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You’ll certainly be… something.
According to BofAML’s monthly asking questions of global fund managers extravaganza anyway. Its conclusion is the new “pain trade” is “short dollar”:
From BofAML’s monthly global fund manager survey, which, by the way, says your autumn pain trades include “Recession-like” allocations to EM (all-time low)…
Some charts from BofAML’s August fund manager survey which suggests you buy those assets which have been hit by “QE crashes”. Simples.
EM equity exposure falling to its lowest level since Nov’01:
Being a traditional investor sucks, doesn’t it? You give your money to a fund manager, they charge fees and half the time don’t even outperform benchmark indexes.
Being a traditional equity fund manager sucks too. Investors give you their money, expecting you to find a stack of alpha — but at the same time they’re insisting your portfolio allocations don’t deviate TOO much from benchmarks, and getting antsy if your returns fall below trend. Read more
Financial advisers have threatened to pull millions of pounds out of Standard Life Investments after the provider took the unusual step of raising fees on some of its funds, bucking the trend for fund managers to cut headline costs for investors. The FT reports in an e-mail to financial advisers, SLI said that fees on seven retail funds and two institutional funds would rise from November 2011. Investors in the funds will not be informed in writing until next week. Two of SLI’s most popular products, the UK Smaller Companies and Global Equity Unconstrained funds, will see annual charges rise from 1.5 to 1.6 per cent, making them more expensive than many peers.
And so… the rotation out of EM equities into DM equities goes on.
Data from Citigroup: Read more
And the overwhelming theme of the latest BofA Merrill Lynch fund managers survey is…
Complacency. Read more
The Financial Services Authority (FSA) has fined Barclays Bank plc (Barclays) £7.7 million for failures in relation to the sale of two funds. Barclays will contact customers and pay redress where appropriate…
Between July 2006 and November 2008 Barclays sold Aviva’s Global Balanced Income Fund (the Balanced Fund) and Global Cautious Income Fund (the Cautious Fund) to 12,331 people with investments totalling £692 million. Read more
Asia is drawing a growing number of Swiss wealth managers as traditional business from mature European markets stagnates or declines, notes the FT. Strong economic growth and rising incomes in key Asian countries have created a new customer base for foreign fund managers. At the same time, in Europe, bankers fear that recent planned tax deals between Switzerland and the UK and Germany will further erode traditional business from within the region.
Active fund managers outperform in many circumstances, including most bull markets, a study of 30 years of performance for $7,000bn worth of US mutual funds has found, reports the FT. The study by FundQuest found that after adjusting for risk and after fees, active management outperform by 0.66 per cent in bull markets, but underperform by 0.68 per cent in bear markets.
Are fund managers becoming complacent? If the latest BofA Merrill Lynch survey of the profession is anything to go by there is certainly reason to think so.
According to the April report the number of investors taking “above normal risk” in their portfolios is now at its highest level since 2006, while the number of respondents predicting above trend growth and below trend inflation has reached its highest reading since February 2008. Read more
Short and err, simple, this one.
From JP Morgan’s European quant strategy team: Read more
It’s the non-shock headline of the day perhaps; but fund managers surveyed by Bank of America Merrill Lynch continue to position themselves for the `ideal’ economic recovery scenario — one where the growth rate is neither too hot, nor too cold.
From BofAML’s November Fund Manager Survey: Read more
From the annual fund management report by International Financial Services London (IFSL):
Global fund management Conventional assets under management of the global fund management industry fell 19% in 2008, to $61.6 trillion (Charts 1 and 2). Pension assets accounted for $24.0 trillion of the total, with $18.9 trillion invested in mutual funds and $18.7 trillion in insurance funds. Together with alternative assets (sovereign wealth funds, hedge funds, private equity funds and exchange traded funds) and funds of wealthy individuals, assets of the global fund management industry totalled around $90 trillion at the end of 2008, a fall of 17% on the previous year.
As asset management houses look to stay sharp, constantly improve and deliver the alpha investors require — Inalytics, the specialist manager evaluation firm, continues its in-depth analysis into the identification of manager skill with the launch of a new whitepaper unveiled today [Monday]. Its latest research and two accompanying portfolio case studies use hard statistical evidence to provide analysis of where managers are strong (or weak) and where the gaps lie.
GLG Partners LP, the US-listed asset manager and long-standing client of Inalytics, co-authored the whitepaper on ‘identifying manager skill’. In order to show tangible working examples, GLG granted access to two of its portfolios to illustrate how the firm uses Inalytics’ research to provide objective feedback to its managers and traders as2 part of an internal process of continual improvement.
The Merrill Lynch fund manager survey for July is out and it shows that the big investment bank’s have been successful in persuading their clients to rotate into more defensive stocks:
Having been fleetingly underweight all the big defensive sectors, investors have started reversing their stance.