Fund Strategy articles from December 2006

Fund Strategy archives from December 2006

COMMENT: Global inequality is far from clear cut.
December 2, 2006... Is the world, and particularly America, as unequal as often assumed? And what are the investment implications of such inequality? Before examining these questions it is important to be clear about definitions. Terminological confusion...

IMA to include offshore sales data.
December 2, 2006... The Investment Management Association is to include offshore funds registered for sale in the UK in its sales figures. This may lead to the introduction of new IMA sectors. The inclusion of offshore funds is intended to provide a more...

Royal London brings Ethical Bond trust to market.
December 2, 2006... Royal London Asset Management launched the Royal London Ethical Bond trust last week. Managed by Sajiv Vaid and Stephen Peirce, the trust invests in fixed interest securities issued by companies that meet ethical criteria. The trust...

Martin Currie to unveil pan-European fund.
December 2, 2006... Martin Currie is launching an unconstrained pan-European alpha fund, managed by Dino Fuschillo. The portfolio, a Luxembourg-domiciled Sicav with UK distributor status and euro and sterling share classes, will be run as a best ideas fund...

IN BRIEF: R&M given green light for two funds.(Brief article)
December 2, 2006... River & Mercantile has received approval from the Financial Services Authority for two fund launches. Two UK equity portfolios are expected to be launched at the end of March, with a core mandate to be managed by Hugh Sergeant and the other,...

IN BRIEF: Fidelity launches offshore Asia fund.(Brief article)
December 2, 2006... Fidelity has launched an offshore Asia Pacific Property fund. The portfolio, run by Polly Kwan, invests in emerging and developed Asia Pacific countries, with the aim of achieving high growth and low volatility. Kwan picks companies on a...

AIC urges companies to oppose listing proposals.
December 2, 2006... The Association of Investment Companies is urging firms to register their "strong opposition" to consultation paper 06/21, published by the Financial Services Authority in December. The paper relates to part two of CP 06/4, released last...

New Star prepares property fund.
December 2, 2006... New Star has announced further details of its International Property fund, set to launch on June 4. As revealed in Fund Strategy on January 15, the fund is a retail version of an institutional product created last year. New Star...

BlackRock swaps manager on UK Income fund.
December 2, 2006... BlackRock Merrill Lynch Investment Managers has changed the manager on its UK Income unit trust. Nick McLeod-Clarke has replaced Chris Littlejohns, manager of the #400m fund since 1993. McLeod-Clarke will cut the number of stocks in...

IN BRIEF: JPM offers global equity fund.(Brief article)
December 2, 2006... JP Morgan Asset Management has launched its Global Equity Income fund. Managed by Gerd Woort-Menker, the fund targets companies with high dividend yield supported by free cashflow. It will invest globally across a range of different sectors....

Artemis extends range to Europe with Luxembourg Sicavs.
December 2, 2006... Artemis has expanded its fund offering into Europe with the launch of its first Luxembourg Sicavs. In December 2006 the group unveiled three Sicavs - Pan-European Equity, Global Equity and UK Equity - all of which are based on existing...

Matrix sets two-month deadline for Reit launch.
December 2, 2006... Matrix Property Fund Management is to launch a real estate investment trust in the next two months. Rob Randall, managing director of Matrix Property Fund Management, a subsidiary of the Matrix group, says Reits will provide the next...

IN BRIEF: Shroders appoints marketing head.(Brief article)
December 2, 2006... Schroders has appointed James Rainbow from Baring Asset Management as head of UK marketing. He will report to James Cardew, former Schroders' head of UK marketing, who now moves up to become pan-European marketing head. Rainbow, who was head...

IN BRIEF: Interest rates unchanged.(Brief article)
December 2, 2006... The Bank of England's Monetary Policy Committee and the Governing Council of the European Central Bank left interest rates unchanged last week. The British rate remains at 5.25%, following the quarter-point rises in November and January. The...

Global economy is at an inflection point, warns Barclays.
December 2, 2006... Barclays Capital says the global economy has reached an inflection point. In the 2007 Barclays Capital Equity Gilt Study, Tim Bond, head of asset allocation at Barclays Capital, says two developments support this argument. First, the...

Summit begins with examination of future global economic prospects.
December 2, 2006... Stephanie Flanders, economics editor of BBC Newsnight, will open this year's Fund Strategy Investment Summit in St Moritz from March 27-30. Her brief is to examine future prospects for the global economy. Flanders will start by analysing...

UK industry flourishes as investor confidence returns.(Industry overview)
December 2, 2006... The British fund management industry had another successful year in 2006. According to figures from the Investment Management Association, total investment funds under management rose for the fourth successive year to #410bn as at December 31,...

STRATEGY: Hedging can beat currency volatility.
December 2, 2006... With a strong pound, sliding dollar and collapsing yen, British investors received significantly lower returns than they might have done last year if they had hedged their currency risk. Last year was great for investors in equities - or...

TRENDS: "Selling in spring" worked last year.
December 2, 2006... Most equity market growth took place in the first quarter and from August onwards in 2006, so the old adage of "sell in spring and buy in fall" would have served investors well. Year-end equity fund returns for 2006 (up 8.28%) are just...

Q&A: UBS builds equity income portfolio block by block.(Interview)
December 2, 2006... Brian Gallagher, manager of the UBS UK Equity Income fund, answers questions from Adam Lewis. Q: Why did you join UBS? A: I joined the group for three reasons. First was the opportunity the group provides in terms of its resources and...

BRITISH INVESTORS: Passing the buck.
December 2, 2006... The strength of sterling against other major currencies is a potential hazard for British Before Christmas, many Brits made a dash for America. This was not to see the sights in New York or head for the sun in Florida. They were seeking...

BRITISH INVESTORS: Funds and currency hedging.
December 2, 2006... Few retail onshore funds hedge currency risk. But there are some notable exemptions, one of which is the Franklin Mutual Shares fund, managed by Peter Langerman. "We believe UK investors want to access our stockpicking and sector analysis...

BRITISH INVESTORS: The yen carry trade.
December 2, 2006... At the end of January 2007, the yen reached a four-year low against the dollar and a record low against the euro. On January 29, the yen fell to Y122.19 against the dollar and Y158.60 against the euro. Many economists and commentators...

ANALYSIS: CIS forecasts sustainable rewards.
December 2, 2006... Mike Fox, manager of the CIS Sustainable Leaders trust, says that although stocks are limited, as firms seek to prove their green credentials, the investment universe can only get bigger. Two weeks ago the world's scientists gave their...

REVIEW: Analysis reveals unlikely relationships.
December 2, 2006... While setting out the author's main argument - that a knowledge advantage is essential for beating the markets - this often amusing book highlights some unexpected historical trends. Ken Fisher is rich. Very rich. In fact, so rich that he...

AFI: Aggressive AFI less risky than FTSE.
December 2, 2006... The riskiest of the three Adviser Fund Indices has proved less volatile, on an annualised basis, than the FTSE All-Share index since launch in 2004, while providing higher returns. Since the inception of the Adviser Fund Index series on...

FoFs: Contrarians help New Star to shine.
December 2, 2006... Mark Harris, co-manager of the New Star Active fund, attributes the portfolio's sector-leading position over five years to a contrarian approach and a willingness to invest in funds at launch. Mark Harris and Craig Heron have jointly...

FOCUS: Unicorn looks to restore confidence.
December 2, 2006... Unicorn has reassessed its fund range after poor performance, bringing Chris Hutchinson in as a fund manager and launching the Outstanding British Companies fund. Frances Hughes reports. Over the past year Unicorn Asset Management has...

Fund Manager's Diary: 22-28 January 2007.
December 2, 2006... Monday/Tuesday I have just returned from a weekend away with the Harlequins rugby team in Montpellier, France. The weather was superb, food was fantastic and, to top it all, we won our match. My return involves an immediate trip to the...

COMMENT: Put alarmist debate on debt into context.
December 4, 2006... Tucked away in the latest issue of a dusty journal lies a healthy corrective to the often hysterical discussion of household debt. An article in the Organisation for Economic Cooperation and Development's Economic Outlook shows the debt...

Martin Currie to restructure Sicav.
December 4, 2006... Martin Currie plans to restructure its $1.4m (#713,000) Pan European Equity Sicav into a high alpha fund. Subject to regulatory and shareholder approval, from February 2007 the fund, managed by Dino Fuschillo, will be modelled on the...

GAM hard-closes #1.3bn UK and global Oeics.
December 4, 2006... GAM has become the latest group to hard-close some of its retail funds. Following last month's decision by Old Mutual to close its #454m UK Select Smaller Companies fund, GAM has announced plans to cap the number of units in issue for its UK...

Trucost set to launch green tracker fund.
December 4, 2006... Trucost, an independent environmental research organisation, plans to launch a green tracker fund in the new year. The fund will hold all of the constituents of the FTSE 350 index, but with companies reweighted according to how efficient...

IN BRIEF: River launches UK funds.(Brief article)
December 4, 2006... River and Mercantile Asset Management has launched its UK Equity High Alpha and UK Equity Smaller Companies funds. The high-alpha portfolio is managed by Hugh Sergeant, who joined the firm from Societe Generale Asset Management in August....

IN BRIEF: SGAM recruits for Paris team.(Brief article)
December 4, 2006... SGAM UK has added to its Paris-based bond management team. Gareth Isaac, formerly of Axa Investment, will join SGAM in February 2007 as a fixed income manager. At Axa he ran several UK and international government bond portfolios. ...

IN BRIEF: Octopus launches protected EIS.(Brief article)
December 4, 2006... Octopus Investments has launched the Octopus Protected Enterprise Investment Scheme. The fund will invest in a series of wholesale companies and the charging structure allows clients to receive tax relief on the full amount. As it has been...

IN BRIEF: Jupiter appoints marketing chief.(Brief article)
December 4, 2006... Jupiter has hired Chris Crawford as head of group marketing services. Crawford joins from First State Investments, where he worked as head of marketing from October 2002. Previously he worked as head of marketing at BT Financial Group and...

M&G reveals details of Optimal fund.
December 4, 2006... M&G has released further details on its Optimal Income fund and announced the departure of Nick Scott, manager of its #235m Asian portfolio. As reported in Fund Strategy on November 6, Optimal Income will be run by Richard Woolnough,...

Legal & General and NDF open investment plans.
December 4, 2006... Legal & General and NDF are both launching investment plans with fixed maturity dates next week. L&G is adding to its series of capital protection and early-payment feature investments, while NDF is launching a growth and income...

Hermes chief executive welcomes FSA's review of private equity firms.
December 4, 2006... Rod Selkirk, chief executive of Hermes Private Equity and chairman of the British Venture Capital Association, has welcomed the Financial Services Authority's review of the private equity industry (see Fund Strategy, November 13, page 10)....

IN BRIEF: Close postpones Mosaic deadline.(Brief article)
December 4, 2006... Close Investments is extending the deadline for applications for the Close Mosaic Property fund to December 28. The fund invests in commercial property located in Central and Eastern Europe. Investors will gain exposure to acquisitions already...

Net retail fund sales hit #1.6bn for October.
December 4, 2006... Net retail fund sales hit #1.6bn in October, an increase of #1bn on the same month last year, according to figures from the Investment Management Association. Gross retail sales were also up, from #3.5bn to more than #5.3bn, with the largest...

Investec Perpetual cuts back Japan fund holdings.
December 4, 2006... Paul Chesson, manager of the #135m Invesco Perpetual Japan fund, has reduced the number of companies held in the portfolio to 33. On average the fund holds 40-70 stocks and Chesson says the low number reflects where he is finding value in...

IN BRIEF: Gartmore trust appoints director.(Brief article)
December 4, 2006... The Gartmore Smaller Companies Trust has appointed Lynn Ruddick as a non-executive director. Ruddick is a fellow of the Chartered Association of Certified Accountants and a member of the Securities Institute. She retired as a managing director...

Dollar depreciation may continue into next year.
December 4, 2006... Following an extended period of low volatility in global currency markets, the dollar has fallen sharply against sterling since mid- November. With the pound rising to above $1.96 against the dollar on November 30 - an increase of 4% since...

TRENDS: With-profits trap can be sprung.
December 4, 2006... The exodus from with-profits funds looks to be far from over, as the vast majority of advisers say they are still planning to recommend their clients transfer their assets to other vehicles. With-profits funds have taken up much space in...

STRATEGY: Dollar bears on the brink of retreat.
December 4, 2006... Making a case for further falls in the value of the dollar is fairly simple. All dollar bears need to do is point to America's current account deficit. However, there are some good reasons to believe that America's external finances may be...

Q&A: China and India offer different attractions.(Interview)
December 4, 2006... Michael Power, a strategist at Investec Asset Management, talks to Frances Hughes. Q: Do you think Chindia (China and India) funds will become the new Bric (Brazil, Russia, India, China) funds? A: Single-country funds are not popular...

STAR SIGNING: Switching teams.
December 4, 2006... Can "star" fund managers who have earned their reputation for managing money at one company perform equally well when they move to another? Paul Farrow looks at how 10 recent movers have fared. New signings sometimes fail. David Beckham,...

ANALYSIS: Aberdeen exploits city short-termism.
December 4, 2006... Chou Chong, manager of the Aberdeen UK Growth fund, seeks out companies that may be out of favour with other investors because of short-term problems, but are fundamentally sound. It is normally left-of-centre journalists who harp on...

CHANNELS: Hargreaves Lansdown builds solid platform.
December 4, 2006... Peter Hargreaves, co-founder of Hargreaves Lansdown, answers this week's questions from Adam Lewis. Q: How many healthy/profitable IFA firms are there at present? A: There are a number of smaller IFA firms that are healthy. By small...

FOCUS: Bedlam breaks out with transparency.
December 4, 2006... Bedlam Asset Management's performance has faltered recently, admits Charles Scott Plummer, sales director, but the firm has won plaudits for its transparent process. James Teasdale reports. Bedlam Asset Management's total funds under...

AFI: Balanced AFI plays it safe as houses.
December 4, 2006... Last week's Adviser Fund Index feature looked at the ways the panellists tried to reduce risk in the Aggressive AFI, during the rebalancing on November 1. The 18-strong panel increased asset class diversification and reduced its exposure to...

FoFS: Margetts ready for bond correction.
December 4, 2006... The Margetts Select Strategy fund, managed by Toby Ricketts, has built up its cash weighting throughout the year in anticipation of a decline in bond markets over the next 12-18 months. Toby Ricketts, manager of the #15.89m Margetts...

Fund Manager's Diary: 20-25 November 2006.
December 4, 2006... Monday Having spent time reflecting on the weakness of the dollar versus the pound, it is sobering to note that while both the British and American stockmarkets have risen in 2006, UK investors investing in the US, after the effect of the...

QUARTERLY REVIEW - COMMENT: Soft landing may be bad news.
December 4, 2006... There seems to be a consensus that the world economy is heading for a "soft landing". The problem is that it is not clear what the term means. If all it refers to is that global growth next year looks set to be slightly slower than in...

QUARTERLY REVIEW - SLOW DRIVER: In the slow lane.
December 4, 2006... Will a cooling American housing market lead to weaker demand among American consumers next year, and ultimately a slowdown in global growth? Or will other countries take up the slack? Simon Hildrey reports. n the new Casino Royale Ifilm,...

QUARTERLY REVIEW - SLOW DRIVER: American Inflation.
December 4, 2006... Paul Ashworth, senior US economist at Capital Economics, says while headline inflation in America declined to 1.3% in October, core inflation remained well above the "Federal Reserve's comfort zone, at 2.7%". "However, over a shorter time...

QUARTERLY REVIEW - BRITAIN: Interest rate hike could hit returns.
December 4, 2006... The prospect of further interest rate hikes in early 2007 is dampening analysts' enthusiasm for British equity markets, with some doubtful of whether the UK stockmarket can deliver gains.All eyes are on British interest rates. They stood at...

QUARTERLY REVIEW - BRITAIN: Mid-caps give hope after low returns.
December 4, 2006... Fund managers are lagging the index because of poor performances by small and large companies. But low market volatility and takeovers offer promise from mid-caps during the next quarter. This year is proving to be an unusual one for...

QUARTERLY REVIEW - AMERICA: Confidence returns to US markets.
December 4, 2006... American equity markets have bounced back after the summer slump, with the Dow Jones index hitting a succession of record highs as fears of an economic slowdown begin to fade. Dow Jones watchers broke open the Champagne again and again as...

QUARTERLY REVIEW - AMERICA: Playing it safe is good US insurance.
December 4, 2006... Uncertainty about the American slowdown suggests investors should select companies that offer the prospect of medium-term growth, especially in the insurance and pharmaceuticals sectors. The market correction of 7.4% in May proved to be...

QUARTERLY REVIEW - JAPAN: Missing link threatens full recovery.
December 4, 2006... Japan's lack of a personal consumption dynamic and a reliance on its export market could slow the country's economic recovery further, especially if demand from China and the US dwindles. Japan's recently installed premier, Shinzo Abe,...

QUARTERLY REVIEW - JAPAN: Japan not insulated from global dip.
December 4, 2006... Although Japanese economic growth remains strong quarter on quarter, much of this is a result of external factors, leaving the economy vulnerable to a fall in exports to America and China. As had been widely anticipated, third-quarter...

QUARTERLY REVIEW - EUROZONE: Eurozone faces global downturn test.
December 4, 2006... The eurozone enjoyed strong growth during the first half of 2006. But estimates for GDP growth for the third quarter were only 0.5% and experts are divided over the sustainability of recovery.Investors in the eurozone have had reasons to cheer...

QUARTERLY REVIEW - EUROZONE: Equities can rise despite slowdown.
December 4, 2006... Eurozone equities have bounced back from the market correction, driven by healthy earnings and a glut of mergers and acquisitions. This should continue no matter what happens in the US.As we head towards the end of 2006, eurozone markets are...

QUARTERLY REVIEW - ASIA: Asia's influence continues to grow.
December 4, 2006... Asian markets are dividing opinion, with some analysts forecasting a bursting of the liquidity bubble, while others say the region's export- driven growth will withstand the US slowdown. The political economy of Asia was a prominent theme...

QUARTERLY REVIEW - ASIA: Asia Pacific outlook - Real GDP.
December 4, 2006... Real GDP (%) 2006 2007 2008 Australia 2.37 3.10 3.18 China 10.51 9.34 8.20 Hong Kong 5.50 4.60 4.31 India 8.21 6.82 6.59 Indonesia 5.09 5.94...

QUARTERLY REVIEW - ASIA: Asian growth outlook still positive.
December 4, 2006... High returns from some Asian markets are tempered by fears about unrest and a hard landing in the US. Despite this, the growth rates in the region look set to remain above those in the West. East Asian markets have performed strongly...

QUARTERLY REVIEW - BONDS: US will lead global bond market rally.
December 4, 2006... American and European bonds rallied over the quarter in anticipation of slowing US economic growth, but the outlook for British bond markets remains unfavourable as inflation fears persist. Inflation around the world has surprised on the...

QUARTERLY REVIEW - BONDS: Bonds benefit from boom in credit.
December 4, 2006... Despite the global slowdown, corporate bonds have been notably resilient and yield spreads have remained tight. This is partly because of a rapid boom in the structured credit market. Since the turn of the year, most investment experts have...

COMMENT: China shifting to higher-value goods.
December 11, 2006... One of the few interesting things in Gordon Brown's generally dull pre- Budget report speech was his reference to China. He started with some figures that will not be a surprise to anyone who follows the economic fortunes of the Asian giant:...

Nucleus IFA wrap on cusp of launch.
December 11, 2006... Nucleus, an IFA wrap proposition, is set to go live before Christmas, according David Ferguson, one of its founders. Ferguson, chief executive of Nucleus, says the wrap, which is 51% owned by IFA firms, has received Financial Services...

F&C to change manager on High Income fund.
December 11, 2006... Stephen Dolbear will step down from his role as lead manager on F&C's High Income fund at the start of next year. He will be replaced on the #320m portfolio by Chris Childs, assisted by Stephen Crewe. F&C plans to market the fund more...

Seven Dials launches Euro Property fund.
December 11, 2006... Seven Dials, an independent commercial property analyst, has unveiled its open-ended European Property fund of funds. The firm is targeting E100m (#70m) in assets under management after the first year, with initial inflows invested from the...

IN BRIEF: Charter trust seeks name change.(Brief article)
December 11, 2006... The board of the #60m Charter Pan-European investment trust, run by Allianz Global Investors, has proposed changing its name to Charter European. The board is also recommending the adoption of a FTSE World Europe (ex UK) benchmark, in place of...

IN BRIEF: Majedie closes UK Equity Service.(Brief article)
December 11, 2006... Majedie Asset Management has closed its UK Equity Service to new business. The firm has more than #4bn in assets under management and the decision is designed to allow Majedie to remain focused on performance, rather than asset gathering. The...

IN BRIEF: Close to run 13 more roadshows.(Brief article)
December 11, 2006... Close Investments will visit 13 more venues in the new year, as part of its winter intermediary roadshow tour. The firm will give presentations on developments within the property, venture capital trust and inheritance tax sectors, and will...

IN BRIEF: Swip hires Japan team leader.(Brief article)
December 11, 2006... Scottish Widows Investment Partnership has appointed Fraser Laird to its Japanese equities team, as investment director. He reports to Ian Vose, the firm's head of global developed markets. Laird has 22 years' experience, including his most...

IN BRIEF: Way unveils tax-efficient service.(Brief article)
December 11, 2006... Way has launched its Tax-efficient Portfolio Management Service, designed to minimise risk exposure, while banking profits in rising markets. TPMS has a quarterly rebalancing mechanism and operates within a multiple-policy, Luxembourg-based...

Correction: M&G Capital fund.(Correction notice)
December 11, 2006... Last week's cover story incorrectly stated that the M&G Capital fund performed poorly and lost investors when it was first taken over by Mike Felton in 2005 (page 21). The fund performed well and its assets under management actually...

Changes prompt upturn for New Star.
December 11, 2006... Significant changes made to the #56m New Star Global Equity and #11m New Star North American funds have heralded a significant upturn in their performance. Greg Kerr, former head of global equities at M&G, took over the funds from Mark Beale...

Mellon opens retail version of Newton Phoenix.
December 11, 2006... Mellon Global Investments has launched a retail version of its absolute return-oriented Newton Phoenix Multi-Asset fund. Retail investors can now access the portfolio through a sub-fund, with a lower initial investment. Managed by...

Recycling petrodollars boosts global markets, says Morgan Stanley.
December 11, 2006... The recycling of "petrodollars" from oil-exporting countries is playing a crucial role in propping up global markets, according to Serhan Cevik, a Morgan Stanley economist.* Massive surpluses held by oil-rich countries will probably also...