Fund Strategy articles from October 2008

Fund Strategy archives from October 2008

COMMENT: Panic reaction causes widespread damage.
October 6, 2008... Daniel Ben-Ami, Editor Bird flu, hurricanes, teenage stabbings and global warming. At first sight they would appear to bear no relation to the financial turmoil but there is an underlying connection. The reaction to all of them is...

Henderson raises spectre of job cuts.
October 6, 2008... Henderson Global Investors has announced it is reviewing its business as it becomes the latest group to try to cut costs during the market turmoil. In February the group announced a wave of redundancies and cost cutting, but owing to...

Uncertainty forces groups to mothball fund plans.
October 6, 2008... BlackRock has shelved plans for a resources fund while Resolution Asset Management is expecting a delay in launching its Argonaut European Absolute Return fund, in the wake of the events of the past few weeks. Gartmore, meanwhile, has...

IN BRIEF: Bad month for jobs losses in US.(Brief article)
October 6, 2008... Nonfarm payroll employment fell by 159,000 in America in September making it the worst month in five years as jobs were lost from construction, manufacturing, and retail trade. Unemployment remained at 6.1% in September, according to the Bureau...

IN BRIEF: Group recruits investment chief.(Brief article)
October 6, 2008... Standard Life Investments has hired Andrew Millington as investment director, UK equities. Millington previously worked at Baillie Gifford where he managed the #12.9m Baillie Gifford Income fund, since November 2007. Patrick Edwardson took over...

JPM absolute return fund to go retail.
October 6, 2008... JP Morgan (JPM) will become the latest group to add an absolute return fund to its retail range, and like Cazenove before it, the portfolio already has a track record of several years. The group wants to make its E3billion (#2.35 billion)...

Lazard widens scope of UK Income portfolio.
October 6, 2008... The #117m Lazard UK Income fund has changed its investment objective and its manager. From last week it can invest in a broader range of securities, including up to 20% in overseas equities and other securities such as corporate bonds and...

Henderson Ucits III switch approved.
October 6, 2008... The #109m Henderson UK Opportunities fund has converted to Ucits III status. The move, approved by shareholders at an extraordinary general meeting, means that Mileen Rash, manager of the fund, can use derivatives as well as other instruments...

Artemis put up for sale by new owner Fortis.
October 6, 2008... Artemis Asset Management was dragged unwillingly into the spotlight last week as Fortis, its new owner, prepared to look for a buyer immediately on completing the deal. Fortis's purchase of ABN Amro's Dutch business for E24 billion (#18.8...

IN BRIEF: Fitch steps up monitoring.(Brief article)
October 6, 2008... Fitch Ratings has heightened its monitoring of liquidity management at fund of hedge fund (FoHF) managers. In light of increased redemption activity in the fund of hedge fund industry Fitch is keeping a close surveillance of rated FoHF...

IN BRIEF: ECB president hints at rate cut.(Brief article)
October 6, 2008... Jean-Claude Trichet, president of the European Central Bank (ECB), hinted at the possibility of a rate cut later in the year. The benchmark ECB lending rate remained at 4.25% but Trichet said there had been discussions about a possible rate...

IN BRIEF: Invesco fills key global equity role.(Brief article)
October 6, 2008... Invesco Perpetual has appointed Paul Boyne as fund manager within its global equities team in Henley. He will report to Bob Yerbury, the group's chief investment officer. Boyne, a chartered accountant, started his investment career with Morgan...

IN BRIEF: Three appointed at Resolution.(Brief article)
October 6, 2008... Resolution Asset Management has recruited three people to its marketing team in preparation for its rebranding to Ignis next month. All three come from New Star Asset Management. Ben Robinson will be head of public relations, Darrel...

Trusts at risk of All-Share exclusion.
October 6, 2008... Several investment trusts face exclusion from the FTSE All-Share index under new liquidity rules, according to Wins Research. Of the 21 trusts "at risk", Wins calculates that 12 may be ejected at the annual FTSE index review in December on...

Investors making increasingly cautious choices.
October 6, 2008... According to the Investment Management Association's (IMA) investment fund statistics for August, the Absolute Return sector was again the most popular UK domiciled net retail sector, with inflows of #150.3m. In July net retail inflows were...

Premier revamp adds pan-Europe to portfolio.
October 6, 2008... The #9m Premier Dividend fund has changed its name, strategy and investment universe following the arrival of its new manager, Chris Wright, last month. As reported in Fund Strategy on September 1, Wright joined Premier from Thames River,...

ANALYSIS: Continued growth belies hysteria over global depression.
October 6, 2008... Given the pervasive sense of doom about the global economy at present it is worth taking a step back to work out what is really happening. In all the hysteria about plunging stockmarkets and failing financial institutions it is easy to lose...

ANALYSIS: Caution and wise buys put Japan in recovery position.
October 6, 2008... Japan has often failed to live up to expectations and as fund managers again begin to get excited about the world's second largest economy the question remains whether this time will be another false dawn. John Alkire, the chief...

STRATEGY: Bad label fails to mar golden future.
October 6, 2008... India's GDP growth moderates putting it at the bottom of the emerging markets table - however, investors can find good value as Indian equity valuations fall below their 10-year average. India holds the unenviable title of being the worst...

TRENDS: Hiding under a quilt after the party.
October 6, 2008... Investors seeking comfort at the end of a raucous party can find it in gilts, a sector that has defied the noise that hit other assets and kept its position as top performer over one year to September. At the time of writing, the American...

Q&A: Market widens chance of high yields for Aviva.(Interview)
October 6, 2008... Josh Rank, the lead manager of the Aviva Investors Global High Yield Bond fund, talks to Frances Hughes. Q: Can you explain why you say now is a good time to enter the high- yield bond market? A: These spread levels have only featured...

TOUCH-AND-GO: Stable condition.
October 6, 2008... The technology sector contracted when huge losses and lack of interest prompted groups to close or merge funds. But the asset class has outperformed most others over the past year so is the ailing sector set to recover? Adam Lewis...

ANALYSIS: Benefits of a bearish view of banks.
October 6, 2008... Jim Leaviss predicted gloom for banks and kept his M&G fixed interest funds out of them. His funds have stayed buoyant while others have plunged. Now his worries are focused elsewhere. It has never been a better time to be a doomster....

INVESTMENT TRUSTS: Optimist stocks up for better times.
October 6, 2008... James Henderson, who says "mea culpa" over prematurely increasing the Law Debenture trust's equity exposure, is investing in companies that he expects to share in the global growth to come. Despite widespread stockmarket pessimism, James...

AFI: Lack of faith exacts its negative toll.
October 6, 2008... The turmoil in the global markets hit all three indices with the Aggressive index - and its exposure to riskier plays - suffering the biggest fall as the crisis of confidence continues to widen. As the tumultuous past few weeks have...

Fund of funds performance data.
October 6, 2008... CF Arch cru Income heads both the one and three-year Cautious Managed performance tables (funds of funds only.) The #30m fund fared particularly well, in relative terms, over the shorter time-frame. According to data from Morningstar, the...

FOCUS: Bespoke fittings for the fuller figure.
October 6, 2008... Morgan Stanley's asset management arm, MSIM, is pushing to gain a bigger share of Britain's IFA market, offering clients a range of non- traditional products, writes Neal Underwood. Virtually everyone will have heard of Morgan Stanley, one...

Fund Manager's Diary: 14-20 September 2008.
October 6, 2008... Sunday Go out for a nice lunch with the family and have a lovely day. Go to bed then get a phone call from the managing director and head of fixed income sales at Goldman Sachs asking if I have heard the news. All their London traders are at...

COMMENT: Growth story bolsters unfashionable theory.
October 13, 2008... Adam Lewis, deputy editor Contrasting views of the prospects for the global markets and the world economy provided the backdrop for one of the four sessions of Fund Strategy's Investment Summit, which was held in Dubai last week (see...

L&G awaits go-ahead for conversion.
October 13, 2008... L&G will convert its #55m Far Eastern Trust to an Asian equity income fund, subject to shareholder approval at an extraordinary general meeting (EGM) next week. If approved, the transition is expected to be completed by November 10. The...

Bank rescue raises fears for UK equity income.
October 13, 2008... The government's #50 billion recapitalisation scheme of British banks could have adverse effects on UK equity income funds. While the funds industry last week welcomed the government's fiscal package, which is being termed "part...

Gartmore shelves plan for absolute return.
October 13, 2008... Gartmore has postponed the launch of its European Absolute Return fund, citing market volatility and changes in the regulatory environment as the main factors why. Last week Fund Strategy revealed the group had pushed back the start of...

IN BRIEF: Hambro chief steps down after 10 years.(Brief article)
October 13, 2008... Nichola Pease will step down from her role as chief executive officer (CEO) of JO Hambro Capital Management. Pease, who becomes deputy chairman after 10 years as CEO, retains an equity stake in the business and remains involved in the...

IN BRIEF: Axa discounts bond fund charge.(Brief article)
October 13, 2008... Axa Investment Managers is applying a discount on the initial charge for the Axa Sterling Corporate Bond fund, managed by Theodora Zemek, global head of fixed income. The initial charge, normally 4%, is reduced to 3% on lump sum investments...

IN BRIEF: Resolution fills alternatives role.(Brief article)
October 13, 2008... Resolution Asset Management has appointed Tim Sweeting to the new position of head of alternatives. Sweeting has more than 20 years' experience in financial markets. He joins from Credit Suisse, where he was managing director, head of absolute...

IN BRIEF: Arch buys into Middle East firm.(Brief article)
October 13, 2008... Arch Financial Products, part of Arch Group Investments, has taken a 48% stake in Financial Partners Group, an IFA firm in the Middle East and Far East. The investment will boost Arch's presence in the regions and provide a platform for its...

F&C fund employs hedge techniques.
October 13, 2008... F&C has launched an absolute return fund that aims for a return of 2-4% over short-term money market rates, net of all costs. The fund invests in a portfolio of derivatives focused on developed markets, predominantly Europe and Amer- ica,...

Flight to safety sets gold price on six-day surge.
October 13, 2008... Investors worried about the safety of banks are increasingly turning to gold. According to ETF Securities, physically backed gold exchange traded commodities (ETCs) are the most traded ETCs year-to-date and now total $4.5 billion (#2.63...

Ban on shorting leaves retail funds unaffected.
October 13, 2008... Retail fund managers are largely unaffected by the ban on short selling in financials stocks, according to a report by Standard & Poor's (S&P). The study, published last week, examines the impact of the ban on several absolute return and...

IN BRIEF: Alliance Trust signs sales head.(Brief article)
October 13, 2008... Alliance Trust Asset Management has appointed Tom Pearson as director and head of UK retail sales. Pearson, currently director, financial institutions group, at Jupiter, will start in his new role with Alliance Trust this week, reporting to...

IN BRIEF: Morningstar buys data provider.(Brief article)
October 13, 2008... Morningstar has acquired Fundamental Data, a provider of data on closed- ended funds in Britain, for #11m, subject to post-closing adjustments. Fundamental Data covers all British and American domiciled closed-ended funds as well as offshore...

CORRECTION: Henderson UK.(Correction notice)
October 13, 2008... Last week's news report on the Henderson UK Opportunities fund (page 9) mistakenly stated that the fund had recently converted to Ucits III. The fund was in fact already structured as a Ucits III product. It was the use of extended powers...

Speakers clash over global prospects.
October 13, 2008... In a week of government bail-outs and global interest rate cuts, contrasting views of prospects for the global markets and the world economy provided the backdrop for the third session of the Fund Strategy Investment Summit in Dubai. Andy...

Former IMS leads sales effort as FundQuest UK.
October 13, 2008... IMS has been rebranded FundQuest UK, the multi-management business of BNP Paribas Investment Partners, the group that acquired it in April. FundQuest activities in Europe now comprise FundQuest Paris, FundQuest UK and Primonial...

UK 'to be worst hit' as IMF slashes forecasts.
October 13, 2008... The International Monetary Fund (IMF) has slashed its forecast for GDP growth in the main advanced economies in 2009, from 1.4% to just 0.5%. In its quarterly World Economic Outlook, published last week, the IMF cut its projected...

IN BRIEF: Central banks cut interest rates.(Brief article)
October 13, 2008... Six central banks cut their interest rates by half a percentage point last Wednesday to ease global monetary conditions. The central banks of America, Britain, Canada, the eurozone, Sweden and Switzerland also released a joint statement with...

IN BRIEF: Midas appoints assistant manager.(Brief article)
October 13, 2008... Midas Capital Partners has appointed Simon Callow as assistant manager of the Midas Income & Growth Trust. Alan Borrows will remain as lead manager. Callow, who joined Midas Capital in 2005, has worked with Alan Borrows, Simon Edwards and...

IN BRIEF: F&C links up with Hua Xia Bank.(Brief article)
October 13, 2008... F&C Asset Management has signed a memorandum of understanding with Hua Xia Bank agreeing in principle to form a joint venture fund management company in China. The move is a key step in F&C's plan to build a presence in Asia following the...

Stability bodes well for Gulf States.
October 13, 2008... Growing populations and infrastructure spending could allow the Gulf States to take full advantage of the oil boom to boost the long-term prospects of their economies. Unlike the earlier boom and bust model associated with oil price...

Green obsession stymies progress, says expert.
October 13, 2008... The West is set to lose further ground to the East as innovation in industry shifts to emerging economies, said James Woudhuysen, professor of forecasting and innovation at De Montfort University. Speaking at Fund Strategy's Investment...

Speaker sounds alarm about risky strategies.
October 13, 2008... Andrew Clare, chairman of Fathom Financial Consulting and head of asset management at the Cass Business School, said the rapid growth in demand for absolute return strategies could mean investors ignore some of the associated risk. ...

STATESIDE: Claws out for fat cats still feasting.
October 13, 2008... Raising the guillotine Many of Wall Street's top brass inhabit Gatsby-style palazzos in Greenwich, Connecticut. Forget about the Thames Valley; nowhere in Britain compares. Imaging clustering some of the stateliest homes in England in one...

STRATEGY: Bite hardens despite hopeful flavour.
October 13, 2008... The outlook for the global economy worsens as confidence in the financial markets continues to dwindle and credit tightens. But falls in commodity prices will boost consumers' incomes. Over the past three months the outlook for global...

TRENDS: Small but perfectly formed over time.
October 13, 2008... The downturn has hit smaller company equities hard in the past six months but the picture is different over the longer term - figures reveal the sector consistently outperforms large caps. UK Smaller Companies funds are a core component of...

Q&A: Group banks on energy of emerging economies.(Interview)
October 13, 2008... Mark Mobius, portfolio manager of the Templeton Emerging Markets fund, talks to Tomas Hirst. Q: Do you think the argument for decoupling holds any weight in light of the dramatic falls in the stockmarkets of emerging economies? A: I...

LEAPS AND BOUNDS: In the swim.
October 13, 2008... Interest in emerging markets plunged as investor confidence nosedived. But steady growth and a home bias towards domestic markets is bringing the trajectory of emerging economies in line with those of developed countries. Abigail Montrose...

LEAPS AND BOUNDS: What the fund managers say.
October 13, 2008... Stockmarkets in emerging markets have been highly volatile. We asked three fund managers what opportunities this has created for them. Alex Ingham of Aviva Investors "We have made some changes but not a huge amount because firstly,...

ANALYSIS: Low position fails to dent optimism.
October 13, 2008... Stephen Snowden, the manager of Old Mutual Corporate Bond, is sanguine about its position at the bottom of the sector and is optimistic about the opportunities that accompany the volatility. When a fund falls to rock bottom in the...

INVESTMENT TRUSTS: Trust shares in long-term prosperity.
October 13, 2008... The JP Morgan Indian investment trust's share price rocketed more than 286% over five years as the country's GDP soared - so short-term dips in performance do not worry the managers. Despite slumps in emerging markets the board of the JP...

AFI: Flexibility the key as caution reigns.
October 13, 2008... "I don't think people can see six weeks ahead, let alone six months" - one expert's explanation for why AFI panellists are tending to increase levels of caution without abandoning aggression. Are the AFI panellists also planning to...

FoFs: SVM finds opportunity amid turmoil.
October 13, 2008... Donald Robertson, the manager of SVM Global Opportunities, sits tight in the face of "irrational" markets and finds value in trusts investing in property in China, eastern Europe and Japan. Donald Robertson, co-manager of SVM's #60m...

FOCUS: Aberdeen builds on strength in depth.
October 13, 2008... Far from its near-collapse after the split-cap debacle, Aberdeen Asset Management has gained balance from its acquisitions and is profiting from client relationships, writes Neal Underwood. Aberdeen Asset Management is celebrating its...

Fund Manager's Diary: 22-28 September 2008.
October 13, 2008... Monday The alarm rings as usual at 5.30am. Wonder what the week will bring as I scamper down to Surbiton station, thankful for the major rally in equity markets on Friday. Interesting meeting with an asset management house, who say...

COMMENT: Revamped tool offers high quality and depth.(Website overview)
October 20, 2008... Daniel Ben-Ami, Editor Last week saw the launch of Fund Strategy's revamped website. It is designed to be used as a research tool rather than simply an online version of the magazine. The new website should make it easier to do...

Demand for group's financial portfolio.
October 20, 2008... At a time when banks worldwide are being recapitalised, a fund management group has decided to launch a specialist financial fund, which it says will target undervalued shares. Dominion Fund Management, a Guernsey-based group, launched the...

Fund flows take a turn for the better in Europe.
October 20, 2008... Fund flows to European equity funds turned positive in August despite risk aversion and bearish sentiment among investors, according to figures from Lipper Feri. However, after weeks of rapid falls across global stockmarkets the positive mood...

New manager to trim Omam fund's holdings.
October 20, 2008... Richard Watts, the deputy manager of the #797m Old Mutual UK Select Mid Cap fund since July 2006, will reduce the portfolio's holdings when he takes over as lead manager in January. As reported in Fund Strategy (May 5), Ashton Bradbury is...

IN BRIEF: Pair link up to launch fund firm.(Brief article)
October 20, 2008... Spike Hughes, formerly of Skandia and Hargreaves Lansdown, has joined up with James Caan, the chief executive officer of Hamilton Bradshaw, a private equity house, to launch Insynergy Investment Management. Insynergy will aim to launch a...

IN BRIEF: Prudential set to unveil fund range.(Brief article)
October 20, 2008... Prudential last week announced the launch of the guided architecture extended fund range, PruSelect. The extended fund range is launching both on and offshore and across different tax wrappers, being made available across the following...

IN BRIEF: Norwich Union changes tack.(Brief article)
October 20, 2008... Norwich Union has reverted to valuing its property funds on a twice- monthly basis. The funds this applies to are the Norwich Property trust, Norwich Property Investment fund and Norwich Union Linked Life Property fund. More frequent valuations...

IN BRIEF: Skandia plans two more specialists.(Brief article)
October 20, 2008... Skandia Investment Group announced plans to add two more specialist funds to the three America funds set to be launched this month. The funds are the Skandia US Value fund, managed by Sheldon Lieberman at Hotchkis and Wiley Capital Management,...

Fund managers see equities as cheap.
October 20, 2008... The highest proportion of global fund managers in over a decade - a net 43% - see equities as undervalued, according to the latest monthly survey from Merrill Lynch. This suggests all they need is a catalyst to put their cash to work. An...

Multi-manager head leaves after sabbatical.
October 20, 2008... Katy Gladstone, a co-head of Henderson Global Investors' multi-manager range, has left her post after a five-month sabbatical. She was to return last month, but Henderson has confirmed that she will not be coming back. Gladstone joined...

Japan fund managers turn bullish on equities.
October 20, 2008... Japan fund managers are upbeat on the outlook for equities despite poor returns this year, according to Standard & Poor's (S&P). In its Japan sector update, S&P found that managers are positive on valuations and Japan's limited exposure to...

IN BRIEF: Impax appoints chief operator.(Brief article)
October 20, 2008... Impax Group has announced the appointment of Charlie Ridge as chief operating officer. He will be responsible for finance, operations, compliance and administration. Before joining Impax he was a managing director within the finance division of...

IN BRIEF: Jupiter managers top Alpha league.(Brief article)
October 20, 2008... Jupiter was awarded top ranking of 40 British managers in the Alpha League Table. EDHEC's final alpha scoring system combines outperformance with the frequency of that outperformance across a fund range. Jupiter achieved an alpha score of...

IN BRIEF: Paul Krugman wins Nobel prize.(Brief article)
October 20, 2008... Paul Krugman has won this year's Nobel economics prize. Krugman, professor of economics and international affairs at Princeton University and a columnist for the New York Times, was awarded the $1.4m (#810,000) for his contribution to the...

Exports threatened as dollar rallies.
October 20, 2008... A weak dollar has coincided with a narrowing American trade deficit but relying on exports to salvage the economy may prove challenging. With the dollar having fallen 24% against the euro over the five years to August, there were signs...

Board votes to blitz F&C fund to repay investors.
October 20, 2008... The board of the F&C Event Driven fund of hedge funds has proposed liquidating the portfolio to repay investors. The decision was prompted by investors seeking to exit the #50m fund, which has lost 17.76% so far this year and has had only...

Manager slams 'out of touch' central banks.
October 20, 2008... Mistakes made by central bankers have led to broken bond markets, according to Nick Gartside, the manager of the Schroder Strategic Bond fund. He told the group's investment conference last week that decisive action from both the...

ANALYSIS: Economists clash over how correction became crisis.
October 20, 2008... After much political wrangling and sleepless nights for Hank Paulson, the American Treasury secretary, the bail-out package designed to reassure investors and bring confidence back into the market was unveiled last week. The $250 billion...

ANALYSIS: Mixed reaction as some banks bow to 'no dividends' rule.
October 20, 2008... Equity income fund managers have given a mixed response to the inability of certain banks to pay dividends to shareholders. Last week Fund Strategy reported that several British banks were considering participating in the government's...

STRATEGY: Banks' central role critical to growth.
October 20, 2008... Many commentators blame "greedy" banks for the global financial crisis and argue that tighter controls are needed - but faith in their vital role in economic growth should be restored. Rightly or wrongly the world is blaming "greedy"...

TRENDS: Positive signs point to new sunrise.
October 20, 2008... Japan will prosper from its neighbours' growth and, with its pared banking sector, the investment world has already been through the worst pain, so good valuations cannot be ignored for long. When I last reviewed those funds that give...