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Delayed birth of Asia Region Funds Passport Scheme
Asset Management
<p>The Asia Region Funds Passport scheme has been gestating for about five years. Workshops among the thirteen APEC economies (excluding China) were followed by a statement of intent in 2013. Four days ago, finance ministers from seven of the region’s leading nations met at Cebu in the Philippines to announce that its birth was on schedule for early next year.</p> <p>Except, they didn’t. Singapore declined to add its signature because the statement of understanding failed to address the crucial issue of equal taxation, a Monetary Authority of Singapore spokesperson told AsianInvestor today.</p> <p>The passport scheme would allow asset managers from countries within the region access to each other’s retail investor markets through the distribution of their products. According to the APEC Policy Support Unit, it could save the investors $20 billion a year annually in fund management costs, offer higher investment returns at the same or lower degree of risk, and encourage the establishment of locally domiciled funds which could create 170,000 jobs in APEC economies within five years.</p> <p>But, clearly the scheme will be still-born if the tax issue is unresolved. South Korea and Australia, especially, have unequal tax regimes for domestic and overseas fund providers – and basically shut foreign interlopers out.</p> <p>Singapore, with its highly sophisticated fund management industry, would be a likely winner if taxation is neutralized across the region. It’s just as likely that the rest of APEC know this – and are fearful.<br /> Photo: Chris Guillebeau</p>
Inside the brain of an investing genius – Peter Lynch
Asset Management
<p>Those readers who have frequented my Investing Caffeine site are familiar with the numerous profiles on professional investors of both current and prior periods (See Profiles). Many of the individuals described have a tremendous track record of success, while others have a tremendous ability of making outrageous forecasts. I have covered both. Regardless, much can be learned from the successes and failures by mirroring the behavior of the greats – like modeling your golf swing after Tiger Woods (O.K., since Tiger is out of favor right now, let’s say Phil Mickelson). My investment swing borrows techniques and tips from many great investors, but Peter Lynch (ex-Fidelity fund manager), probably more than any icon, has had the most influence on my investing philosophy and career as any investor. His breadth of knowledge and versatility across styles has allowed him to compile a record that few, if any, could match – outside perhaps the great Warren Buffett.</p> <p>Consider that Lynch’s Magellan fund averaged +29% per year from 1977 – 1990 (almost doubling the return of the S&amp;P 500 index for that period). In 1977, the obscure Magellan Fund started with about $20 million, and by his retirement the fund grew to approximately $14 billion (700x’s larger). Cynics believed that Magellan was too big to adequately perform at $1, $2, $3, $5 and then $10 billion, but Lynch ultimately silenced the critics. Despite the fund’s gargantuan size, over the final five years of Lynch’s tenure, Magellan  outperformed 99.5% of all other funds, according to Barron’s. How did Magellan investors fare in the period under Lynch’s watch? A $10,000 investment initiated when he took the helm would have grown to roughly $280,000 (+2,700%) by the day he retired. Not too shabby.</p> <p>Background </p> <p>Lynch graduated from Boston College in 1965 and earned a Master of Business Administration from the Wharton School of the University of Pennsylvania in 1968.  Like the previously mentioned Warren Buffett, Peter Lynch shared his knowledge with the investing masses through his writings, including his two seminal books One Up on Wall Street and Beating the Street. Subsequently, Lynch authored Learn to Earn, a book targeted at younger, novice investors. Regardless, the ideas and lessons from his writings, including contributing author to Worth magazine, are still transferrable to investors across a broad spectrum of skill levels, even today.</p> <p>The Lessons of Lynch</p> <p>Although Lynch has left me with enough financially rich content to write a full-blown textbook, I will limit the meat of this article to lessons and quotations coming directly from the horse’s mouth. Here is a selective list of gems Lynch has shared with investors over the years:</p> <p>Buy within Your Comfort Zone: Lynch simply urges investors to “Buy what you know.” In similar fashion to Warren Buffett, who stuck to investing in stocks within his “circle of competence,” Lynch focused on investments he understood or on industries he felt he had an edge over others. Perhaps if investors would have heeded this advice, the leveraged, toxic derivative debacle occurring over previous years could have been avoided.</p> <p>Do Your Homework</p>
UK Pimco execs, CEO got 30% pay cut in 2014
Asset Management
<p>Pimco's U.K. directors had their pay slashed by 30% in 2014 in the wake of Bill Gross' departure last fall, reports the Financial Times.</p> <p>Pimco has been bleeding assets since before Gross left for Janus Capital last September. Its London unit had a 11% decrease in assets under management last year, falling to £120.8 billion, after the flagship Total Return bond fund failed to produce strong returns and the firm lost both its CEO and founder within a year.</p> <p>In 2014, Pimco's nine U.K. directors were paid £36.5 million, compared to £48.6 million total in 2013. The highest paid director saw his pay cut 57% from £22 million to £15.7 million. Pimco's U.K. directors include William Benz, managing director in London, and Douglas Hodge, CEO since Mohamed El-Erian's sudden resignation in early 2014.<br /> Photo: Images Money<br /> &nbsp;</p>
Earnings surprises…are you kidding me?
Asset Management
In the game called the quarterly earnings season, positive surprises have become so commonplace among US large-cap stocks that they’ve nearly lost all meaning. We wonder why investors keep playing along. The media are an integral part of the entertainment, cheering or booing companies from the sidelines as if earnings season were a sporting event. This incessant focus further feeds
A bull on China
Asset Management
<p>While high-profile hedge fund managers such as Ray Dalio go full-on negative on the region, Nikko Asset Management Asia’s Peter Sartori says that China, as well as Asia’s emerging markets, will continue to beat its first world peers.</p> <p>According to the Straits Times, Sartori argues that there’s still a compelling case for a “long-term bull market” in the region, despite all its recent routs and regulatory missteps:<br /> “The pace of initiatives appears to be increasing in China, particularly in the state-owned enterprises and financial services space…While naysayers argue that the attempted shift from an investment-led economy to a consumption-led economy will result in a major dislocation in financial markets, we believe that the government has enough tools and capital at its disposal to make the transition successfully.”<br /> He also adds that the nation’s highly-scrutinized GDP doesn’t really mean anything to the equity market, saying:<br /> “Does GDP matter from the stock market point of view? No. There's no strong correlation between economic growth and stock market returns. In fact, it's the opposite. When Japan and Korea's economies were growing, their stock markets' returns were lacklustre. When growth slowed in those countries, their markets went through a long and sustained bull market. That's what's under way now in China.”<br /> While he does have a point, low growth in the new and open China seems to be uncharted territory for most, and the fact that Beijing’s been behaving like a riddle wrapped in a mystery within an enigma doesn’t help his argument either.</p> <p>That said, Sartori’s also betting on India in the medium term, asserting that all the nation’s recent troubles “provide scope for looser fiscal and monetary policies.”</p> <p>India bulls are sure to love that.<br /> Photo: groucho</p>
S&P cuts Brazil to junk: what it means
Asset Management
<p> S&amp;P cut Brazil's sovereign credit rating to BB+.<br /> The Bovespa index fell about 0.6 percent on Thursday. The real tumbled more than 1.75 percent.<br /> Although a downgrade was expected, the timing of the demotion was unexpected.</p> <p>Standard &amp; Poor's has downgraded Brazil’s sovereign credit rating to BB+. While the move came as no surprise, the timing did catch many analysts and investors off guard, as the demotion was expected for later this year.</p> <p>In addition, the firm maintained the outlook on the rating at negative. This also surprised most analysts.</p> <p>Read more at Benzinga, here.<br /> Photo: Sam valadi</p>
A day in the life of an asset management consultant: Greek crisis and ‘healthy’ stress levels
Asset Management
<p>What is it like to work a London office of one of the world’s biggest advisory firms? A FinBuzz guest writer shares her daily working routine. </p> <p>It may look like I live in a fairy tale, but I worked hard to get it and don’t plan on slowing down any time soon. I have a degree from an American business school and moved to London right after studies. Recently I changed jobs and am very content.</p> <p>Three months ago I started a position with a financial consultancy that works with corporate and central banks in Europe, as well as insurance companies.</p> <p>8:45 AM</p> <p>I wake up, brush my teeth, and leave the house. My commute to work only takes one minute. Literally. I live and work in the West End and I am very lucky that my office of 40 employees recently moved to the area. When I knew that the office was moving, I looked for a place in the same area.</p> <p>9:00 AM</p> <p>When I get to my desk, I start the day by making myself a cup of coffee and reading all the news in FT, Economist and other major publications, looking not only for general developments, but for news in my area of expertise as well. We work a lot with EU banks, including lots of Greek projects. So every single day I read articles on the front page that I later use in my work. It is an interesting feeling, because you have to adapt and change your strategies every day, depending on how things develop in Greece. I feel that what I am doing at the moment is at the epicentre of the financial world.</p> <p>9:30 AM</p> <p>We start gathering for a team meeting. We work in teams that are constantly changing, depending on projects. The minimum time you spend on one team is three months, and the maximum – one year.</p> <p>Most of people in the office are from Europe, especially France and Greece. But we also have Italians, Germans, Chinese, Indians… everyone.</p> <p>I like working in an international team like this, because we have local people who know culture and the language of Greece in our case, but we also have contributions from the other members, who have very fresh and diverse views.</p> <p>All of us are global citizens: people from Greece who work here are not very typical Greeks, as well as people from Italy are not very typical Italians. They are more global Greeks, global Italians, etc. It seems as if we are all on the same wavelength, but each of us also contributes his/her own perks.</p> <p>So we discuss plans for the day as a team. Usually we will have a conference call with a client and decide who prepares what.</p> <p>I worked in a classic investment bank before. The business model there is traditional and you are not expected to develop quickly. All the projects that we do here are new and unique, no one has worked on anything identical before, so no one knows how exactly we approach it; there is no procedure. That’s why we feel like we are all in the same boat: senior members and people like me, who joined recently, are all welcome to put something on the table, to join the discussion, to share views and ideas. This is definitely my favourite part of everything I do workwise – discussing ideas with colleagues, brainstorming, finding a new way to do things.</p> <p>11:00 AM</p> <p>Conference call with a client. Last week I went on a business trip to Greece. I love meeting clients, because it effective to meet personally to discuss and agree on an action plan. So the conference ca</p>
NexAmerica People Moves: Goldman loses, replaces insurance lead; JPMorgan hires portfolio manager
Asset Management
<p>Hartford steals Goldman insurance lead. Hartford Investment Management Company, subsidiary of the Hartford insurance company, has hired John Melvin as head of portfolio management, effective September 14. Melvin most recently worked at Goldman Sachs Asset Management as CIO for the global insurance asset management business. He also worked as head of insurance fixed income in the Americas for Deutsche Insurance Asset Management.</p> <p>Goldman hires for insurance team. GSAM has hired Matthew Armas as global head of insurance fixed income for the firm in New York, replacing Melvin. Amas has worked as a senior portfolio manager for GSAM in London for more than 10 years. Insurance Asset Risk</p> <p>JPMorgan appoints emerging markets portfolio manager. Diana Amoa has joined JPMorgan Asset Management as a senior portfolio manager on the local currency emerging markets debt team based in London. Amoa most recently worked at UBS AG. Celina Merrill has also joined the firm as senior credit analyst in the corporate debt emerging markets team. The New York-based Merrill previously worked for Van Eck Global. Reuters</p> <p>Deutsche names new institutional head for MENA. Albert Trinkl has been named head of institutional asset management in MENA for Deutsche Asset &amp; Wealth Management. He will be based in Dubai. Trinkl most recently worked for Lingohr &amp; Parther Asset Management as head of institutional clients in the Middle East, Africa &amp; Australia. CPI Financial </p> <p>Woodford booms with six new hires. Woodford Investment Management has hired Lucinda Crabtree, Richard Lockington, and Harry Raikes as investment analysts. Mohammad Sohail, James Coats, and Dominic Eccles have also joined the firm on the operations team. Woodford was established in 2014 by Neil Woodford, formerly of Invesco Perpetual. Yahoo Finance<br /> Photo: ©iStock.com/ooyoo<br /> &nbsp;</p>
StanChart, Manulife team up to dominate HK’s pension fund arena
Asset Management
<p>HSBC may be the undisputed champ in Hong Kong’s pension fund arena, but perennial runner-up Manulife has been busy looking for ways to bridge the gap – and fast.</p> <p>According to Asia Asset Management, Manulife has just entered a 15-year partnership with Standard Chartered Bank – Hong Kong’s 12th largest Mandatory Provident Fund (MPF) provider – to exclusively distribute the latter’s MPF products in the territory.</p> <p>The deal reportedly cost Manulife 400 million big ones, but in return, it gets to boost its 18.8% share of the region’s MPF business closer to HSBC’s 23%. Not to mention a large chunk of the nation’s Occupation Retirement Schemes Ordinance (ORSO) traffic and a big piece of StanChart’s investment management ops as well.</p> <p>Regarding the partnership, Manulife Asia CEO Roy Gori had this to say:<br /> “This partnership between two of Hong Kong’s top financial services companies will enable us to increase value to customers and deliver the benefits of economies of scale.</p> <p>The MPF industry in Hong Kong is experiencing continued consolidation, and Manulife is seen as a partner of choice. Manulife is a major player in the pension business in Hong Kong, Canada, the United States, and Indonesia. This deal complements Manulife’s recent acquisitions in Canada and the United States and accelerates our strategy to grow our Asia and wealth management businesses.”<br /> Photo: Kirill Ξ/Κ Voloshin</p>
People Moves: Aberdeen hires senior manager in Korea; Monument hires three in HK
Asset Management
<p>Aberdeen adds senior manager in Seoul. Dong-Ki Kim, Russell Investments Korea’s former business development associate director, has joined Aberdeen Asset Management as senior manager for its Seoul office. This will be a new position for the firm as it looks to expand its operations within Korea. Prior to his tenure at Russell Investments, Kim spent several years at Hanwha Life Insurance, where he managed investments from mezzanine debt to properties to hedge funds. He will be reporting to Alex Kim, the asset manager's chief representative in the region. Asia Asset Management </p> <p>Monument Group makes three HK hires. Albert Jun, a former VP and Fund Placement Division senior at NH Investment &amp; Securities Korea, will be joining the Monument Group in Hong Kong as director. He will be in charge of marketing, with a focus on Korean as well as other Asian investors. Also joining the firm are Sabrina Meng, a four-year veteran of Emerald Hill Capital Partners, who’ll be a senior associate within Monument’s analytics team, and Kris Ho, who’ll be handling the firm’s various client service and office management needs as its operations manager. She joins the fund placement agent from MVision, where she held a similar role the past five years. FINalternatives</p> <p>For Capital Markets moves, click here.<br /> Photo: Luke Ma</p>