Next Steps for Fixed Income Investors in a New Era of Income

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From March 2022 through the publication of this article, the Fed raised its funds rate target 525 basis points to 5.5%, a nearly 23-year high. The funds rate target is now set more or less in line with the 1982-2008 average of 5.31%, up significantly from the period of near-zero rates that ran through most of the 2008-2021 period. The implications of interest rate (or cost of capital) normalization will reverberate through balance sheets, correlations, portfolio construction and portfolio management.

Regarding balance sheets, a gnawing question bandied about the financial press and market participants is whether there is too much debt in the system. This topic is always a concern from a macro perspective. Still, from an investment manager’s and portfolio’s perspective, the question should be, “Are you selecting ‘good’ balance sheets and avoiding ‘bad’ balance sheets?” A disciplined selection process between balance sheets is one of the hallmarks of successful fixed income investing.

In today’s fixed income environment, concern is emerging around the impact of inflation and rising labour costs on corporate balance sheets. Still, even more unease is developing around government balance sheets. We believe the current budget situation is a risk and one of several headwinds we are currently experiencing in the market. There will be more and more Treasury issuance, and the Treasury plans to term out some of this new paper, which means potentially more supply further out the curve. That, combined with the Fed’s quantitative tightening as it slowly winds down its balance sheet, inflation pressures deriving from labour, oil or lingering supply chain hiccups, are all part of the mosaic pushing the cost of capital higher and feeding expectations that the new era of normal interest rates will be here for the longer term. It’s the new normal.

Regarding correlations, a critical change resulting from the higher interest rates is that it forces investors to wrestle with how bonds will fit into a broader portfolio going forward. As with balance sheet selection, the normalization of interest rates impacts fixed income’s role in portfolio construction. Recall that during the low-rate era, which goes back to about the year 2000 (during the dot-com bust when the Fed pushed its funds rate down as low as roughly 1% in 2003), the correlation between fixed income and equities turned positive and stayed there for about 20 years – nearly a generation.

Bonds performed well because interest rates were declining, and the resulting drop in the cost of capital drove equities higher. This period is fondly (or not so fondly in retrospect) remembered as the Greenspan, then Bernanke, then Yellen “put” as successive Federal Reserve leaders extended the Fed’s role beyond its traditional mandates to include suppressing excessive equity market volatility and keeping equity investors happy. It was not until 2022 that the Fed finally rid itself of this perceived obligation. That occurred when correlations spiked back into negative territory in tandem with the current tightening cycle.

In other words, with the normalization of interest rates, it’s reasonable to expect a return to negative correlations between fixed income and equity performance, as we saw before the low-rate era that dawned in 2003. During the 30 years from 1971 through 2000, the correlation between stocks and bonds was -0.31. That correlation flipped to +0.30 from 2000 through today, even considering that correlations normalized back to about -0.30 in recent months.

Regarding portfolio construction, the shift in cross-asset correlations has two significant consequences: First, bonds can behave differently from stocks in how they perform directionally. Secondly, fixed income is re-establishing its traditional role as ballast in an investment portfolio because there is actual yield in holding bonds. Over time, fixed income holdings help dampen portfolio volatility. The market takes care of itself, rather than the Fed taking care of the market.

From a portfolio construction perspective, asset allocators may now use fixed income to dampen the volatility of their equity holdings, provided the normal negative correlations between the asset classes continue. Given the likelihood of the Fed’s “higher rates for longer” mentality in the current inflationary market environment, negative correlations should extend into the foreseeable future.

We expect market volatility to rise as central banks no longer desire to suppress the cost of capital to push demand forward and stimulate growth. With increasing volatility comes the risk of dislocation, which, in our view, calls for managing fixed income portfolios and fixed income asset allocation with a much more agile and flexible approach. That contrasts with many managers’ predominant ‘siloed’ approach to improved income management.

The speed at which credit spreads widened and recovered has increased remarkably over the past decade, most notably during the COVID crisis. During the dot-com bubble, high yield spreads blew out to more than 600 bps, and it took about three years for spreads to narrow to below that mark. During the Global Financial Crisis, it took high yield spreads about a year to complete the widening to narrowing cycle. Fast forward to the COVID crisis, and that same cycle took just one month. Why has this cycle shortened so much? Look to the Fed. The Fed has learned to utilize a variety of liquidity measures, tools, and communication to steady financial markets during each subsequent crisis. It doesn’t mean another era of zero interest rates is around the corner. Still, it’s essential to understand how much more effective central banks have become at providing support during uncertain situations.

This affirms our conviction that flexibility concerning a manager’s investment style and an investor’s asset allocation decisions will hold greater importance in achieving successful outcomes. These outcomes are where active management’s skill and agility should provide a distinct advantage over passively managed fixed income portfolios. From a portfolio management perspective, we favour having a defensively minded approach for most of a market cycle to allow the rotation into attractively priced assets when markets sell off.

This style of management will likely be increasingly important going forward. Dislocations are increasingly more nuanced. Suppose you want to outperform and generate robust returns and income for your investors. In that case, managers need to understand that different markets dislocate at different times, even within a broader market sell-off. Within that period, if you are executing and making decisions faster, you can earn attractive excess returns across different sub-markets as value appears.

Another source of income in the fixed income markets is the ‘pull to par’ effect. Income matters, and savvy managers can boost returns during a period of high coupon securities. Agile investors may add lift returns by selecting bonds issued during the low-rate period but are now trading at a discount. As these bonds return to par closer to maturity, that provides impetus to aggregate returns.

For investors, we believe the implications of the new era of income focus on 1) the role of fixed income in the broader portfolio and 2) how best to capture value in an environment characterized by higher rates and higher volatility.

Investors need to re-evaluate how the fixed income asset class will behave from a return, risk, and correlation perspective. Higher rates and positive real yields allow fixed income to reassert itself as a provider of ballast to the broader portfolio. With the central bank ‘put’ in hibernation, it is possible to see the correlation return to, and remain, negative as was the case for markets before 2000.

We believe higher rates will be coupled with higher volatility. A moderate market dislocation occurs once every 2-3 years, and we expect this trend to continue. For investors, this means incorporating more flexibility in how managers capture opportunity and how allocators manage asset allocation. We think ‘style box’ investing will be more challenging – higher volatility favors strategies with a broader opportunity set and managers who quickly capture dislocation. Allocators, if possible, should incorporate this flexibility into their own decision making, as downside protection and the ability to reallocate capital to dislocated markets can enhance long-term excess returns.

 

Opinion article by Jeff Klingelhofer, co-head of investments and Managing Director for Thornburg IM. 

 

 

Pictet Asset Management: Geopolitical Risks Cast Shadow Over Stocks

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Photo courtesyLuca Paolini, Chief Strategist of Pictet Asset Management

Just as the markets had started taking the Ukraine-Russian war in their stride, the latest grim developments in the Middle East remind investors of how quickly geopolitical crisis can boil up. The conflict in Gaza comes at a point when economies are looking vulnerable.

The United States is in our view at the cusp of slowing significantly as US Federal Reserve rate hikes of the past year feed through to consumers. And though the Chinese economy looks like it has troughed, sentiment there remains depressed. Elsewhere, Europe’s resurgence is slow in coming. As a consequence we remain neutral equities. Valuations for stocks may be more palatable following the market’s recent pull-back and corporate earnings look resilient for now, but muted economic growth means there’s no compelling case to buy.

Our defensive stance is reinforced by our overweight in bonds.

Fixed income markets have suffered significant upheaval this year and the prospect of a surge in government bond supply is a growing worry given substantial public sector deficits, particularly in the US. Yet with bonds offering the most attractive yields for many years – they hit 5 per cent on 10-year US Treasuries, while real yields are at multi-decade highs – and a likely slowdown in both growth and inflation, we continue to hold an overweight in fixed income.

Fig 1. Monthly asset allocation grid
November 2023

Source: Pictet Asset Management

Our business cycle indicators show that while emerging market economies remain resilient, developed markets are slowing. Within developed markets, the euro zone has better prospects than the US, although both are growing below potential. Over the short-term, the stickiness of inflation remains a concern, with headline price pressures having picked up. And should the conflict between Hamas and Israel expand beyond that immediate region, oil prices would respond. But we think overall that disinflationary forces hold sway, driven by subdued growth and easing supply chain pressures.

We expect the US economy to slow to well below potential and this year’s current rate of rate of expansion of 1.9 per cent. That’s mostly because we expect consumption to be muted as American households work through the savings surplus they built up during Covid. The euro zone is also subdued, with countries dependent on manufacturing faring especially badly. But that should improve with China’s slow recovery.

Japan remains the one bright spot in the developed world: we see it as the only major developed economy growing above potential in 2024. Consumer spending is strong, while governance reforms across the corporate sector are helping attract foreign capital.

Liquidity conditions continue to diverge across the world, with the US and Europe tightening and Japan witnessing the opposite (for now); China continues to offer modest stimulus.

In the US, higher real rates are proving a drag on loan-making. Also inhibiting the flow of credit is a pick up in the pace of quantitative tightening by the Fed and an increase in issuance of US government securities to cover the country’s significant budget deficit. Net US bond issuance is likely to come to USD300-500bn per quarter for the current quarter and quarters to come, compared to less than USD200bn during the previous quarter. Debt servicing costs will further add to the upward pressure.

Elsewhere, China’s flirtation with deflation could prompt Chinese authorities into taking a more aggressive monetary stance. Meanwhile in Japan, there are signs that a move towards tightening is imminent, though timing is a question.

Fig. 2 – Not so nifty
Performance of US equities ex-big 7 stocks vs US aggregate fixed income

*Top 7 by current market cap: AAPL, MSFT, AMZN, GOOG, NVDA, META, TSLA.
Source: Refinitiv, MSCI, IBES, Pictet Asset Management. Data covering period 31.12.2021 to 25.10.2023.

Our valuation metrics clearly favour bonds over equities, not least because of a recent jump in yields. US equity price-earnings (PE) multiples remain above our model estimate. The 12-month price to earnings (PE) ratio for the market is 12 per cent above our secular fair value forecast of 16 times. The ‘Magnificent 7’ tech stocks that had been dominating the equity market’s performance, weakened somewhat, but are still on a rich forward PE of 28 times, which represents an 80 per cent premium to the rest of the market.  But the rest of the market has tracked developments in bond yields (see Fig. 2).

Relative to bonds, equities are very expensive in the US. For the first time since 2001, stocks’ 12-month earnings yield is below the Fed funds rate and the gap between the earnings yield and the real bond yield is below 2 per cent. This has only happened four times in the past half-century.

Our technical indicators show weakening trends for equities, led by declining momentum in Japan and a deterioration in the euro zone. Seasonality remains favourable for the market over the next month, however. The bond trend has also deteriorated. Sentiment remains weak, suggesting oversold conditions for eurozone and Chinese equities. Within fixed income, high yield credit and emerging market hard currency bonds also look oversold.

Piece of opinion written by Luca Paolini, Pictet Asset Management’s Chief Strategist.

Discover Pictet Asset Management’s macro and asset allocation views here.

SEC Approves Finra Rules for Remote Inspection and Reduction of Broker Examinations

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The SEC has approved Finra’s request to relax controls on home-based work for brokers/dealers. The new regulations approved by the SEC facilitate remote inspection of broker offices and reduce the frequency of required examinations.

This change, originally proposed by Finra, reflects a significant adjustment in the supervision of stockbrokers, moving from annual reviews to once every three years for home offices.

The SEC’s decision follows an extensive period of debate and opposition, particularly from investor advocates, who expressed concerns about the increased flexibility granted to brokers and their employers, as reported by AdvisorHub. The SEC has stated that these new rules are in line with its broader responsibilities to prevent fraud and protect investors.

Finra’s initiative to adapt its inspection procedures to the post-pandemic era has been a focal point since the onset of the COVID-19 pandemic closures.

In 2020, the regulatory body temporarily suspended its in-person inspection requirements, extending this relief measure until the end of this year due to concerns that arose, notably from state regulators and plaintiff attorneys.

The remote inspection plan, proposed as a three-year pilot, received additional comments from the SEC in August. However, despite ongoing opposition, Finra defended its proposal, arguing that advancements in surveillance technology allow for more effective remote monitoring, adds the specialized media. Additionally, restrictions were put in place to prevent high-risk firms and brokers from participating in the pilot program.

In its approval, the SEC emphasized that the pilot would provide firms with greater flexibility, while mitigating risks by implementing specific safeguards. These measures would limit eligibility to certain member firms and locations only.

Finra officials told the SEC that the rule change, allowing less frequent examinations of home offices, aligns these residential spaces with its definition of a “non-branch” location.

The industry has broadly supported these rules, as they allow firms to maintain remote examiners hired during the pandemic, avoiding the need to terminate them if they were required to work in-office.

HANetf Partners with Tidal Financial Group to Offer Clients US and European ETF White Label Services

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HANetf, Europe’s independent white-label UCITS ETF and ETC platform, and leading provider of digital asset ETPs, is delighted to announce its partnership with Tidal Financial Group, US-based leading ETF investment and technology platform, to offer ETF white label services to one another’s clients, announce the firm. 

Under the agreement, HANetf will extend its suite of services to include Tidal’s extensive client base, allowing them to access the diverse world of UCITS ETFs, ETNs, and ETCs. 

Tidal will, in turn, provide HANetf’s clients and network the opportunity to venture into the U.S. market with 40 Act and 33 Act ETFs, setting the stage for a seamless and integrated approach to both markets.

Through this partnership, both companies will be able to offer their clients flexible options to enter both or either of the European and US markets irrespective of their global footprints. This essentially bridges the gap between the European and US ETP markets for Global asset managers looking to launch funds.

This dual approach can help to safeguard asset managers’ intellectual property by launching their IP in both wrappers and markets. It also facilitates access to a broader audience of global investors who may have specific preferences, such as tax considerations and time zones.

The US and European ETF markets are the two largest ETF markets globally, and the collaboration between HANetf and Tidal will enable their clients to tap into both markets without compromise. Both wrappers are also popular in other geographies including Latin America and Asia. Arguably, if asset managers want to deliver their investment strategies to a global audience they will be able to achieve this through issuing UCITS and 40 Act ETFs.

HANetf can launch ETFs quickly, and cost-efficiently, via its company-owned Irish ManCo and ICAV platforms. It also supports SICAV depending on asset manager choice. Beyond ETFs, HANetf can also offer clients the ability to launch ETCs via its ETC platform, and other ETPs on its multi-asset platform. Since its first launch in 2018, HANetf has launched over 45 products and accrued over $2.6 billion assets under management (AUM). 

Tidal owns and operates its own trusts, providing a robust platform for asset managers to enter the ETF market, and has partnered with over 54 ETF issuers with more than 118 leading ETFs on the market. It currently has over $9.5 billion in AUM.

Both HANetf and Tidal offer full fund management, regulatory, trade execution and operations services. In addition to infrastructure, both firms are equipped with comprehensive marketing and distribution capabilities, which are often regarded as the most challenging aspects of achieving success in the ETF market.

Hector McNeil, Co-Founder and Co-CEO of HANetf comments: “We are very proud to announce our agreement to work with Tidal in order to offer US ETF white label capability to our clients. Since launching HANetf five years ago, we have had multiple requests from global clients to be able to offer both UCITS and US ETF capability. Working with Tidal matches up the leading US white label provider and Europe’s first and leading white label provider. Clients will be able to either supplement their UCITS ETF offering with 40 Act ETFs or if they haven’t entered the ETF market will be able to offer both wrappers to allow simultaneous launch in both of the World’s leading ETF markets in one fell swoop.”

Mike Venuto, Co-Founder and CIO of Tidal Financial Group comments: “We are excited to expand our relationship with HANetf.  Over the past few years, we have participated in the growth of European ETFs as a sub-advisor to HAN clients.  With this partnership, we are now able to connect our US based customers with our counterparts in Europe. Recently, ETF Express recognized Tidal as the Best US White Label Platform due to our full service offering.  Through this partnership, our clients will be able to repurpose the innovations, ideas and content we produce with them here to also access the European UCITS ETF market.”

ZEDRA to Acquire Fiduciary Services Business From AlTi Tiedemann Global

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Boreal Capital Management Roberto Vélez Miami

ZEDRA, a global specialist in Active Wealth, Corporate & Global Expansion, Fund Solutions and Pensions & Incentives, announces its plan to acquire LJ Fiduciary and Alvarium Private Office (“APO”), with offices in the Isle of Man, Geneva and the UK.

LJ Fiduciary and APO will be rebranded and merged into the existing ZEDRA Group.

LJ Fiduciary’s and APO’s service offering includes global private client and corporate administration services. This latest acquisition will enhance ZEDRA’s strategy in the Active Wealth and corporate services space, reinforcing the ambition to be recognised as an international leader in Active Wealth, Corporate & Global Expansion, Funds Services and Pensions & Incentives.

ZEDRA will welcome 59 employees who have been providing trust, corporate, marine and aviation, and family office administration services through its offices in the Isle of Man, Geneva and London.

This brings ZEDRA’s headcount to over 1,000 experts across 16 countries spanning Asia, Oceania, the Americas and Europe. Both organizations share the same core values of close client relationship management, assisting them with their personal interests, family requirements and business interests.

Their combined capabilities provide clients with access to a more diverse service offering, adding value and deepening client relationships.

Ivo Hemelraad, CEO at ZEDRA, commented: “We are delighted to welcome the team from LJ Fiduciary and APO. The combined extensive experience and knowledge will be a great asset as we look to further grow our footprint and our capabilities.”

The transaction is subject to regulatory approval.

Former Merrill Lynch Vice President Joins Snowden Lane Partners

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Captación de capital de Dynasty Financial

Snowden Lane Partners, an independent, advisor-owned, wealth advisory firm dedicated to providing client-focused advice in a values-driven culture, announced that former Merrill Lynch Vice President William H. “Trey” Jones III has joined the firm as a Partner and Managing Director, and will form The Jones Group with $230 million in total client assets.

With Jones joining, Snowden Lane has now recruited seven advisors representing over $1 billion in client assets in 2023.

“We’re consistently looking for quality advisors that align with Snowden Lane’s values and mission to deliver the highest quality advice, and we’re thrilled to welcome Trey to the firm, as he fits that mold perfectly,” said Greg Franks, Managing Partner, President & COO of Snowden Lane Partners. “More broadly, I’m extremely proud of the progress our firm has made over the past year amid a competitive recruiting environment and am looking forward to carrying that momentum forward in 2024.”

Added Jones: “Since the beginning of my career, I’ve always sought to meet each of my clients where they are in their financial journeys and deliver bespoke solutions that meet their individual needs. As I examined options for the next phase of my career, Snowden Lane stood out as a destination where I’d be empowered to carry those same values forward. I’m excited to be joining the firm and am looking forward to continuing to provide my clients with creative solutions.”

Prior to joining Snowden Lane, Jones spent 10 years at Merrill Lynch, most recently serving as a vice president and wealth management advisor. Jones joined the firm in 2013 in an operations role before successfully completing Merrill Lynch’s Financial Advisor program in 2017 and earning his CFP® and CRPC™ designations. He graduated from Coastal Carolina University with a B.A. in Business Administration.

Jones specializes in personalized financial planning, with a particular focus on retirement, Social Security, tax efficiency, and wealth management strategies that help address clients’ growth and income goals. Additionally, Jones supports small businesses with financial strategies and advice. He deploys a comprehensive approach to wealth management, delivering a breadth of investment, planning, insurance, retirement, and banking solutions on his clients’ behalf.

Since its founding in 2011, Snowden Lane has built a national brand, attracting top industry talent from Morgan Stanley, Merrill Lynch, UBS, JP Morgan, Raymond James, Wells Fargo, and Fieldpoint Private, among others, the firm says.

Just 19% of Investors Use Their Parents’ Advisor

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Just one in five affluent investors use the same advisor as their parents, according to the latest Cerulli Edge—U.S. Retail Investor Edition.

Advisors must reinforce the value of their services to clients both early in the relationship and in times of unique difficulty to strengthen and retain relationships for the long term.

Maintaining a relationship across generational divides is a ‘win-win’ for both investors and the advisory firm itself—young investors receive the benefits of an advisor who already is familiar with the family’s financial situation, and the advisor has a chance to preserve the account for the next generation.

Despite the benefits, Cerulli’s research shows more than 90% of affluent investors who use their own advisor did not consider their parents’ advisor in their selection process, and just 6% gave their parents’ advisor even the slightest consideration. The increasingly mobile nature of the younger demographic means they are more likely to switch advisors, unless the firm itself really gets to know them and their financial needs.

“While they may begin as a sort of ‘marriage of convenience,’ advisors can create long-lasting relationships with their clients’ children,” says research analyst John McKenna. “Advisors whose clients have financially interested children should work with them—either helping them with their own financial plans or directing someone else within the firm whose life experiences align with these clients to join the advising team,” he adds.

For parents, having family-level conversations can smooth out potential future trouble spots in terms of inheritance or financial support, should misfortune befall either generation.

“More than ever, involvement in financial discussions for wealth planning is becoming a ‘need to have’ rather than a ‘nice to have,’ and with an increasingly affluent Millennial demographic, advisors cannot afford to squander such business-expanding opportunities,” concludes McKenna.

Schroders Capital Reaches $1.5bn Private Equity Secondaries

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Schroders Capital has now successfully raised over $1.5 billion for private equity secondaries from its various vehicles over the past three years, showcasing the firm’s ability to raise capital across the platform and meet clients’ investment needs.

This follows a $410 million successful final close of Schroders Capital Private Equity Secondaries IV which underscores Schroders Capital’s strong track record and the confidence clients have in its secondaries strategy.

Schroders Capital’s secondary strategy is primarily focused on GP-led and select LP investment opportunities in the lower middle-market buyout and growth-equity segments.

Schroders Capital has been particularly active in GP-led secondaries, successfully closing on more than 50 transactions since 2021. This expertise and experience position the firm as a trusted partner for both GPs and LPs seeking liquidity solutions.

Last year, Schroders Capital acted as the lead investor in the single asset continuation vehicle for Init, a digital transformation service provider, managed by German buyout manager EMERAM Capital Partners. Earlier this year, Schroders Capital led a multi-asset continuation vehicle with Volpi Capital, including geospatial data company Cyclomedia.

Schroders Capital’s secondaries activity has a global reach, with dedicated teams in Zurich, New York, and Singapore. These strategically-located offices enable the firm to leverage its global network and expertise, providing investors with access to a diverse range of attractive secondaries opportunities across different geographies.

“We are proud of the success and growth of our secondaries activity. Our strong track record, deep industry expertise, and global presence position us well to continue delivering attractive investment opportunities to our clients,” said Christiaan van der Kam, Head of Secondary Investments Private Equity at Schroders Capital.

 

Mark Mobius Announces His Intention to Leave Mobius Capital Partners

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Photo courtesy

Mark Mobius takes a step back at Mobius Capital Partners. As reported by the firm in a statement sent to the London Stock Exchange, Mark Mobius will leave his post at Mobius Capital Partners in the coming months.

The veteran investor, specialized in emerging markets, will thus step back from the company he founded in 2018 with Carlos Hardenberg.

“Mark Mobius, founding partner, has notified the company and its investment manager, Mobius Capital Partners LLP (MCP), of his intention to retire from the company in the coming months, leaving a legacy of excellence and devotion to MCP and the Company. His contributions have been fundamental to the success of the company, and his approach to investing in emerging markets since the 1980s remains rooted in the investment philosophy of Mobius Capital Partners LLP,” states the company’s announcement.

As clarified in the statement, Hardenberg will lead the firm and continue managing Mobius Investment Trust, so his departure will not imply major changes in the daily operations of the investment firm. “Mobius Investment Trust will continue to be managed by Mobius Capital Partners LLP, which is led by Carlos Hardenberg, with the support of an experienced team of emerging market specialists. Carlos has been investing in emerging markets for over 23 years and has worked closely with Mark Mobius. He has successfully managed national, regional, and global emerging and frontier market portfolios, including the largest emerging market investment fund listed in London, generating significantly superior returns throughout the period,” the document further clarifies.

“Our trajectory over the past five years has been marked by progress, and we are truly grateful for the results achieved. We want to express our deepest gratitude to Mark for his exceptional contribution to emerging market investment throughout his long career and, more recently, to Mobius Capital Partners LLP and Mobius Investment Trust over the past five years. Mark’s dedication has been fundamental to our success. Looking ahead, I intend to promote our most talented employees to the rank of partners. With this, I want to recognize their great performance and commitment to Mobius Capital Partners LLP,” declared Carlos Hardenberg, founding partner.

Mobius has stated that he will focus on “new and exciting” projects in Dubai. “It has been an incredible journey at MobiusCap, where I have witnessed its growth and success, looking ahead I will shift my focus and dedicate more time to new and exciting projects in #Dubai, focusing on investments and consulting in #entrepreneurship. I also have two new books coming out soon, so stay tuned for more updates!” Mobius tweeted on the social network X (ex Twitter).

In the issued statement, Mobius commented: “I am proud of the solid performance of the investment team over the past five years, which demonstrates that a concentrated and differentiated portfolio of high-quality securities can generate exceptional returns. As a shareholder of Mobius Investment Trust, I will closely follow the development of the company and continue to be available to the team and the Board.”

Finally, on behalf of the Board of Directors, Maria Luisa Cicognani, chairwoman of Mobius Investment Trust, stated: “Mark and Carlos have played a decisive role in the success and profitability of Mobius Investment Trust since our IPO, and now that Mark intends to leave the partnership, we would like to express our immense gratitude for his advice and expertise over the years. We look forward to continuing to work with Mark, leveraging his support and vast knowledge of emerging markets, as Mobius Capital Partners LLP progresses with a strong and committed team led by Carlos, whom we are confident will continue to deliver outstanding results to our shareholders.”

Before creating Mobius Capital Partners, Mobius spent more than 30 years at Franklin Templeton Investments, most recently as Executive Chairman of Templeton Emerging Markets Group. He is one of the most reputed investors in the industry and known for over 40 years of working and traveling through emerging and frontier markets. During this time, he has been in charge of actively managed funds totaling more than 50,000 million dollars in assets.

Millionaires Share Practical Financial Tips in New Research

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A new study from Ameriprise Financial confirms that becoming a millionaire comes down to practical behaviors and discipline around money.

Ameriprise surveyed 580 Americans ages 27-77 who currently have a million dollars or more in investable assets to understand how they built their savings.

Eighty percent cited “financial planning and investing” as the top driver behind their ability to accumulate more than $1 million. They also said, “making a good income” (71%) and “living within my means” (69%) contributed to their financial success. Only 13 percent credited “luck” for their good fortune.

The Ameriprise study probed further to understand how millionaires view wealth. Most (85%) agreed that wealth means having a sense of financial security. Sixty-six percent of those surveyed said they associate the term with “the ability to provide for myself and my family,” and 58 percent linked it to the “freedom to do what I want.”

“There is no standard definition of what it means to be wealthy, but in general, investors associate it with having the means to live life on their terms,” said Marcy Keckler, Senior Vice President of Financial Advice Strategy at Ameriprise. “Whether that means having $1 million, $10 million, or any other figure, building wealth requires planning, prioritization, and taking steps to protect your future.”

Data from the survey was collected as part of a larger study Ameriprise published earlier in 2023.

The deeper look at millionaires also revealed:

  • Most millionaires don’t consider themselves wealthy. Six in ten (60%) investors with $1 million or more surveyed classify themselves as upper middle class, and an additional 31 percent say they are part of the middle class. Only eight percent characterize themselves as wealthy. For comparison, a quarter (25%) of those with $25,000-$999,000 in investable assets say they are upper middle class, 58 percent say they are middle class and two percent say they are wealthy.
  • Millionaires’ financial priorities differ from less affluent investors. Investors with more than $1 million revealed that their top three financial priorities are “protecting accumulated wealth” (62%), followed by “saving for retirement” (43%), and “managing market volatility” (32%). Comparatively, investors with under $1 million in assets said, “saving for retirement” is their top priority (49%), with “managing day-to-day living expenses” (42%) coming in second, and “increasing income” (35%) and “paying down debt” (35%) tying for third.

“Millionaires want to protect their hard-earned wealth and they’re looking for peace of mind that they’re on track to reach their next financial goals,” said Keckler. “It’s encouraging to see so many of them taking sound financial principles to heart. Investors at any life stage or wealth level can benefit from a comprehensive financial plan that accounts for their unique goals and the inevitable bumps in the road along the way.”