Vanguard has filed a registration statement with the U.S. Securities and Exchange Commission to offer a national municipal bond index fund with an exchange-traded fund (ETF) share class. Vanguard Tax-Exempt Bond Index Fund will be the firm’s first tax-exempt index fund and ETF. Vanguard is one of the largest managers of municipal bond funds in the industry—with about $140 billion in tax-exempt bond and money market funds—and one of the largest ETF providers, with $422.6 billion in assets.
Vanguard Tax-Exempt Bond Index Fund’s target benchmark is the S&P® National AMT-Free Municipal Bond Index. The fund will offer investors exposure to investment-grade municipal bonds across the entire yield curve. The fund is intended to provide a sustainable level of current income that is exempt from federal personal income taxes.
“For investors in high tax brackets, a high-quality, broadly diversified municipal bond fund or ETF can provide tax advantages as well as diversification from the risks of the equity market,” said Vanguard CEO Bill McNabb. “Vanguard is pleased to bring a low-cost index option to the municipal category as a complement to our lineup of low-cost actively managed tax-exempt bond funds.”
The fund, which is expected to be available in the second quarter of 2015, will offer three share classes: Investor Shares, Admiral Shares, and ETF Shares (with estimated expenses ratio of 0.20%, 0.12%, and 0.12%, respectively). The municipal bond funds in Lipper’s General and Insured Municipal Debt Funds category have an average expense ratio of 0.97%; comparable ETFs in the category have an average expense ratio of 0.49%.
Investor Shares will require a minimum initial investment of $3,000 and Admiral Shares will require a minimum initial investment of $10,000. These share classes will also include a 0.50% purchase fee to defray portfolio transaction costs and enable the fund to more closely track its benchmark.
A municipal bond funds pioneer
Vanguard Fixed Income Group is one of the world’s largest fixed income managers, overseeing more than $800 billion, of which $140 billion is invested in tax-exempt bond and money market funds. Vanguard offers 12 actively managed municipal bond funds (five national, seven state-specific) and six tax-exempt money market funds (one national, five state-specific).
Vanguard offered its first three tax-exempt bond funds (short-, intermediate-, and long-term) in 1977. It was the first mutual fund company to offer shareholders a choice among municipal bond funds of differing durations.
Adam Ferguson, a portfolio manager in Vanguard Fixed Income Group, will manage the new fund. Mr. Ferguson joined Vanguard in 2004 and currently manages multiple municipal bond funds.
Vanguard has an experienced municipal team of approximately 40 professionals, including portfolio managers, senior credit research analysts, research associates, and traders. The team’s approach, whether managing money market funds, bond index funds, or actively managed bond funds, is to invest shareholders’ money in a disciplined, risk-controlled manner.
Photo: Florian K. Alain Ucari Succeeds Bruno Dumitrescu in The Leadership of Julius Baer’s Entities in Monaco
Effective from 6 January 2015, the leadership of Julius Baer’s entities in Monaco changes: Bruno Dumitrescu, who has led both Bank Julius Baer (Monaco) S.A.M. and Julius Baer Wealth Management (Monaco) S.A.M. since 2010, has decided to step down from his present management responsibilities to fully focus on acquiring and servicing key clients in the future. He is succeeded by Alain Ucari who joins Julius Baer from Credit Suisse Monaco where he has been CEO.
Bruno Dumitrescu joined Julius Baer during the acquisition of ING Bank (Switzerland) Ltd and its subsidiaries in 2010, after leading their wealth management in Monaco as CEO for eight years. Previously, he was Commercial Director at ABN-AMRO Bank N.V. in Monaco for seven years. His leadership in the past years enabled the Bank and Wealth Management companies of Julius Baer in Monaco to successfully and strongly grow. Going forward, Bruno Dumitrescu will fully focus on acquiring and servicing key clients in his new roles as Senior Relationship Manager within the Bank and Vice-Chairman of the Wealth Management Unit in Monaco. He will continue to report directly to Rémy Bersier, Region Head Southern Europe, Middle East and Africa and member of the Executive Board.
Alain Ucari takes over from Bruno Dumitrescu as CEO of Julius Baer’s two entities in Monaco, reporting to Rémy Bersier. Prior to joining Julius Baer, he was CEO of Credit Suisse Monaco during more than twelve years. In this position, he continuously expanded the bank’s share of the local market, broadening the client base and increasing the profitability. Previously, Alain Ucari worked in senior management functions for Credit Suisse in Lebanon, the United Arab Emirates and in Switzerland. He maintains an extensive professional network, both in Monaco and on an international level.
“I would like to thank Bruno for his outstanding commitment, his personal contribution as well as for his achievement in successfully positioning Julius Baer in Monaco and developing our local business in the past years. I am pleased that we can continue to build on his broad expertise in his new roles. At the same time, I am also very happy that Alain agreed to take over such an important management responsibility. With his solid experience, excellent reputation and vast network he is the best possible choice to further build on Julius Baer’s positioning in Monaco. Bruno and Alain will closely collaborate to ensure a smooth transition and to set the path for further growth in this key market,” said Rémy Bersier.
Mirabaud Asset Management welcomes Patrick Huber, who joins the firm as Senior Portfolio Manager responsible for Swiss large cap companies.
Patrick Huber’s appointment is an additional step towards strengthening the management capabilities of an existing team which, thanks to its expertise and good performances, has been able to win numerous mandates and multiple awards. Among other asset classes, in Swiss equities specifically Mirabaud Asset Management currently manages nearly one billion Swiss francs, distributed among various Swiss equity funds and mandates, both on behalf of professional and institutional investors, said the firm in a press release.
With fifteen years’ experience and an unparalleled level of knowledge of Swiss companies, Patrick Huber joins Mirabaud Asset Management from Lombard Odier Investment Managers where he had been responsible for the Swiss equities team. Patrick Huber has a degree in Banking and Finance from the Zurich Higher School of Economics and Administration (HWV) and a Master of Advanced Studies in Corporate Finance from the University of Lucerne (IFZ).
Within Mirabaud Asset Management, Patrick Huber will be responsible for Swiss large cap companies while Matthias Egger remains responsible for small and mid-cap companies. Nicolas Burki will remain in his current role as analyst manager and, along with Patrick Huber and Matthias Egger, will be involved in analysing Swiss companies monitored by the team and in managing a number of mandates.
Lionel Aeschlimann, CEO of Mirabaud Asset Management, announced: «We are delighted to welcome a talented new manager, Patrick Huber, into our Swiss equities team, which represents one of Mirabaud Asset Management’s key strategic focus areas. We firmly believe we have one of the best teams operating in this asset class. Patrick Huber, who shares our values and our active management approach based on strong convictions, will be a major contributor to the quality, strength and sustainability of our client offering.»
Mario Rivero, director de Flexfunds. Flexfunds ETP lanza FlexETP 3, una plataforma de estrategias personalizadas
Flexfunds ETP has announced the introduction of its FlexETP 3 Product Platform with great success in the ETP market. Asset managers are now able to determine a customized solution for their strategies.
This new FlexETP 3 Product Platform enters the market at a time when investors are progressively more involved in products related to provide issuance and custodial services for the investment vehicles.
FlexETP Funds: The Investors participate in investment strategies of public securities. The underlying securities are held in a custody account and are controlled by the Portfolio Manager or by an assigned third party. Products can include any fee and/or payment characteristic, and can be used as a product for multiple investors or to manage a single account.
FlexETP Wrapper: The FlexETP Wrapper provides access to private securities through a feeder-like Euroclearable security. Existing private funds, entities or securities can be accessed directly from an investor’s account, preventing the need to open and administer new accounts and transfers. Private securities acquire instant global distribution, exposure and track record.
FlexETP Private Placement: The FlexETP Private Placement creates a security tied to a loan agreement or debt contract. Products can be designed according to the characteristics of the underlying contract, including distributions and/or interest accrual. The price / NAV is published in the investor’s statement. Through Euroclear, the FlexETP’s securities and payment distributions are distributed into the investor’s account.
“We frequently hear about the need of issuance and custodial services for the investment vehicles”, said Mario Rivero, Director at Flexfunds ETP. “With this new FlexETP product platform, we created one of the most efficient asset management program, FlexETP has many advantages, and it concentrates on price, speed and flexibility”.
Foto: Garfield Anderssen. BNY Mellon completa la compra de Cutwater Asset Management
BNY Mellon today announced the successful acquisition on January 2, 2015, of Cutwater Asset Management (“Cutwater”), a U.S.-based fixed income and solutions specialist with a 20-year track record and approximately $22 billion in assets under management.
Cutwater will now operate as part of BNY Mellon’s $1.6 trillion in assets multi-boutique investment management business. It will work closely with, and be administered by, Insight Investment, a leading European asset manager and one of BNY Mellon’s premier investment firms.
Cutwater’s investment capabilities encompass a wide range of U.S. fixed income strategies including core, long duration, high yield, loans, absolute return and liability risk management. These capabilities will deepen BNY Mellon’s and Insight’s fixed income research and portfolio management expertise in the world’s biggest and most diverse credit market.
BNY Mellon announced its intention to acquire Cutwater from MBIA Inc. on October 6, 2014. The terms of the transaction were not disclosed.
Photo: Alastair Mundy, Head of Value at Investec. Investec: “Finally Things Are Changing With Large Companies in UK”
Alastair Mundy, Head of Value at Investec Asset Management, discusses in this interview where he sees the best investment potential in 2015.
What has surprised you most in 2014?
What has really surprised me this year was quite how poor the performance of Tesco’s share price was. We knew trading was tough in the food retail sector and we knew their accounting was pretty aggressive, but even we were surprised when the accounting irregularities hit the screens.
However, we are keeping faith with Tesco, we still think they can turn the business around, and we think they can compete against discount retailers. There is now new management at Tesco, Dave Lewis has come in from Unilever, and we expect him to shake things up very quickly; perhaps sell the Asian or European divisions and/or some non-corporate businesses, and perhaps be more competitive against the discount retailers.
Where do you see good value in the UK equity market in 2015?
The best value we see in the UK equity market going into 2015 is in the larger stocks in the market. Companies like HSBC, Glaxo, BP and Shell have performed poorly against the mid-cap companies over the last decade and we think finally things are changing with these very large companies. Rather than looking for acquisitions they are making disposals, reducing their non-core assets, cutting costs and we believe focusing on what is right for the shareholder.
Why do you believe there is value in mega caps?
We think if mega-cap companies can shrink back to where they really have the strong competitive advantage, shareholders will be surprised at the amount of earnings growth these companies can deliver. They are on quite low valuations already compared to some other smaller companies in the market, so we think that is what is going to drive performance.
How are you positioning your portfolios in terms of strategy and style?
Our UK Special Situations portfolio is positioned increasingly towards the FTSE 100 companies, where we have a very large weighting. We have been reducing our weighting towards FTSE 250 companies over the last couple of years and this has continued in 2014. We also hold quite a lot of cash; not so that we can spend it if there is a small market fall, but to wait for some really fantastic opportunities or for individual stocks if they have profit warnings or fall significantly out of favour.
How are you positioned in your complementary assets on your Cautious Managed portfolio?
We think it is very important to focus our Cautious Managed portfolio on capital preservation at the moment, as we see a number of concerns around the world. These concerns range from geopolitical worries to fairly disappointing earnings growth for companies worldwide, and, of course, the end of quantitative easing in the US. All of these factors suggest that equity valuations should not be as high as they are. So, what do we need if we think equity valuations are going to fall? We need some complementary assets such as gold, gold equities, Norwegian krone, cash and index-linked bonds, both US and UK. We cannot be absolutely positive that these complementary assets will rise if equity markets fall significantly, but we are hoping that they will dampen volatility if equity markets become more volatile. The strategy of investing in out-of-favour companies and combining this with a focus on complementary assets that work well with equities in different times in the cycle has been a strategy that has been successful for us over the past 21 years on our Cautious Managed portfolio.
ING Investment Management (ING IM), which will soon rebrand as NN Investment Partners, has announced the appointment of Hiroshi Kimura as CEO of ING IM Japan.
Kimura joins ING from Alliance Bernstein, where he was managing director client relations and communications and member of the board. Kimura replaces Douglas Hymas, who recently joined BNY Mellon as country head Japan.
Commenting on this appointment, Management Board member Martin Nijkamp said: “With Kimura-San, we have appointed a CEO that brings highly sought-after experience and a business development track record to take ING IM Japan to the next level. His breadth of expertise fits well with our strategic ambitions, and his leadership skills will contribute greatly to ING IM’s growth plans in Japan.”
Photo: John Bennett, Head of European Equities at Henderson. Henderson: "Europe Remains the Global Whipping Boy"
Europe remains the global whipping boy, says John Bennett, Head of European Equities at Henderson. But among european countries, the Henderson team prefers Germany, “where balance sheets are improving and political headwinds are easing”.
What lessons have you learned from 2014?
I have long believed that we live in a world of momentum investing. Investors fail to anticipate inflection points; they like to chase it once the inflection has already happened. This is reflected in the amount of time that people waste from quarter to quarter, focusing on earnings per share (EPS) guidance as an indicator of a company’s prospects. This is a horrible trend that originated in the US. The way to get a competitive advantage, in my view, is to ignore it and focus on what really matters – cash flow. I always look at the cash flow, because cash will always out, as will value.
2014 also provided a reminder of why (with the exception of some of the Nordics), I prefer to ‘rent’ or trade European banks, holding stocks in the sector on a short-term basis. The industry has been a disappointing investment since the mid-1990s and it remains in a structural bear market, subject to short, sharp rallies.
Where do you see the most attractive opportunities within your asset class in 2015?
I think that large caps offer the best prospects in Europe, with investors willing to pay a higher price for quality businesses where they perceive a greater source of safe income. At a sector level, our established and often contrarian commitment to the pharmaceutical sector remains intact, while “smart cars” has been a consistent investment theme for two years now.
Recent months has seen us call off a major bear in telecommunications and utilities, two areas of potential opportunity in 2015. Merger and acquisition (M&A) speculation has fuelled a rally in the European telecommunications sector and we expect further consolidation going forward. The case for utilities is driven by delta – the rate of change we see in the industry. We are focused primarily on Germany, where balance sheets are improving and political headwinds are easing.
What are the biggest risks?
Europe remains the global whipping boy: the economy is in a mess, politicians are dysfunctional (a global problem) and there are fault lines in financial markets. I prefer to focus on the micro, identifying attractive sector and stock-specific opportunities, rather than geopolitical events we cannot influence and which may, or may not, be a factor.
Are you more positive or negative now than you were 12 months ago on the economic and investment outlook, and why?
The bull market is starting to look stretched in Europe and without a step-up in revenue growth leading to earnings growth any rise in equity markets can only come from an expansion of price/earnings (P/E) multiples. M&A activity is likely to remain in focus and may well accelerate. In the near term, investor uncertainty has risen and the market remains schizophrenic, while deflation remains a real and present danger. The European Central Bank is clearly seeking to underpin the eurozone and we saw in 2012 that this can be very supportive. But equities were cheaper back then and the cycle younger.
I think 2015 could see a significant pick-up in volatility, so investors should brace themselves for difficult markets. That is why I think stock picking is so important. By understanding a company’s strengths and weaknesses we can seek to be better positioned than the general market both in good times and bad.
Foto: Americasroof . Morgan Stanley alerta del robo de información de casi un millar de sus clientes de wealth management
Morgan Stanley began advising certain Wealth Management clients that an employee had stolen partial client data. The Wealth Management employee has been terminated, and law enforcement and regulatory authorities have been advised of the incident, said the firm in a statement.
While there is no evidence of any economic loss to any client, it has been determined that certain account information of approximately 900 clients, including account names and numbers, was briefly posted on the Internet. Morgan Stanley detected this exposure and the information was promptly removed.
Overall, partial account information of up to 10 percent of all Wealth Management clients was stolen -350,000 clients were affected, according to Bloomberg. The data stolen does not include account passwords or social security numbers. The Firm is taking the precaution of notifying all potentially affected clients and instituting enhanced security procedures including fraud monitoring on these accounts.
All impacted clients are in the process of being contacted by the Firm and their Financial Advisors. A dedicated information line also has been established at 855-398-6437 (U.S. and Canada) or 512-201-2186 (outside the U.S. and Canada).
“Morgan Stanley takes extremely seriously its responsibility to safeguard client data, and is working with the appropriate authorities to conduct and conclude a thorough investigation of this incident”.
Foto: ChrisCruises. Los fondos de pensiones: elevando la apuesta por los activos alternativos
Pension funds are restructuring for a new investment climate. They are becoming more hands-on in the way they manage their investment portfolios. This proactive approach extends to all aspects of their operations and governance. New research from State Street reveals key trends that are radically reshaping almost every aspect of how pension funds manage their investments and deliver long-term value to their members. One of these trends is a “Big Bet on Alternatives”.
For pension funds, alternative investments have typically constituted a small part of the portfolio. This is changing. Pension funds are finding that a small allocation to alternatives is not sufficient to generate the required growth. This is forcing many of them to place bigger bets on alternatives.
Private equity emerges as a hot area for investment, with 60 percent of respondents anticipating increased allocations into this asset class. A significant proportion of pension funds also say they will invest more in direct loans (54 percent), real estate (46 percent) and infrastructure (39 percent).
Pension funds are also showing a greater appetite for hedge funds. Globally, 29 percent of pension funds that already invest in hedge funds will increase their allocation, while 25 percent will invest in this asset class for the first time. There have been some high-profile withdrawals from hedge funds in recent times. But our research reveals that many pensions will continue to seek out hedge fund strategies with the potential to deliver upside returns.
More than half of pension funds (53 percent) plan to make greater use of low-cost investment strategies. Many are adopting a “barbell strategy,” to blend the cost efficiencies of passive strategies with higher-growth/ higher-risk asset classes such as alternatives. The shift into alternatives may represent a real test of capabilities, as pension funds seek to manage risk and performance across complex portfolios.
To learn more, you may request the report: “Pension Funds DIY: A Hands-on Future for Asset Owners”, through this link www.statestreet.com/vision/assetowners
