Foto: Carlescs79. Northern Trust anuncia cambios en su grupo global de Family Office
Northern Trust has appointed Lesley Hodgson as senior director of its Global Family and Private Investment Offices (GFO) group in Europe, Middle East and Africa (EMEA).
Based in London, Hodgson will manage the client service teams in both London and Guernsey and will also support business development across the region. She will report to Daniel Lindley, managing director of GFO for EMEA.
Hodgson, who joined Northern Trust in 1995, was most recently managing director of Northern Trust’s GFO business in Guernsey where she was responsible for oversight of client servicing and fiduciary and asset administration in the context of Northern Trust’s offshore client offering.
“Lesley has been instrumental in developing our Guernsey business and we are pleased to appoint her to this broader role,” said Lindley. “Through the structuring of her new role we not only maximize efficiencies and best practices across our Guernsey and London offices, but ensure we are well positioned for future growth.”
The GFO group is a boutique practice within Northern Trust’s Wealth Management business. Established over 30 years ago, it provides customised solutions to ultra-high net worth families, their family offices and private investment offices. It currently provides asset servicing, fiduciary, investment advisory and credit services to more than 375 families and their family offices across the globe, with average assets under custody per client in excess of US$850 million.
BNP Paribas has announced the appointment of Yann Gérardin as Head of Corporate and Investment Banking (CIB). In this role, he will have responsibility for implementing the 2014-2016 development plan and continuing the process of adapting CIB to its environment.
Currently Head of Global Equities and Commodity Derivatives (GECD), he will take on hisnew role on 1 October 2014, reporting to Alain Papiasse.
Alain Papiasse, Deputy Chief Operating Officer for the BNP Paribas Group, in addition to supporting the development of CIB, will represent the Group General Management in North America, particularly in terms of implementing the remediation plan and new regulatory requirements. With his wealth of experience and knowledge of the region, he will also help reinforce coverage for large clients in order to support BNP Paribas’ North American development plan.
Jean-Laurent Bonnafé, Director and Chief Executive Officer of BNP Paribas, said: “In asking Yann Gérardin to take on these new responsibilities, I have full confidence in his managerial capability, which has been ably demonstrated within GECD since these activities were established. He has helped make BNP Paribas GECD a global leader in theequity derivatives industry. I would particularly like to thank Alain Papiasse for the key role he has played in successfully developing BNP Paribas Corporate and Investment Banking since 2009. His commitment will be a major asset in North America, a region of strategic importance to our Group.”
As greater numbers of institutional investors turn to equity strategies that capture style factors such as volatility, value, momentum or yield, most continue to lack clarity on the factor exposures across their combined equity portfolios, according to new research by Northern Trust Asset Management.
A survey of 139 global institutional investors found that just 18 percent of global investors said they were “very certain” of the actual risk factor exposure across their listed equity portfolios, while 51 percent were only “moderately certain” and 31 percent were either “fairly uncertain” or unaware of their exposures.
Based on the survey results and in-depth analysis of three pension funds in the United Kingdom, Europe and United States, the study finds that institutional investors incorporating a wide range of active and passive equity strategies in their overall portfolio end up with a neutral factor exposure – despite intended tilts to one or more factors – so that portfolios do not always reflect the investors’ goals and objectives.
The study demonstrates how significant allocations to factor-based equity strategies would achieve the investors’ objectives more effectively and includes case studies of four “early adopter” institutions that have successfully implemented factor-based strategies as a guide for others considering the approach.
“Interest in the blurring space between active and passive management continues to grow, as many investors are less concerned with beating a broad market benchmark and more interested in meeting their particular objective,” said Matthew Peron, Managing Director of Global Equity at Northern Trust Asset Management. “While our research identifies some of the challenges to risk factor investing, it also validates our ‘Engineered Equity’ solutions, which aim to capture exposure to specific factors, either individually or in combination, to meet investors’ specific goals. Engineering exposure to certain factors, while engineering out unintended exposures, are both equally critical to achieving objectives.”
Survey: Global Investors on Risk Factors
Seeking to understand how global institutional investors are using factor-based strategies, Northern Trust Asset Management surveyed 139 investors in the United States, Europe, United Kingdom, Asia, Africa and the Middle East. Approximately 45 percent had more than US$1 billion in assets under management. Of those surveyed:
51 percent said they employ factor tilt strategies in their listed equity portfolios.
The most widely used risk factors were value (33.9%), quality, size, momentum (each 16.9%) and volatility (13.9%).
Within their listed equity portfolios, across managers, the top investor concern was “overexposure to certain factors/regions,” followed by “absolute volatility” and “unexpected factor bias within the overall combined exposure” and “tracking error versus benchmark.”
To assess overall factor exposure, 57 percent use an internal team, 17 percent use consultants and 6 percent use other resources, while 20 percent either don’t assess or don’t consider it a priority.
“If the key concern is overexposure to a certain factor or region, being able to look across the portfolio to understand how that exposure looks is imperative,” said John Krieg, Managing Director of Institutional Distribution at Northern Trust. “The fact that fewer than one in five respondents felt certain of their factor exposures shows the difficulty of monitoring a large, complex institutional portfolio.”
Qualitative Analysis: 3 Pension Funds
The study includes an in-depth examination of the equity portfolios of three substantial, experienced pension funds in the United Kingdom, Europe and the United States. The funds had between four and 25 equity portfolios, tracked up to nine equity benchmarks and employed factor-based strategies to reach investment objectives such as value, low volatility or liability matching. However, Northern Trust’s analysis showed the actual factor tilt for each pension fund was neutral.
“What we found was that, regardless of the approach used to define the asset allocation – asset-liability management, core-satellite, tactical or strategic – the portfolios didn’t always reflect the investors’ goals, objective and intended exposures,” Krieg said. “In each case, the analysis showed how the replacement of some active and passive strategies with an Engineered Equity solution like Northern Trust’s Quality Dividend Focus or Quality Value Strategy would have increased the desired exposures.”
Krieg added: “In general, taking an experimental approach to factor-based investing does not produce the desired results. Investors have a greater likelihood of success if they make a substantial commitment to these strategies.”
Learning from Early Adopters
As a road map to implementation of factor-based strategies, the study describes the successful experience of four large institutional funds in Sweden, Denmark, the Netherlands and Taiwan with combined assets under management of more than US$375 billion. While all four were at different stages of adoption and complexity, the study found three key takeaways that can be applied for any investor:
Taking stock of what is currently in your portfolio before making any future investment decisions is crucial to success.
Failing to base future investment decisions on a strong understanding of your current portfolio can lead to unintended bias or cancel out intended bias.
Using Engineered Equity strategies in your portfolios can provide more risk-efficient and cost-effective outcomes while still achieving your performance goals.
“For all four successful investors, understanding their current portfolios was an essential first step to making investment decisions that achieved their intended exposures while avoiding unintended bias,” Peron said. “Our analysis showed that to realize noticeable results, you need to make a deliberate and substantial commitment to Engineered Equity strategies.”
The white paper, entitled Through the Looking Glass: Portfolio Truths. Factor Solutions, is the latest in a series, “The Equity Imperative,” that has previously established the trend toward equity strategies that aim to meet specific investment objectives beyond broad market exposure. In addition to industry surveys, The Equity Imperative series includes research examining the principles underpinning Engineered Equity at Northern Trust Asset Management. The research series and related information can be found at this link.
Liontrust Asset Management has recruited James Beddall to work alongside Jonathan Hughes-Morgan as co-head of International Sales. Liontrust is in the process of setting up a Branch Office in Luxembourg, where James Beddall is based, subject to appropriate regulatory approvals.
James Beddall joins Jonathan Hughes-Morgan in selling Liontrust’s Dublin range of funds through global banks, private banks, multi-managers and institutional investors internationally, with the primary focus being on Continental Europe. He will market the funds in France, Germany, Italy, Spain, Switzerland, the Benelux and Nordic regions. Jonathan Harbottle, Head of Institutional Sales, will retain responsibility for some clients in continental Europe.
James Beddall, who has 17 years of experience in international sales, has joined Liontrust from F&C Investments where he was Head of International Wholesale Sales. He moved to Thames River Capital in 2007, which was then acquired by F&C in September 2010.
Prior to Thames River, James Beddall was Vice President and Director (from January 2003) of Credit Suisse Asset Management from 2000 to 2007. He joined CSAM to set up the fund sales and distribution in the Benelux region and later on took on responsibility for France, Spain, the UK, the Nordic region and Eastern Europe.
“I am excited about the challenge and opportunity of helping to grow international sales at Liontrust,” says James Beddall. “I was keen to join an asset management business with the desire and potential to grow significantly its international business.
“Liontrust has a strong range of funds and fund managers and we believe there will be demand for the Global Credit and Asia Income teams in particular. I am also looking forward to working again with Jonathan.”
John Ions, Chief Executive of Liontrust, says: “Expanding our sales effort in Continental Europe is the logical next step after the very strong growth in AuM we have generated in the UK over the past four years.
“With the recruitment of James, we have put together a very strong sales team to market our funds internationally. We are also actively looking for more fund management teams that will appeal to the Wholesale market in Continental Europe.”
Foto: Iñakideluis, Flickr, Creative Commons. Encaje de bolillos
The Federal Reserve Board recently reported that almost half of Americans have not begun planning for retirement. Wilde Wealth Management Group is teaming up with Retirement Consultants to change that, expanding their reach across Arizona to encourage more corporate employees to prepare for retirement.
Both firms are licensed to advise clients on 401(K) accounts in addition to other financial services, and many of their clients work for major Arizona employers such as CenturyLink, Intel, Raytheon, Tucson Electric, and the Arizona universities. Both firms are hosting information sessions and meeting with employees individually at their workplaces to inspire them and help them plan.
Trevor Wildeof Wilde Wealth, based in the Phoenix area, says, “If your employer offers 401(K) matching, that’s a no-brainer. It’s a great place to start. From there, we personalize the rest of your financial plans to prepare for your individual needs and goals. Having a consistent review process with each client is a vital element of our practice.”
Michael Santoroof Retirement Consultants, based in the Tucson area, says, “As they say, most people don’t plan to fail; they fail to plan. For many people, their employer-sponsored retirement plan comprises the largest portion of their nest egg, yet they don’t give it the care and thought it deserves. Most don’t even realize how many choices they have. Then, as employees enter their 50s, it’s like the red zone in football—those last 20 yards where you want to focus on a strategic plan and avoid fumbling. It is critical to plan, coordinating all your financial decisions to work as a team for that final run.”
The Federal Reserve Board, in its latest annual “Report on the Economic Well-Being of U.S. Households” reported, “Almost half of respondents had not planned financially for retirement. . . . 31 percent of respondents reported having no retirement savings or pension, including 19 percent of those ages 55 to 64, and 25 percent didn’t know how they will pay their expenses in retirement.”
S&P Dow Jones Indices and RobecoSAM, the investment specialist focused exclusively on Sustainability Investing, announced the results of the annual Dow Jones Sustainability Indices review. This year marks the 15 year anniversary of the DJSI.
Launched in 1999, the DJSI World is the first global index to track the financial performance of the leading sustainability-driven companies worldwide based on an analysis of financially material economic, environmental, and social factors. The three largest additions (by free-float market capitalization) to the DJSI World this year include Amgen Inc, Commonwealth Bank of Australia and GlaxoSmithKline PLC and deletions include Bank of America Corp, General Electric Co and Schlumberger Ltd.
Guido Giese, Head of Indices, RobecoSAM: “We are proud to celebrate 15 years of providing investors with sophisticated benchmarks for corporate sustainability. Since 1999, we have helped investors realize the financial materiality of sustainability and companies continue to tell us that the DJSI provides an excellent tool to measure the effectiveness of their sustainability strategies. In 15 years, the total number of companies we assess has more than quadrupled. We have also developed new sustainability benchmarks for investors such as country and regional indices.”
David Blitzer, Managing Director and Chairman of the S&P Dow Jones Index Committee: “Both the importance and the understanding of sustainability has grown dramatically over the past decade and a half. During that time the Dow Jones Sustainability Indices have been established as the leading benchmark in the field. S&P Dow Jones Indices is pleased to work with RobecoSAM in combining S&P DJI’s experience with indices and RobecoSAM’s expertise in assessing corporate sustainability programs.”
RobecoSAM recognizes the following companies for being in the DJSI World all 15 years:
The DJSI follow a best-in-class approach, including companies across all industries that outperform their peers in numerous sustainability metrics. Each year over 3,000 companies, including 800 companies from emerging markets, are invited to participate in RobecoSAM’s Corporate Sustainability Assessment, which provides an in-depth analysis of financially material economic, environmental, and social practices.
Following this assessment, RobecoSAM identifies the top company in each of the 24 industry groups (according to GICS):
Daniel Ivascyn, nuevo CIO de PIMCO. Foto cedida. Sensación de alivio y emoción “abrumadora” en PIMCO tras la salida de Bill Gross
PIMCO has elected Daniel Ivascyn to serve as Group Chief Investment Officer (“Group CIO”), succeeding William H. Gross who has left the firm. In addition, the firm appointed Andrew Balls, CIO Global; Mark Kiesel, CIO Global Credit; Virginie Maisonneuve, CIO Equities; Scott Mather, CIO U.S. Core Strategies; and Mihir Worah, CIO Real Return and Asset Allocation. Douglas Hodge, PIMCO’s Chief Executive Officer, and Lew “Jay” Jacobs, President, will continue to serve as the firm’s senior executive leadership team, spearheading PIMCO’s business strategy, client service and the firm’s operation.
The firm also appointed Mr. Mather, Mr. Kiesel and Mr. Worah as Portfolio Managers for the Total Return Fund. Saumil Parikh, Mohsen Fahmi, and Mr. Ivascyn will serve as Portfolio Managers for the Unconstrained Bond Fund. As Group CIO, Mr. Ivascyn will continue to oversee the firm’s alternatives strategies, structured credit, and income strategies. Chris Dialynas, Managing Director and Portfolio Manager, will return to the firm from sabbatical during the fourth quarter of 2014. These changes and appointments are effective immediately.
Said Mr. Hodge: “As part of our responsibilities to our clients, employees and parent, PIMCO has been developing a succession plan for some time to ensure that the firm is well prepared to manage a seamless leadership transition in its Portfolio Management team. We have passed the torch of leadership to a team of investors who are among the very best in the investment management industry. They are seasoned, highly skilled professionals who embody PIMCO’s values and have established track records of delivering value to clients.”
Mr. Hodge continued: “Today’s announcement marks the completion of our portfolio management succession process. These appointments are a continuation of the structure that PIMCO established earlier in 2014 and they reflect our long-held belief that the best approach for PIMCO’s clients and our firm is to evolve our investment leadership structure to a team of seasoned, highly skilled investors overseeing all areas of PIMCO’s investment activities.”
Said Mr. Ivascyn: “We have assembled a team of world-class investors over the course of many years, and established a time-tested top-down, bottom-up investment process that will guide our investment philosophy and continue to serve our clients well into the future. Our CIO’s and I are fully committed to consistently deliver to our clients the investment excellence that they have rightly come to expect of us.”
Under this leadership structure, Mr. Balls and Mr. Worah have additional managerial responsibility for PIMCO’s Portfolio Management group and trade floor activities globally. Mr. Balls will oversee Portfolio Management in Europe and Asia-Pacific, and Mr. Worah will oversee Portfolio Management in the U.S.
Said Michael Diekmann, Chief Executive Officer of Allianz Group: “Since becoming part of the Allianz Group in 2000, PIMCO has grown enormously and contributed consistently to Allianz’s success. We join our PIMCO colleagues in recognizing Bill Gross for his accomplishments over the 43 years since PIMCO’s founding. We wish Bill good luck. The management and investment structure put in place in January as well as the thorough succession planning gives us complete confidence in PIMCO’s investment and executive leadership team.”
Said the Independent Trustees for PIMCO’s fixed income and equity mutual funds and the Chairman of PIMCO’s closed-end funds: ”We are “fully supportive of PIMCO, its executive leadership and its portfolio management teams. They have our complete confidence.”
Mr. Ivascyn added: “We have a deep bench of talent with extensive investment and leadership experience, including more than 240 portfolio managers globally, and our outstanding team around the world gives us the scale, talent, expertise and commitment to manage this transition. We will continue to add and promote talent at all levels to help us drive our firm forward.”
Professional biographies (in alphabetical order):
Andrew Balls Mr. Balls is CIO Global, a managing director in the London office and a member of the Investment Committee. He is head of European portfolio management, leading PIMCO’s European investment team (which is based in London and Munich), and he also oversees PIMCO’s investment teams in the Asia Pacific region. He manages a range of global and European portfolios, including PIMCO’s Global Advantage strategy, combining developed and emerging fixed income markets. Mr. Balls was previously a portfolio manager in Newport Beach and the firm’s global strategist. Prior to joining PIMCO in 2006, he spent eight years at the Financial Times as an economics correspondent and columnist in London, New York and Washington, DC. He has 16 years of investment experience and holds a bachelor’s degree from Oxford and a master’s degree from Harvard University. He was a lecturer in economics at Keble College, Oxford.
Chris Dialynas Mr. Dialynas is a managing director in the Newport Beach office, a portfolio manager, and a member of PIMCO’s Investment Committee. He has written extensively and lectured on the topic of fixed-income investing. Mr. Dialynas served on the editorial board of The Journal of Portfolio Management and was a member of the Fixed Income Curriculum Committee of the Association for Investment Management and Research. He has 36 years of investment experience and holds an MBA from the University of Chicago Graduate School of Business. He received his undergraduate degree from Pomona College. He joined PIMCO in 1980.
Mohsen Fahmi Mr. Fahmi is a managing director and generalist portfolio manager in the Newport Beach office, focusing on global fixed income assets. Prior to joining PIMCO in 2014, he was with Moore Capital Management, most recently as a senior portfolio manager and previously as chief operating officer. In London earlier in his career, he was co-head of bond and currency proprietary trading at Tokai Bank Europe, head of leveraged investment at Salomon Brothers and executive director of proprietary trading at Goldman Sachs. Prior to this, he was a proprietary trader for J.P. Morgan in both New York and London, and he also spent seven years as an investment officer at the World Bank in Washington, DC. He has 30 years of investment experience and holds an MBA from Stanford University. He received a master’s degree in civil engineering from the Ohio State University and an undergraduate degree from Ain Shams University, Cairo.
Daniel J. Ivascyn Mr. Ivascyn is Group CIO, and a managing director in the Newport Beach office. He is the head of the mortgage credit portfolio management team and a lead portfolio manager for PIMCO’s credit hedge fund and mortgage opportunistic strategies. Mr. Ivascyn is a member of PIMCO’s Executive Committee and a member of the Investment Committee. Morningstar named him Fixed-Income Fund Manager of the Year (U.S.) for 2013. Prior to joining PIMCO in 1998, he worked at Bear Stearns in the asset-backed securities group, as well as T. Rowe Price and Fidelity Investments. He has 23 years of investment experience and holds an MBA in analytic finance from the University of Chicago Graduate School of Business and a bachelor’s degree in economics from Occidental College.
Mark R. Kiesel Mr. Kiesel is CIO Global Credit and a managing director in the Newport Beach office. He is a member of the PIMCO Investment Committee, a generalist portfolio manager and the global head of corporate bond portfolio management, with oversight for the firm’s investment grade, high yield, bank loan, municipal and insurance business as well as credit research. Morningstar named him Fixed-Income Fund Manager of the Year in 2012 and a finalist in 2010. He has written extensively on the topic of global credit markets, founded the firm’s Global Credit Perspectives publication and regularly appears in the financial media. He joined PIMCO in 1996 and previously served as PIMCO’s global head of investment grade corporate bonds and as a senior credit analyst. He has 22 years of investment experience and holds an MBA from the University of Chicago’s Graduate School of Business. He received his undergraduate degree from the University of Michigan.
Virginie Maisonneuve, CFA Ms. Maisonneuve is CIO Equities, managing director, global head of equities and portfolio manager based in the London office. Prior to joining PIMCO in 2014, she was head of global and international equities at Schroders plc. Previously, she was co-CIO and director at Clay Finlay, a portfolio manager at State Street Research and Management, and a portfolio manager at Batterymarch Financial Management. She has 27 years of investment experience and holds an MBA from the Ecole Superieure Libre des Sciences Commerciales Appliquees (ESLSCA) in Paris. She also holds a master’s degree in Mandarin Chinese from Dauphine University in Paris and an undergraduate degree from People’s University (Renda) in Beijing.
Scott A. Mather Mr. Mather is CIO U.S. Core Strategies, and a managing director in the Newport Beach office and head of global portfolio management. Previously, he led portfolio management in Europe, managed euro and pan-European portfolios and worked closely with many Allianz-related companies. He also served as a managing director of Allianz Global Investors KAG. Prior to these roles, Mr. Mather co-headed PIMCO’s mortgage- and asset-backed securities team. Prior to joining PIMCO in 1998, he was a fixed income trader specializing in mortgage-backed securities at Goldman Sachs in New York. He has 20 years of investment experience and holds a master’s degree in engineering, as well as undergraduate degrees, from the University of Pennsylvania.
Saumil H. Parikh, CFA Mr. Parikh is a managing director in the Newport Beach office and generalist portfolio manager. Mr. Parikh is also a member of the PIMCO Investment Committee and leads the firm’s cyclical economic forums. He previously served as a specialist portfolio manager on the short-term, mortgage and global portfolio management teams. Prior to joining PIMCO in 2000, Mr. Parikh was a financial economist and market strategist at UBS Warburg. He has 15 years of investment experience and holds undergraduate degrees in economics and biology from Grinnell College.
Mihir P. Worah Mr. Worah is CIO Return and Asset Allocation, and a managing director in the Newport Beach office, a portfolio manager, and head of the real return and multi-asset portfolio management teams. Prior to joining PIMCO in 2001, he was a postdoctoral research associate at the University of California, Berkeley, and the Stanford Linear Accelerator Center, where he built models to explain the difference between matter and anti-matter. In 2012 he co-authored “Intelligent Commodity Indexing,” published by McGraw-Hill. He has 12 years of investment experience and holds a Ph.D. in theoretical physics from the University of Chicago.
Foto cedida. Hispania adquiere el hotel Meliá Jardines del Teide, en Tenerife
Hispania, through its subsidiary Hispania Real SOCIMI, S.A.U., has acquired the Meliá Jardines del Teide hotel for an amount of 36.7 million Euro, fully disbursed with Hispania’s own funds.
Meliá Jardines del Teide is a 4* hotel with 300 keys located in Costa Adeje, the most exclusive area in the South of Tenerife, in the Canary Islands. The hotel, which has more than 12,000 sqmof gardens with local species and terraces, is located in the surroundings of Playa del Duque beach and offers plenty of complimentary services, such as 3 swimming pools with solarium, bars and restaurants, 3 conference rooms with capacity for up to 450 people, discos and squash courts.
The hotel is currently operated under a rental contract and is managed by the hotel group Meliá. Hispania’s strategy for this asset contemplates an investment plan for its repositioning within Costa Adeje. Once this capex investment takes place, Meliá will remain as the hotel’s operator.
“The Canary Islands and, more specifically, the South of Tenerife, is one of the most relevant touristic destinations in Europe and it enjoys a relatively stable affluence of tourists all year round. The acquisition of a high quality asset such as the Meliá Jardines del Teide hotel fits perfectly within our strategy of investment in consolidated holiday destinations and it offers a repositioning potential which we expect to materialize with our business plan”, asserts Concha Osácar, Board Member of Hispania.
With this deal, Hispania has already invested 347 million Euro, 65.2% of the net proceeds raised in its IPO last March 14th, building a portfolio which includes a Gross Leasable Area of 91,218 sqm of offices in Madrid and Barcelona, 412 dwellings -213 in Barcelona and 199 in Madrid-and4 hotels totalling 639 keys, one in Marbella, two in Madrid region and this last one in Tenerife.
Foto: Arild Vågen . BOCHK AM y Citi lanzan un vehículo UCITS high yield en renminbis
Bank of China (Hong Kong) Asset Management (BOCHK AM) and Citigroup Global Markets have jointly launched the BOCHK RMB High Yield Bond Fund. This is BOCHK’s first Renminbi (RMB) high yield bond UCITS Fund registered in Luxembourg. The Fund aims to generate long-term capital growth and income by investing mainly in debt securities which are either denominated in RMB, hedged to this currency or have other exposure to this currency, giving investors the potential for investment returns from RMB fixed income investments and RMB currency appreciation.
BOCHK AM is one of the largest active RMB fund managers globally, with discretionary and advisory mandates of USD 7.7 billion. BOCHK AM first launched an RMB high yield bond fund in August 2011, which has produced an average return of 15.2% per annum over the past 3 years. Citi’s Markets and Securities Services business has collaborated with BOCHK AM to launch the new UCITS Fund. Citi and BOCHK AM will act as the Fund’s distributors, while BOCHK AM will take the role of investment manager, and Citibank International (Luxembourg Branch) is the Fund’s administrator and custodian.
The Fund benefits from BOCHK AM’s expertise and experience in investing in the RMB high yield market, leveraging BOCHK AM’s onshore and offshore China market insights. BOCHK AM has the full support of Bank of China (Hong Kong) Limited, the sole RMB clearing bank and a major RMB participating bank in Hong Kong. The Fund provides a highly liquid solution for those investors looking to deploy capital into the growing RMB markets and seeking participation in the ongoing internationalization of the currency. The Fund also builds on the growing importance of Luxembourg as a key investment centre for RMB, with RMB262 billion5 (USD42 billion) of assets held in Luxembourg-domiciled funds linked to RMB.
The Bank of China Group has been present in Luxembourg since 1991. Citi first opened for business in Luxembourg in 1970, and today provides a full range of Investor Services products to UCITS and non-UCITS clients including global custody, fund accounting, transfer agency, corporate secretarial, securities lending and depositary bank services.
Dr. AU King Lun, Chief Executive Officer of BOCHK AM, said, “The Fund launch is a major milestone for BOCHK AM. Our strategic collaboration with Citi highlights the growing importance of RMB bonds as a new asset class for investors globally.”
“Citi is delighted to work with BOCHK AM to facilitate global investors in accessing a world-class solution to gain exposure to the RMB fixed income marketplace.
BOCHK AM’s insights, delivered via the UCITS format with associated benefits and safeguards, represents a timely and exciting investment proposal for a wide range of global investors,” said Mr. Eric Personne, EMEA Head of Citi’s Multi-Asset Group.
Foto: Robert Weißenberg. El optimismo de los inversores de EE.UU. está en su nivel más alto desde 2007
The Wells Fargo/GallupInvestor and Retirement Optimism Index jumped to +46 in the third quarter, its highest level in seven years. The index is up 17 points from the second quarter’s +29, with most of the gains stemming from investors’ heightened optimism about economic growth and the labor market. While the optimism index is at its highest point since December 2007, it remains well below the pre-2008 recession 12-year average of just under +100.
Optimism among non-retired investors jumped almost 20 points to +50 while the optimism of retired investors rose 11 points to +35. The Wells Fargo/Gallup quarterly survey measures the perceptions of U.S. investors with $10,000 or more in investable assets; results are based on phone interviews with 1,011 investors, aged 18 and older, from Aug. 15-24.
“Investors are saying they’re more optimistic about the economy and the job market. But non-retirees worry about their ability to earn more in their lifetime, and they are skeptical the stock market is the place for them to grow their savings,” said Karen Wimbish, director of Retail Retirement at Wells Fargo. “Clearly, average investors have not forgotten their recession experiences.”
Investors Tread Water Financially and Feel the Effects of Inflation
Looking to the future, the majority of non-retired investors expect their income to be stagnant: 56 percent say they do not foresee a time when “their income will be significantly higher than it is today” as compared to 42 percent who do foresee potential for growth in income.
Non-retirees with $100,000 or more in assets are especially pessimistic about the prospect of earning more: 61 percent say they do not foresee a time when their income will be significantly higher than it is today, compared with 51 percent of investors who have less than $100,000 in assets.
“Investors with higher assets appear to feel as if they’ve hit a ceiling. They have done well, but don’t see opportunity for continued income gains in the future,” Wimbish said.
When asked how their finances today compare to five years ago, a majority (58%) say they are doing “about the same” (34%) or “worse” (24%) than five years ago, while 42 percent say they are “doing better.” Similarly, just 37 percent say they are saving and investing more money in recent months than they did prior to the recession. A majority (63%) says they are saving “about the same” (34%) or “less” (29%). These figures are essentially unchanged from two years ago, indicating that investors have not been able to make much financial headway in the economic recovery.
When asked directly about the impact the 2008 recession has had on their finances, nearly half (46%) say they are still feeling the effects of the recession “a lot” (19%) or a “fair amount” (27%). Another 31% only feel its impact “a little,” while 22 percent say “not at all.”
In the midst of the national conversation about wage stagnation, half of investors (51%) think the pressure on American families’ ability to save today is due to rising prices caused by inflation, whereas about four in 10 (37%) say the pressure is caused by lack of wage growth or stagnation. Nine percent of investors say the pressure is caused by a combination of the two factors.
Caution Towards Stock Market Deemed “Wise” by Majority
A new Wells Fargo/Gallup question this quarter asked investors whether they think caution toward investing in the stock market is “wise because it protects people from possible market losses,” or “unwise because it prevents people from realizing significant market gains.” Sixty percent of all investors say such caution is “wise” while 37 percent call it “unwise, because it prevents investors from realizing significant market gains.”
In the poll, 68 percent of investors say they “actively choose stocks for their long-term investment accounts,” but almost a third (29%), say they “consciously avoid stocks in long-term investment accounts.” When respondents are divided between those with $100,000 or more in assets and those with less, 42 percent of those with less than $100,000 in assets say they “consciously avoid stocks in long-term investment accounts,” versus 20 percent of those with more than $100,000 in assets.
Of the 29 percent of all investors who say they consciously avoid stocks, less than half (41%) feel confident they can reach their financial goals without stock market exposure. The majority (56%), say they are notconfident they can reach their financial goals without taking on stock market risk, but they still think it’s better to avoid that risk.
“The fact that nearly seven out of ten say they choose stocks for their long term investing is a good strategy for growing assets over time, and yet it’s noteworthy that nearly a third actively choose to avoid stocks for long term accounts. And, this active avoidance is even more pronounced for people with fewer assets – these investors could stand to gain in the market through a long-term, gradual investing strategy and they seem to know it but they think avoiding risk is more important,” said Wimbish.
While most investors say they actively choose to include stocks in their long-term investment accounts, they may not be allocating enough to stocks. On average, investors say that 38 percent of their retirement savings are invested in the stock market. Naturally, this is lower among retirees, at 33 percent, but not much lower than among non-retirees, who say they have 40 percent invested in stocks.
Relatedly, in sharp contrast to the common recommendation that investors’ scale their exposure to the stock market by age, the survey finds little difference in the average percentage of retirement savings that investors of various ages say they have invested in the stock market. This average is 33 percent among all retirees, 39 percent among non-retirees aged 18 to 49, and 41 percent among non-retirees aged 50 to 64.
Retirement Confidence Hinges on Social Security
Taking their savings and Social Security income into consideration, a majority (69%) of investors say they are “highly” or “somewhat” confident they will have enough money to maintain their desired lifestyle throughout their retirement years.
However, nearly half (46%) are “very” or “somewhat” worried about outliving their savings, including 50 percent of non-retirees and 36 percent of retirees. Retirees who run out of money could become entirely dependent on their Social Security checks.
“Clearly Social Security plays a key role in thinking about retirement income, and concerns about the government’s ability to address the system’s financial problems exist for both retirees and non-retirees,” said Wimbish.
Six in 10 (58%) don’t think federal lawmakers will address the financial problems with Social Security in time to preserve the system for future retirees. Two-thirds of younger investors (67%), those under age 50, are especially pessimistic, saying lawmakers will not fix the system. These same investors are also much more doubtful than older ones that they will ultimately receive their full or even slightly reduced benefits in retirement. A little more than a third (38%) of investors between the ages 18 to 49 believe they will get most or all of the benefits due to them under the current system, compared to 71 percent of those between the ages 50 and 64, and 73 percent among those 65 and older.
Despite these divergent perceptions about whether Social Security will be there for them in retirement, non-retirees on average expect Social Security to account for 26 percent of their annual retirement income, while retirees, on average, report that it currently accounts for 30 percent of their retirement funding.
