Morningstar announced that its board of directors has appointed Kunal Kapoor, CFA, chief executive officer, effective Jan. 1, 2017. Kapoor, 41, who currently serves as president for Morningstar, has also been appointed to Morningstar’s board of directors.
Company founder Joe Mansueto will become executive chairman effective Jan. 1, 2017 and will continue to serve as chairman of the board. To limit the number of inside directors, Don Phillips has voluntarily opted to step down from the board, effective Dec. 31, 2016.
Joe Mansueto, chairman and chief executive officer of Morningstar, said, “I can’t think of a better person than Kunal to lead Morningstar as we head into the next stage of our company’s innovation and growth. He’s a Morningstar veteran who lives and breathes our mission of creating great products that help investors reach their financial goals.”
Kapoor originally joined Morningstar as a data analyst in 1997 and has been president of the company since October 2015. In his current role, he is responsible for product development and innovation, sales and marketing, and driving execution and accountability across the company. He previously served as head of global products and client solutions and has served in a variety of other leadership roles for Morningstar, including director of mutual fund analysis, director of business strategy for international operations, president and chief investment officer of Morningstar Investment Services, and head of Morningstar.com and the company’s data business.
As mentioned above, Don Phillips will step down from the board of directors, effective Dec. 31, 2016, and will be succeeded by Kapoor. He will continue in his role as a managing director for Morningstar, focusing on research innovation. Mansueto added, “Don has been an outstanding board member since we first formed a board in 1999, and his perspective on the industry is second to none. Don is a beloved leader in the Morningstar community, and I am grateful for his commitment to Morningstar’s success.”
CC-BY-SA-2.0, FlickrPhoto: Susanita, Flickr, Creative Commons. Brexit will Fuel Fund Launches in Europe
According to Detlef Glow—Lipper’s Head of EMEA Research, and Christoph Karg—Content Management Funds EMEA at Thomson Reuters Lipper, at the end of Q2 2016, equity funds dominated the scene with a market share of 37% of the funds available for sale in Europe, followed by mixed-asset funds (28%), bond funds (21%), and money market funds (3%). The remaining 11% of “other” funds were real estate funds, commodity funds, guaranteed funds, and funds of hedge funds.
At the end of June 2016 there were 31,815 mutual funds registered for sale in Europe. For Q2 2016 a total of 689 funds (437 liquidations and 252 mergers) were withdrawn from the market, while only 463 new products were launched. However, the Thomson Reuters’ professionals expect that following the “Brexit” vote and its possible implications for fund distribution in Europe, “the number of products to rise over the course of the next two years. Investment managers based in the United Kingdom will ensure their access to the continental European market with the launch of products that are domiciled in the EU, while EU-based asset managers may start to launch funds that are domiciled in the U.K. The first scenario is expected to lead to an even higher dominance of Luxembourg and Ireland as international fund hubs in Europe, while the latter may drive up the number of products domiciled in the U.K.”
Additionally, they believe that market and fund-flow trends will impact the activity of the European fund promoters in one or another direction, “since these trends normally lead to the launch of new products or, contrarily, to the closure of existing products that have fallen out of favor with investors. With the increasing pressure on profitability, at least for bank-or insurance-owned asset managers, fund promoters will also further clean up their product ranges to become more efficient in an environment of increasing costs from the permanently increasing regulatory demands.”
For Q2, Luxembourg continued to dominate the fund market in Europe, hosting 9,109 funds, followed by France, where 4,452 funds were domiciled.
You can read the full report on the following link.
Ludovic Colin . Ludovic Colin New Head of Global Flexible Investment at Vontobel AM's Fixed Income Boutique
As of 1 September, Ludovic Colin has been appointed Head of Global Flexible Investment team at Vontobel Asset Management’s Fixed Income boutique. The newly created team will be responsible for the management of the Vontobel Fund – Bond Global Aggregate and Vontobel Fund – Absolute Return Bond.
Ludovic Colin will take over as lead Portfolio Manager of the Absolute Return Bond strategies, with Jack Loudoun as deputy Portfolio Manager. Ludovic Colin joined Vontobel Asset Management in 2015 as senior Portfolio Manager. Prior to that, he was a Cross Asset Macro Specialist at Goldman Sachs and Portfolio Manager at Amundi in London. Jack Loudoun, who joined Vontobel Asset Management in 2015 as Portfolio Manager for the Absolute Return Bond strategies, has a long track record in managing absolute return bond strategies going back to 2002, mainly working for Invesco and Deutsche Asset & Wealth Management. Throughout his career, Jack has been responsible for global rates, credit and macro strategies.
“The new team will further broaden our well established flexible fixed-income capabilities, providing our clients with both total and absolute return offering”, said Hervé Hanoune, Head of Fixed Income at Vontobel Asset Management.
Vontobel’s Zurich-based Fixed Income boutique was established in 1988 and focuses on four actively managed product lines: Global & Swiss Bonds, Corporate Bonds, Emerging Markets Bonds and Global Flexible Bonds. The boutique is comprised of 24 investment professionals with an average of 15 years of investment experience. Vontobel’s bond experts share the belief that fundamental research, independent thinking and active portfolio management are the key to consistent outperformance.
During recent years, Vontobel has seen the assets under management of its fixed-income offering grow to CHF 25 billion. Besides the acquisition of TwentyFour Asset Management, one of the key drivers of this growth has been the inflows into the Flexible Bond funds of Vontobel Asset Management’s Zurich based Fixed Income boutique.
CC-BY-SA-2.0, FlickrPhoto: Roberto Trombetta. Multi-Asset Funds Fail to Keep Volatility-Busting Promise: Should They Consider Cutting Fees?
Multi-asset funds in Europe have not lived up to the sales pitch of providing a buffer against unsettled markets, according to the latest The Cerulli Edge – Global Edition, which advises managers of poorly performing funds within the asset class to consider cutting fees.
While Cerulli Associates, a global analytics firm, acknowledges that some multi-asset sectors are faring better than others, its evaluation of the overall performance of the asset class over the 12 months prior to July 2016 shows that, on average, returns have been negative.
In terms of asset-weighted average returns, none of the multi-asset sectors, as defined by Morningstar, were in positive territory during the review period. Cerulli notes that a number of the funds are highly correlated to the stock market, some by up to 90%, which, given market conditions, defeats the funds’ key objective of providing stability.
“The past 12 months have been tough for multi-asset managers. Overall, the asset class has failed its first real test–and investors are beginning to take note. While a single year is not enough to truly judge performance, it does serve as an indicator,” says Barbara Wall, Europe managing director at Cerulli.
Average multi-asset fund fees (ongoing charges) in the UK have dropped 16 basis points in the past two years. Cerulli believes that charges will continue to fall in both the UK and mainland Europe. “More managers may be forced to sacrifice part of their fees,” says Angelos Gousios, an associate director at Cerulli Associates.
He says the case for liquid alternative multi-asset funds sticking with existing charges on the basis that special skills are required no longer holds water. “Fund buyers will not hesitate to switch to less expensive alternatives if performance and risk targets are not met,” says Gousios.
Noting that cheaper, more innovative strategies such as smart beta multi-asset funds are on the increase, Gousios warns that managers “charging unjustifiable performance fees in both rising and falling markets are at risk of being marginalized.”
Despite Cerulli’s damning assessment, the firm is optimistic with regard to the longer term prospects for multiasset funds. “Tailwinds that will increase their exposure include defined contribution pension schemes in the UK. However, inflows are likely to be more concentrated from now on, with managers that fail to deliver falling by the wayside,” says Gousios.
CC-BY-SA-2.0, FlickrSonia García-Romero . Sonia García-Romero Joins Citi to Focus on LatAm's UHNWI
Citi Private Bank hired Sonia Garcia-Romero as Managing Director and Investment Counselor Team Leader, Latin America, ex-Mexico and Brazil. Garcia-Romero will work from the Miami office and report to Lisandro Chanlatte, Head of Investment Counselors for Latin America. In this capacity Garcia-Romero will be responsible for leading investment services for ultra-high net worth clients. She will also lead the Multi-Family Office business and will focus on increasing penetration of capital market solutions for the firm’s clients.
“Sonia has over 20 years of experience working in the financial industry and an impressive track record of devising innovative actionable investment solutions,” said Chanlatte.
Garcia-Romero joins Citi from J.P. Morgan Private Bank, where she served as the Market Manager and Investments Team Leader for the Andes, Central America and Caribbean region. Prior to J.P. Morgan Private Bank, she worked in the Investment Bank and on the Global Markets Treasury Liquidity and Repo desks for J.P. Morgan. She holds a Bachelor of Science from C.U.N.E.F (Universidad Complutense) in Madrid.
“The global platform and institutional capabilities are just a few reasons I am excited to be joining Citi Private Bank. I look forward to building on the success of the Latin American Investments team and continuing to provide our clients with sophisticated financial solutions,” said Garcia-Romero.
CC-BY-SA-2.0, FlickrJames Ross . James Ross gets Promoted to Co-Manager of the Henderson Horizon Pan European Equity Fund
Henderson Global Investors has strengthened the European equities team by promoting James Ross to co-manager of the €3.9bn Henderson Horizon Pan European Equity Fund. The fund has been managed by Tim Stevenson since its inception in 2001 and over this period Tim has delivered top-decile performance returning 162.0% against an index return of 88.3%.
The Fund’s investment objective is to seek long term capital appreciation by investing at least 75% of its total assets in equity securities. The fund may invest in shares of European (including UK) companies in any industry.
James has been with Henderson since joining the graduate scheme in 2007 and has been co-manager on the Henderson UK Alpha Fund since January 2013. Since taking over management of the fund, alongside his co-manager Neil Hermon, James has delivered top-quartile performance with the fund delivering 48.0% against an index return of 28.2%.
Commenting on the appointment, Stevenson said, “Having worked with James for the past 10 years, I am very pleased to bring him on to the fund to work alongside me. James and I share a common investment philosophy and with his help I feel confident we can continue our successful track record of finding good quality growth companies in an increasingly tough market.”
Neil Hermon will assume lead management of the Henderson UK Alpha Fund with immediate effect and has appointed Indriatti van Hien as deputy fund manager on the fund. Indriatti has worked alongside Neil and James for the last four years and has played an increasingly important role on the fund.
CC-BY-SA-2.0, FlickrEGA´s team in the NYSE. Columbia Threadneedle Investments Completes Acquisition of Emerging Global Advisors
Columbia Threadneedle Investments announced that Columbia Management Investment Advisers, LLC has completed its acquisition of Emerging Global Advisors, LLC (EGA), a New York-based registered investment adviser and a leading provider of strategic beta emerging market portfolios. Terms of the acquisition were not disclosed.
The acquisition adds over $900 million in assets across a suite of nine emerging markets equity exchange- traded funds (ETFs) and significantly expands the firm’s capabilities in the development, management and deployment of innovative strategic beta products. The product line includes strategic and thematic index-based investment strategies, highlighted by the $671 million EGShares Emerging Markets Consumer ETF (ECON).
“We believe that our combined strategic beta offerings enhance and complement our actively managed investment capabilities and bring our expertise to a broader set of investors,” said Ted Truscott, chief executive officer of Columbia Threadneedle Investments. “We are pleased to welcome our new EGA colleagues to Columbia Threadneedle and to offer our clients and partners a strong platform of strategic beta portfolios.”
Marc Zeitoun, formerly EGA chief product and marketing officer, now leads Columbia Threadneedle’s strategic beta platform as head of strategic beta, reporting to Mr. Truscott. Edward Kerschner now serves as chief portfolio strategist for strategic beta, reporting to Colin Moore, global chief investment officer, and Mr. Zeitoun.
EGA’s website (www.emergingglobaladvisors.com) has been rebranded to Columbia Threadneedle Investments. Product information and market commentary related to the EGShares suite of ETFs can be found by visiting www.columbiathreadneedleetf.com and accessing the emerging market ETF section.
CC-BY-SA-2.0, FlickrCourtesy photo. UBS AM to Appoint Pedro Coelho as Head of UBS ETFs Spain
UBS Asset Management has appointed Pedro Coelho as Head of UBS ETFs Spain. Pedro will be based in Madrid and report to Simone Rosti, Head of UBS ETFs Southern Europe.
In his role, Pedro will be responsible for business development for ETFsand will aim to grow and strengthen the professionals clients relationships in all key market segments (asset managers, pension funds, insurance companies, private banks, family offices and independent financial advisors), together with the UBS AM Spain business led by Juan Infante.
Pedro started his career in the financial sector in 2000 in Lisbon and before joining the UBS ETF’s team he worked for 10 years in NN Investment Partners, in Madrid and Lisbon, where he was a Senior Clients Director for Iberia, Latin America and US Offshore. He has a Bachelor’s degree in Economics by ISEG Lisbon School of Economics and Management and an M.B.A. by NOVA School of Business & Economics.
UBS ETFs have a long-term track record of providing index-based investment solutions to clients. In 2001, UBS launched its first ETF. It was the beginning of a success story and today UBS is the fourth European ETF provider and one of the fastest growing in Europe, with around 29 bn USD in AUM (source: ETFGI, July 2016).
In Europe, UBS offers a wide range of ETFs, replicating more than 170 fund and currency share classes, covering equities, fixed income, commodities and alternatives.
UBS ETFs are managed by UBS Asset Management, a large scale investment manager with a presence in 22 countries. UBS AM offer investment capabilities and investment styles across all major traditional and alternative asset classes to institutions, wholesale intermediaries and wealth management clients with about 660 bn USD of AUM and a long-term commitment to passive management (215bn USD in indexed products and managing passive assets for 30 years).
CC-BY-SA-2.0, FlickrCourtesy photo of Huw van Steenis . Huw van Steenis, Appointed Global Head of Strategy at Schroders
Huw van Steenis has been appointed as Global Head of Strategy and member of the Group Management Committee at Schroders. Based in London, and reporting into Group Chief Executive, Peter Harrison, Huw will be responsible for business strategy and corporate development.
This newly created role within Schroders will focus on medium and longer-term strategy development, reflecting the firm’s commitment to growth. He joins in the fourth quarter of 2016.
Huw comes to Schroders with more than 20 years’ experience in the investment industry, including 14 years as Managing Director and Global Coordinator Banks and Diversified Financials Research at Morgan Stanley. During his tenure at Morgan Stanley he drove award winning research on the investment management and securities industry. Prior to this, he worked at JPMorgan and Boston Consulting Group.
Harrison, said:“Huw joins Schroders at a pivotal time for the industry. As a creative thinker and influential collaborator, his deep knowledge and experience of the investment industry is a valuable asset in these times of rapid change. Our highly-diversified business model and strong financial position gives us a firm foundation on which to grow. We see many interesting long-term opportunities and will be taking advantage of our position to invest behind them.”
Huw van Steenis, said: “It is a huge honour to join Schroders, a firm which stands for the very best in investment management: with world-class investment strategies, outstanding client service and a deep bench of talent which has delivered for clients over many years. I look forward to working with Schroders’ pre-eminent teams to meet the challenges and opportunities for investors. The company has a bold strategy and a culture of ambitious continuous improvement, both of which will be critical in meeting the competitive challenges ahead.
CC-BY-SA-2.0, FlickrPhoto: SpaceRitual, Flickr, Creative Commons. Mega Funds Continue to Dominate the Global Mutual Fund Landscape - 45% of Assets go to <1% of Players
Less than 1% of the approximately 65,000 mutual funds sold around the world controlled 45% of the global fund industry’s $23.0 trillion in assets as of 30 June 2016. New research from Propinquity, a specialist consultancy to investment management companies worldwide, offers insight into these giants. What’s more, the small subset of 634 ‘mega funds’, defined as those with total net assets of $5 billion or more, have been responsible for nearly half (48.1%) of the industry’s global growth since 2007.
446 of the 634 worldwide mega funds are sold in the U.S. This represents 82.9% of global mega fund assets ($8.5 out of $10.2 trillion). 68.7% of total U.S. mutual fund assets are in mega funds – the U.S. has never been this hyper-concentrated. This concentration is in sharp contrast with European domiciled funds, which have 16.9% of assets in mega funds.
In 2007, 11.6% of mega fund assets were passively managed. As of Q2 2016, passive funds make up 25.8% of global mega fund assets ($2.6 out of $10.2 trillion). By contrast, passive funds make up only 15.1% ($3.5 out of $23.0 trillion) of the broader worldwide mutual fund universe.
As of Q2 2016, the average passive mega fund has $40.1 billion in assets while its active counterpart has $13.4 billion – a third as large. The greatest economics of scale are found in passive strategies, while fees are slim, barriers to entry are high link.
