Courtesy photo.. Hartwig Kos Joins SYZ Asset Management as Co-Head of the Multi-Asset Team
SYZ Asset Management, the institutional asset management division of the SYZ Group, has announced the appointment of Hartwig Kos as Co-Head of the Multi-Asset team. Hartwig Kos will co-manage the team with Fabrizio Quirighetti and also serve as Vice-CIO of SYZ Asset Management. He will take up his position on 15 October 2015.
Based in London, Hartwig Kos will contribute with his specific skills and experience in active allocation strategies to the team of 7 people in place and will take over the management of the OYSTER Multi-Asset Diversified fund as lead manager. For their part, Fabrizio Quirighetti and his team in Geneva will manage the OYSTER Multi-Asset Absolute Return EUR and OYSTER Absolute Return GBP and Fixed Income strategies.
Before joining SYZ Asset Management, Hartwig was a Director in the Global Multi Asset Group at Baring Asset Management, where he was responsible for managing the Baring Euro Dynamic Asset Allocation Fund. He was also the Co-Manager of the Baring Dynamic Emerging Market Fund. Moreover, Hartwig was a member of the Strategic Policy Group at Barings, the firm’s asset allocation committee. Hartwig holds a Ph.D. in Finance from Cass Business School in London and a degree in Economics and Business Administration from the University of Basel, Switzerland. Hartwig is also a CFA® charterholder.
The London office is one of SYZ Asset Management’s clusters of excellence and notably houses the European equities fund management and research team. An office was opened in Edinburgh in November 2014 to include additional European fund management and research capabilities and an expanded sales team.
Commenting on the appointment, Katia Coudray, CEO of SYZ Asset Management, said: “I am pleased to have hired Hartwig Kos. He is an investment professional who is highly respected by his peers and his renowned experience in active allocation management adds value to our fund management team.”
Hartwig Kos added: “SYZ Asset Management has an excellent reputation and a convincing track record in the competitive field of multi-asset management. I am delighted to be a part of this team and join a Group with a strong investment culture and a human dimension.”
Photo: Moyan Brenn. Advisors May Not be Allocating Enough Effort to Target Millenials
New data released by Hartford Funds suggests that there is significant opportunity for financial advisors to better engage their young clients. Survey results uncovered that most advisors report not proactively pursuing the ‘Millennial’ generation as potential clients, despite identifying as prospects the individuals that fall into that category. Findings also revealed that advisors expect client risk aversion to nearly double in the next 12 months, continuing an upward trend.
When asked how much they focus on attracting Millennial clients, 56 percent of advisors said “less than other age groups” or “not at all.” However, 70 percent reported that they target clients in their late-twenties and early- to mid-thirties. Further, the majority (63 percent) of financial advisors who say they’re not targeting Millennials at all are also pursuing prospects in this age group.
“The term ‘Millennial’ has become a buzzword in financial services, being discussed constantly by financial firms and advisors. However, our survey suggests a disconnect when it comes to understanding who falls into this Millennial category,” said Bill McManus, Director of Strategic Markets at Hartford Funds. “In an attempt to filter noise, many advisors might be missing valuable insights for attracting their younger client targets.”
When asked about retirement, 71 percent of financial advisors plan to work for at least 16 more years, and 53 percent plan to work for more than 20 years. Despite the desire to continue offering financial advice beyond 2030, these advisors overwhelmingly are not focused on attracting Millennial clients. More than half of advisors who plan to work for more than 15 more years target Millennials less than any other age group or not at all. Similarly, 51 percent of advisors who plan to work for more than 20 years are also targeting Millennials less than any other age group or not at all.
“When factoring in career longevity, there is even greater concern that many advisors aren’t intentionally engaging Millennial clients. Advisors who plan to work for at least two more decades need to thoughtfully engage their younger clients in order to grow along with their needs,” McManus continued. “Millennials will reach critical planning milestones in the coming ten years and require support in navigating the market and reaching their goals.”
When discussing client risk aversion, advisors expect a significant rise in the coming 12 months. Continuing a steady upward trajectory, 57 percent of financial advisors expect clients to become more risk averse in the next 12 months, up 22 percent from 2014 (35 percent) and up 40 percent from 2013 (17 percent).
“Because advisors foresee greater risk aversion among clients in the coming months, they are in the unique position to help maintain focus on the bigger picture and minimize clients’ tendencies to make emotionally-driven investment decisions,” McManus added. “Particularly as the market and investors anticipate a rise in interest rates, it will be critical for advisors to help clients manage through potential market adjustments.” The data underscores that the majority of financial advisors (57 percent) place market volatility at the forefront of the issues that keep them up at night; interest rates follows in second (51 percent) and international turmoil and its impact on markets follows in third (46 percent). Financial advisors appear to be unanimously less concerned by clients’ anxiety about saving and investing (42 percent), while only 32 percent of financial advisors are worried about attracting the next generation of clients. Concerns about inflation come in last, with only nine percent of financial advisors noting this as an area of worry.
For its third annual Advisor Anxiety Survey, executed by Hartford Funds during June of 2015, Hartford Funds spoke with more than 100 financial advisors about their anxieties as well as attitudes and practices regarding Millennial clients, individuals born roughly between 1980 and 2000.
Photo: ben
. Most Latino Business Owners Expect to Pass Business on to a Family Member
According to a new study by Massachusetts Mutual Life Insurance Company (MassMutual), research from the2015 MassMutual Business Owner Perspectives Study revealed that 80 percent of Latino respondents expect to pass their businesses on to a family member – most often a child. However, 37 percent of those individuals said their chosen successor may not even know about this succession plan.
For Latino business owners, the aspiration to live the American Dream is no different, but the definition of success may be broader, encompassing their ability to care for and support extended families, friends, and their communities. The study reported they feel a strong sense of responsibility to their families and communities but tend to lack financial confidence and knowledge to put plans in place to ensure they can continue to provide for them.
“Latino entrepreneurs are strongly interconnected with their businesses, community and families,” said Dr. Chris Mendoza, Latino Markets Director, MassMutual. “Without the proper financial knowledge and preparation, Latino business owners are inhibited from fully realizing and protecting their dreams.”
Latino-owned businesses are growing at double the national rate, according to the U.S. Census, are generally younger and more likely to take community into account when making business decisions.
Only half of the Latino business owners surveyed have a formalized plan in place (a buy-sell agreement) to protect themselves for an untimely death; even fewer have a buy-sell agreement in place for disability; Protecting the business (35 percent) and family (37 percent) are the primary motivators for having these plans in place, yet an unforeseen illness or injury could jeopardize their ability to meet that goal.
While Latino business owners are ahead of their general population peers, when it comes to succession planning (49 percent of Latinos vs. 41 percent of the general population have a succession plan), only about half of the Latino business owners surveyed have any type of succession plan in place; Eighty percent said they will pass the business on to a family member – most often a child. However, 37 percent of those individuals said their chosen successor may not even know he/she is the successor (significantly higher than 23 percent of the general population).
Forty percent don’t have any retirement savings plan outside of their businesses and either plan to continue receiving income from the business post-retirement or will use the proceeds from the sale of the business to fund their retirement; Latino business owners are significantly more likely than the general population to say they plan to retire but haven’t given it much thought, and few (only 12 percent) say they plan to retire in the next five years, driven by the younger average age of Latino business owners; They are more likely to leave the business to a family member or relative (80 percent vs. 65 percent of the general population) and much less likely to sell the business to a key employee (9 percent vs. 14 percent of the general population).
CC-BY-SA-2.0, FlickrPhoto: Chris Bullock, credit analyst at Henderson and co-manager on the Euro Corporate Bond Fund and Euro High Yield Bond Funds. . The High Yield Bond Market Has Trebled in Size in The Last 10 Years
High yield bonds have been a staple of US portfolios for more than thirty years, and the trends that have led to a large and well-developed US market are beginning to establish themselves elsewhere as companies increasingly turn to high yield bonds as a source of funding.
This growing global supply creates greater choice for investors at a time when demand for high yield bonds is also increasing because of the favourable risk/return and yield characteristics of the asset class.
High yield bonds are corporate bonds that carry a subinvestment grade credit rating. They are typically issued by companies with a higher risk of default, hence the higher yields. Henderson believe the following factors combine to make high yield bonds an attractive investment:
Growing and globalising market
High income in a low yield world
Low sensitivity to the interest rate cycle
Default rates expected to remain low
Significant opportunities for credit selection
A growing and globalising market
As the table shows, the high yield bond market has trebled in size in the last 10 years and, geographically, is becoming more diverse. “In part, this reflects a more confident and established market, as well as companies increasingly turning to the high yield bond market after banks cut back on lending following the financial crisis”, points out Chris Bullock, credit analyst at Henderson and co-manager on the Euro Corporate Bond Fund and Euro High Yield Bond Funds.
Today, the high yield market comprises a vast range of companies from household giants such as Tesco, Heinz and Telecom Italia through to small and medium-sized companies that are raising funding through bond markets for the first time. This creates an attractive and expanding mix of issuers that can reward strong credit analysis.
High income in a low yield world
High yield bonds continue to offer an attractive income pick-up.
Yields in many fixed income sub-asset classes are still close to historical lows despite recent rates market volatility. Yields have been driven by low global central bank rates combined with quantitative easing (QE). In the first half of 2015 alone, 33 central banks cut interest rates, while the ECB embarked on its €60bn-a-month quantitative easing programme.
From a risk-return perspective, high yield bonds are typically seen as occupying the space between investment grade bonds and equities. As the chart shows, over the last 15 years, high yield bonds have outperformed investment grade corporate bonds, government bonds and even equities, with less volatility than equities. The high income element in high yield bonds has been a valuable component of total return.
CC-BY-SA-2.0, Flickr. David Steyn Appointed as CEO and Chairman of the Management Board of Robeco
Robeco today announces the appointment of Mr. David Steyn (1959) as Chief Executive Officer and Chairman of the Management Board of Robeco Groep N.V. (‘Robeco’) as of 1 November 2015.
David Steyn has over 35 years of international experience in asset management, in management,distribution and investment roles. Previously David Steyn was in charge of strategy at Aberdeen Asset Management plc and chief operating officer and head of distribution at AllianceBernstein LP, based in London and New York. He studied law at the University of Aberdeen.
David Steyn, said: “I am honored to be given the opportunity to become part of an asset manager with such a strong heritage and reputation. I am looking forward to building Robeco further on a continuing path of excellence, meeting the evolving needs of clients around the world.”
Dick Verbeek, Chairman of the Supervisory Board, said: “The Supervisory Board has given positive advice to the shareholders, because we believe that David is an excellent candidate for CEO of Robeco to continue the growth path. I’m confident that we can count on David’s long and proven track record in asset management to lead Robeco and benefit from the opportunities that will arise in the global asset management market in the years to come. On behalf of the entire company, I would like to extend him a warm welcome.”
Makoto Inoue, President and Chief Executive Officer of ORIX Corporation and member of Robeco’s Supervisory Board, said: “I am delighted to welcome David Steyn to Robeco. I am convinced that together with the members of the Management Board and staff at Robeco he will be able to accelerate Robeco’s growth ambitions globally while continuing to deliver great results for clients.”
The appointment of David Steyn is subject to formal approval by the relevant Dutch authorities. Once the regulatory approval has been obtained, David Steyn will work closely together with Roderick Munsters, whose departure was announced earlier this month, to ensure a smooth transition.
Photo: Nicu Buculei
. Dividend: It Is Essential To Analyze The Long Term Sustainability To Avoid ‘Value Traps’
The case for equity income investing continues to strengthen. Worldwide, quoted companies paid out a record $1 trillion in dividends last year, according to the Henderson Global Dividend Index, a long-term study of global dividend trends. By investing globally, investors can gain exposure to a broader range of income opportunities and benefit from significant portfolio diversification.
Broadening opportunity set
Companies increasingly recognise the benefits of attracting investors by being able to demonstrate a strong and growing dividend policy. This is well established in Europe and the US but the dividend culture is now providing increased opportunities in regions such as Asia-Pacific and selected emerging markets. This broadening universe provides an attractive diversification opportunity for equity income investors.
Long-term outperformance
Studies indicate that dividends generate a significant proportion of the total returns from equities over time. The combination of reinvested income with potential capital growth has led to long-term outperformance of higher dividend paying companies compared to the wider equity market, as shown in the chart below.
A focus on cashflow is required in order for dividends to be sustained; dividends are therefore a strong indicator of the underlying health of the business.
Higher yielding shares by their nature tend to be more contrarian and out of favour thus offering revaluation opportunities.
Maintaining a healthy dividend stream imposes a disciplined approach on a company’s management team and can improve decision making.
Risk reduction – diversification benefits
As more companies globally pay dividends, the potential to diversify increases. Some markets suffer from high dividend concentration and as a result equity income strategies focused on single countries may become overly reliant on a low number of high-yielding companies that dominate the market. A global remit also maximises the opportunities at a sector level; for example, many high yielding technology companies can be accessed through investing in the US or Asia, but not the UK.
Key considerations
Look beyond the headline yield: High-yielding equities can be more risky than their lower-yielding counterparts, particularly after a period of strong market performance when equity price rises push yields down. The high-yielding companies that are left are often structurally-challenged businesses or companies with high payout ratios (distributing a high percentage of their earnings as dividends) that may not be sustainable. An investor simply focusing on yields, or gaining exposure through a passive product such as a high-yield index tracker fund, may end up owning a disproportionate percentage of these companies, often known as ‘value traps’. It is also worth noting that companies which cut their dividends tend to suffer poor capital performance as well. Therefore, it is essential to analyse the sustainability of a company’s ability to pay income.
Seasonality: A global approach offers equity investors diversification benefits and the opportunity to receive income from different sources throughout the year. Most regions show some dividend seasonality. European companies typically pay out more than three fifths of their annual total during the second quarter according to data within the Henderson Global Dividend Index. This is by far the region with the most concentrated dividend period. North America shows the least seasonality of any region with many firms making quarterly payments. UK firms also spread payments more smoothly than other parts of the world, although larger final dividends tend to be paid in the spring and summer following the annual general meeting season.
Dividend outlook: Overall, we are encouraged by the health of global companies generally, with strong balance sheets and disciplined management teams focused on generating good cashflow, which should be supportive for dividend growth in the long run.
Photo: Matthias Rhomberg
. Mirae Asset Global Investments Grows Equity Analyst Team in U.S.
Mirae Asset Global Investments has announced the hiring of four analysts to expand its global equity research team in the United States.The new investment analysts are based in New York and report to Jose Gerardo Morales, Chief Investment Officer. They are responsible for providing research and analysis in support of Mirae Asset USA’s mutual funds and international sub-advisory portfolios. The additions bring the total number of equity investment professionals with Mirae Asset USA to eight.
The additions to the investment team include:
Tatiana Feldman is a senior investment analyst focusing on global emerging markets ex-Asia. Prior to joining Mirae Asset USA, Mrs. Feldman served as an investment analyst with INCA Investments, an equity research analyst at Brasil Plural and a senior analyst at Morgan Stanley covering Latin America. Mrs. Feldman holds a bachelor of journalism and mass communications degree from New York University.
SungWon Song, Ph.D. is an investment analyst focusing on the global healthcare sector. Prior to joining Mirae Asset USA, Dr. Song worked at Nationwide Children’s Hospital, where he served as a postdoctoral research fellow, and The Ohio State University, where he worked as a Graduate Research Associate. Dr. Song holds a Ph.D. in Molecular Cellular Developmental Biology from The Ohio State University, a master’s in biotechnology of biological sciences from Columbia University and a bachelor of biotechnology and genetic engineering from Korea University.
Malcolm Dorson is an investment analyst focusing on global emerging markets ex-Asia. Prior to joining Mirae Asset USA, Mr. Dorson worked as an investment analyst at Ashmore Group covering Latin America and at Citigroup, as an assistant vice president focusing on asset management for ultra-high net worth clients. Mr. Dorson holds an M.B.A. from the Wharton School, an M.A. in international studies from the Lauder Institute and a bachelor of arts degree from the University of Pennsylvania.
Michael Dolacky is an investment analyst focusing on the global healthcare sector. Prior to joining Mirae Asset USA, Mr. Dolacky was an investment analyst with Senzar Asset Management and a fixed income analyst at Nomura Securities. Mr. Dolacky holds a bachelor of economics degree from Tufts University.
“We are committed to growing our investment infrastructure in the U.S. and building upon Mirae Asset’s reputation as a leading source of global investment expertise,” said Peter Graham, CEO of Mirae Asset USA. “Each of these new analysts brings a wealth of experience, diverse expertise and deep understanding of the markets or sectors they cover.”
Next week, Investec Asset Management shall have the pleasure of organizing the eighth edition of its global investment conference, Investec Global Insights 2015. The asset management company will gather 250 delegates from 23 countries worldwide in London, with the aim of providing its clients with the most complete and updated analysis for making their investment decisions.
After the last twelve months, during which the market has undergone some significant changes, the content of the conference is more relevant than ever. Attendees from the United States, Latin America, Europe, UK, Middle East, Africa, and Asia will have the opportunity to attend several ‘Meet the Portfolio Manager’ sessions and interact with peers from major fund buyers from all around the world.
This year, some of the featured presentations will focus on the following topics:
Is it still worth investing in emerging markets?
Are developed markets looking stretched?
When will rates rise and what will be the impact?
How do you find sustainable sources of income?
Outside the purely financial field, the conference will feature the starring presentation of Francois Pienaar, captain of the South Africa National Rugby Union team from 1993 to 1996. He will share his experiences, which led the team to win the Rugby World Cup in 1995. In Invictus, the film based on this feat directed by Clint Eastwood, Pienaar is played by Matt Damon.
Richard Garland, Investec’s Managing Director, will act as conductor of the event for the duration of the conference.
For further information on the event’s agenda please consult the attached document.
CC-BY-SA-2.0, FlickrPhoto: OTA fotos. Japan: Goodbye Deflation?
Shinzō Abe had ambitious plans following his re-election as Prime Minister of Japan in 2012. He was prepared to pull all the levers available to him, in the form of radical economic and reformist polices, to end Japan’s ‘lost decades’ of crippling deflation. While the success of his reformist policies might be up for debate, his monetary and fiscal stimulus plans have finally seen both inflation and the stock market moving in the right direction – upwards (see chart below). “Abe ‘gets it’: everything that can be done to end deflation and return to growth must be done. And the only way to dig yourself out of deflation is to aggressively inflate your way out of it”, writes the Japanese Equity Team at Henderson.
These policies have helped Japanese equities to become one of the best performing asset classes so far this year, albeit at the expense of a significantly weakened yen. One particular beneficiary has been financials, point out Henderson. In recent years the sector has been buoyed by banks finally writing-off legacy bad loans, leaving their balance sheets stronger than most of their developed world counterparts. In addition, the banks’ Tier 1 capital ratios have been buoyed by the surge in the equity market.
For most western banks, this capital tends to be held in low-risk fixed income assets, with a low percentage held in equities. However, in Japan a significant proportion is held in non-financial domestic equities. In a reflationary environment, this surge in equity shareholdings has bolstered the capital of banks, leaving them far more sufficiently capitalised to withstand any unforeseen shocks, while also being well positioned to benefit from any recovery in the domestic economy.
The road ahead
Longer term, financials are set to benefit from any rise in interest rates, which have remained ultra-low in Japan for decades. A rise – albeit likely a very small and gradual one – would allow banks to earn a higher net interest margin. That is, the margin on what can be earned from the lending activities of banks, versus what is paid to depositors, increases. However, this currently feels like a distant prospect, with markets not forecasting a rise in rates until the second half of 2016.
“In the meantime, we see opportunities in those domestically-orientated companies that are likely to benefit from a recovery in the economy. Most notably the service and retail sectors should benefit, following the lull induced by the 2014 consumption tax hike, which saw the tax on goods and services rise from 5% to 8%. Stocks we hold in these sectors include Rakuten, Japan’s leading ecommerce company, and Fujitsu. The latter has new management, which we hope will focus more on its highly cash-generative core IT service business”, explains the Japanese Equity Team.
“It is too early for Abe to claim economic victory. However, should he continue with his economic and reformist policies, we could finally see a return to something approaching ‘normality’, much to the relief of the country’s ever-patient investor base”, concludes.
Photo: Deurim Poyu. Economic Uncertainties in The U.S. Keeping CFOs Up at Night
The nation’s finance chiefs are relatively optimistic about the future, but remain cautious in the face of domestic uncertainties like Congressional inaction on tax reform. This is according to the latest edition of Grant Thornton LLP’s CFO Survey, which reflects the insights of more than 900 chief financial officers and other senior financial executives across the United States.
More than half (55 percent) of CFOs say uncertainty in the U.S. economy is a major concern that could impact their businesses’ growth in the next 12 months. This is despite the fact that most CFOs expect the U.S. economy overall to remain the same (49 percent) or improve (43 percent) in the next 12 months, suggesting that factors other than the overall health of the economy are presenting a barrier to growth.
“While the U.S. economy has stabilized, our data suggest that uncertainty related to other economic factors is making strategic planning difficult for financial executives,” said Randy Robason, Grant Thornton’s national managing partner of Tax Services. “CFOs are looking to Washington, regulators and the Federal Reserve for answers and getting nothing but indecision.”
Business leaders’ concern over these economic uncertainties appears to have increased significantly since earlier this year. In May 2015, only net 22 percent of U.S. business leaders saw economic uncertainty as a major constraint on their ability to grow in the coming year, according to the Grant Thornton International Business Report.
Particularly frustrating for CFOs is the dysfunction in Congress over a bill to extend more than 50 popular tax provisions that expired at the end of 2014.
Meanwhile, good news for finance professionals: CFOs are aggressively looking to develop and hire new talent. The vast majority (70 percent) of CFOs say finding and retaining the right talent is a critical need for supporting growth. Forty percent expect their business’s new hiring to increase in the next six months; 52 percent expect hiring to remain the same. A majority of CFOs (67 percent) plan to increase salaries in the coming year, holding steady since 2014.
