considering the country’s size.
Reforms in both pension and mutual funds are under consideration in Mexico, and the implementation of many new rules are expected to be rolled out soon.
“On the pension side, the new rules include measures to strengthen the social safety net, which will likely lead to larger flows directed at Afore pension managers, and will make the Afore investment regimen more flexible,” explains Thomas V. Ciampi, founder and director of Latin Asset Management. “A big part of this added flexibility will include greater margins for international investment via separate-account mandates.”
“On the mutual fund side, major reform is underway with some structural changes to the industry, as well as a planned rollout of new open-architecture fund platforms that regulators hope will lead to a new era of third-party distribution, new product development, enhanced advisory services, and increasedinvestor sophistication,” Ciampi continues.
It seems European investors followed this old market adage in May 2015, since equity funds faced outflows of €3.1 bn. But, even more noteworthy, the European mutual fund industry faced a slowdown in flows into long-term mutual funds. Those are two of the conclusions of Lipper’s latest monthly snapshot of European fund flow trends (data as at end May 2015).
“That said, the European mutual funds industry still enjoyed net inflows of €16.3 bn into these kinds of products for May, but the flow numbers stood far behind the numbers of the former months of the year. Opposite to April, the majority of the flows went into mixed-asset funds (+€18.9 bn), followed by bond funds (+€1.1 bn), property funds (+€0.6 bn), and commodity funds (+€0.4 bn). On the other side of the table, equity funds faced the highest outflows (-€3.1 bn) from long-term mutual funds, followed by alternative/hedge products (-€1.4 bn) and “other” products (-€0.4 bn)”, point out Detlef Glow, Head of EMEA research, who wrote this report.
Key highlights below:
The European funds industry enjoyed net inflows of €16.3 bn into long-term mutual funds for May. Mixed-asset funds (+€18.9 bn) were the best selling asset class overall, followed by bond funds (+€1.1 bn). Meanwhile, equity funds faced net outflows (-€3.1 bn).
Money market products faced overall net outflows of €12.8 bn for May, split into inflows of €1.0 bn into enhanced money market funds and outflows of €13.7 bn from money market funds.
The single market with the highest net inflows for May was once again Italy (+€4.9 bn), followed by Switzerland (+€2.1 bn) and Germany (+€1.5 bn). Meanwhile, Spain (-€1.5 bn), Austria (-€0.4 bn), and Finland (-€.0.2 bn) stood on the other side.
Intesa SanPaolo, with net sales of €2.5 bn, was the best selling group of long-term funds for May, slightly ahead of BlackRock (+€2.5 bn) and Pioneer (+€2.0 bn).
The ten best selling funds gathered inflows of €6.3 bn, 38.98% of the overall inflows for May, showing that fund flows in Europe are highly concentrated.
“For bond funds inflows were driven by funds domiciled in Switzerland (+€1.8 bn), followed by funds domiciled in the international fund hubs (+€0.8 bn), Sweden (+€0.6 bn), France (+€0.5 bn), and Denmark (+€0.4 bn). On the other side Spain (-€1.8 bn) was once again the domicile with the highest net outflows from bond funds, bettered somewhat by funds domiciled in Germany (-€1.1 bn) and Austria (-€0.5 bn)”, explained Glow.
Bob Doll / www.youtube.com. Así va la quiniela de Bob Doll para 2015: cuatro aciertos, cuatro interrogantes y dos predicciones incorrectas
At the beginning of this year Bob Doll, Senior Portfolio manager and Chief Equity Strategist at Nuveen Asset Management described 2015 as the year when investors transition from disbelief to belief, or from skepticism to optimism. Sir John Templeton coined the phrase, “Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria.” Nuveen believes we are entering the “optimism” phase. As Doll points out, 2015 is on track to be another decent year for U.S. equities as we experience:
Solid momentum in U.S. economic growth with low inflation,
A pickup in consumer spending based on job growth, confidence and a positive wealth effect,
Solid earnings growth,
Stimulus from low commodity prices and financing costs and
A still-good liquidity environment aided by stimulus from non-U.S. central banks.
Midway through the year, these statements largely hold true. These are the predictions Bob Doll made at the beginning of the year, and how they are faring:
U.S. GDP grows 3% for the first time since 2005 (X) Although Bob Doll believes the U.S. will grow 3% for the rest of the year, the weak first quarter will make it difficult for the year as a whole to average 3%.
Core inflation remains contained, but wage growth begins to increase (✔)U.S. inflation appears to be bottoming as it moves from very low to low levels
The Federal Reserve raises interest rates, as short-term rates rise more than long- term rates (?) Both short- and long-term U.S. bond yields have started to rise in anticipation of Fed rate hikes,1 which Nuveen expects will begin in September.
The European Central Bank institutes a large-scale quantitative easing program (✔) This happened in January, and the effects are being felt in Europe, where growth is improving to some degree.
The U.S. contributes more to global GDP growth than China for the first time since 2006 (✔)As a result of U.S. growth improving and China’s growth slowing, this one is heading in the right direction.
U.S. equities enjoy another good yet volatile year, as corporate earnings and the U.S. dollar rise (?) This is the seventh year of the bull market in the United States. The S&P 500 Index has never risen for seven consecutive calendar years,yet Doll highlights this is a distinct possibility in 2015, even if only by a modest amount.
The technology, health care and telecom sectors outperform utilities, energy and materials (✔) If we were scoring these predictions in degree of correctness, this would be at the top of the list. As of last week’s market close, these favored sectors in the U.S. are up an average of 6.6% for the year while the other three are down 3.7%.
Oil prices fall further before ending the year higher than where they began (?) Oil fell earlier in the year before experiencing a recovery. If the year ended today, this one would be proven correct
U.S. equity mutual funds show their first significant inflows since 2004 (x) Equity mutual fund flows have actually been negative so far this year as investors have been moving out of U.S. stocks.Nuveen expects investor confidence will pick up and that flows will increase, but they acknowledge they will likely be on the wrong side of this prediction
The Republican and Democratic presidential nominations remain wide open (?)The list of Republican candidates is longer than virtually anyone predicted. While Hillary Clinton remains the Democratic front runner, her candidacy is not without its difficulties.
Looking Ahead
While U.S. equities are no longer table-poundingly cheap, Doll beleives that they offer better value than other financial assets and should outperform cash, bonds, inflation and commodities. Even though equities are likely to advance further, the pace of gains is likely to be slower than what investors experienced during the first six years of this bull market. Nuveen believes U.S. equities are likely to produce average annual returns somewhere in the mid-to-high single digit range. Within the U.S. equity market, they prefer mid-cycle cyclicals, companies that can generate positive free cash flow and those with higher levels of domestic earnings.
All market prices are as on 6/26/15 according to Morningstar Direct, Bloomberg and FactSet
UBS has confirmed that William Kennedy will succeed to Andreas Schlatter as global head of Distribution for its global asset management business after Reuters has revealed a UBS internal memo.
Kennedy will take up his new duties in mid-September and will be based in Zürich. He will report to Ulrich Koerner, president of UBS Global Asset Management.
“With his strong client focus, his thorough knowledge of products and his wide network across units, William Kennedy is the ideal candidate to lead the further transformation of our global distribution organisation,” said the memo which was reported by Reuters and signed by Koerner and UBS Wealth Management president Juerg Zeltner.
Prior to this, Kennedy was head of Investment Products and Services at UBS AG.
UBS Global Asset Management had €616bn in assets under management as at 31 March 2015.
