Bank of America Merrill Lynch, Goldman Sachs and J.P. Morgan are tied for the number-one spot among brokers, with trading shares of 8.3%–8.5% in U.S. Equity Trading for combined high-touch and low-touch cash equity commissions with U.S.-based institutions as of early Q1 2014. Morgan Stanley and Credit Suisse round out the top five with identical market shares of 7.8%. These firms are the 2014 Greenwich Share Leaders in U.S. Equity Trading.
“In U.S. equities the main priority is getting paid for what you deliver,” says Greenwich Associates consultant Jay Bennett. “By maintaining their trading share in trading, some of the bulge bracket banks are now punching above their weight class in terms of their research presence. On the other hand, mid-sized brokers and research specialists that are now being paid in large part through CSAs must be careful that they are being adequately compensated for their research.”
In the increasingly important category of U.S. Equity Algorithmic Trading, the top position is held jointly by Credit Suisse, Goldman Sachs and Morgan Stanley, which are used for algo trading by 60%–64% of institutional investors. J.P. Morgan, UBS and Bank of America Merrill Lynch round out the 2014 Greenwich Share Leaders in U.S. Equity Algorithmic Trading, tied with market penetration scores of 48%–51%.
Citi is the clear leader in North American Portfolio Trading, with a trading share of 10.5%, followed by three banks—Bank of America Merrill Lynch, Goldman Sachs and Morgan Stanley—tied with shares of 9.2%–9.7%, and then Barclays, Deutsche Bank and Credit Suisse, which are tied with shares of 8.2%-8.6%. These firms are the 2014 Greenwich Share Leaders in U.S. Equity Portfolio Trading.
Greenwich Quality Leaders
Greenwich Associates asks institutional portfolio managers, analysts and traders participating in our annual research program to rate the quality of service and products they receive from individual brokers. In U.S. Equity Research and Analyst Service, J.P. Morgan and Sanford C. Bernstein receive top scores and are the 2014 Greenwich Quality Leaders among institutional portfolio managers and Sanford C. Bernstein claims that title alone among institutional analysts.
The 2014 Greenwich Quality Leaders in U.S. Equity Trading are Credit Suisse, Goldman Sachs and Morgan Stanley. The 2014 Greenwich Quality Leaders in U.S. Equity Electronic Trading are Credit Suisse and RBC Capital Markets.
More than three quarters of asset managers say they are embarking on a fundamental shift in their overall business strategy in response to changing client demands in the areas of innovation, distribution and front office solutions, a report by State Street Corporation has found. The report titled, “Frontline Revolution: The New Battleground for Asset Managers,” highlights that although asset managers are overwhelmingly positive about the future, true success will be defined through investing in new capabilities, long-term investments and the right mix of talent, transformation and tools.
“Asset managers can have a clearer line of sight by preparing an arsenal of tools and capabilities to thrive in this more specialized and trying environment. That comes with transforming single asset products into fully serviced solutions.”
“Emerging from the financial crisis, asset managers have growth in their crosshairs,” said Joseph Antonellis, vice chairman at State Street. “Although nearly all of the managers surveyed are optimistic about business growth over the next twelve months, few believe they are well equipped to provide the solutions their clients need. To close the capability gap, the top areas of investment over the next three years will include risk analytics, performance analytics and data integration.”
Defending existing borders, but pushing new boundaries:
48 percent of survey respondents believe developing new products for their existing country markets offers the greatest growth opportunity followed by growing market share of their existing products within existing country markets (24 percent) and bringing in existing products to new country markets (20 percent)
42 percent will target growth from new client segments
32 percent expect to expand number of distribution channels
47 percent plan to expand into new markets over the next three years, and of these, 60 percent are focused on opportunities in Asia Pacific
Barriers to expansion:
85 percent say regulatory barriers are the top challenge when expanding into new markets
55 percent say distribution challenges deter them from expanding into otherwise attractive new markets
67 percent of respondents note that multi-asset solutions represent a major source of growth for their business over the next three years. This reflects the shift toward more outcome-based investment solutions for investors. However, 74 percent believe that few managers are equipped to excel in providing these solutions.
“More than ninety percent of respondents agreed that those managers offering the greatest degree of transparency will have the upper hand in attracting new assets,” continued Antonellis. “Asset managers can have a clearer line of sight by preparing an arsenal of tools and capabilities to thrive in this more specialized and trying environment. That comes with transforming single asset products into fully serviced solutions.”
To secure a competitive advantage, the report highlights how asset managers should hone their capabilities to achieve their full growth potential by:
Mastering regulatory compliance, enhancing operational efficiency and focusing on enterprise-wide agility
Upgrading the front office to support new growth segments and more complex multi-asset solutions
Deploying advanced tools to deliver a more outcome-based perspective on investment risk and performance
Identifying where the new solution set requires different skills and augmenting capabilities with the right blend of in-house and external support
State Street commissioned FT Remark to conduct a global survey of 300 senior executives at asset management firms from April – May. Respondents were equally distributed across North America, Europe and Asia Pacific and managed at least $5 billion in retail and/or institutional client assets.
Foto: DanNguyen, Flickr, Creative Commons. ¿Una subida de los tipos de interés a la vista?
J.P. Morgan Asset Management has announced that its first ETF, JPMorgan Diversified Return Global Equity (JPGE), officially launched for trading today. The fund represents the next generation of strategic beta ETFs, seeking to provide global equity returns from four distinct return factors and reduced volatility by diversifying risks across regions and sectors. It is designed to be a core global equity allocation.
JPMorgan Diversified Return Global Equity is a strategic beta, developed market equity ETF that tracks an index co-developed with FTSE Group – the FTSE Developed Diversified Factor Index.
The fund is designed to provide market participation with lower volatility, and starts with the premise that traditional market-cap weighted and single-factor indices expose investors to excessive risk concentrations and a systematic bias toward overvalued securities. Therefore, the fund seeks to reallocate risk by weighting stocks according to four factors: value, size, momentum and low volatility. Research has shown that these factors, when combined, may offer better risk-adjusted returns.
The fund is managed by an experienced J.P. Morgan team, with 18-year veteran Beltran Lastra as the lead portfolio manager. Lastra’s team currently manages $12 billion in AUM globally (as of April 30, 2014).
“We believe that J.P. Morgan has unique investment insights and global capabilities that will be attractive to ETF investors, and this product is an important first step in delivering those capabilities,” said Robert Deutsch, head of the ETF business for J.P. Morgan Asset Management. “J.P. Morgan has grown to one of the largest global mutual fund managers and our ETF offering will be a natural extension our product line-up.”
“We believe that the custom index co-developed with FTSE sets this fund apart and reflects a next-generation-style ETF that will be attractive to U.S. investors,” Deutsch said.
“We are delighted that J.P. Morgan has chosen FTSE as the index provider for launching their new ETF business in the United States,” said Jonathan Horton, president of FTSE North America. “Electing to work with FTSE to co-develop the methodology behind this ground-breaking multi-factor index series is a great example of combining J.P. Morgan’s research and investment process know-how with our index expertise creating customized solutions in partnership with clients.”
PwC US announced four professionals from its Florida market will be admitted into the firm’s partnership, effective July 1, 2014:
Juneen Belknap will be admitted as an advisory principal in the insurance practice based in Orlando. Belknap has experience with clients in property and casualty personal and commercial insurance as well as life, annuity and retirement services. She has supported initiatives across the customer experience, product development, marketing, sales, service, operations, and IT functions. Belknap holds a B.A. in liberal arts from Amherst College and an MBA from the Wharton School at the University of Pennsylvania with a focus in marketing and operations management.
Manuel Iraola will be admitted as an advisory partner in the deals practice based in Miami. Iraola brings over 17 years of experience providing M&A advisory services to corporate and private equity clients in the U.S., Europe and Latin America. As the leader of the U.S. firm’s Latin America deals practice, he has led cross-functional teams on over 150 deals ranging in size from $2 million to more than $10 billion in the U.S. and numerous Latin American markets across a variety of industries. Iraola holds a B.A. in biology and economics from Brown University and is a CPA licensed in Florida.
Tracy Junger will be admitted as an assurance partner based in Orlando. Junger has over 18 years of experience working primarily with large, multi-national SEC registrants in the retail and consumer products and financial services industries. Her experience includes a 5-year tour in PwC’s Global Capital Markets Group in London focusing on projects including equity and debt offerings, carve-outs, internal controls effectiveness projects and IFRS conversion projects. Junger holds a B.B.A in accounting from Stetson University and is a CPA licensed in Florida.
Catherine Stahlmann will be admitted as an advisory principal in the banking and capital markets practice based in Miami. Stahlmann co-leads the firm’s U.S. anti-money laundering (AML) practice and brings more than 22 years of experience assisting global banks develop comprehensive AML programs that include target operation models, governance, client due diligence/ customer risk scoring programs, risk assessments (entity, product, geography), account monitoring systems, and reporting infrastructure. She has also assisted banks in addressing regulatory enforcement actions including Cease and Desists, Deferred Prosecution Agreements, monitorships, and other requirements mandated by regulators. Stahlmann holds a bachelor of commerce degree in management science from the University of Ottawa and is a member of the Association of Certified Anti-money Laundering Specialists, the American Bankers Association, and the Florida International Bankers Association.
“These individuals understand our clients’ key business issues and have the passion and enthusiasm to help them transform their business, all while maintaining a focus on our people and the qualities that make PwC distinctive,” said Mario de Armas, managing partner for PwC’s Florida Market. “We welcome them into the partnership and congratulate them on achieving this significant career milestone.”
These four individuals are among 180 professionals admitted to the U.S. partnership, representing all PwC service lines. The number includes 69 new partners in audit and assurance, 49 in tax, 61 in advisory and one in internal firm services. The new admissions bring PwC’s U.S. partnership to more than 2,850 men and women.
S&P Dow Jones Indices, one of the world’s largest providers of financial market indices, RobecoSAM and Toronto Stock Exchange (TSX) have announced the launch of the S&P/TSX 60 ESG (Environment, Social and Governance) index.
The Index is designed to track the performance of the constituent companies of the S&P/TSX 60, Canada’s leading equity benchmark, while taking into account each company’s sustainability performance relative to the corresponding industry-specific standards. RobecoSAM, the investment specialist focused exclusively on Sustainability Investing, evaluates companies’ sustainability profiles using their proprietary assessment methodology.
The S&P/TSX 60 ESG index is designed for market participants who currently use the S&P/TSX 60 and are looking to deepen the scope of their stock analysis to include sustainability criteria. The construction methodology is based on the S&P/TSX 60, while companies’ sustainability profiles are evaluated using the RobecoSAM Corporate Sustainability Assessment (CSA). Companies are then re- weighted according to their sustainability score, meaning those with a higher score are weighted higher in the S&P/TSX 60 ESG index than in the S&P/TSX 60.
Alka Banerjee, Managing Director of Global Equity Indices, S&P Dow Jones Indices: “We are excited to expand our ESG offering with the launch of the S&P/TSX 60 ESG index. This index provides investors in the Canadian equity market with an objective, investible benchmark against which they can measure their sustainability investment portfolios. With the launch of our latest ESG index, S&P Dow Jones Indices continues to play a leading role in providing investors with the benchmarks needed to gauge the environmental consciousness of some of the world’s most followed companies.”
Guido Giese, PhD, Head of Indices, RobecoSAM: “The launch of the S&P/TSX 60 ESG index marks an important step towards enabling investors in the Canadian equity market to benchmark their portfolios against an index that is grounded in sophisticated ESG information. Expanding our offering is also a response to an overall increasing interest in regional sustainability indices and we are pleased that we can satisfy investor thirst for an investible, regional ESG benchmark.”
Eric Sinclair, President, TMX Datalinx and Group Head of Information Services, TMX Group: “We are very pleased to launch the S&P/TSX 60 ESG index, which recognizes Toronto Stock Exchange issuers for their ESG efforts and performance. As interest in ESG continues to grow, we believe investors should value this index offering.”
CC-BY-SA-2.0, FlickrOne point during the press conference held in order to announce the deal. Courtesy photo. Invex Bank Signs an Agreement with BlackRock to Increase its Global Investment Range
In order to increase the range of worldwide investments available to its clients in Mexico, Invex Bank has signed a licensing agreement with BlackRock, as was stated by the Mexican company in a press conference held in Mexico City on Tuesday.
Invex clients will be able to invest in the global market through INVEXTK, its equity fund, with the support of international markets’ specialists from the world’s largest asset management company.
“This new partnership is part of our objective to position ourselves as the best private bank in Mexico; therefore we’ve decided to offer our clients the best investment strategies, hence the desire to work hand in hand with BlackRock, one of the best specialists in this field on a worldwide scale. From now on, we plan to double our hold of equity funds before the end of the year, and continue offering investors the best in solid, clear, and transparent products,” said Jean Louis Guisset, managing director of Invex Private Banking.
Meanwhile, Juan Hernandez, Sales Director for iShares at BlackRock, said: “At BlackRock we are delighted with the signing of this partnership, which will enable us to help more Mexicans in the international diversification of their investments. We believe that participating in this type of joint strategies is essential in order to continue sharing the benefits of having a diversified portfolio with Mexican investors.”
The INVEX fund will follow the recommendations of BlackRock’s model portfolio, consisting of iShares ETFs, in an active strategy with monthly tactical rebalancing. Invex Bank partners with BlackRock in order to reinforce the importance of international diversification for its clients.
Invex is a Mexican financial institution which has been in the market for over 20 years, and has divisions in Private Banking, Corporate Banking, Investment Banking, Funds, Trust, International, Infrastructure, Leasing, and Cards. Invex has stood out for its sound track record and for maintaining steady growth.
Eduardo Garcia Lecuona, the founder and president of Intercam, believes that once Mexicans become familiar with the extent and the ground rules of the reforms undertaken by Enrique Peña Nieto’s government, the country will experience a big recovery. Although the Mexican economy has slowed in the first half of the year, other experts agree with his opinion.
During an interview with Funds Society, the executive reviewed the current Mexican financial situation and the history of the group, which is currently at the consolidation stage; at a turning point in the formation of the financial group three years after buying the missing piece in order to become a financial conglomerate. The purchase of Banco Regional de Chihuahua in Monterrey marked a before and after and provided a boost to its structure, which today consists of a brokerage firm, a funds management company, and a bank.
For Garcia Lecuona, Intercam is now at the consolidation stage, where the only thing left is to continue growing. Currently, with75 open offices and 800 consultants throughout the Republic of whom 150 are private bankers, the group does not contemplate its growth outside of Mexico. A few years ago they did contemplate their entry into Chile, but eventually discarded the idea because it seemed a very expensive market. However, the executive admits that they do not lack the appetite, but that they prefer to focus on Mexico for now.
Retraining the sales force
Garcia Lecuona explained that they have had to pay special attention to retraining its sales force because the amendment to the securities’ market regulations will change the rules of the game, making the market more transparent, but requiring greater accountability, and where, among other things, the interests of the manager and the client must be aligned. In this new scenario, “you have to verify the client’s risk profile from investment services… The dealer broker and the executive have much more responsibility in working with the client,” he pointed out.
Likewise, Garcia Lecuona said that what the client is looking for is the service, and does not understand the setting as much from the point of view of the regulations, but that does not mean that they have to stop paying their complete attention.
Regarding the current situation in Mexico, Garcia Lecuona acknowledged that the year has started very slowly, but hoped that as the rules of the second legislation of the new reforms become known, it will begin to show in the economy.
“Mexicans are seeing the impact of the reforms. Once we understand the rules, the recovery will be extensive.” Likewise, the executive stressed that in Mexico the security issue is not completely resolved. For Garcia Lecuona this has been a major deterrent to investment in recent years.
As to where higher growth is being recorded, Garcia Lecuona highlighted that in recent years, thanks to the Group’s extensive branch network, from Intercam, they have been serving Canadian and U.S. clients who chose Mexico for retirement in areas like Los Cabos or San Miguel de Allende, to name a few. This segment is amongst those in which they are encountering greater impetus. Additionally, they are experiencing growth in the support of companies and entrepreneurs with international business activity with local vision.
Intercam’s History
Intercam was founded in 1987 by Garcia Lecuona, an ex-banker from Citibank who managed the company in its infancy as a transnational banking business until in 1992, with the signing of the FTA between the U.S. and Mexico, trade between the two neighbors exploded, and thanks to the international payments of its client base, many of whom were exporters, Intercam recorded a tremendous growth during the 90s.
Another major step came in 2004 with the purchase of a fund management company through which Intercam began selling its own products; it began with two general debt funds, one in pesos and the other one in dollars, but it also began to distribute third party funds. “We started with the open-architecture model, which brought more customers to our business.” From 2004 to 2008 they entered the wealth management business offering consultancy services to those clients for whom they performed business transactions. Back then the group’s average client had approximately $50,000 invested in funds, while currently their average client has over $400,000. They now have six funds of their own and distribute more than 68 funds including bond, variable, and hedge funds from Mexican mutual funds companies.
The brokerage house came in 2006 and in 2010 they began operating the Intercam broker dealer in Miami, with which they began to attract a further private banking segment and serving clients in Latin America who were seeking opportunities to diversify their investments.
Assets began to grow significantly and the company entered the institutional management business, attracting afores and insurance companies, clients with greater sophistication in managing their assets. For the past few years they have been annually renewing a mandate with FIRA, a Government Trust Fund for Rural Development, which only works with five fund managers.
Currently, Intercam boasts 68,000 clients, 53,000 of whom are companies and 15,000 private investors.
CorpBanca has responded to the amended complaintregarding the proposed merger of CorpBanca and Banco Itaú Chile brought by Cartica Management, LLC in the United States District Court for the Southern District of New York. CorpBanca will file a pre-motion letter seeking permission to file two separate Motions to Dismiss Cartica’s newly filed complaint, saying that Cartica now seeks money damages that would be to the exclusive benefit of Cartica and no other CorpBanca shareholders. Cartica filed the amended complaint after the Court held a conference to discuss proposed motions by the defendants to dismiss the lawsuit.
CorpBanca issued the following statement:
“CorpBanca continues to firmly believe that Cartica’s claims are entirely without merit, and that Cartica’s interests are not aligned with those of other CorpBanca shareholders. Cartica originally pretended that it was filing its complaint on behalf of minority shareholders to obtain more information about the transaction. In fact, CorpBanca has supplied an abundance of disclosures about the proposed merger throughout the process, including the transaction documents, the risks and benefits of the deal, and the prospects for the post-merger bank. CorpBanca’s shareholders have all material information they need to cast a fully informed vote.
Faced with all this information, and CorpBanca’s letters to the Court explaining the significant flaws in Cartica’s Complaint, Cartica has revealed its true colors and motivations: To seek money for its trading in CorpBanca shares over the last six months, exclusively for its own benefit and to the detriment of the other shareholders. Cartica’s new claim, which was omitted from its press release, demonstrates that Cartica is looking for special treatment and a coerced payout on its investment in CorpBanca.
Cartica has publicly stated that it supports a merger between CorpBanca and Itaú. Yet, it asks the Court to enjoin the transaction and has now added Itaú to the lawsuit. This is nothing more than a desperate attempt to proliferate its self-serving campaign. Cartica is trying to prevent other CorpBanca shareholders from casting their votes in favor of the transaction. And it now appears to be using this lawsuit to try to hold up the deal in order to extract a payment from CorpBanca. This is not shareholder activism in the name of good corporate governance but rather an orchestrated scheme to threaten a valuable merger for a personal profit.
The new story in Cartica’s amended complaint also raises concerns about Cartica’s trading practices. Cartica says that it purchased additional shares of CorpBanca during the last six months based on information it obtained in a private meeting with CorpBanca’s majority shareholder CorpGroup. While no material non-public information was disclosed at any time by CorpBanca or its majority shareholder in its discussions with Cartica, the activist hedge fund apparently attempted to trade on these discussions to its own advantage and to the detriment ofother CorpBanca shareholders from whom it bought shares. While Cartica tries to hold itself out as a long-term investor and champion of minority shareholders, the truth is that it has been actively trading CorpBanca shares the whole time, and this suit is a little more than an effort to justify its speculative and misguided trading strategy to its investors.
With respect to the claims in Cartica’s amended complaint, CorpBanca strongly believes that Cartica’s suit continues to lack merit. Cartica’s request for additional disclosures, including request for immaterial and extraneous details, and in many cases, nonexistent materials, amounts to nothing more than an endless paper chase. CorpBanca has published massive amounts of information with respect to the proposed merger, far in excess of that required by law, including the Transaction Agreement, the Shareholders Agreement, the loan agreement, an SEC filing describing the benefits and risks of the deal, financial information on both CorpBanca and Itaú, pro forma financial statements regarding the merged bank, fairness opinions rendered by two leading global investment banks in connection with the deal, and a 100-page disclosure document describing in detail the deal, its structure, terms, background and conditions.
With respect to its securities claim, Cartica continues to complain about CorpBanca’s business decisions in Chile, which are outside the jurisdiction of a U.S. federal court. Yet, Cartica has never filed any case in Chile regarding CorpBanca’s business decisions, the only proper place for such a dispute. With respect to its claims of deficiencies in 13D filings by CorpBanca’s controlling shareholder, Cartica is seeking additional information about Corp Group’s agreements with Itaú that were disclosed to the public long ago.
CorpBanca strongly believes that the proposed transaction is in the best interests of CorpBanca shareholders and that Cartica’s interests are not aligned with those of other CorpBanca shareholders. CorpBanca remains firmly committed to the dismissal of Cartica’s self-serving lawsuit.”
Wikimedia CommonsPhoto: Ed Yakovich. Henderson Strengthens the US-Based Credit Team With Double Hire
International asset manager Henderson Global Investors has added two investment grade credit analysts to its fixed income team based in Philadelphia.
Timothy Gage joins from Franklin Square Capital Partners and Jonathan Mann from JP Morgan Chase & Co. Both will report to Andrew Griffiths, Henderson’s Global Head of Credit Research, and begin in June and July respectively.
Educated at the University of Pennsylvania, Gage has 16 years’ experience in the credit markets having spent time at Morgan Stanley Investment Management, BNP CooperNeff Advisors and Susquehanna International Group.
After graduating from Columbia College in 2010, Mann spent a year at Lord, Abbett & Co. after which he joined JP Morgan Chase & Co.
The pair joins an existing team of six high yield professionals. Their main responsibilities will be to oversee specific industry sectors and US domiciled non-financial companies across the investment grade corporate bond universe. This team forms part of a broader global credit team based in London.
Stephen Thariyan, Global Head of Credit, said, “In February 2013 Henderson’s Philadelphia office was established – the fact that we are able to add to that team so soon is testament to our performance for our clients in the last year. It also signals the increasing demand for global fixed income product in the market. To attract two analysts of such a high calibre indicates our growing presence in the global credit sector. ”
Investors have become more discerning about investing in emerging markets as their economies reform at varying speeds, according to findings from the annual independent survey released by CREATE-Research and commissioned by the Principal Financial Group® and Principal Global Investors.
“Emerging markets are no longer seen as a homogenous group. Different countries are developing at different speeds,” said Barb McKenzie, chief operating officer of Principal Global Investors. “Those identified as embracing a reform agenda are recognized as being more attractive. Survey respondents expect these economies to converge structurally and financially with developed economies in the near-term.”
Nearly 35 percent of survey respondents believe China will deliver strong returns over the next three years, while only 15 percent believe Brazil can do so. Similarly, more than 50 percent of respondents believe China will make significant progress in implementing necessary economic reforms, whereas only 6 percent believe Russia can do so.
The report, Not All Emerging Markets Are Created Equal, explores the extent to which emerging economies and developed markets will converge or diverge over the rest of this decade. It seeks to uncover how emerging economies resemble their developed peers in terms of economic well-being and investment approaches, and analyzes factors that are likely to affect convergence.
The findings are based on a survey of more than 700 pension plans, sovereign wealth funds, pension consultants, asset managers and fund distributors across 30 countries with combined assets under management of $29.7 trillion. The survey was followed by 110 interviews.
From buy-and-hold to tactical
Marked volatility in emerging markets has caused investors to become more discerning, changing the landscape of emerging markets investing to be considered tactical rather than buy-and-hold. According to the survey, those investors viewing emerging market assets as an opportunistic play has increased from 30 percent to 48 percent for equities, and from 15 percent to 51 percent for bonds, since 2012.
“While emerging markets in the East continue to converge with developed markets in the West, it is clear from our research that emerging economies will no longer move in lock step,” said Prof. Amin Rajan, CEO of CREATE-Research and author of the report. “This could be the age of stock-pickers, as catchy acronyms such as BRICS become irrelevant.”
United States drives global economy
Survey respondents view the United States as the key driver of the global economy over the next three years:
Forty-seven percent of investors believe the U.S. recovery will deliver the best returns
Nearly 65 percent of investors believe the U.S. government will make significant progress in rebooting its economy
Thirty percent of investors think the outlook for Europe remains decidedly cloudy, with isolated pockets of revival expected only in Scandinavia and the United Kingdom
Key findings by investor segment
Themes emerging from the survey relative to each investor segment include:
Defined benefit plans: aging member demographics are driving the transition from asset accumulation to liability matching, with opportunistic investors looking toward distressed debt, emerging marketing equities, ETFs and emerging market corporate bonds
Defined contribution plans: inadequate plan balances are intensifying the search for higher returns with the most opportunity seen in ETFs and active equities and bonds
Retail investors: becoming ultra-cautious as they approach or reach retirement with a focus on cost, convenience and capital preservation when choosing investment products
High-net-worth investors: pursuing a range of goals including inflation protection and regular income via real assets and low volatility via balanced and capital protection funds
“The research clearly shows a change in the landscape of emerging markets investing as investors become more discerning,” said Julia Lawler, senior vice president at The Principal®. “The demographics of aging populations with an eye toward retirement coupled with investors interested in a buy-and-hold approach are leading a fundamental change in asset allocation decisions.”
