According to the latest Investment Funds Industry Fact Sheet from the European Fund and Asset Management Association (EFAMA), which provides net sales of UCITS and non-UCITS, during September 2015, total net assets of the European investment fund industry decreased by 2.3% percent to stand at 12,109 billion euros.
With information from 27 associations representing more than 99 percent of total UCITS and AIF assets, the main developments that month can be summarized as follows:
UCITS net sales decreased to 1 billion euros, down from net inflows of 9 billion euros in August. The decrease can be attributed to net outflows from money market funds.
Long-term UCITS (UCITS excluding money market funds) experienced a rebound in net sales of 12 billion euros, compared to net outflows of EUR 3 billion in August.
Equity funds enjoyed a turnaround with net sales of EUR 3 billion, up from net outflows of EUR 3 billion in August.
Net outflows from bond funds amounted to EUR 1 billion, compared to net outflows of EUR 12 billion in August.
Net sales of multi-asset funds remained steady with inflows of EUR 8 billion in both August and September.
UCITS money market funds recorded net outflows of EUR 11 billion, compared to net inflows of EUR 12 billion in August. This reflected usual end-of-quarter redemptions.
Total AIF net sales saw net outflows of EUR 6 billion, down from inflows of EUR 6 billion in August.
Net assets of UCITS stood at EUR 7,815 billion at end September 2015, representing a decrease of 2.2% during the month, while net assets of AIF decreased by 2.5% to stand at EUR 4,294 billion at month end. Bernard Delbecque, Director for Economics and Research at EFAMA commented: “The rebound in net sales of long-term UCITS, even though modest, suggests that investor confidence began to strengthen again in September, after a few weeks of turbulence in the markets.”
New research from Cerulli Associates finds that two-thirds of marketing managers plan to add to their staff to support their digital transformation needs, focusing on content, data analytics, and technology-skilled individuals.
“When marketing managers are asked which trends are impacting their job, most respond with answers that are directly associated with digital transformation,” states Pamela DeBolt, associate director at Cerulli. “Acquiring more technologically-oriented personnel allows managers to enhance their ability to deliver content through budding digital channels, such as blogs, videos, or social media. Another opportunity for hiring comes in the form of more analytically-oriented candidates. More and more, marketing groups are performing their own segmentations, engaging in predictive analytics, and attempting to measure marketing return on investment (ROI).”
In its new report, Cerulli explores digital marketing and how firms are using these digital technologies to promote their brand, build preference, and increase sales through various sales marketing techniques.
“Digital is a positive game-changer for marketing groups, contributing to more targeted segmentation, expanded delivery mechanisms, and more opportunities to build firms’ brand,” DeBolt explains. “Firms have been able to use innovations in technology to improve the scale and efficiency of digital marketing, and to get a better handle on the idea and implementation of big data for business intelligence/predictive analytics. To take advantages of these opportunities for growth, marketers must recognize the importance of adding skilled employees to better shape their organization to navigate the challenges they will face.”
“The recent resurgence of product lines-in terms of both size and complexity-has led to a new demand for marketing professionals,” DeBolt continues. “The acceptance and embracing of technology into the marketing process has added a new flavor to marketing organizations. More quantitatively-focused candidates have become highly desirable, as marketing heads look to fill positions surrounding analytics and measuring ROI.”
Foto de Simon Cunningham. ¿Será que la volatilidad impulsa la gestión activa?
During the last six years, US equities experienced a nearly uninterrupted rally. An unusually accommodative monetary policy environment coupled with economic and earnings growth helped fueled the U.S. stock market—things, however, are starting to change.
The Federal Reserve (Fed) is signaling its intention to normalize monetary policy, which could happen as early as this month. At the same time, earnings growth outside of energy is modest and valuations are on the expensive side of fair value. It is therefore likely that investors going forward will not only have to adjust to more modest returns from U.S. stocks, but they may also have to brace for heightened volatility at a time when U.S. fixed income will continue to yield low level of returns.
In order to maintain the same level of returns, investors will have to change their strategies. One way to do so in the equity market would be to look for beta by pursuing cheaper markets (sectors, factors, geographies) with fundamental tailwinds, as well as strategies that have long-term structural support. For example, exposure in Europe or Japan—other developed countries with improving economic activity, accommodative monetary policy, cheaper currencies and strong profit growth.
Another strategy would be to combine active and passive management. While passive management has outperformed active management in the last years, this was done at a time during which the stock market was moving higher and was immersed in a low volatility environment, where generating alpha proves to be more difficult. Nowadays, investors can potentially benefit more from security and risk selection, be it via actively-managed exchange traded funds (ETFs), multi-asset managers, long/short managers or traditional active equity managers. However they must keep in mind two essential issues with active management: • Finding a top-tier investment manager who will benefit from this shift in the investment environment is not certain, and • Alpha generation is basically a zero-sum game over time. In aggregate, investors compete to generate alpha, creating winners and losers.
Although the dataset is admittedly small, historical data shows that in US large caps, periods when alpha generation improves happen to coincide with periods of stress in financial markets. So, while alpha generation may be thought of as sourcing opportunities to generate a higher return, it may equally be thought of as being underweight risks during times of heightened financial and economic stress. Thus, it might be safer to have a more thoughtful approach to combining alpha and beta strategies going forward.
In regards to the fixed income sphere, (where given the low level of interest rates it doesn’t take much of a reversal in interest rates to wipe out a year’s worth of coupon income), in order to boost returns and generate sufficient income, investors may feel compelled to migrate to ever riskier credits, extend maturity/duration, or allocate to less liquid securities. However, like with equities, there is an option other than pure market beta. Instead of taking more risk, investors could consider how they build alpha generation tools into their fixed income portfolio. One way to do so would be employing global multi-asset income solutions as a way to limit volatility while also pursuing objectives like income and total return. Tools such as unconstrained bond funds, global long/short credit or credit ETFs can be a good way of diversifying your fixed income sources.
With the world ‘normalizing’ comes the worry of higher volatility. Yet, it also presents an opportunity for alpha generation that has somewhat evaded markets in recent years. Investors can take advantage of that through picking the right active fund manager, through flexible multi-asset portfolios while also employing beta strategies to boost returns through tactical sector, geography and factor tilts.
This material is for educational purposes only and does not constitute investment advice nor an offer or solicitation to sell or a solicitation of an offer to buy any shares of any Fund (nor shall any such shares be offered or sold to any person) in any jurisdiction in which an offer, solicitation, purchase or sale would be unlawful under the securities law of that jurisdiction. If any funds are mentioned or inferred to in this material, it is possible that some or all of the funds have not been registered with the securities regulator in any Latin American and Iberian country and thus might not be publicly offered within any such country. The securities regulators of such countries have not confirmed the accuracy of any information contained herein.
According to Thomson Reuters Lipper‘s latest Launches, Mergers, and Liquidations report, as of the end of the third quarter 2015 there were 31,982 mutual funds registered for sale in Europe. Luxembourg, hosting 9,136 funds, continued to dominate the fund market in Europe, followed by France, where 4,631 funds were domiciled.
Amongst European Funds, equity ones ontinue to dominate the scene with 37% of the funds available for sale, followed by mixed-asset funds at 27%. Bond funds stood at 21%, while money market funds represented 4% of the market. The remaining 11% of “other” funds were real estate funds, commodity funds, guaranteed funds, and funds of hedge funds.
As Detlef Glow, Lipper’s Head of EMEA Research, and Christoph Karg, Content Specialist Germany & Austria, state, during Q3, 646 funds (322 liquidations and 324 mergers) being withdrawn from the market and only 453 new products being launched, the European fund universe shrank by 193 products. The specialists note that “Since the European fund industry is enjoying high net inflows for 2015, it is surprising the industry is still cautious with regard to fund launches.” Adding that “there is still a lot of pressure on asset managers with regard to profitability, which is also driving the cleanup of the product ranges,” and so “the consolidation of the European fund industry might continue over the foreseeable future.”
You can read the full report in the following link.
The latest research from global analytics firm Cerulli Associates found that assets overseen by different types of institutional investors in the U.S. rose about 6% in 2014, compared to 9.8% in the previous year.
“Institutional assets experienced more modest growth than the strong equity markets of last year,” said Chris Mason, research analyst at Cerulli. “This modest overall growth masked substantial growth among several institutional channels, representing continued addressable market opportunities for institutional asset managers.”
One area of significant growth was in the growing demand by institutional investors for more customized investment solutions. “Custom solutions assets have more than doubled since 2010 from about $500 billion to more than $1 trillion last year,” stated Mason. “Cerulli’s projections show increasing demand for custom solutions in the next five years from corporate pension plans, public plans, and non-profits.
Cerulli’s research also finds that asset managers and investment consultants are moving rapidly to address the demand for sustainable investments by U.S. institutional investors. “Asset managers and investment consultants that focus on environmental, social, and governance (ESG) factors will benefit from increased demand as different stakeholders place more pressure on investment committees to consider such factors in their investment decision-making process,” explained Mason.
According to a proprietary survey done in partnership with The Forum for Sustainable and Responsible Investment (US SIF), 64% of responding asset managers indicated that they believe it will be “very important” for managers to offer ESG capabilities in the next 2 to 3 years in order to compete in the marketplace.
Foto: Gideon Tsang
. El número de advisors creció en 2014 en Estados Unidos
The industry’s total U.S. advisor headcount increased for the first time in nine years – by 1.1%-, according to the research “Advisor Metrics 2015: Anticipating the Advisor Landscapein 2020”, by Cerulli Associates.
“Many positive developments led to the headcount growth last year,” states Kenton Shirk, associate director at the firm. “From the advisor perspective, there is a heavier focus on teaming and onboarding rookie advisors into multi-advisor practices. Advisors are eager to hire junior advisors so they can refocus their own efforts on their largest and most ideal clients. There is also greater awareness and concern about succession preparedness.”
“While all of this recent growth has provided some positive momentum, the industry is still not in the clear,” Shirk explains. Although there was an uptick in the number of advisors in 2014, the projection is that the industry’s headcount will begin declining again in 2019 as advisor retirements increase.
“In 2020, we believe that modest headcount gains will be trumped by a sizable uptick in advisor retirements,” Shirk continues. “The industry’s headcount will begin to decline once again at an even more pronounced rate than in the recent years.”
To minimize the decrease in headcount, Cerulli recommends the industry begins laying a solid foundation to recruit and groom new advisors in the upcoming years.
Foto de Chris Ford. Crear un perfil de objetivos reales para los inversores es más importante que buscar un rendimiento numérico
When it comes to building investment portfolios, managers must look for durable, risk focused portfolios that allow investors to navigate short term volatility in the markets.
According to John Hailer, President and Executive Director, Natixis Global Asset Management, it is imperative to “remove emotions from investing.” In his opinion, creating a real goal profile for investors is more important than looking for quantitative returns, also, considering the current expectations and the fact that “volatility will linger for a while, traditional portfolios will not be enough to achieve the expected return.” Instead, a combination of strategies including active management and liquid alternatives must be used.
Of course, when opting for an active strategy, according to David Lafferty, Chief Market Strategist, Natixis Global AM, such strategy should be “very active and not just half-ways”, since if the only active feature is in the name, it will be very diffícult to exceed the net return. With regards to the Mexican market, where the operation of the firm according to Mauricio Giordano, CEO, Natixis Global AM Mexico, is a long term commitment, including, “a wide offer of solutions with a high level of specialization in each of its affiliate managers”, Lafferty recalled that when the Mexican bonds offer an average 3.5% in return, Mexican investors are expecting returns of 10% in their portfolios, hence there is an important difference in the perception of the market.
However, he feels optimistic about the prospects for Mexico since its current circumstances are not linked to the situation in China, and the fact that the peso has lost more than other currencies vs. a strong dollar, means that “Mexico is better positioned than most emerging economies to offer returns denominated in dollars,” which makes it an “attractive destination for the international capital.”
With regards to the rate hike from the Federal Reserve, Lafferty explained this should not be of concern, as any process of normalization will happen gradually and it is an evidence that the economy is improving, which is positive for the market perspectives. While the volatility is here to stay, keeping a long term, well diversified profile will help navigate the current environment.
Foto: Vrysxy
. Crece el número de firmas de Miami que invierten en hedge funds
The Miami metropolitan area is beginning to establish itself as an active player in the hedge fund space, with a steady rise in the number of firms investing in hedge funds and their allocations to the asset class. Preqin’s Hedge Fund Investor Profiles database currently tracks 70 hedge fund investors based in the Miami area.
The average Miami-based institutional investor in hedge funds currently allocates approximately $65mn to the asset class, an increase of $15mn from 2013. Miami has also seen the number of investors active in hedge funds rise over the last three years from 50 in 2013, to 66 in 2014 and 70 in 2015.
The current average allocation to hedge funds for institutional investors in Miami is 16.2% of their assets, an increase of 13.8% on 2014 and greater than the North American average of 16.1%. If allocations continue to increase, Miami will soon compete with larger North American markets such as New York (22%), Los Angeles (18.6%) and Chicago (17.1%). The institution based in the Miami area that has the highest allocation percentage to hedge funds is Chauncey F. Lufkin III Foundation, which has more than 81% of its total assets under management (AUM) dedicated to hedge funds.
Of the institutional investors active in the space, private wealth firms are the most numerous, making up 29% of all Miami-based firms investing in hedge funds. Foundations, funds of hedge funds and public pension funds account for 19%, 17% and 17% of Miami-based hedge fund investors respectively. As shown in the Preqin´s chart below, long/short equity funds are the most sought after by Miami-based investors, utilized by 65% of institutional investors in the area.
With a wide variety of Miami-based institutions invested in hedge funds and with reasonably high allocations to the space, the area provides a relatively small but notable source of capital for hedge fund managers. Should investor numbers continue to increase, the area may continue to develop as an important location for the industry, Preqin says.
PineBridge Investments nombra CEO a Gregory A. Ehret - Photo Youtube. PineBridge Investments nombra CEO a Gregory A. Ehret
PineBridge Investments, the global multi-asset class investment manager, announced the appointment of Gregory A. Ehretas Chief Executive Officer, effective January 25, 2016. Mr. Ehret joins PineBridge from State Street Global Advisors, the investment management arm of State Street Corporation, where he served as President and a member of the Executive Management Group.
PineBridge Chairman John L. Thornton said, “Greg is an industry veteran with an impressive track record of growing a global business across both developed and emerging markets. His leadership and operational expertise will position PineBridge to continue providing our clients with an integrated global perspective and a unique investment offering.”
“I have watched PineBridge develop its award-winning multi-asset platform and I am honored to lead such a distinguished team,” said Mr. Ehret. “With its strong footprint in key markets across the globe, I am excited to engage with PineBridge’s investment groups as they structure and deliver leading products to the firm’s clients.”
Stephen Fitzgerald, Interim CEO, will continue to serve as Deputy Chairman, a role he has held since 2013. Mr. Thornton added, “I would also like to thank Stephen for his dedicated leadership over the past few months, and we are pleased to continue benefiting from his international investment expertise on the Board.”
At State Street, Mr. Ehret was most recently responsible for global client outreach, product development, marketing, operations and technology, and was a member of the board of several operating entities and fund companies. During a 20-year tenure at State Street, Mr. Ehret held numerous management roles in the United Statesand Europe. Mr. Ehret has a BA in Economics from Bates College and an MBA from Boston University.
The most recent research from global analytics firm Cerulli Associates takes a critical look at the opportunity for managed account providers in the $5.2 trillion private defined contribution (DC) market. As the DC market matures, the asset management industry continues to reassess and measure the efficacy of a target-date product as the primary retirement investment solution for the majority of savers. Likewise, DC plan sponsors are closely scrutinizing the results of their target-date fund selection as it continues to gather a greater percentage of plan contributions.
“Managed account providers may experience greater success in the DC arena if managed accounts are consistently positioned and presented as a service, not just another investment option,” states Jessica Sclafani, associate director at Cerulli. “Importantly, managed accounts should be a complement rather than an adversary to target-date funds.”
“An increase in the availability of managed accounts reflects the DC industry’s growing interest in customization as a route to supporting improved participant outcomes,” Sclafani continues. “As participants’ investable assets increase, they become more interested in financial planning and personalized strategies, which are not addressed by the two most common QDIAs-target-date funds and balanced funds-but are both components of managed account programs.”
Cerulli’s latest report, Retirement Markets 2015: Growth Opportunities in Maturing Markets, focuses on trends in the $21.5 trillion retirement marketplace, including assets and growth projections in the different retirement segments – private/public defined benefit plans, private/public defined contribution plans, and the IRA market.
“Rather than fighting an uphill battle in trying to displace target-date funds, Cerulli recommends managed account providers focus on capturing the segment of participants who are nearing retirement, have amassed outside assets, and are looking for additional services,” Sclafani explains. Cerulli estimates there are approximately 19.5 million households ages 45 to 69 with investable assets ranging from $100,000 to $2 million. Cerulli considers these households, which represent $9.1 trillion in investable assets, as the target market for managed account providers.
Cerulli believes that managed account providers must partner with DC plan sponsors to make sure the differentiated value of a managed account is conveyed to participants (e.g., access to personalized advice or the ability to incorporate assets outside of the DC plan for a more holistic financial planning experience). For participants to opt in to a managed account service, they need to understand what they are paying for. This requires extra work from both the plan sponsor and managed account provider in educating the plan participant base.
