Photo: Raul Garcia Piñero. Nomura Launches Two JPX-Nikkei 400 ETFs
Nomura today announces the launch of the “Nomura JPX-Nikkei 400 Daily EUR-Hedged UCITS Exchange Traded Fund” and the “Nomura JPX-Nikkei 400 Daily USD-Hedged UCITS Exchange Traded Fund”. The ETFs are listed on the London Stock Exchange and are available to investors in key European markets.
The investment objective of the funds is to track the performance of the recently launched JPX-Nikkei 400 Total Return US dollar and Euro-hedged indices. Offered in EUR–hedged and USD-hedged formats, the ETFs will allow investors to gain exposure to Japanese equities, while reducing the impact on their portfolios of potential JPY depreciation against those currencies.
The JPX-Nikkei 400 Total Return Index spearheads a new generation of benchmarks, with the objective of increasing the appeal of Japanese equities by including companies with high and sustainable dividend yields; encouraging better corporate governance and capital efficiency. The selection criteria are based on return on equity, governance, size and liquidity. The index is calculated on a free-float adjusted market capitalisation weighted basis.
The ETFs are part of Nomura’s US$52.7 billion NEXT FUNDS range, which offer physical replication of benchmark indices in various asset classes.
These additions represent a further step in the international expansion of NEXT FUNDS into the UCITS ETF market, following the launch in January of the “Nomura Nikkei 225 Euro- Hedged UCITS ETF” and the “Nomura Nikkei 225 UCITS US Dollar-Hedged ETF”.
Mike Ward, Head of Equity Sales, EMEA, at Nomura, said: “These new ETFs provide best- in-class access to Japanese equities for our international clients, while allowing them to hedge currency risk. They are a direct response to the broad-based interest in Japanese equities among the international investor community.”
Photo: Paulo Brandao. Santander, Teachers' and PSP Investments Launch Cubico Sustainable Investments
Banco Santander, Ontario Teachers’ Pension Plan and the Public Sector Pension Investment Board today announced the formal launch of Cubico Sustainable Investments, a London-headquartered firm established to manage and invest in renewable energy and water infrastructure assets globally.
Owned equally by Santander and two of Canada’s largest pension funds, Teachers and PSP Investments, the firm has significant capital to invest and is committed to a long-term growth strategy designed to make it one of the largest and best in class renewable energy and water investors in the world.
Following the transfer of 19 wind, solar and water infrastructure assets previously owned by Santander, Cubico has a balanced and diversified portfolio valued at more than US$2 billion. The assets in operation, construction or under development have a total capacity of more than 1,400 megawatts and are located across seven countries: Brazil, Mexico, Uruguay, Italy, Portugal, Spain, and the United Kingdom.
The firm is led by Santander’s former Asset & Capital Structuring (A&CS) team of 30 professionals who specialize in managing and investing in infrastructure investments globally. A&CS team leader Marcos Sebares becomes Chief Executive Officer of the company. Alongside capital and financial expertise, a local Cubico specialist will take an important role in the management of each of its assets, ensuring that resources, contacts, ideas and knowledge of best practice are brought to all its investments.
The company has a flexible investment mandate and through its strong origination capability will focus on identifying assets that will achieve significant scale and value over the lifetime of its ownership. Cubico has the mandate to hold assets for the long term.
Cubico will be headquartered in London, with regional offices in Milan, Sao Paulo and Mexico DF. The company will build on the A&CS strategy of developing a global platform of diversified infrastructure assets that generate stable cash flows and superior returns.
Marcos Sebares, Chief Executive Officer, Cubico Sustainable Investments, commented: “Today represents the beginning of an exciting new chapter for us. Renewable and water infrastructure developments require decisive long-term investment and commitment. We are uniquely positioned to provide this through our strong ownership structure, experienced team and global footprint. We have already built a strong pipeline of attractive assets to add to the platform and look forward to working with our partners over the coming years to consolidate Cubico’s position as one of the world’s leading renewable energy and water infrastructure investors.”
Andrew Claerhout, Senior Vice-President, Infrastructure at Teachers’, commented: “We are pleased to have worked with our partners to create Cubico. We look forward to supporting the strong management team and its efforts to build a platform for global growth in the renewable energy and water sector.”
Bruno Guilmette, Senior Vice-President, Infrastructure Investments at PSP Investments, commented: “We are pleased to have completed this landmark transaction alongside reputable partners such as Banco Santander and Ontario Teachers’ Pension Plan. This new joint venture will allow us to continue to grow and develop our portfolio of private energy assets while contributing to environmentally sustainable energy production.”
Juan Andres Yanes, Senior Executive Vice President, Banco Santander S.A, commented: “This is the culmination of almost two years of focused work that started in 2013 with the identification of the sale opportunity and the best parties to join us in this innovative endeavour. We are pleased to start this new joint venture with Teachers’ and PSP Investments, two of the best known pension funds in infrastructure investment. We are confident that this venture represents a significant milestone for Santander to increase its footprint in the renewable and water infrastructure industry.”
CC-BY-SA-2.0, FlickrFoto: Donkey Hotey
. Día Mundial de la Tierra: hay que abastecer alimentos mundialmente a precio razonable
BNP Paribas Investment Partners is adding a new fundamental active world equity fund, Parvest Equity Best Selection World, to its flagship Parvest umbrella fund. The fund is managed by its highly experienced Global Equity team that joined in February and is led by Simon Roberts.
Parvest Equity Best Selection World is a high conviction stock picking fund managed using an unconstrained long-only strategy with an absolute return philosophy. The portfolio consists of the fund managers’ top stock picks and is highly concentrated, with a maximum of 40 names. It is not benchmark-constrained and has a high active share of close to 90%, and is expected to have a tracking error in the range of 4-8%1.
The investment team seeks to identify companies based in Europe, the USA, Japan and Emerging Markets, which have strong compounding growth potential that has been underestimated by the market, or where companies are undergoing significant restructuring by reducing their asset base and therefore leading to increased and sustainable profitability.
Parvest Equity Best Selection World combines a proprietary quantitative screening process that identifies a universe of stocks with attractive financial characteristics with fundamental analysis to identify and invest in stocks with an expected risk-adjusted absolute annualised Internal Rate of Return (IRR) of at least 20%. Position sizes will be consistent with the expected IRR at any time and this approach is also a major part of the sell discipline. The fund follows a long-term investment approach, resulting in low turnover. It is expected that much of the alpha will be sourced from stock selection across sectors and that there will be no intentional style bias through time, which should enable it to perform in different market conditions.
Guy Davies, Director of Equities at BNP Paribas Investment Partners, comments: “We are pleased to announce the launch of Parvest Equity Best Selection World, managed by our recently-appointed global equity team. The team members average more than 20 years’ industry experience and have worked together for many years. They have a strong and demonstrable investment record, and being able to offer our clients this capability is a further step in our strategy of developing a world class equity proposition.”
CC-BY-SA-2.0, FlickrPhoto: James. Aberdeen to Acquire Flag Capital Management to Boost Global Alternatives Capability
Aberdeen Asset Management announce today it has entered into an agreement to acquire FLAG Capital Management, LLC (FLAG), a manager of private equity and real asset solutions with offices in Stamford CT, Boston, MA, and Hong Kong.
This acquisition is in line with Aberdeen’s strategy to strengthen and grow its global alternatives platform and solutions provision via multi-manager coverage of hedge funds, property and private market allocations, infrastructure investments and pan-alternative capabilities. FLAG’s well-established private equity teams in the U.S. and Asia will help broaden Aberdeen’s private markets solutions activity within the alternatives arena.
As of December 31, 2014 , FLAG managed assets of approximately $6.3 billion of invested and committed capital on behalf of its broad client base. FLAG is a diversified private markets solutions business focused on venture capital, small- to mid-cap private equity, and real assets in the U.S. , as well as private equity in the Asia-Pacific region. The business will be fully integrated into Aberdeen’s current private markets capability. This will position Aberdeen as a leading global private equity investor with over 50 investment professionals and roughly $15 billion of assets under management.
Aberdeen’s alternatives platform, overseen by Andrew McCaffery, Global Head of Alternatives, will have total assets under management of $21.3 billion following completion of the transaction.
The transaction provides key benefits to Aberdeen:
The addition of FLAG’s U.S.- and Asia-focused investment capability, combined with Aberdeen’s strength in Europe, will offer clients a compelling global private markets solutions proposition;
FLAG’s long-established presence across the institutional and high-net-worth client segments in the U.S. increases Aberdeen’s exposure to the region and enhances the footprint among family offices, endowments and public and corporate pension plans;
Aberdeen believe FLAG’s expertise in successfully launching private equity and real asset-linked products will permit Aberdeen to accelerate organic growth in this business segment;
FLAG’s funds bring highly stable revenues that are at low risk of outflows; once launched, each fund’s revenue stream is defined, based on committed capital and a fixed fee schedule over the multiple-year life of the fund, which typically is set at 12 years;
The integration of FLAG’s investment platform boosts Aberdeen’s pan-alternatives capability, allowing Aberdeen to provide to its client base a full range of private markets solutions.
Commenting on the transaction, Martin Gilbert, Chief Executive of Aberdeen, said: “Institutional investors are increasingly looking towards alternative asset classes, including private market allocations, to diversify their portfolios and enhance returns. This transaction is in line with Aberdeen’s strategy of undertaking clear value-added acquisitions that will assist with accelerating business growth in this area. FLAG meets this objective in two ways. Initially, it strengthens further our private market capability by bringing additional Asian expertise and new U.S. resource. This will also benefit our overall pan-alternatives platform. Secondly, FLAG deepens and expands our U.S. client base, which is a key growth market for Aberdeen.”
Commenting on the transaction, Peter Lawrence, Chief Executive of FLAG, said: “We at FLAG are thrilled to be joining Aberdeen, not only because of its reputation and position as one of the leading global asset management firms, but also because of the clear cultural fit of our two organizations. We believe the combination serves the interests of all of our constituents, particularly our limited partners and the talented team of professionals that have built FLAG into the high-achieving, high integrity firm that attracted Aberdeen in the first place. Simply put, we can think of no better or more appropriate future for all involved. As integral members of Aberdeen’s private markets solutions team, we’re excited to deliver a truly global array of private capital solutions for our investors.”
CC-BY-SA-2.0, FlickrPhoto: Paul Downey. Amundi Launches Floating Rate Notes ETF
Amundi has launched the first ETF in Europe exposed to USD denominated floating rate notes. This fund aims to protect portfolios from interest rate moves.
The firm says that the ETF has a low degree of price sensitivity to interest rates and a yield moving in line with interest rates.
The fund has been listed on Euronext Paris and has already been recongnised by the Financial Conduct Authority. It will be soon cross-listed on the main European markets, including the London Stock Exchange.
Valerie Baudson, global head of ETF, Indexing and Smart Beta at Amundi, said: “Our innovative Floating Rate Notes range is of particular interest in today’s market for investors seeking a source of yield in a low rate environment and a hedge in the event of a rise in EUR and US short term rates. Our building blocks are innovation, cost-efficiency and quality of replication.”
CC-BY-SA-2.0, FlickrPhoto: Scott S.. SEC Proposes Rules To Modernize Information Reported By Investment Advisors
The Securities and Exchange Commission yesterday proposed rules to “modernize and enhance” the reporting and disclosure of information by investment companies and advisors.
The aim would be to increase the quality of information available to investors and allow the Commission to more effectively collect and use data.
“These recommendations will vastly improve the type and format of the information that funds provide to the Commission and to investors,” said SEC Chair Mary Jo White. “Investors will have better quality and greater access to information about their fund investments and investment advisors, and the SEC will have more and better information to monitor risks in the asset management industry.”
The SEC said the investment company proposals would enhance data reporting for mutual funds, ETFs and other registered investment companies, requiring a new monthly portfolio reporting form and annual reporting form.
“The information would be reported in a structured data format, which would allow the Commission and the public to better analyze the information,” the SEC said. “The proposals would also require enhanced and standardized disclosures in financial statements, and would permit mutual funds and other investment companies to provide shareholder reports by making them accessible on a website.”
The proposed amendments to Investment Advisers Act Rule 204-2 would require advisors to maintain records of performance calculations and communications related to performance.
The comment period for the proposed rules will be 60 days after publication in the Federal Register.
CC-BY-SA-2.0, FlickrPhoto: ankakay
. Moneda Asset Management Announces US$100 Million Investment from CPPIB Credit Investments Inc.
Moneda Asset Management announced today that CPPIB Credit Investments Inc., a wholly owned subsidiary of Canada Pension Plan Investment Board (CPPIB) and Canada’s largest pension fund manager with C$264.6 billion in assets, has made a US$100 million investment into the Moneda Deuda Latinoamericana fund, which is managed by Moneda S.A. Administradora General de Fondos.
The Moneda Deuda Latinoamericana fund is a high-yield bond fund which invests in US dollar- denominated corporate credit of companies throughout Latin America.
Fernando Tisné, senior partner and portfolio manager of the fund, explained: “We have been able to take advantage of credit opportunities in Latin America over the last 15 years by building a highly diversified portfolio, not only by issuer, but also by country through a deep fundamental analysis process. We believe that it is of utmost importance to be methodical in the investment process, build a highly diversified portfolio and invest with patience.”
“Through our investment in the Moneda Deuda Latinoamericana fund, we are able to gain a presence in the attractive Latin American high-yield credit market, said Mark Jenkins, Senior Managing Director & Global Head of Private Investments, CPPIB. “Moneda is a well-established, successful fund manager run by a strong management team with a proven track record. We look forward to building our relationship with the Moneda team as we seek to expand our presence in the region in this sector.”
“We are happy to partner with such a sophisticated Canadian institutional investor. This investment is an important part of Moneda ́s Canadian business which was first initiated in 2011. Very few foreign investors have dedicated Latam high yield credit exposure, but when evaluating the asset class, there is clear value on its own and when added to a global fixed income portfolio. This education process is part of our long term business model globally,” said Tisné.
With this investment, Moneda Asset Management continues its growth among high-level, reputed foreign institutional clients, such as pension and sovereign wealth funds and family offices globally, which together with their strong base of Chilean clients, enables it to manage over US$ 4,500 billion. Founded in 1993, Moneda is a Latin America focused asset manager that invests across the corporate capital structure. Our investment philosophy is based on fundamental, long term and bottom-up analysis of companies across the region.
Moneda Deuda Latinoamericana manages USD 979 million (abr-2015).
CC-BY-SA-2.0, Flickr. Eight Factors That Will Change Global Consumers Behaviours
Today’s consumers are different than yesterday’s. This is the consequence of three major mutually interacting factors: Demographics, markets and economics. Alongside historically unprecedented demographic changes, people’s behaviours have also changed: They are getting married later, having fewer children, both parents are both working and young adults are entering the job market much later than they used to. Understanding these demographics changes is essential to understanding consumer behaviors.
The report “Demographic Focus – Changing Global Consumers” of Credit Suisse provides insights into changing global consumer behavior and expenditure patterns.
The market place has also changed mainly due to new technologies and new marketing techniques. The way people consume today is very different to how they used to consume in the past. Indeed with ongoing global technological changes people are becoming more and more reliant on technology to consume. This creates pressure for certain age groups that may not adapt as quickly as they should to cope with these new ways of consuming. Moreover marketing techniques are becoming more prominent and are creating difficulties for consumers to assess the cost-benefit characteristics of a product. This has huge implications as it means people will need to spend a lot more time trying to decipher the huge amount of information available on goods and services that can be quite complex.
Moreover freer international trade, more efficient international transportation services and new information and communications technology have created more open international markets for goods and services. Increased trade has promoted competition thereby boosting consumer welfare worldwide. Once again this has both an upside and downside impact on consumers, as they have access to more products and information but they also need to sort out the amount of information available to make optimal consumption choices.
In the first section of our report we talk about changing consumers analyzing how consumers have changed. In the second section we look at how they consume, what affects their consumption and how their consumption has changed. “The power of individual choice has never been greater, and the reasons and patterns for those choices never harder to understand and analyze.” Mark J. Penn (Chief Strategy Officer, Microsoft & former advisor to Bill Clinton).
According with Credit Suisse those are the eight factors that will change global consumers behaviours:
Demographics is about consumers and workers. Individuals consume from birth to death and there are nearly 7.3bn global consumers today. With dramatic life cycle changes, individuals’ consumption behavior and patterns have been undergoing major rapid changes – later marriage, and parenthood, multiple workers in a family and delayed job market entry.
The G6 (France, Germany, Italy, Japan, UK and US) countries’ consumers account for 50.3% of world consumption, thus have the world’s largest consumer markets. The EMG6 (Brazil, China, India, Mexico, Russia and Turkey) countries’ consumers account for 19.6% of world consumption, their consumption share is growing.
Contrary to popular perception, old people are the largest consumer group as they are the richest age group. Consumption shares for the 50+ age group accounts for 58.1%, 54.2% and 59.7% of the total consumption in Japan, US and Germany respectively.
Today’s young adults consume relatively less than their corresponding cohorts born a generation or two earlier. They start accumulating assets later due to longer years in education. High youth unemployment and high student debt levels put additional pressure on these young adults.
Working women are a group of new consumers with increasing numbers of them getting educated, working and becoming richer..
Consumer behaviors have been impacted by changing technologies. Consumers are more sophisticated and more impatient in terms of purchase experiences. An information intensive and complex market place forces them to access and process information quickly
The state of the economy and their own economic status also influences the way people consume. Job uncertainty leads to increased precautionary saving amongst workers. Economic confidence and fads/fashions also affect consumer expenditure patterns.
Those who miss out on these consumer trends and changes are unlikely to capitalize on opportunities and are unlikely to be winners.
CC-BY-SA-2.0, FlickrPhoto: Paul Falardeau. Sustaining the Dollar’s Rise: Three Additional Factors
The US dollar has seen a substantial rise over the last nine months. In its last analysis, Henderson looks at why thinks it will remain at elevated levels and examine what this means for investors. James McAlevey, portfolio manager of Henderson Horizon Total Return Bond Fund named three additional factors:
1. Slower global currency reserve growth
In the ‘taper tantrum’ risk asset sell-off, the ability of some EM countries to pay their now more expensive dollar-denominated debts came into question. This resulted in assets flowing into US dollars; however, a considerable proportion remained in EM with a clear differentiation between fragile economies and their stronger peers; the Brazilian real weakened by c.16%, while Asian currencies, such as the Korean won, actually appreciated by 5.3%.
While the ‘tantrum’ passed, Henderson has subsequently seen the growth of foreign currency reserves slowing and in fact shrinking in the second half of 2014, as some EM central banks in particular were forced to sell reserves to defend their currencies against outflows. As these central banks sell reserves, they are required to sell non-US dollar foreign currencies and buy dollars before they sell dollars against their own currency. This trend further supports the dollar.
Aggressive rate cuts and a subdued US dollar in the years following the financial crisis have made it a major funding currency for carry trades (borrowing at low interest rates in one currency to fund purchases of higher yielding assets elsewhere) particularly into China/Asia. Now, however, as the dollar strengthens, investors could look to reduce exposure (ie, buying dollars to repay their debt), a move which would make the dollar appreciate even more.
3. Not enough dollars
A falling current account deficit (the difference between import costs and export receipts) is normally a positive driver for a currency. This is especially true for the US dollar given it is a reserve currency, and the principal currency of global trade. As chart 3 shows, the US current account deficit has been shrinking since 2012 as a percentage of global trade and this trend is expected to continue. This means a reduction in global liquidity as fewer dollars are available for foreigners to conduct trade. If the current account deficit continues to narrow, or we see a pick-up in global trade, then the dollar should continue to rise.
CC-BY-SA-2.0, Flickr. BNY Mellon Wealth Management Names Donald Heberle as CEO
BNY Mellon has appointed Donald J. Heberle to be the new Chief Executive Officer of BNY Mellon Wealth Management, succeeding current CEO Lawrence Hughes. After 24 years with the company, Hughes has decided to retire from his role as of June 30, 2015, and will continue with BNY Mellon in an advisory role within BNY Mellon Investment Management.
Heberle will be based in New York where he will continue to direct the long-term growth and expansion strategy that the Wealth Management leadership team has been driving for the past two years.
Since he joined BNY Mellon in 1997, Heberle has served in several key leadership roles. As Executive Director of Client Advice and International Wealth Management, Heberle oversees the firm’s International Wealth Management business, its Family Wealth Advisory and Wealth and Estate Strategist groups as well as client service delivery strategy.
In previous roles Heberle served as Executive Director for the Family Office and International Wealth Management businesses; was Director of Investment Strategy for Mellon’s Private Wealth Management group; and developed and implemented the firm’s tax-managed equity investment process. Heberle received a bachelor’s degree in economics from Harvard College and a master of business administration in finance and accounting from Carnegie Mellon University.
“We thank Larry Hughes for his 24 years of service to BNY Mellon. He and his talented leadership team have helped build BNY Mellon Wealth Management into one of the strongest firms in the business. We are pleased to announce that Don Heberle, one of Wealth Management’s most senior executives, will now take over as CEO,” said Curtis Arledge, Vice Chairman of BNY Mellon and CEO of Investment Management. “I look forward to continued growth under Don’s leadership and am also very pleased that Larry is willing to serve BNY Mellon in an advisory role.”
“BNY Mellon is an institution with a rich history and a bright future, and I am honored to have the opportunity to lead one of its key businesses,” said Heberle. “I look forward to working with my colleagues across both Wealth Management and the rest of Investment Management on strategic initiatives to expand the business, while delivering innovative solutions to serve existing clients and attract new ones.”
“It has been a privilege working with everyone at BNY Mellon over the past two and a half decades, and under Don Heberle’s capable leadership, I am confident that Wealth Management will continue moving forward with great momentum.” Hughes said, “I’m proud of having led a team that was continually at the top of the industry in client satisfaction and retention, of our efforts to build the brand and profile, and of our ongoing expansion in current and new markets.”
