Fund Strategy articles from December 2008

Fund Strategy archives from December 2008

COMMENT: Lost decade points to need for tough action.
December 1, 2008... Daniel Ben-Ami, Editor Those who want to know the likely economic trajectory of the western developed economies would do well to look at the recent historical experience of Japan. Although the West's current predicament differs in some...

RWC aiming to profit from distress.
December 1, 2008... RWC Partners is launching a Distressed Convertibles fund to take advantage of extraordinary values in the market owing to forced selling. The fund will lock investors in for two years because of its illiquidity. However, Dan Mannix, the...

Liontrust pair refine stock selection process.
December 1, 2008... Anthony Cross and Julian Fosh, joint managers of the Liontrust Intellectual Capital and First Opportunities funds, have introduced a two-tiered process to selecting stocks. Intellectual capital describes the intangible assets some companies...

Maia men embroiled in Mumbai terror attack.
December 1, 2008... Chris Ralph and Jason Collins, joint founders of Maia Capital, were trapped in last week's attacks in Mumbai, with Ralph having to barricade himself in the Taj Mahal Palace hotel. Collins was not in the building at the time of the siege and...

IN BRIEF: Australian fund resumes trading.(Brief article)
December 1, 2008... The trading suspension in the Oceanic Australian Natural Resources fund has been lifted. Normal dealing resumed on November 18 and redemptions were relatively small. Trading was suspended by Capita Financial, the fund's authorised corporate...

IN BRIEF: Apollo launches two retail funds.(Brief article)
December 1, 2008... Apollo Multi Asset Management last week launched its first two retail funds: Apollo Balanced and Cautious. Both are managed by Steve Brann, Tom McGrath and Craig Wetton. Brann and McGrath were fund managers at Miton Asset Management and...

New Star halts trading on property portfolio.
December 1, 2008... Trading in the New Star International Property fund will not resume until at least after the new year, says Stuart Webster, the head of global property at New Star. The group suspended dealing in the #475m fund last week after some large...

Veritas Asian reopens as value dives.
December 1, 2008... Veritas has re-opened its Asian fund to new investors after the assets under management halved in value in a year. In October 2007 the fund was soft-closed after assets soared to $800m (#519m) to protect the shareholders. However, 13...

IN BRIEF: T Rowe expands Sicav range.(Brief article)
December 1, 2008... T Rowe Price has expanded its Luxembourg Sicav range via the launch of a Global Real Estate Securities fund. The fund invests in real estate operating companies, real estate investment trusts (Reits) or similar entities. However, it will not...

IN BRIEF: Growth Investment plan unveiled.(Brief article)
December 1, 2008... Legal & General has launched its Growth Investment Plan Plus 17, offering investors 150% of any growth on the FTSE 100 over the next six years. The product also includes an early payment feature. If the FTSE has grown by more than 15% by the...

IN BRIEF: IFDS Omnis range hits #50m.(Brief article)
December 1, 2008... The IFDS Omnis fund range has hit #50m in assets under management. The range, which was launched on July 7, 2008, consists of three multi- asset, multi-structure, multi-manager funds with varying risk profiles. The funds use a core-satellite...

Eight trusts face ban from All-Share.
December 1, 2008... Eight investment trusts face exclusion from the FTSE All-Share index under new liquidity rules, according to Wins Investment Trusts. The news follows last week's announcement from FTSE that it will apply less stringent requirements than were...

Axa adds ethical sub-fund to Distribution range.
December 1, 2008... Axa Investment Managers has added to its Oeic Distribution range with the launch of an ethical sub-fund. The fund is managed by Jim Stride, managing director and head of UK equities, and is the fourth addition to the range. Distribution...

Figures reveal soaring investment into UK Gilts in October.
December 1, 2008... UK Gilts became the best-selling asset class in October, the first time it has taken a leading share of the Investment Management Association's (IMA) net retail sales. Monthly statistics from the IMA showed retail investments into the UK...

IN BRIEF: Clerical Medical in property launch.(Brief article)
December 1, 2008... Clerical Medical has appointed Invista Real Estate Investment Management to launch a UK Property fund. The fund, which is structured as an Oeic, will aim to invest in a portfolio of commercial properties offering a stable medium to long-term...

Britain forecast to be among hardest hit by recession.
December 1, 2008... Britain will be one of the industrialised countries worst hit by the severest recession in the global economy since the early 1980s. That is the verdict of the Organisation for Economic Co-operation and Development (OECD) in its...

IN BRIEF: UK Equities head at Lazard to retire.(Brief article)
December 1, 2008... Tony Willis is to retire from his role as head of UK Equities at Lazard, handing his two mandates to Alan Custis, his co-manager. Willis, who is managing director and head of UK equities at the group, is stepping down in February after 25 years...

ANALYSIS: Managers' hit rate no better than 50-50, say researchers.
December 1, 2008... The active versus passive management argument is one that never seems to go away and last week was reignited by research published by Inalytics. According to Inalytics, a specialist firm that helps pension funds to select and monitor equity...

STRATEGY: Those with long view will see returns.
December 1, 2008... Even with the gloom and doom predictions from prominent economists, investors can still find opportunities for growth, especially when thinking through a five-year strategy. We are still in the epicentre of 'Credit Quake 08', according to...

TRENDS: Large caps are latest European style.
December 1, 2008... Despite the relative success of European mid and small caps over the past few years, testing market conditions have highlighted the stability and value of large company stocks. Europe's investment landscape has changed. Investors'...

Q&A: Emerging commodities offer insane valuations.(Interview)
December 1, 2008... Bryan Collings, of the Ignis International Hexam Global Emerging Markets, talks to Adam Lewis. Q: How would you describe the environment in emerging markets? A: It is an amazing time in emerging markets. There are so many myths and...

COVER: Fighting fit.
December 1, 2008... The global slowdown has stymied Japan's economic expansion as demand for exports shrinks and share prices fall. But its strong banking sector prompts some analysts to argue that the country will be the first to recover, writes Jack Mulchand....

Japan's economic outlook.
December 1, 2008... The Japanese economy officially fell into recession after recording two consecutive quarters of contraction this year, raising fears about its prospects for 2009, including the worrying possibility of worsening deflation. The Japan...

Japan's lost decade.
December 1, 2008... Japan's so-called "lost decade" of the 1990s, when its economy succumbed to an extended period of deflationary torpor, provides valuable lessons about how to deal with the impact of the global financial crisis, according to analysts at...

ANALYSIS: 'Buying opportunity of the century'.
December 1, 2008... Rod Sleath, the manager of Collins Stewart Continental Europe Focus, says there has never been a better time to buy in Europe, and that he is not just a blind optimist - he has done the research. He is the most exuberant fund manager I've...

INVESTMENT TRUSTS: Martin Currie defends ailing stance.
December 1, 2008... Tom Walker, a portfolio manager at Martin Currie, defends his decision to include private equity in the investment trust, saying that gains in the long run will make up for short-term setbacks. Exposure to private equity has hurt the...

AFI: M&G is top fund choice for caution.
December 1, 2008... Seven Adviser Fund Index panellists selected Richard Woolnough's Optimal Income fund for their Cautious portfolios in the November rebalancing, lifting M&G to first place among providers. M&G received a significant boost in the Cautious...

FoFs: Nurs funds help ease bear wounds.
December 1, 2008... Credit Suisse's Cautious Managed Portfolio expands its product base to include listed alternatives and takes an aggressive position in planning how to deal with a market rally. When Graham Duce and Aidan Kearney, joint-heads of...

FOCUS: HSBC hoping to make onshore leap.
December 1, 2008... HSBC's funds business, rebranded to signal its global market credentials, aims to beat adviser prejudice against bank ownership and the stigmas of offshore investing, writes James Smith. HSBC's track record in the British fund industry...

Fund Manager's Diary: 10-16 November 2008.
December 1, 2008... Monday First up is the morning traders' meeting. I manage international bond portfolios, both nominal and inflation-linked, so my attention is always drawn first to overnight developments from Asia. This time the focus is west not east as...

QUARTERLY MARKET REVIEW: Ditch green dogma for real growth ethos.
December 1, 2008... Daniel Ben-Ami, Editor Governments around the world have announced measures to bolster liquidity in their financial systems and fiscal packages to boost consumption. Yet none of them seems to be getting to grips with the real problems...

QUARTERLY MARKET REVIEW: Deep waters.
December 1, 2008... Leading economies are in recession and the International Monetary Fund's forecast is that the global slowdown will be worse than expected. Abigail Montrose traces the course of the worldwide slump and assesses the prospects for recovery. ...

QUARTERLY MARKET REVIEW: Stockmarket in the eye of the storm.
December 1, 2008... The fund managers' view is unanimous: Britain's economy, already in a more parlous state than three months ago, will soon be even worse. They are bracing themselves for the onslaught. "Six months ago we were suffering a financial sector...

QUARTERLY MARKET REVIEW: Best to stay true to first principles.
December 1, 2008... In an equity market that has suffered from too much complexity and too much debt, focusing on cash-generative companies with robust business models should produce good opportunities. Britain's economic environment has worsened over 2008....

QUARTERLY MARKET REVIEW: This is no time for playing the hero.
December 1, 2008... Reasons to be wary about the performance of European companies can be found in abundance, but experts suggest that a step-by-step approach to rebuilding equity positions is the best strategy. Until markets fully recover, investors should...

QUARTERLY MARKET REVIEW: Pick the strictly individual dancers.
December 1, 2008... As the eurozone awaits benefits from lower interest rates and lower energy costs, companies that follow a different beat within their sectors could offer the prospect of gains when markets recover. In September, a fire in the Channel Tunnel...

QUARTERLY MARKET REVIEW: Wait for the buyers to come back.
December 1, 2008... After an autumn of superlatives - the lowest rate, the worst volatility - the market's dynamics are not working. One expert advises waiting for signs of sustained aggressive buying before wading in. With 20/20 hindsight, hardly a soul...

QUARTERLY MARKET REVIEW: Follow Buffett to thrive in the bear pit.
December 1, 2008... With America's stockmarket arguably past its low point, Warren Buffett's strategy of buying good stocks at their cheapest is clearly the right approach - but not all investors find it easy. There is a good chance that the American...

QUARTERLY MARKET REVIEW: Theory buckles as slowdown strikes.
December 1, 2008... The global downturn hit the decoupling theory as Asia's stockmarket plunged and exports slowed. But although even the most robust economies in the region will be affected, the outlook remains positive. Not so long ago, there was hopeful...

QUARTERLY MARKET REVIEW: Time to seek out strong survivors.
December 1, 2008... Caution is still the watchword for investors in Asia, but the credit crisis is separating the resilient companies from the weak, providing a rich hunting ground of stocks with low price-to-book ratios. The world has changed dramatically...

QUARTERLY MARKET REVIEW: Benefits beckon with global upturn.
December 1, 2008... Falling investor confidence and concerns about world recession have driven the Japanese market close to 25-year lows. But signs point to a strong resurgence when the global economy recovers. It has been a torrid period for global equity...

QUARTERLY MARKET REVIEW: Prospects remain good despite dips.
December 1, 2008... The MSCI Emerging Markets index halved in value since its peak a year ago with Russia suffering the biggest fall in the Bric region. But prospects for investors remain promising. The three months to the end of September saw the worst...

QUARTERLY MARKET REVIEW: Global positioning is key to success.
December 1, 2008... In a quarter marked by a clear return to quality, profits in the global bond markets have been greatly affected by a fund manager's position on the yield curve and in currency weightings. In an eventful quarter for global bond markets one...

QUARTERLY MARKET REVIEW: Growing appeal of a fixed rate lock-in.
December 1, 2008... At a time when debt is rapidly being withdrawn around the globe, it is dawning on investors that the best thing they can buy is a good-quality asset that pays a good fixed level of interest - such as a bond. Bonds are back. Many...

COMMENT: A production dearth not consumer binge.
December 8, 2008... Daniel Ben-Ami, Editor There is a pervasive myth that the economic crisis has its roots in an overconsumption binge during the good times. In this upside down version of events, the fundamental problem was cheap credit fuelling...

Gartmore chiefs fall as axe swings.
December 8, 2008... Karl Bergqwist, the co-head of Gartmore's fixed income team, and Ashley Willing, the co-manager of the Gartmore UK Focus fund, became the latest victims of the job cuts in the asset management industry. The two managers were joined by...

Lowes' global equity offering favours America.
December 8, 2008... Lowes Wealth Management, a Beijing-based boutique, has made its foray into the British retail investment market with the launch of a global equity fund. Elite LWM East-West Value is a conviction portfolio of 25-35 holdings from a range...

Uncertainty prompts firms to put New Star funds on hold.
December 8, 2008... Several large wealth managers and IFAs have moved New Star funds on to their hold lists following the group's restructuring. Brewin Dolphin did not have any New Star funds as a buy before the asset manager's corporate problems. This was...

IN BRIEF: US suffers sharp employment cut.(Brief article)
December 8, 2008... Employment data from America showed the largest monthly drop in the number of people employed since December 1974. The November non-farm payroll reports showed 533,000 jobs were lost outside the agricultural sector in November, drastically more...

IN BRIEF: Association seeks action on equities.(Brief article)
December 8, 2008... The Investment Management Association (IMA) last week asked Financial Services Authority (FSA) to tackle problems in London's cash equity market revealed by the collapse of Lehman Brothers. Lehmans' collapse resulted in a large number of...

IN BRIEF: Bank of England rate drops to 2%.(Brief article)
December 8, 2008... The Bank of England cut its base interest rate by one point to 2% last week in line with market expectations. The European Central Bank also cut rates by a larger-than-expected three-quarters of a point, reducing its base rate to 2.5% and...

IN BRIEF: Skandia platform shut to new clients.(Brief article)
December 8, 2008... The Skandia Multifunds platform will close to new business from January 1, 2009 as part of a strategy to simplify Skandia's platform proposition. Top-ups to plans will still be possible via the Multifunds platform and a top-up tool is being...

IN BRIEF: Name change for private equity club.(Brief article)
December 8, 2008... iPEIT, the Initiative for Private Equity Investment Trusts, formed in 2006 to raise understanding of the listed private equity sector, announced last week that it is to change its name to LPEQ (Listed Private Equity), to reflect its expanded...

IN BRIEF: Firm unveils three risk-graded funds.(Brief article)
December 8, 2008... GHC Fund Management has announced the launch of three risk-graded funds called GHC Resilient 4,5 and 6. The funds will operate as Oeics and have combined assets under management in excess #42m. The three funds will join GHC's five Oeics...

Skandia rejigs in wake of volatility.
December 8, 2008... Skandia Investment Group (SIG) has restructured its Alternative Investments fund of funds in response to market volatility. In a move away from the established format of equal weightings between asset classes, the #27m fund increased its...

Firm reveals plan for three traded life products.
December 8, 2008... Managing Partners Limited (MPL) is planning to launch three traded life funds in January. The funds will be managed by Jeremy Leach, the managing director of MPL, and will open up access to previously untapped emerging market...

Home loans surge fuels hopes for recovery.
December 8, 2008... Jonathan Armitage, the head of American large cap equities at Schroders, says mortgage applications in America have hit a 30-year high. This is a sign that a recovery is in sight. Statistics from the American Mortgage Bankers' Association...

IN BRIEF: Paper proposes liquidity overhaul.(Brief article)
December 8, 2008... The Financial Services Authority (FSA) published a consultation paper which proposes an overhaul of the liquidity requirements for banks, building societies and investment firms last week. Measures include a new framework for liquidity risk...

IN BRIEF: Barclays Wealth in Plan issue.(Brief article)
December 8, 2008... Barclays Wealth has launched an issue of its Defined Returns Plan (DRP). DRP Capital Protection is backed by the company's AA-rated parent Barclays Bank. The plan offers full capital protection when held for its full terms and will deliver its...

IN BRIEF: JO Hambro puts funds on platform.(Brief article)
December 8, 2008... JO Hambro Capital Management (JOHCM), a boutique investment management company, has launched Dublin domiciled funds onto the Cofunds platform. Advisers are able to access and use the funds. Eight funds have been added to Cofunds in addition...

Experts differ on outlook for Europe.
December 8, 2008... Britain is likely to be one of the hardest hit of the European economies, according to a report by Jamie Dannhauser, an economist at Lombard Street Research*. In the third quarter of 2008 alone the country suffered a contraction in the...

BlackRock gains A rating amid criticism of agency.
December 8, 2008... Old Broad Street Research (OBSR) gave the BlackRock UK Absolute Alpha Fund an A rating last week, but some in the industry say that the ratings agencies have been too slow in rating absolute return products. The BlackRock fund was launched...

Societe Generale hones onshore fund ranges.
December 8, 2008... Societe Generale Asset Management (SGAM) consolidated its onshore gilt and corporate bond fund ranges into single portfolios at the end of November. The firm also created the SG Continental Europe equity fund by merging its Europe and...

STRATEGY: Might is right in battle to survive.
December 8, 2008... Investors should eschew risky punts in favour of good quality companies with strong market positions and robust balance sheets - not least because recovery is predicted to take years. The global economy has entered a co-ordinated...

TRENDS: Skill, not magic, is source of success.
December 8, 2008... Absolute return funds often quote target returns in terms of the London Interbank Offered Rate but this low beta strategy is risky and good managers only make returns by beating benchmarks. Absolute return investing is not a magical...

Q&A: Global bond fund not shaken by stress test.(Interview)
December 8, 2008... Michael Hasenstab, the manager of the Templeton Global Bond fund, talks to Hannah Smith. Q: How is the portfolio positioned and what changes have you made? A: We have been following three major strategies. Firstly, we have been...

COVER: Classic perils.
December 8, 2008... Policymakers grapple with the effects of the downturn as the twin perils of deflation and inflation threaten global growth. Vanessa Drucker, Fund Strategy's American editor in New York, examines the dilemma. Economists rarely agree on...

Japan's protracted period of deflation.
December 8, 2008... Japan demonstrates the most glaring model of an economy plagued by an entrenched deflation. Since 1995, prices there struggled in negative territory, suffering a further blow in 1997, when the Asian contagion crisis hit Japanese exporters. ...

ANALYSIS: New star anticipates lift from Europe.
December 8, 2008... Headlines predicted doom as "grindingly bad" markets took their toll on performance, but New Star shed underperformers and scrutinised its balance sheet and is poised to rise again. What a tumultuous week for New Star. The 'galaxy' of...

INVESTMENT TRUSTS: Tarnish is temporary on Midas fund.
December 8, 2008... Midas Income & Growth invests in blue chip equities and overseas property, which did not escape the ravages of the downturn - but it will shine again, says the manager, Alan Borrows. Alan Borrows, the manager of the Midas Income & Growth...

AFI: Advisers strap in for downhill run.
December 8, 2008... Panellists' bearish views on Britain, which triggered cuts in domestic equity weightings in the AFI rebalancing, were backed up by depressing business and consumer data last week. Economic data did little to cheer British equity investors...

FoFs: The difference a year makes in Japan.
December 8, 2008... A year ago Japan looked to Toby Ricketts, manager of Margetts' International Strategy fund, to be a no-go area. Now the relative strength of Japanese banks has led him to change that view. Toby Ricketts has started moving back into Japan...

FOCUS: Cazenove's cat laps up the cream.
December 8, 2008... After a quiet start as a demerged business, Cazenove Capital Management is poised to take centre stage with the excellent performance of its Absolute Target fund, writes Tomas Hirst. Since its demerger from JPMorgan Cazenove in December...

Fund Manager's Diary: 27 October to 2 November 2008.
December 8, 2008... Monday My visit to Mumbai begins. Despite its status as one of the most domestically demand-driven stories, India has suffered along with emerging market peers amid forced liquidity selling and a flight to safety. The contrast with my...

COMMENT: Downturn stems from fear and green growth.
December 15, 2008... Daniel Ben-Ami, Editor As the days go by explanations for the economic crisis pile up. Initially the favoured explanation was a combination of greedy bankers and irresponsible borrowers. Others added to the list since include insufficient...

IN BRIEF: Agency suspends funds' AA ratings.(Brief article)
December 15, 2008... Old Broad Street Research (OBSR) suspended the AA ratings of the Old Mutual Japanese Select fund and the Gartmore UK Focus Fund last week. Old Mutual's Japanese Select fund was suspended after it was announced that Leslie Jones is to retire...

Firm unveils fund for British retail market.
December 15, 2008... Somerset Capital Management has launched its first fund for British retail investors, a Global Emerging Markets Oeic. It is run by a team led by Jacob Rees-Mogg and Edward Robertson, ex founders of Lloyd George Management. Rees-Mogg and...

Blue Oar set to launch absolute return.
December 15, 2008... Blue Oar Asset Management plans to add a third fund to its range, an absolute return vehicle that will sit within its Oeic umbrella. The portfolio is likely to be similar to the offshore Blue Oar UK Equity Long Short fund, which is run by...

Liquidity problems halt New Star Africa fund.
December 15, 2008... New Star has suspended trading on its Heart of Africa fund, less than a month after it halted trading on its International Property fund. The Africa fund is managed by Jamie Allsopp. The group has applied for a 28-day freeze on the #29m...

Expect it to be worse, says Woodford.
December 15, 2008... The recession in Britain in 2009 could be much worse than the government has predicted, Neil Woodford, the head of investment at Invesco Perpetual, has warned investors. In a conference call for clients, Woodford forecast that the...

New manager increases mid caps on S&W fund.
December 15, 2008... Mark Pignatelli has turned over 70% of the Smith & Williamson (S&W) European Growth Trust and increased exposure to mid caps since taking over the portfolio in early November. He replaces New Star's Richard Lewis and Annie Stradling, who...

JPM values chance to exploit US recovery.
December 15, 2008... JPMorgan (JPM) has launched a US Equity Income fund to exploit the recovery in the American market, which the group says is imminent. The fund, to be managed by Clare Hart, invests primarily in large and mid-cap value stocks and aims for a...

STRATEGY: Harder lessons in real economics.
December 15, 2008... Policymakers moved to limit the damage from the downturn and with tighter regulation, volatile markets and high commodity prices, there will be no return to pre-crunch conditions. As 2008 draws to a close, the global economy teeters on the...

STATESIDE: Consuming passions still smoulder.
December 15, 2008... Figures belie the public appetite for spending as millions queue for bargains on Black Friday, the well-heeled splash out on entertaining and demand for cosmetic surgery remains undimmed. Stealth splurging While economic data tells...