Foto cedidaPhoto BIVA. Vanguard is Preparing to Launch its First Mexican Domiciled ETF
Vanguard is seeking approval from local regulators to launch its first Mexican‐domiciled ETF that will seek to track the FTSE BIVA Index, providing investors access to a broad Mexican equity exposure.
This ETF will be the first local investment vehicle launched by Vanguard in Mexico and will complement their current ETF suite of international ETFs cross‐listed in the Mexican International Quotation System.
“The launch of this ETF reinforces Vanguard’s long‐term commitment to the Mexican market. Mexican equities are an important asset class in local portfolios and we strongly believe an ETF structure will enable our clients to efficiently access the local equity market. This product is unique as it seeks to track an inclusive and diversified index while maintaining a strong liquidity profile. Given its inclusiveness, this ETF will best serve investors – from large pension plans to individual investors ‐‐ who are looking to take a long‐term strategic allocation in Mexico.” said Juan Hernandez, Country Manager Vanguard México.
“This is a very exciting time for BIVA, as we are fulfilling our objective of contributing to the promotion, growth and modernization of the Mexican stock market. Receiving Vanguard along with their first local ETF, represents a great honor and reinforces our commitment towards providing investors with innovative products, as well as giving them exposure to companies of all sizes, not just the large ones, but medium and small as well.” Said María Ariza CEO BIVA.
The FTSE BIVA Index is designed to reflect the performance of liquid Mexican companies. The benchmark currently provides an unbiased representation of the Mexican equity universe, including FIBRAS (local REITs). All Mexican equity securities listed in the country are considered, allowing for new issues to be included as the local equity universe expands over time. This enables smaller companies to be part of the index contributing to a broader market liquidity.
BIVA, which is part of CENCOR, is considered among the most advanced stock exchanges due to its technology provided by NASDAQ who powers more than 70 markets worldwide, providing state‐of‐the‐ art standards. Its flagship index FSTE BIVA offers a modern, inclusive and representative benchmark of the Mexican market, comprised by companies of all sizes.
Vanguard has been conducting business in Mexico for more than 10 years. In 2017, the firm opened its first office in Mexico City to better support the Mexican Investors.Vanguard currently offers more than 70 US‐domiciled and UCITS ETFs cross‐listed in Mexico, and is the second largest ETF manager in the country.
Foto cedidaMike Corcell y James Tollemache. RWC Partners hablará sobre inversiones en acciones estadounidenses durante el Investments & Golf Summit 2019
RWC Partners, an independent asset manager, will talk about US equities at the 2019 Investments & Golf Summit organized by Funds Society.
RWC’s team has invested long-short in US equities for over 16 years “and as fundamental stock pickers we look for investments that come from understanding changing company or industry dynamics. Our approach is based on a philosophy of protecting our client’s investment and patiently waiting for opportunities. Taking a long-short approach allows us to deliver a risk and return profile that is complementary to other assets including long-only US equity exposure.”
Managing its US Absolute Alpha Fund is Mike Corcell, Portfolio Manager, RWC US Equity. He joined RWC in 2009 to establish the US equity team, where he employs a similar approach to that which he successfully adopted in the past. Mike previously worked for SAC where he managed a US long/short equity fund based in London, and Threadneedle Investments. Mike joined Threadneedle in 2003 to launch and manage the US long/short “American Crescendo” strategy.
James Tollemache, who heads the RWC’s sales strategy wil also be present at the event, where on May 7th participants will be able to take the opportunity to discuss about Global Markets as well as the latest portfolio management strategies and investment ideas from top-performing Asset Managers.
Founded in 2000 and head quartered in London with 151 employees globally, RWC’s nine independent investment teams currently manage over 15 billion dollars on behalf of institutional and wholesale investors across the world. They specialise in providing strategies that enable their clients to invest in developed and emerging market equities, convertible bonds and income solutions that help them meet their long-term financial needs.
The sixth edition of Funds Society’s Investments & Golf Summit will take place on May 6th-8th at the Streamsong Resort and Golf. For more information and/or registration, follow this link.
Wikimedia CommonsHollie Briggs, foto cedida. El secreto de Loomis Sayles para generar alfa en mercados eficientes y conseguir flujos en el entorno actual
Active investing has experienced large outflows during the last 6-7 years as investors have tilted towards ETFs and other index funds, which typically offer a way to get market exposure at far lower fees. The trend has been so strong that passive U.S. equity funds could soon overtake their active peers. However that is not the case for the Growth Equity Strategies team at Loomis Sayles, a Natixis affiliate, which has received over $25 billion dollars in the last 8 years. Their performance might be the reason of their popularity. How do they do it?
They are an active manager with a long-term, private equity approach to investing, that looks to invest in high-quality companies with secular, sustainable competitive advantages and profitable growth, “but we only want to buy them when they trade at a significant discount.” Says Hollie Briggs, vice-president and product manager at Loomis Sayles, in an interview with Funds Society.
Their process is not a normal one. With a bottom-up approach, each of their seven analysts looks at around five new names every year while also updating their, close to 150 names, library.
Briggs mentions that with around 2 months of research per new name, the analysts take a very deep dive into the company’s core. “Since we are dealing with public information, to have a different view you have to have a an independent insight.
In order to decide on a name to analyze, they start by looking at the global value chain analysis at each industry in order to identify the players that are generating the largest profits. Then they forget about the past and only look at what they think that is going to happen in order to create a 10-year forecast, taking into consideration the addressable market and growth expectations. With that in mind they look at what the present value should be, and act accordingly.
At Loomis Sayles, valuation drives timing. According to Briggs, “short term investors overreact to information” and when that happens, her team looks at the issue and asks key questions to see if the intrinsic value of the company changes on the long term. “We look at our models and reverse engineer what would have to be true for the value to be correct and if we disagree then we up our position.” She mentions.
In general, they prefer names that are current secular long-term drivers of growth, with high barriers to entry. Theirs is a long term game. One of their portfolio companies spent close to 5 years in their library and two years in the building its position phase.
Their team is also chosen carefully. In order to hire their last recruit the team went over 1200 resumes. More that what company the candidate has worked at or what school he or she went to, at Loomis Sayles they look for three main things: They want people that are passionate about investing, as well as independent thinkers that believe that their work is enhanced when they work as a team.
They need someone “that cannot be swayed by market consensus, because we are buying when everyone is selling it takes someone that is comfortable being different,” Hollie mentions, adding that at Loomis Sayles, in order to add a name to the portfolio there also has to be a team discussion. Analysts there are a true team, not competing with each other but with other asset managers since compensation there does not depend on how well each analysts’ names perform in the portfolio, but according to Hollie, on a single number “and that is TOTAL portfolio performance.” She concludes.
FlexFunds has recently announced the appointment of Alex Contreras as Head of Global Sales.
“Alex is in charge of leading new business development, has been a pioneer in developing business strategies addressed to strengthening growth in every market where FlexFunds is present, as well as consolidating the relationship with current clients. He is also in charge of providing support to the offices located in the Americas, Asia and Europe, and supporting the project for the opening of new locations worldwide, in line with FlexFunds’ sustained growth.” Said the company in a press release.
Before joining FlexFunds, Alex had multiple responsibilities, not only in driving the overall performance of the business units in which he was involved, but also in ventures in the US. He has experience in several areas, such as real estate, financial and mortgage services as well as international banking in renowned companies, such as Blackhawk Capital Group and UBS.
“Alex’s contribution within FlexFunds’ structure is essential to support the company’s business strategy and the development of our vision to be positioned as a world leader in asset securitization. We count on his valuable experience in leading and developing business to conduct the implementation of our global expansion strategy,” said Mario Rivero, CEO of FlexFunds.
He got his degree of Bachelor in Economics and Business at UCLA and has an MBA from the UCLA Anderson School of Management in Los Angeles, USA.
Wikimedia CommonsPhoto: koka_sexton. The Fed Will Stop Reducing its Balance in September
The Federal Reserve on Wednesday left rates unchanged and lowered its economic forecasts. Moving from a 2.3% GDP growth estimate to a 2.1%, as well as upping unemployment numbers from 3.5% to the still low 3.7%. It also signaled it was done hiking rates for the year.
“Growth is slowing somewhat more than expected,” Fed Chair Jerome H. Powell said at a news conference. “While the U.S. economy showed little evidence of a slowdown through the end of 2018, the limited data we have so far this year have been somewhat more mixed.”
Most importantly, the Fed also announced it would stop reducing its balance by September.
According to Rick Rieder, BlackRock’s Chief Investment Officer of Global Fixed Income: “The Committee also re-iterated its intention to run a larger balance sheet going forward than previously assumed, which we would agree with. That approach is more sensitive to the banking and broader financial system, which arguably has become a much larger part of the economy than ever before, but this is not necessarily a dangerous dynamic at all. It just requires regulation and moderate policy adjustment over long periods of time. Reducing mortgage holdings as part of the balance sheet adjustment and running a shorter weighted-average maturity of its Treasury holdings allows the Fed to run a larger balance sheet, but with less duration and a less “credit-heavy” character over time.”
Wikimedia CommonsPhoto: Steven Depolo. LatAm Institutional Investors Embrace ETFs As Instrument Of Choice For Volatile Times
Latin American institutions continue to adopt ETFs at record levels according to the third annual Latin American Exchange-Traded Funds Study from Greenwich Associates, with ETF allocation now 18% of total assets in 2018. This is up from 13% in 2017 and just 8% in 2016.
The Greenwich Associates study, entitled “ETFs: Instruments of Choice for Latin American Portfolios” surveyed 50 institutional investors throughout Latin America on how they are utilizing and implementing ETFs within their portfolios. Latin American institutions are applying the funds to a growing list of applications across asset classes, resulting in ETFs becoming more mainstream components of investor’s portfolios.
Several trends are contributing to that growth:
Risk management: Latin American institutions view risk management as their top priority for the year ahead, with approximately 70% of study respondents name “managing risk-return that is in line with objectives/outcome” as their primary 2019 objective. Latin American institutions are increasingly using ETFs to strategically and tactically position their portfolios against the looming risk of trade wars, economic recession and renewed market volatility.
Rise of indexing: Like their counterparts in the United States, Europe and Asia, Latin American institutions continue to move assets from active management to index strategies. In fact, 88% of study participants named ETFs as their preferred wrapper for index exposures and 45% have used ETFs to replace other vehicles, primarily active mutual funds and individual stocks. This transition of portfolio assets remains one of the biggest and most consistent sources of ETF demand.
Strategic Exposures: Latin American institutions continue to adopt ETFs for strategic purposes such as exposure to fixed-income, international diversification, and tax efficiency—with the last achieved through the use of European UCITS due to preferential withholding or estate tax rates for non-U.S. investors. 68% of respondent institutions label ETFs as strategic, with 40% of respondents reporting average ETF holding periods of longer than one year.
Appetite for Smart Beta: ETFs have also emerged as institutions’ vehicle of choice for smart beta strategies. Sustained appetite for factor-based approaches could actually accelerate demand for ETFs in 2019. More than 60% of current investors in smart beta ETFs plan to increase allocations to the funds in the coming year. This increase is partly being driven by more sophisticated use of factor-based strategies. 57% of institutions report having developed investment views on specific factors that they want to implement in their portfolios, and can do so using ETFs.
“As these and other developments make ETFs more mainstream components of institutional portfolios, Latin American institutions are applying the funds to a growing list of applications across asset classes,” says Greenwich Associates Managing Director Andrew McCollum and author of Repositioning Portfolios, Latin American Institutions Up Their Use of ETFs. “This proliferation of uses is fueling fast expansion—especially in equity portfolios, where half of current ETF investors are planning to expand allocations in 2019, with many of these institutions anticipating increases in excess of 10%.”
“The ETF discussion is no longer about active versus passive, it is about making active investment decisions utilizing ETFs. What we are seeing today around the world and in Latin America are active investors using ETFs as efficient building blocks for their active portfolios. We are also seeing increased interest and understanding from investors about the importance of diversifying their portfolios and gaining a larger exposure to international markets.” says Nicolas Gomez, Head of iShares for Latin America.
Wikimedia CommonsIgnacio Pakciarz, Aswath Damodaran, & Jerry Cohen. BigSur Partners' Event with Aswath Damodaran: A Total Success
BigSur Partners – a global investment and wealth management company headquartered in South Florida with more than $1B in assets under management and a provider of investment advising services throughout Latin America, the United States and globally – alongside NYU Stern School of Business, welcomed more than 100 business executives, community leaders, clients and NYU alumni to the private conference with “Wall Street’s Dean of Valuation” NYU Stern Professor Aswath Damodaran, at the East Miami Hotel in Brickell Avenue, Miami Florida.
During his presentation, Damodaran spoke on equity valuation and strategies that lead to increased investment sentiment for successes in business. Discussing topics from his recent book, Narrative and Numbers: The Value of Stories in Business, as well as giving meaningful insight to investor sentiment.
Ignacio Pakciarz, Founding Partner and CEO at Bigsur Partners, as well as Stern Board of Overseers member told Funds Society: “We were delighted to see so many guests from BigSur and from NYU Stern. We are also very honored to have Professor Damodaran as our main speaker; his views on valuation are truly compelling: an asset’s value is based not only on metrics, but also on its story! We hope we can host many successful events like this one in the future, where we can share ideas from leaders, experts, and academics across different sectors and industries with our community.”
The BigSur Event Series was created with the goal of finding the best ideas in academia, industry experts, leading family offices and other counterparts interested in financial markets to present to the firm’s valued clients for ongoing industry insights.
Foto: Scott S
. SEC Gets RIAs to Return 125 Million Dollars to Investors
The Securities and Exchange Commission announced on Monday that it settled charges against 79 investment advisers who will return more than $125 million to clients, with a substantial majority of the funds going to retail investors. The actions stem from the SEC’s Share Class Selection Disclosure Initiative, which the SEC’s Division of Enforcement announced in February 2018 in an effort to identify and promptly correct ongoing harm in the sale of mutual fund shares by investment advisers.
The initiative incentivized investment advisers to self-report violations of the Advisers Act resulting from undisclosed conflicts of interest, promptly compensate investors, and review and correct fee disclosures.
In a statement, SEC Chairman, Jay Clayton said: “I am pleased that so many investment advisers chose to participate in this initiative and, more importantly, that their clients will be reimbursed. This initiative will have immediate and lasting benefits for Main Street investors, including through improved disclosure. Also, I am once again proud of our Division of Enforcement for their vigorous and effective pursuit of matters that substantially benefit our long-term, retail investors.”
The SEC’s orders found that the investment advisers failed to adequately disclose conflicts of interest related to the sale of higher-cost mutual fund share classes when a lower-cost share class was available. Specifically, the SEC’s orders found that the settling investment advisers placed their clients in mutual fund share classes that charged 12b-1 fees – which are recurring fees deducted from the fund’s assets – when lower-cost share classes of the same fund were available to their clients without adequately disclosing that the higher cost share class would be selected.
According to the SEC’s orders, the 12b-1 fees were routinely paid to the investment advisers in their capacity as brokers, to their broker-dealer affiliates, or to their personnel who were also registered representatives, creating a conflict of interest with their clients, as the investment advisers stood to benefit from the clients’ paying higher fees.
The RIAs involved are:
Ameritas Investment Corp.
AXA Advisors LLC
BB&T Securities LLC
Beacon Investment Management LLC
Benchmark Capital Advisors LLC
Benjamin F. Edwards & Co. Inc.
Blyth & Associates Inc.
BOK Financial Securities Inc.
Calton & Associates Inc.
Cambridge Investment Research Advisors Inc.
Cantella & Co. Inc.
Client One Securities LLC
Coastal Investment Advisors Inc.
Comerica Securities Inc.
Commonwealth Equity Services LLC
CUSO Financial Services LP
D.A. Davidson & Co.
Deutsche Bank Securities Inc.
EFG Asset Management (Americas) Corp.
Financial Management Strategies Inc.
First Citizens Asset Management Inc.
First Citizens Investor Services Inc.
First Kentucky Securities Corporation
First National Capital Markets Inc.
First Republic Investment Management Inc.
Hazlett, Burt & Watson Inc.
Hefren-Tillotson Inc.
Huntington Investment Company, The
Infinex Investments Inc.
Investacorp Advisory Services Inc.
Investmark Advisory Group LLC
Investment Research Corp.
J.J.B. Hilliard, W.L. Lyons LLC
Janney Montgomery Scott LLC
Kestra Advisory Services LLC
Kestra Private Wealth Services LLC
Kovack Advisors Inc.
L.M. Kohn & Company
LaSalle St. Investment Advisors LLC
Lockwood Advisors Inc.
LPL Financial LLC
M Holdings Securities Inc.
MIAI Inc.
National Asset Management Inc.
NBC Securities Inc.
Next Financial Group Inc.
Northeast Asset Management LLC
Oppenheimer & Co. Inc.
Oppenheimer Asset Management Inc.
Park Avenue Securities LLC
PlanMember Securities Corporation
Popular Securities LLC
Principal Securities Inc.
Private Portfolio Inc.
ProEquities Inc.
Provise Management Group LLC
Questar Asset Management Inc.
Raymond James Financial Services Advisors Inc.
Raymond Lawrence Lent (d/b/a The Putney Financial Group, Registered Investment Advisors)
Wikimedia CommonsCourtesy photo. Justin Teman Joins Loomis, Sayles & Company
Loomis, Sayles & Company, an affiliate of Natixis Investment Managers, announced that Justin Teman has joined the firm as Director, LDI solutions. Justin is based in the company’s Boston headquarters and reports to Maurice Leger, head of product management and strategic planning.
“We are pleased to welcome Justin to Loomis Sayles,” said Leger. “Justin’s extensive expertise addressing client objectives with LDI solutions will continue to enhance our LDI presence and capabilities. He will be instrumental in delivering superior insights to our clients and designing solutions that meet their goals.”
In this new role, Justin will work closely with prospects and clients to understand and meet their needs by collaborating closely with the investment teams that contribute to Loomis Sayles’ LDI solutions. He will also help to position the solution set, deliver innovative thinking and contribute to LDI solution implementation.
Teman joined Loomis Sayles in 2019 from Cambridge Associates, where he was a Managing Director in the pension practice. As the firmwide expert on LDI, Justin helped clients in areas such as asset allocation, liability hedging, glide paths, risk transfers and completion management. Previously, he was an actuarial consultant at Mercer. Justin earned a BS in Business Administration, with a concentration in applied actuarial mathematics, from Bryant University. He is a CFA charterholder and a member of the American Academy of Actuaries.
Marisa L. Hernández, courtesy photo. Marisa L. Hernández to Join BigSur Partners
Marisa L. Hernandez will assume the role of Chief Operating Officer at BigSur Partners effective March 18.
In a statement, the company told Funds Society: “Marisa is a highly accomplished investment professional with 19 years of experience across asset classes, industries and regions. We are delighted to have an executive of her talent and seniority join our leadership team, as we are position BigSur for the next leg of growth given an exciting set of opportunities in the wealth management business.”
Hernandez joins BigSur after a successful career as an equity analyst and Co-Portfolio Manager at prestigious finance organizations in New York. She worked at asset manager Neuberger Berman for the last 12 years, where she most recently served as Senior Vice President. She was previously an equity analyst at UBS Securities. Before coming to the U.S., Marisa was an entrepreneur in her native Uruguay where she founded and managed a construction company.
Hernandez holds a Civil Engineering degree from the University of Uruguay, a post-graduate certificate from the University of Padua (Italy), an MBA from the MIT Sloan School of Management and is a CFA Charterholder.
