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China’s New Roar in the Year of the Tiger

China’s roar has changed entering the year of the tiger. China will now emphasize quality over speed, not GDP growth at all costs.

2020 feels more like a decade ago than a year ago. The strong results provided by Chinese equities and bonds, the strong appreciation of the Renminbi, and the belief that a more balanced policy under President-elect Biden would occur; fueled their optimism going into 2021.

While KraneShares expected monetary and policy tightening going into 2021, they underestimated the intensity and reach of the tightening cycle.

Rapid developments were harder to predict, especially during a year of regulatory reconfiguration for one of China’s most lucrative sectors. Chinese internet companies were the targets of a broad regulatory campaign in China addressing anticompetitive behavior, cybersecurity risks, consumer data protection, and the financial risks posed by previously unregulated fintech companies. Even though 2021 was a challenging year for China, it was just a single year in the context of a much bigger opportunity.

2022 is an important year politically for China. China’s behemoth economy indeed suffers from imbalances with internal and external regulatory risks that could cost investors, especially in the short term. KraneShares believes the government is committed to dealing with these imbalances through reform and regulations. President Xi is expected to secure a third term during the Chinese Communist Party Congress (CCPC) assembly in the fall of 2022 and KraneShares is of the opinion that the government will seek to strike a positive tone in politics and business as the country continues its transition to high-quality growth. The US-China relations may see a moderate improvement in 2022 after their, albeit limited, progress over the past year. In absence of willingness to seek catastrophic confrontation, KraneShares believes the impact of US-China relations on markets will be neutral in 2022. The political importance of 2022 is also why they think China adopted a rapid-fire approach concerning internet regulations in 2021.

China’s policy darlings, which include health care, clean technology, 5G, and semiconductors, will continue to see support based on the most recent statement from the latest Central Economic Work Conference, which sets the government’s economic and financial policy framework each year. The takeaways from the Central Economic Work Conference, which was attended by senior political leaders in China, emphasized the stability, speed, and quality of growth in 2022. The conference acknowledged that China’s economy faces three pressures: demand contraction, supply shock, and expected weakness. The panel recommended that policy support, whether fiscal or monetary, be frontloaded in 2022. The recommendation explains the reserve requirement ratio (RRR) and loan prime rate (LPR) cuts in December, which KraneShares assumes will set the tone for a looser monetary policy in 2022.

In 2022, the country will continue to advance on many fronts, including climate, electric vehicles, health care, the internet, cloud, high-end manufacturing, and more. However, China’s leading industries, especially the internet sector, are undergoing an important shift from simply capturing ever more consumer spending to a focus on material innovations and the localization of import-reliant supply chains.

Consumer sentiment, the property sector, and China’s zero COVID policy are some of the risks facing China in 2022. The sporadic lockdowns in various Chinese cities and ports due to COVID-19 outbreaks hurt consumption and the feeling of security. Furthermore, real estate regulations aimed at setting a new normal in the property market hurt consumers’ sentiment. The recent earnings season in China confirmed consumers’ fatigue and household savings rates have surged since 2020.

Growth targets for 2022 will be more challenging to attain this year compared to last, especially as the favorable base effect recedes. Slowing GDP growth is to be expected, given the level of development that China has already achieved. KraneShares believes China will do whatever it takes to maintain the sentimental 5% level of GDP growth and we know skeptics will sound the alarm on the GDP level dipping below 5% for the first time, even though achieving 5% growth in a 16.8 trillion-dollar economy is like adding an economy the size of Germany every 3 to 4 years.

China’s roar may change its tone in 2022, but KraneShares thinks it will remain as loud as ever. As Joe Tsai, Alibaba’s co-founder and Executive Chairman put it during Alibaba’s investors day: “China is not going away.” The event’s tone was geared towards innovation and the future, without legacy industries hindering their progress. It represented what China is all about: innovation and progress.

KraneShares has always been constructive on China, especially in the long term. They encourage investors not to view China as a trade but rather as a long-term investment and encourage diversification across multiple industries to help reduce risks.

To find KraneShares’ in-depth outlook as well as investment opportunities for 2022 and beyond, please visit the following links:

UCITS

US (domestic market)

HSBC USA Appoints Four New Board Members

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HSBC Bank USA has appointed Deborah P. Bailey, Melvin L. Flowers, George W. Madison and Alice D. Schroeder to the HSBC North America Holdings Inc. (HNAH) and HSBC Bank USA, N.A. (HBUS) Boards of Directors.

In a press release, the company has announced that Flowers and Madison’s designations are effective as of January 11 while Bailey and Schroeder were appointed in late October 2021.

“We are delighted to welcome Deborah, Melvin, George and Alice to our Boards. They each have wide-ranging expertise from a variety of industries and we’re confident they will make valuable contributions to our Boards as we continue to transform and grow our US business“, said Jamie Forese, Non-Executive Chairman of the Board, HSBC North America Holdings Inc., and Director of HSBC Holdings plc.

Experienced and diverse

Bailey is a former Managing Director with KPMG and Deloitte, where she led advisory practices specializing in governance, compliance and risk management for financial institutions. Prior to her consulting career, Bailey spent many years in government service at US financial regulators, like the Board of Governors of the Federal Reserve, where she rose to Deputy Director of Banking Supervision and Regulation.

Flowers is a former Corporate Vice President of the Internal Audit and Risk Management function at Microsoft Corporation. During his time at the company, he transformed Microsoft’s internal audit and enterprise risk management functions into a strategic risk-based organization that covered financial reporting, risk management, cyber security, privacy and compliance with regulations and company commitments. Prior to joining Microsoft, Flowers served as Chief Financial Officer at Novatel and at two high-growth telecommunications equipment manufacturers.

Madison is a former Partner at Sidley Austin LLP, where he advised the firm’s multinational clients on corporate governance issues and regulatory compliance matters. Prior to joining Sidley Austin, Madison served as General Counsel of the Department of the Treasury under President Obama and as a senior advisor to Secretary of the Treasury Timothy Geithner. In this capacity, Madison played an instrumental role in the formulation of the Dodd-Frank legislation and related regulation, and advised on the creation of the Financial Stability Oversight Council and the Consumer Financial Protection Bureau.

Lastly, Schroeder is an experienced non-executive director, whose board roles include UK and US-listed businesses as well as privately held companies and regulated subsidiaries. She began her career as a CPA with Ernst & Young and spent the majority of her executive career in the financial services sector. She worked as a Wall Street analyst with a focus on insurance and investment management before joining Morgan Stanley where she was a Managing Director leading the global insurance research team.

“When we set out to appoint new members to our Boards, we were focused on finding experienced individuals who would bring diverse views and perspectives,” commented Forese,

The Most Challenging Annual Forecasting in Years

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The world remains in a state of disequilibrium. While modern civilization has rarely found balance, the range of outcomes tied to central banks optimizing for future growth and political leaders navigating new domestic and international realities stands particularly wide. That makes our annual forecasting ritual more difficult. Last year’s prognostications of a resilient consumer and stubborn inflation proved correct, but a major conflict in Europe and the Federal Reserve’s war on inflation left our market optimism misplaced. Higher interest rates and the prospect of a recession spared neither stocks nor bonds and punished speculative fads along with blue chip stalwarts. For 2022, the S&P 500 was down 18%, nearly returning the index to its 2020 close.

The direction of markets in 2023 and beyond depends largely upon the answers to three questions: (a) will hot and cold conflicts in Ukraine and Taiwan, respectively, stay contained? (b) can the Fed return inflation to the low-single-digits without triggering deep economic and earnings recessions? and (c) given the altered political economic backdrop, what multiple should investors pay for stocks? Despite abysmal sentiment, market volatility remains subdued with inflation data driven rallies and sell-offs punctuating what has generally been a steady grind lower. We continue to await a market uplift (the so-called January effect) as tax loss selling abates.

Uncertainty in the board room and elevated borrowing costs curtailed deals and financial engineering. M&A normalized to pre-pandemic levels, totaling $3.6 trillion in 2022, down 32% from the record-breaking $5.1 trillion activity in 2021, excluding SPACs. Activity by both strategic and financial buyers reawakened late in the year as market dislocations presented bargains too enticing to resist. Portfolios benefited from several deals, including Philip Morris International’s recently completed acquisition of Swedish Match and the announced acquisition of Aerojet Rocketdyne (+20%) by L3 Harris Technologies, Aerojet’s second trip to the altar in as many years. A number of announced spin-offs, including Liberty Braves as an asset-backed company and a fourth separation involving Madison Square Garden could create future consolidation targets. The most active industries were Technology ($720 billion, or 20% of total dealmaking), Energy & Power (13% of deal volume), and Industrials (12% of deal volume). Private Equity accounted for a record 20% of M&A activity in 2022, with total value reaching $785 billion. The U.S. remained the top venue for M&A with deal activity totaling $1.5 trillion, or 43% of worldwide volumes, a similar proportion compared to 2021.

The contracting stock multiples, widening credit spreads and rising interest rates spared few asset classes. Convertibles were caught up in this storm, but there are some positive takeaways for our market. Specifically, convertibles outperformed their underlying equities this year, participating in only 56% of the downside.

The convertible market is now quite fixed income oriented with high yields, high premiums, and low deltas. While this is not the typical profile of our market, it presents a unique opportunity. At current levels, many convertibles should participate in very little equity downside from here. They offer yields to maturity that in many cases exceed the expected annual return of our market over the long term. Some of these issues are trading at double digit yields to maturity despite positive cash flows and growth opportunities. We have seen some companies that have addressed investor concerns by issuing more manageable converts and buying back or exchanging some percentage of their existing debt. This can be an accretive transaction for the company and usually improves the credit. One portfolio holding, Bandwidth, did a transaction like this during the quarter and it was one of our top performing convertibles as a result. As it becomes clear that a company is not on a path to bankruptcy the bonds will move higher regardless of the equity price. This is what we call a credit delta. Additionally, in the event that one of these companies is acquired, the bonds would be puttable at par. This would be a very attractive outcome for bond holders. We continue to look for value in this area of the market and have added a number of these issues to the portfolio.

After a record low year for convertible issuance in 2022, we expect the primary market to rebound this year. The issuance we saw in the fourth quarter came at attractive terms and we expect this to continue as there is a significant appetite among convertible investors for new paper. We believe many companies have delayed coming to the market and converts offer an attractive way for companies to add low cost capital to their balance sheets, particularly as interest rates move higher and other forms of financing such as High Yield become more expensive. Continued issuance allows us to stay current and we expect to selectively layer new issues into our portfolio to maintain the asymmetrical risk profile we are seeking to achieve.

Pictet Asset Management: Omicron Wave Won’t Sink Stocks

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A new year, old problems? The rapidly spreading Omicron variant has triggered renewed mobility restrictions, leaving investors concerned about the economic fallout in some parts of the world.

But the global recovery remains resilient, thanks to a strong labour market, pent-up demand for services and healthy corporate balance sheets. Ample household savings can also cushion the blow: the IMF forecasts that the global gross savings ratio will hit an all-time high of 28 per cent in 2022.

Weighing the Omicron threat against this economic picture, we leave our asset allocation unchanged for the time being, with a neutral stance on equities and an underweight position in bonds. Given our positive outlook for the economy, we are looking for opportunities to raise our weighting in stocks in 2022.

Our business cycle indicators show the global economy is on track to grow 4.8 per cent in 2022.

We raised our GDP forecast for the US as the world’s biggest economy is experiencing a strong recovery in both manufacturing and services.

Buoyant consumer sentiment and excess savings of some USD2.2 trillion should also lead to robust jobs growth in the coming months.

Price pressures, however, been stronger and more persistent than expected. November CPI rose at the fastest pace since 1982 at 6.8 per cent, with core inflation running at an above-trend 4.9 per cent.

Even after stripping out Covid-sensitive items and base effects, inflation is still running way above the central bank’s official target at 3.6 per cent.

We expect core inflation to peak at 5.8 per cent in early 2022, which should prompt the US Federal Reserve to raise interest rates by as early as June 2022; it recently announced its intention to end asset purchases by March.

The euro zone economy remains resilient, but the outlook is becoming less clear because of the economic impact from renewed mobility restrictions and persistent supply chain disruptions.

Nevertheless, we still expect the region’s economy to grow 4.4 per cent, higher than the market consensus. We have become more optimistic on Japan; its economy is recovering from a sharp but brief Covid wave.

The country’s vaccine rollout is progressing well while consumer and business confidence indicators and housing market data have been encouraging. A weaker yen and a fresh fiscal stimulus should support growth in the coming months.

Our liquidity indicators lend weight to our neutral stance on equities.

Liquidity conditions for the US are turning negative as the Fed moves to rein in a surge inflation with tighter monetary policy. The picture is very different in China after the People’s Bank of China cut its reserve requirements ratio by 50 basis points in December.

The latest PBOC easing should release about RMB1.2 trillion of long-term monetary stimulus according to our calculations, equivalent to 1 per cent of GDP. The PBOC is creating liquidity at a quarterly rate of USD232 billion, by far the fastest pace among all major central banks.

Our valuation signals are more favourable than a year ago for both equities and bonds: price-earnings multiples for world stocks are down some 10 per cent from this time last year while bond yields across developed economies have risen by as much as 50 basis points.

Even so, it is difficult to find good value in any major asset class. We expect equities’ price-earnings ratios to contract some 5-10 per cent again this year in response to rising real bond yields.

Our expectations for earnings growth this year stand at 16 per cent, however, more than double the market’s consensus.

Technical indicators have turned negative for equities due to seasonal factors.

Balanced against this is the fact that investors sentiment is much less bullish than a few months ago, suggesting some more upside for riskier assets.

Opinion written by Luca Paolini, Pictet Asset Management’s Chief Strategist.

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

Information, opinions and estimates contained in this document reflect a judgment at the original date of publication and are subject to risks and uncertainties that could cause actual results to differ materially from those presented herein.

Important notes

This material is for distribution to professional investors only. However it is not intended for distribution to any person or entity who is a citizen or resident of any locality, state, country or other jurisdiction where such distribution, publication, or use would be contrary to law or regulation.

The information and data presented in this document are not to be considered as an offer or sollicitation to buy, sell or subscribe to any securities or financial instruments or services.

Information used in the preparation of this document is based upon sources believed to be reliable, but no representation or warranty is given as to the accuracy or completeness of those sources. Any opinion, estimate or forecast may be changed at any time without prior warning. Investors should read the prospectus or offering memorandum before investing in any Pictet managed funds. Tax treatment depends on the individual circumstances of each investor and may be subject to change in the future. Past performance is not a guide to future performance. The value of investments and the income from them can fall as well as rise and is not guaranteed. You may not get back the amount originally invested.

This document has been issued in Switzerland by Pictet Asset Management SA and in the rest of the world by Pictet Asset Management (Europe) SA, and may not be reproduced or distributed, either in part or in full, without their prior authorisation.

For US investors, Shares sold in the United States or to US Persons will only be sold in private placements to accredited investors pursuant to exemptions from SEC registration under the Section 4(2) and Regulation D private placement exemptions under the 1933 Act and qualified clients as defined under the 1940 Act. The Shares of the Pictet funds have not been registered under the 1933 Act and may not, except in transactions which do not violate United States securities laws, be directly or indirectly offered or sold in the United States or to any US Person. The Management Fund Companies of the Pictet Group will not be registered under the 1940 Act.

Pictet Asset Management (USA) Corp (“Pictet AM USA Corp”) is responsible for effecting solicitation in the United States to promote the portfolio management services of Pictet Asset Management Limited (“Pictet AM Ltd”), Pictet Asset Management (Singapore) Pte Ltd (“PAM S”) and Pictet Asset Management SA (“Pictet AM SA”). Pictet AM (USA) Corp is registered as an SEC Investment Adviser and its activities are conducted in full compliance with SEC rules applicable to the marketing of affiliate entities as prescribed in the Adviser Act of 1940 ref.17CFR275.206(4)-3.

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Total Professionally Managed Assets in the U.S. Grow by Nearly 11%

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Captura de Pantalla 2022-01-31 a la(s) 15 — . Pexels

U.S professionally managed assets grew nearly 11% and boast an 8% 10-year compound annual growth rate, according to the latest research by Cerulli Associates.

While the majority of addressable assets reside in the institutional channel, retail client asset growth has outpaced that of institutional markets consistently over the last 10 years, says the document The State of U.S. Retail and Institutional Asset Management 2021: Targeting Growth Opportunities.

The largest institutional client segments are insurance general accounts, corporate defined contribution (DC): 401(k) plans, and state and local government defined benefit (DB) plans. Collectively, these three channels represent more than 60% of the total institutional addressable market.

Cerulli points out that as institutional investors increasingly seek greater portfolio customization, enterprise risk management, and access to co-investment opportunities, they are growing their reliance on intermediaries—investment consultants, outsourced chief investment officers (OCIOs), or financial advisors—to select investment products and/or manage their portfolios. “Institutional investors demand more than returns and want an investment partner that exceed performance expectations and more,” remarks Brendan Powers, associate director of the firm.

The research also shows that growth of the retail segment of professionally managed assets has outpaced that of institutional over the subsequent decade, accounting for 49% of the total. As of year-end 2020, distribution through third parties, such as broker/dealers (B/Ds) and registered investment advisors (RIAs), account for 75% of total retail channel assets. The strongest channel growth occurred among hybrid RIAs (20%) and independent RIAs (16%).

In response to this evolving dynamic, Cerulli believes that asset managers should devote time and resources toward considering how they plan to address the retail segments. “From platform-level product placements to the introduction and adoption of asset allocation model portfolios, retail channels are increasingly demanding the levels of sophistication and dedicated service formerly reserved for institutional gatekeepers,” comments Powers.

While the fragmented nature of the retail channel will continue to pose challenges, the opportunities will outweigh the costs. “As commoditization and shrinking fees threaten many market competitors, managers will need to rethink their priorities as retail channels seem poised to account for the majority of client assets in the near future,” concludes Powers.

Jeff Klingelhofer (Thornburg IM):”The Returns Seen Over the Past Years Are Not Sustainable in the Medium Term”

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Inflation, tapering, valuations… what should we expect from global fixed income the year going forward? Jeff Klingelhofer, co-head of Investments at Thornburg IM, shares his view on the biggest opportunities and challenges in 2022.

With 2021 in the rear-view mirror, what are the biggest lessons you’ve learned over the past year? Did anything take you by surprise?

Navigating 2020 was not an easy feat, but after coming to grips with a global pandemic—and with the assistance from fiscal and monetary policy- makers around the world—the global economy and financial markets not only regained their footing but delivered extraordinary 2021 results that astonished investors. The biggest lesson in 2021 was that we should never discount the market’s ability to rally in the face of unknowns and adversity. The other lesson was to never discount the consumer’s ability to power the economy and drive company earnings growth. Bolstered by rounds of relief checks from the federal government, in the first half of 2021 consumer spending quickly recovered from its modest 2020 contraction and became the clear driver of economic growth.

Turning to fixed income specifically, the bond markets likewise did not follow the script many had expected. Buoyed by the central bank’s accommodative policies, as well as the government’s multi-trillion-dollar pandemic relief package, credit spreads between U.S. corporate debt and Treasuries narrowed to their lowest levels in more than a decade. A similar story held true for the high-yield bonds, where spreads collapsed and prices rallied.

Looking ahead to next year, what are your expectations for inflation and economic growth in 2022?

Our perspective is that inflation has been broadly a transitory phenomenon, as we expect supply bottlenecks to heal to some degree in 2022— although not dramatically. We also believe consumption demand will slow, as consumers have long ago tapped into their stimulus checks and personal savings levels are decreasing. Taken together, the supply-demand imbalance seen in the past year will improve, but wages will likely remain higher. So, we expect overall inflation to remain elevated, but it should begin to soften and remain moderate in 2022. Our expectations for economic growth next year will hinge on these questions: How fast will the labor market heal? And will the labor-market recovery be robust enough to replace the stimulus payments that will be fading away? We are cautiously optimistic that the current economic recovery will continue well into the new year, but that it will slow down due to structural headwinds in 2022, such as waning savings and easing of pent-up consumer demand.

How have inflationary risks and the potential for rate hikes impacted your portfolio positioning?

It remains to be seen whether inflationary pressures absolutely mean higher rates next year. The driving cause of inflation is critically important to understand when it comes to determining how quickly and by how much the Fed will raise rates—and in this case we think this will largely depend on whether inflation is predominantly driven by rising wages or by the ongoing supply-demand imbalances. If it’s the former, we think the labor market will be able to sustain higher wages than those of pre-COVID-19, as we’re coming off multiple decades of suppressed wages. Higher overall labor costs will feed into higher inflation, but not by a lot. On the other hand, if inflation is driven more by supply-demand imbalances and persists, we believe the Fed will act more aggressively to rein in inflation and won’t allow the markets to run hot. At the end of November, the Fed Chairman as well as other officials retired using the word “transitory” to describe the US inflation situation. We expect the Fed will be closely watching incoming data and will react appropriately to prevent run away inflation.

With rising rates set to knock on the door in 2022, many investors are questioning the role of fixed income. We continue to believe that bonds have had a long history of serving as a ballast in a portfolio during risk- off periods and that they can continue doing so by providing downside protection and diversification. We have therefore adjusted our portfolio positioning to be more defensive: We are favoring shorter-duration opportunities and will be even more discerning with our credit selections. For example, over the past couple years US investment grade issuance has doubled and companies have taken on meaningful amounts of debt due to the ultra-low interest rates. It will be more important than ever to select corporate credits from companies with strong cash flows that can service their debt coming out of the pandemic. We currently see opportunities in securitized markets that are backed by healthy U.S. consumer spending.

What are the risks worth keeping an eye on in 2022? What’s keeping you up at night?

Return forecasts will be arguably low going forward compared to previous environments where investors enjoyed double digit returns from equity markets for many years. The returns seen over the past years are not sustainable in the medium term. So the key risk lies in these concerns: How will investors prosper in an environment where we are unwinding from 30 years of falling fixed income rates and how do you continue to generate attractive returns? It will take a great deal of creativity to deliver positive outcomes for our clients and active managers will be best suited to meet that challenge.

Thornburg is a global investment firm delivering on strategy for institutions, financial professionals and investors worldwide. The privately held firm, founded in 1982, is an active, high-conviction manager of fixed income, equities, multi-asset solutions and sustainable investments. With $49 billion in client assets ($47 billion AUM and $1.9 billion AUA as of December 31, 2021) the firm offers mutual funds, closed-end funds, institutional accounts, separate accounts for high-net-worth investors and UCITS funds for non-U.S. investors. Thornburg’s U.S. headquarters is in Santa Fe, New Mexico with offices in London, Hong Kong and Shanghai. For more information, please visit www.thornburg.com.

For more information, please visit www.thornburg.com

Outlook 2022: New Capital Asia Future Leaders Fund

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city-ge42080e67_640 — Pixabay CC0 Public DomainCity of Ho Chi Min, Vietnam. Ho Chi Min

The key theme across Asia continues to be digitalization, supported by an increase in IPOs across e-commerce, mobility, and FinTech. Chris Chan, Portfolio Manager of the New Capital Asia Future Leaders Fund, shares his thoughts for 2022 for the Asian equity sector.

2021 was a tough year for Asian markets Compared to the S&P500, Asian markets underperformed by about 30% (year-to-date – 16/12/21). The key element driving this underperformance was the Chinese stock market. However, going into 2022, we are much more constructive on the Chinese market.

There are a three key reasons for this. First and foremost: valuations. If you look at Chinese valuations compared to the rest of Asia and the US markets, historically speaking, it remains very attractive.

Secondly, in December 2021, the PBOC came out for very supportive for monetary easing. When you look back, typically there is a very strong correlation between the monetary easing cycle and Chinese stock market returns. Therefore, we expect this to be a positive stimulus for the China markets for 2022.

Thirdly, when you look at what’s driven the drawdown, it’s largely Chinese Internet names due to the pressures of negative regulation. When you look over the past few months, you can see that the incremental regulatory news flow is much less than it was. We expect this to continue and believe will act as a catalyst for the large cap Chinese tech names to recover.

We do expect bottom up earnings to remain weak, particularly in the property and the consumer sectors, at least for Q1 so we are looking at Q2 onwards for recovery on the fundamental side.

Outside China, we remain constructive on India with valuations historically high given the fact that the market has rallied about 30% (YTD 16/12/21). In the ASEAN region, we’ve been increasing our weight in markets like Vietnam and Indonesia, primarily because when you look at the latent recovery coming out of lockdown, arguably ASEAN has been further behind the rest of Asia, and therefore has more to offer for 2022, as confirmed by superior real GDP growth rates compared to the rest of the region.

The overriding thematic that we see across Asia continues to be digitalization, both in terms of digital services in India and Southeast Asia, supported by the increase in tech or digital IPOs across e-commerce, mobility, and FinTech. Within China, electric vehicles and solar energy remain the key structural trends benefiting a variety of companies across the supply chain.

You can also listen to Chris Chan, Portfolio Manager of the New Capital Asia Future Leaders Fund, rated five stars by Morningstar, as he shares his thoughts for 2022 for the Asian equity sector in this video.

UBS Acquires a Digital Platform to Offer Wealth Management Services for Millennial and Gen Z Affluent Investors

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UBS and Wealthfront, an automated wealth management provider serving the next generation of investors, have signed an agreement whereby the bank will acquire the plataform in an all-cash transaction valued at 1.4 billion dollars.

UBS has revealed that through this acquisition, it will accelerate its growth ambitions in the US, broaden its reach among affluent investors and expand its distribution and capabilities. To do so Wealthfront will become a wholly owned subsidiary of UBS and will operate as a business within UBS Global Wealth Management Americas.

The transaction is currently expected to close in the second half of 2022, subject to closing conditions including regulatory approvals.

With over $27 billion in assets under management and more than 470,000 clients in the US, “Wealthfront’s award-winning, state-of-the-art platform helps clients easily manage their wealth by providing access to financial planning capabilities, banking services and investment management solutions”, the firms say.

Following the transaction, Wealthfront and its clients will benefit from access to UBS’s leading wealth management capabilities, including the UBS Chief Investment Office’s best-in-class thought leadership, an unrivaled global footprint, and deep products and services shelf.

“Adding Wealthfront’s capabilities and client base to our global investment ecosystem will significantly boost our ability to grow our business in the US,” commented Ralph Hamers, Group Chief Executive Officer of UBS.

The platform’s primary focus is on millennial and Gen Z investors, a client segment with significant domestic growth potential. With more than 130 million investors in the US alone, millennials and the Gen Z population together comprise a high growth segment that will own an increasing share of the world’s wealth.

In addition, Wealthfront will expand UBS’s existing offering through the firm’s Wealth Advice Center, which focuses on serving core affluent clients, and its Workplace Wealth Solutions business, which works with employees of corporate clients on equity plan participation, financial education and retirement programs.

“Partnering with UBS will allow Wealthfront to offer our clients additional value-added services and best in class research that will help accelerate our vision to make growing wealth delightfully easy,” said David Fortunato, Chief Executive Officer of Wealthfront.

AllianzGI Creates Unit Dedicated to Private Markets Impact Investments

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To enhance its commitment to impact investing, Allianz Global Investors (AllianzGI) has announced the creation of a dedicated Private Markets Impact unit within its Sustainable investment platform. This new area will be led by Matt Christensen, Global Head of Sustainability and Impact Investing.

The Private Markets Impact unit combines existing equity and debt investing expertise with a newly created impact measurement and management capability. The firm has revealed in a press release that this 12- strong unit, which will be overseen by Christensen, will complete the Sustainability platform created in 2021 to push the boundaries of sustainability for its clients.

Three impact teams

Martin Ewald, Lead Portfolio Manager, heads the Private Equity Impact Investing team, which seeks to invest in real assets and private companies that contribute to solve global environmental and/or social issues. He is currently responsible for EUR 500 million committed through the Allianz Impact Investment Fund and AfricaGrow initiative, and also the Emerging Market Climate Action strategy (EMCA) launched at COP26 by AllianzGI in cooperation with the European Investment Bank.

In this sense, AllianzGI reveals that with a target size of EUR 500 million, EMCA will invest in climate-focused investment funds and projects active in emerging markets and developing countries, with a focus on climate mitigation, climate adaptation, and access to electricity.

Meanwhile, Nadia Nikolova, Lead Portfolio Manager, is heading the Development Finance & Private Debt Impact Investing team, which currently invests in de-risked sustainable loans in emerging and frontier markets. The team brings together the expertise from the AllianzGI Private Credit platform with an impact investing lens. It focuses on building partnerships with Development Finance Institutions and Agencies, Donors and commercial investors to mobilize private capital for sustainable development, and already raised over USD 2 billion since 2017.

Also announced at the recent COP 26, the team manages the vehicle for the recently announced Managed Co-Lending Portfolio Program (MCPP) between Allianz and the International Finance Corporation (IFC), a member of the World Bank Group. “The new program, MCPP One Planet is the world’s first cross-sectoral portfolio of emerging-market loans aligned with the Paris Agreement”, the company explains.

In addition, AllianzGI announced the creation of an Impact Measurement & Management team, led by Diane Mak, and the launch of an impact framework to facilitate the due diligence and selection of investments that contribute to material and positive impact. The approach supports rigorous measurement and management of impact over the lifecycle of the investment to ensure that impact is being delivered. Diane Mak joined AllianzGI in August from Y Analytics where she oversaw TPG Global’s impact assessments and management activities.

“Impact investing is fast-growing out of its niche. Investors want to see a positive change for the planet while generating a return, and impact investing offers a solution to these twin goals. The future growth trajectory of impact investing depends on asset managers demonstrating how the impact can be measured and reported. Our new Impact Measurement & Management approach enables us to measure impact in private equity and debt investments and will allow us to develop further our offering according to the best standards”, said Christensen.

Lastly, Christensen has been appointed as a board member of the GRESB Foundation, a newly established not-for-profit organization that owns and governs the ESG standards upon which the GRESB real estate and infrastructure assessments are based. GRESB, a mission-driven and industry-led organization, provides standardized, validated and transparent ESG data to financial markets. The GRESB Foundation Board will guide the GRESB Standards to ensure they remain investor-led and aligned with responsible investment principles.

What Is the Next Step for the U.S. Equity Market for 2022?: A New VIS with DWS

| For Constanza Ramos | 0 Comentarios

Next Tuesday, February 1, at 10:30 am EDT, Funds Society will host a new Virtual Investment Summit entitled “What Is the Next for the U.S. Equity Market by 2022?”.

Jerónimo Nin, Head of Trading and Investments at Nobilis, will present this event, which will feature speakers David Bianco, CFA, Chief Investment Officer-Americas at DWS, and Jesús Martín-del-Burgo, Head of Coverage-Latin America at DWS.

U.S. equity investors have much to digest heading into 2022 around “transitory” inflation, the speed of monetary policy changes, variants, and corporate earnings. How do all these data points then come together to present a picture of the stock market for the year ahead? This VIS will address these issues.

You can register at this link to attend the virtual event.

Host

Jerónimo Nin, Head of Trading and Investments at Nobilis has more than 15 years of experience in financial markets. He holds a degree in Economics from the Universidad de la República and is CFA charterholder. He has been an investment manager at Nobilis since the company’s inception, where he is responsible for supervising the model portfolios and managing two Fund of Funds in Uruguay, with AUM above 220 million dollars.

Nin was Chief Investment Officer of Integration at AFAP. He has extensive experience in active portfolio management and investment decision making. In addition, he worked at BEVSA and has given several lectures locally and internationally on investment decision making in the securities markets and the pension system.

Speakers

David Bianco, Chief Investment Officer-Americas at DWS has more than two decades of investment experience, having rejoined DWS in 2012 in his current role. Prior to that he was Chief U.S. Equity Strategist at Deutsche Bank and, before rejoining, at BofA Merrill Lynch and at UBS. Prior to being chief strategist, Bianco served as the Valuation & Accounting Strategist at UBS, a Quantitative Strategist at Deutsche Bank and an industry equity analyst at firms such as Deutsche Bank, Credit Suisse and at NatWest Markets. He earned a BS in Economics from The Wharton School, University of Pennsylvania and is a CFA Charterholder.

Jesús Martín-del-Burgo, Head of Coverage-Latin America at DWS, joined DWS in 2006 with 7 years of industry experience. Prior to his current role, he was Head of Sales for Chile and Peru and before that, he served as Head of Product Management for Iberia and Latin America and as a Risk Manager for DWS Investments in Madrid. Before joining, he worked as a Senior Investment Consultant for Insurance Companies and in Equity Sales at various institutions. Additionally, Martín-del-Burgo served as Academic Co-Director and Lecturer at Instituto de Estudios Bursátiles (IEB) from 2007 to 2011. He earned a BA in Business Administration from Universidad Autónoma de Madrid; Master’s Degree in Portfolio Management and MBA in Banking and Finance from Instituto de Estudios Bursátiles.