Photo: Stephanie Ouwendijk, new a vice president and portfolio manager at Franklin Templeton Investments. Franklin Templeton Hires Portfolio Manager From Ashmore
Franklin Templeton Investments has announced that it has appointed Stephanie Ouwendijk as a vice president and portfolio manager.
Ouwendijk joined Franklin Templeton on 16 February 2015, as part of its Emerging Markets Debt Opportunities team which sits within the Franklin Templeton Fixed Income Group.
She is based in London and reports to William Ledward, senior vice president and portfolio manager, who leads the Emerging Markets Debt Opportunities team. The team currently manages over $10bn for institutional investors.
Ouwendijk joins Franklin Templeton from Ashmore Group, a London-based emerging markets asset management firm, where she served as fund manager since June 2010. Most recently, she was part of a team responsible for External Debt and Blended Debt funds, and in particular was responsible for CEE and Africa sovereign and quasi-sovereign credits.
Prior to working at Ashmore, she was an emerging markets analyst/portfolio assistant at Gulf International Bank Asset Management. She holds an MSc in investment management from Cass Business School in London, and MSc and BSc in business administration from Vrije Universiteit in Amsterdam. She is a Chartered Financial Analyst (CFA) Charterholder.
The Franklin Templeton Fixed Income Group is an integrated global fixed income platform comprising over 100 investment professionals located in offices around the world. The group launched its first fixed income portfolio more than 40 years ago and has been managing money for the institutional market for more than 30 years.
Photo: Jacob Ehnmark. Investec Asset Management Announces Use of Stock Connect in UCITS Fund Range
Investec Asset Management announced today that funds within its flagship Luxembourg-domiciled UCITS Global Strategy Fund range will now have the capability to invest in the Chinese domestic equity market using Shanghai-Hong Kong Stock Connect. Regulatory approval was received in December 2014 and it is believed that Investec Asset Management is the first global investment manager of UCITS funds set up to invest using Stock Connect.
This news follows the award of an RQFII (Renminbi Qualified Foreign Institutional Investor) licence by the China Securities Regulatory Commission (CSRC) and the allocation of its RQFII investment quota by the Chinese State Administration of Foreign Exchange (SAFE).
In the near future, Investec Asset Management intends to utilise its RQFII licence and quota to launch two new daily dealing UCITS funds in its GSF range, one focusing on Chinese equity exposure and the other on onshore Chinese bonds. This builds on its range of dedicated Asian investment strategies, including the Investec 4Factor All China Equity Strategy and the Investec Asia ex Japan and Investec EM Equity Strategies.
These developments allow Investec Asset Management to provide clients with direct access to mainland Chinese equity markets across both global and regional products in a product structure offering both flexibility and liquidity.
Greg Kuhnert, Manager of the Investec Asian Equity Strategy commented, ‘The A share market represents the other 50% of the China pie previously closed to foreign investors. Because of our long-term investment in the region and investment hub on the ground, this market appears rich with opportunities for investors such as us who are focused on companies demonstrating improving profitability, return on capital, capital discipline and valuations.’
Amadeo Alentorn, Manager and Head of Analysis for the Global Equity team at Old Mutual Global Investors, who was recently in Madrid . “The ECB has Disappointed by Acting too Late; There Was an Opportunity to Change the Sentiment a Year Ago”
After the last few years of constant increases in the equity markets, uncertainty is once again starting to make an appearance, in response to aspects such as the divergence in worldwide monetary policies, or the political and electoral events which could cause significant changes over the course of the year. In this current backdrop of greater uncertainty and volatility, the proposal of Old Mutual Global Investors, which recently presented in Madrid its long / short global equity strategy with an absolute return perspective (Global Equity Absolute Return), makes complete sense.
It is a totally neutral market strategy with zero exposure to market or beta, and uncorrelated with the market behavior, which makes it a good strategy to diversify risks. “It has an absolute return profile that is generating much interest among Spanish investors and looking for a 6% return over liquidity,” says Amadeo Alentorn, Manager and Head of Analysis for the Global Equity team at Old Mutual Global Investors. Something that has been achieved in recent years with a volatility of around 5% and which has allowed it to increase its assets to 3 billion dollars (of the total 5 billion which the company manages in equity, between this and other long only strategies).
Behind their success lies a systematic model, which, out of a global universe of 3,500 companies with the largest capitalization and liquidity in the world, selects 700, through the implementation of five criteria of a fundamental nature: valuation, growth, sentiment analysis, business management, and market dynamics.
These criteria change their weight and become more or less important depending on the market situation. Thus, the model has a number of historical situations by which it analyzes which factors have worked better, and acts accordingly. Therefore, the emphasis changes depending on the economic climate: if the market falls, the greatest weight will be on the quality of the companies, business management, etc., factors that tend to work better. “Currently, the sentiment is neutral: there is still risk aversion, despite the ECB. Although volatility will grow, and is greater than in the past, it’s still not too high. The current economic climate values strong balance sheets and the quality of the companies, the most defensive stocks; and valuation criteria do not work too well,” says the manager. In his opinion, the ECB has disappointed markets by acting too late, and a year ago would have had the opportunity to change the sentiment; hence he predicts lateral movements in the markets and increased volatility.
The model, which gets its profitability mainly from stock selection (i.e. choosing the securities on the long side to be better than short), also gets profitability through sector positions, which can afford to have some exposure: for example, they are short on energy securities and long in defensive sectors such as the health sector or utilities. In fact, amongst their long positions in Spain these sectors stand out, in securities such as Iberdrola and REE, for the strength of their balance sheets and sustainable growth of the sector. But regardless of sector positions, exposure is zero in currency, regional positions, or by country, the manager explains.
Amadeo Alentorn, Manager and Head of Analysis for the Global Equity team at Old Mutual Global Investors, works from London within a team consisting of two others managers, analysts, and training experts.
Wikimedia CommonsPhoto Luc Viatour. Leading Entrepreneurs from U.S., Latin America and Europe will meet at eMerge Americas’ 2015
eMerge Americas, a global technology conference focused on innovations transforming industries across the Americas, will host a world-class array of early and later-stage companies to highlight innovation and disruptive technology through its Startup Showcase to be held in May, 1st to 5th, in Miami Beach.
As part of the eMerge Americas 2015 program, the Startup Showcase takes place in front of hundreds of investors and industry innovators. The showcase will culminate with the top companies pitching on eMerge’s Center Stage for the chance to walk away with up to $150,000 in cash and prizes. The companies selected for the Startup Showcase will also gain valuable insight from mentors in the lead up to eMerge Americas through an innovative virtual boot camp followed by an live boot camp for entrepreneurs in Miami during the event.
Registration is currently open and until MArch 15th. Startups interested in participating can visit www.emergeamericas.org/startups/
Wikimedia CommonsPhoto: Coolcaesar. FATCA Deadlines for 2015
Even though FATCA officially went ‘live’ on July 1st last year, APEX Funds Services reminds us sthat many of the key implementation deadlines will take place in the following years. FATCA generally imposes registration, due diligence and reporting obligations on Foreign Financial Institutions (“FFIs”).
Last year, FFIs were required to implement new account opening procedures and register with the US Internal Revenue Service (“IRS”). There was a surge in registrations on the IRS portal in late December as Model 1 FFIs rushed to register and obtain their Global Intermediary Identification Number (“GIIN”) before the year end deadline. For FFIs that have failed or were unwilling to register and comply, then 2015 will bring a number of challenges e.g 30% withholding tax on certain US source payments, stiff penalties and/or enforcement action by their local tax authority along with reputational, legal and other operational headaches.
Acording to Karen Wallace, Global Head of Compiance at APEX Funds Services Holdings, for FFIs that have registered under FATCA then their focus for 2015 should be on the following upcoming deadlines:
March onwards: registering for an on-line account with the IRS or relevant local tax authorities in order to comply with the reporting obligations e.g registration required by the Cayman tax authority by 31 March 2015.
31 March 2015*: reporting deadline to the IRS for Model 2 IGA jurisdictions and FFIs in non-IGA jurisdictions.
31 May/30 June 2015: typical reporting deadlines for Model 1 IGA jurisdictions.
30 June 2015: review of pre-existing individual high value accounts as at 30 June 2014 must be completed
*The IRS has advised an automatic 90-day extension is granted to all filers (without the need to file any form or take any action) with respect to calendar year 2014 only.
For the above reporting dates, FFIs must report the name, address, U.S. TIN (date of birth for pre-existing accounts if no U.S. TIN), account number, name and identifying number of the reporting institution, and account balance or value for US reportable accounts for calendar year 2014. Reporting obligations will increase in 2016 and 2017 respectively. It is essential that FFIs have a comprehensive FATCA compliance programme in place to limit non-compliance risk and meet the obligations of the relevant IGAs and/or the IRS.
Photo: Jorge Royan . The Role of the Advisor as Master Builder of the Integrated Wealth Plan
Family Office Exchange (FOX), a global membership organization of private family enterprises and their key advisors, will celebrate the 2015 Wealth Advisor Forum at the Biltmore in Coral Gables, FL, April 27-29.
The event will show how the family’s key advisor serves as the architect and integrator for the advisor ecosystem, and how advisors can contribute meaningfully toward solutions for families by embracing the mindset of a master builder. Advisors that work in a mindful and complementary way with other advisors to create the integrated wealth plan serve their clients more effectively.
The Forum will reveal new FOX insights on what families say they want and need from their advisors and will document the critical factors for building an integrated wealth plan.
Speakers include NYU’s Ben Dattner and Yale lecturer Sarah Biggerstaff. They will be joined by FOX experts Alexandre Monnier, President, and Amy Hart Clyne, Executive Director of the Knowledge Center.
Registration for the event is open to FOX members and non-members, but seating is limited. Attendees are also encouraged to join FOX for the Michael Brink Memorial Golf Outing on April 27 at the Biltmore Golf Course.
Global gross domestic product (GDP) growth should accelerate somewhat in 2015 and 2016 from the pace of the last three years because of much lower oil prices, the avoidance of special drags on the world economy, and continuing easy monetary policies from global central banks, according to BNY Mellon Chief Economist Richard Hoey. Hoey made the comments in his February outlook.
Among the drags on the economy in recent years that are unlikely to be repeated are the weather-impacted decline in U.S. GDP in the first quarter of 2014 and the Japanese recession in the middle two quarters of 2014 due to the rise in the value-added tax, Hoey said. Furthermore, he added that in recent weeks there have been monetary policy easing moves from the European Central Bank, the Swiss National Bank, the Bank of Canada, the National Bank of Denmark, Norway’s Norges Bank, the Central Bank of the Republic of Turkey, the Central Reserve Bank of Peru, the Reserve Bank of India, and the Central Bank of Egypt, among others.
“Recent currency trends should support global growth,” Hoey said. “There should be a boost to export competitiveness in such economically weak regions as Europe and Japan, due to sharp declines in their currencies. These currency declines have coincided with a sharp drop in oil prices. As a result, they are more likely to have cyclically-appropriate anti-deflationary effects than to generate excess inflation.”
Hoey noted the recovery in global growth has been more sluggish in this cycle than in past recoveries. Despite the aggressive use of credit to finance the leveraged purchase of existing assets, he said the appetite to use credit to finance increased current spending has been restrained until now in many countries.
While Hoey is seeing tailwinds to economic growth from inexpensive energy that is likely to last for some time and the accommodative monetary policies, he points to a number of factors that could moderate the expansion in global GDP.
These restraints include a downward shift to lower trend growth in China, according to the report. China engineered a domestic credit boom a half-decade ago to limit the impact of the global financial crisis and global recession on its economy, Hoey said. However, he said the hangover from that credit boom is now contributing to a slowdown in the growth rate of China.
Hoey said the slowdown is occurring just as there is a demographic inflection point to slower growth in the Chinese labor force. He added, “We believe that the outlook for the Chinese economy is a downward shift to slower trend growth rather than a hard landing.”
Another challenge to growth cited by Hoey is the decline in the global trade multiplier. Before the financial crisis, global trade grew faster than GDP, but that does not appear to be the case now.
“As emerging markets are now becoming more dependent on domestic demand growth, the global trade multiplier has shifted down, with global trade and the global economy both growing at about the same pace,” he said.
Photo: Andreas Lehner. The Time for Sitting Back and Relaxing is Over
In the last hundred years, from 1915 to 2014, the classic 60/40 portfolio (60% equities/40% bonds) has generated 8.4% per year. That return can be broken down into 10.3% on equities and 5.6% on bonds. A period of that length obviously has its ups and downs, but despite the myriad crises over the last few decades, the figures for the last 50 and even the last 25 years are better still.
The performance of this simple strategy is not just good; it has also been consistent over time. It is then tempting to conclude that the 60/40 portfolio is both time- and crisis-proof and that investors should stick with it. The recent turbulent period is also concrete evidence of this, with a robust return of 7.2% over the last ten years. Quite an achievement in a decade marred by the global financial crisis, the Great Recession, record unemployment in many countries and sluggish economic growth.
According to Research Affiliates, since 2004 the 60/40 portfolio has beaten 9 of the 16 major asset classes. This implicitly demonstrates that it’s not easy to improve the success formula by adding an extra performance-enhancing asset.
“60/40 shows that you do not always have to take drastic steps to achieve attractive returns,” admits Jeroen Blokland, Senior Portfolio Manager of Investment Solutions. “But many of those other assets do not have 100-year track records.” And there is one further observation, of course. “The performance says nothing about the risk-return profile. Adding some other assets to the 60/40 would probably have added little in terms of performance but may well have reduced the level of risk.”
Nor is 100 years of history any guarantee for the future. The period between 1965 and 1974 was a difficult one for the 60/40 strategy, which generated a nominal annual return of 2.3%. And after adjusting for inflation the return was actually negative. That poor return was related to the high equity valuations and low bond yields at the beginning of the period. And now, in 2015, equity valuations are even higher and bond yields are even lower than they were in 1965. This could lead to an new era of low returns and Research Affiliates have given a figure for this. According to their models, the expected return for the 60/40 portfolio over the next ten years is a meager 1.2% per year.
More active – or smarter
The decision for investors now is whether to accept this or to actively adjust their portfolios. ‘Actively’ in this context does not just mean searching for ‘the new Apple’, emphasizes Blokland. “At asset-allocation level, you can shift to a larger weight in equities and less in bonds or to actively managed allocation funds. But within the parameters of the 60/40 strategy you can also search for strategies that have historically outperformed the broader market, without actually departing from the 60/40 split.”
According to Blokland, this brings you to factor plays – such as low volatility, value and momentum – that have a track record of generating extra returns and can be applied to both equities and bonds. “Not that this will suddenly turn the 1.2% return into 8%, but it may well help you generate an extra percent without increasing your portfolio’s level of risk.”
It is clear that investors who have been able to rely on the good old 60/40 strategy for years will now have to do something to ensure that their capital increases. The era of sitting back, relaxing and generating returns of 8% is coming to an end. Action is required – action in the form of active management.
The United States held steady in its ranking among the top 20 countries in the world for retirement security, according to the 2015 Natixis Global Retirement Index, published this week by Natixis Global Asset Management. For the third consecutive year, the U.S. placed 19th among 150 nations, as benefits of the U.S. economic recovery offset growing demand on government finances.
“As our analysis shows, the security of retirees’ savings is influenced by a range of factors largely out of their control,” said John Hailer, president and chief executive officer for Natixis Global Asset Management in the Americas and Asia. “We’re seeing that individuals will have to shoulder more of the financial burden by saving and investing more effectively to ensure financial security in retirement.”
Now in its third year, the Natixis Global Retirement Index is based on an analysis of 20 key trends across four broad categories: health, material well-being, finances and quality of life. Together, these trends provide a measure of the life conditions and well-being expected by retirees and near-retirees.
While the U.S. got strong grades for its finances, largely due to low inflation and interest rates, and enjoyed higher Gross Domestic Product growth, its position in the rankings may be fragile. The U.S. benefits from high per-capita income and spends more per capita on healthcare than any other nation. However, those resources don’t reach all Americans. The U.S. has a relatively large gap in income equality, and Americans have access to fewer doctors and hospital beds than citizens in other developed nations.
Further, the U.S. population is aging and living longer. The proportion of the U.S. population over the age of 65 is expected to rise from 13% in 2010 to 21% in 2050. As a result, there will be fewer workers to pay for programs, such as Medicare and Social Security, that serve older Americans.
Europe leads in quality of retirement
Top-ranked countries in 2015 benefited from well-developed and growing industrialized economies with strong financial systems and regulations, broad access to healthcare, and substantial public investment in infrastructure and technology. Despite relatively heavy tax burdens, these countries rank high in per-capita income levels and low in income inequality.
“These countries currently lead the way, but could face headwinds as the citizens live longer in retirement and the cost of funding various programs continues to increase,” said Hailer.
The index showed:
Stability at the top: Switzerland retained its No. 1 ranking because of its high per-capita income, strong financial institutions and environment. Switzerland has a mandatory occupational pension system and a well-funded universal health system. Norway held the second spot on the strength of its widely shared wealth.
Big leaps: Iceland jumped seven slots, to No. 4, because of structural changes in the nation’s financial system after its banking crisis. The Netherlands rose to No. 5 from No. 13 on strengthened finances, while Japan’s fiscal reforms and healthcare improvements helped it vault to No. 17 from No. 27.
Down under policies working: Australia (No. 3) and New Zealand (No. 10) are two non-European countries in the top 10 due in large part to mandatory retirement savings programs.
“Bold public policies and a commitment to innovation are making the greatest contribution to the security of retirees in the top-ranked countries,” Hailer said. “They offer valuable lessons for countries trying to improve their retirement systems and prepare citizens for financial security in retirement. In the U.S., we need to open access to work-based retirement programs so more Americans can put money away for their future needs.”
Some progress is being made at the federal level, and the states are beginning to take action as well. Illinois, for example, recently introduced an automatic retirement savings program for workers in the state that don’t already have a retirement plan at work, a first for the nation.
Photo: New logo of NNIP. ING IM Changes Its Name to NN Investment Partners
As part of the EC Restructuring agreement, ING Group agreed to divest its Insurance and Investment Management activities.
From April 2015 we’ll be known as NN Investment Partners, a stand-alone business of NN Group. As part of NN Group N.V. since last July 2nd 2014, a publicly traded corporation, the new name, with a new logo, is the final step in the journey that NN Group and NN Investment Partners are making to an independent future.
Jaime Rodríguez Pato, Managing Director ING Investment Management Iberia & Latam: “We may be changing our name. We won’t be changing who we’ve always been. Our customer commitment remains the same. Proprietary research and analysis, global resources and risk management are still fundamental in a wide variety of strategies, investment vehicles and advisory services that we offer in all major asset classes and investment style.”
History and background
NN Investment Partners is the asset manager of NN Group N.V., a publicly traded corporation. Our investment management products and services are offered globally through regional centres in several countries across Europe, the United States, the Middle East and Asia, with the Netherlands as its main investment hub. We manage in aggregate approximately EUR 180 bln (USD 227 bln) in assets for institutions and individual investors worldwide. We employ over 1,100 staff and are active in 18 countries across Europe, Middle East, Asia and U.S.
The successful history of client-focused asset management extends back to 1845 and reflects our roots as a Dutch insurer and bank. Clients draw upon our more than 40 years’ experience in managing pension fund assets in the Netherlands, one of the world’s most sophisticated pension markets. This rich heritage enables us to deliver exceptional long-term, risk-adjusted performance across asset classes, complemented by best-in-class service.
