Wikimedia CommonsAmerican Psycho. Mexican Investors Show Growing Optimism for Stocks, But Stick to More Conservative Strategies in 2013
Virtually all Mexican investors (95%) are optimistic about meeting their long-term investment goals, yet stock ownership is low and investment return expectations are high, according to the 2013 Franklin Templeton Global Investor Sentiment Survey. The survey polled 9,518 investors in 19 countries across Asia Pacific, the Americas and Europe on their current attitudes towards investing and their expectations for 2013 and the decade ahead.
Two thirds of Mexican investors think they will be able to meet their long-term investment goals without stocks, and Mexico has the lowest level of stock ownership (16%) of all 19 markets surveyed. By comparison, Hong Kong investors reported the highest level of stock ownership at 87% and US respondents reported 64%. Mexican investors predict a 10.8% market return in 2013 and a 14.9% average annual return on their investments over the next 10 years, the survey showed. In addition, more Mexican investor say they will be adopting a more conservative investment strategy (59%) this year than will be adopting a more aggressive one (38%).
“Given the research on expected long-term investment returns for different asset classes, there appears to be a clear disconnect between Mexican investors’ high expectations for returns and their lack of equity exposure,” said Hugo Petricioli, Franklin Templeton’s country head for Mexico and Central America. “Portfolio diversification, including stock ownership, has historically proven essential to long-term investment returns, so clearly some investor education is needed.”
Global Investing, Benefits of Working with a Financial Professional
Like investors in most countries, Mexican investors have a home country investment bias. Mexican investors currently allocate nearly two thirds of their investments to Mexico, although they expect this percentage to decline slightly over the next 10 years as a larger percentage is allocated to developed markets. However, Mexican investors show concern about investing about their own country, with nearly half of those surveyed citing lack of knowledge as the main barrier, followed by the impact of exchange rates on their investment returns and regulatory restrictions.
Globally, those who work with a financial professional are more geographically diversified with their investments, had a more accurate view of past stock market performance and were more likely to identify themselves as being optimistic about reaching their financial goals (82%) than those who do not (76%).
Global Survey Results
While over 60% of global investors believe their country’s stock market will be up in 2013, risk continues to be a concern. In addition, two-thirds (66%) of investors now expect the best equity and fixed income opportunities will be found outside their home market this year (2013), reflecting growing optimism for global investing.
Overwhelmingly, investors around the globe have higher expectations for 2013 stock market performance, particularly in emerging markets where 66% expect their local stock market will improve (versus 58% in developed markets). However, despite this optimism, 57% of those surveyed plan to pursue a more conservative investment strategy this year, with younger investors (aged 25 to 34) leading the charge toward “safer” havens.
“In spite of investors’ positive outlook, it appears that avoiding loss, rather than achieving higher returns, is still their top priority,” said Greg Johnson, president and chief executive of Franklin Templeton Investments. “Clearly the market volatility over the past five years has reinforced a preference among investors for capital retention over investment gains. As seen in recent years, this risk avoidance has led many investors to remain on the sidelines, missing opportunities.
Wylie Tollette, director of Performance Analysis and Investment Risk for Franklin Templeton Investments added, “Many investors need to rethink risk and focus on the long term. Risk avoidance and risk management are two different things. Trying to avoid short- term risk and volatility entirely may expose investors to other kinds of risks, such as inflation and the impact of rising interest rates. These longer-term risks can negatively impact their ability to meet their financial goals.”
Contributing to investor risk aversion, more than half (51%) of investors globally incorrectly believe their domestic stock market was flat or down last year, when in reality, every market surveyed experienced an increase except Spain—and the MSCI World Index was up nearly 17%.
Investors See Best Opportunities Abroad
Despite reporting an overall tendency toward more conservative investing, investors recognize the opportunities of investing abroad.
Reflecting growing optimism for global investing, two-thirds (66%) of investors now expect the best equity and fixed income opportunities will be found outside their home market this year (2013).
Considering performance of equities by geographic region, the highest portion of investors (28%) believes that Asia will provide the best equity return opportunity in 2013. Asia was also selected, with the portion increasing slightly to 33%, when investors considered equity returns over a 10-year period.
While investors are not quite ready to send the majority of their assets overseas in 2013, they do plan to invest nearly 40% of their assets in foreign markets over the next 10 years, split evenly between developed and emerging markets.
Only in Australia and the United States do the majority of investors see the best equity and fixed income opportunities at home rather than abroad, as they plan to keep about three-quarters (78% in Australia and 74% in the United States) of their assets at home over the next 10 years.
Retirement is Top Investment Goal
Retirement is the top investment priority globally, with about a third (31%) of investors selecting it as their top investment goal in 2013. The selection of retirement was highest in the United States and Canada (54%), while lowest among investors in Latin America (19% in Mexico) and parts of Asia Pacific (29%). The top goal in those two regions is saving to purchase a new home (37% in Mexico and 31% in Asia Pacific). At 12%, Europe had the highest number of investors who indicated that saving for emergencies was their top goal.
Younger Investors Most Conservative, Global-Minded
Over two-thirds of younger investors (aged 25 to 34) do not see stocks as essential to meeting their long-term investment goals, the same figure for all Mexican investors. Compared to the other age groups surveyed, younger investors are also least likely to expect stocks to outperform other asset classes and more likely to be conservative in 2013.
That said, younger investors have more of their assets currently invested abroad, at an average of 37%, and show a greater willingness to invest abroad going forward.
Stocks, Precious Metals Lead Asset Class Expectations
Globally, stocks and precious metals were each selected by 21% of investors as the asset classes expected to perform best in 2013. However, those residing in developed markets generally have a more favorable outlook for equities, with Australia, Canada, Hong Kong, Japan, Singapore and the United States expecting stocks to be the top performing asset class this year.
As investors look further into the future, they expect real estate to outperform all other asset classes over a 10-year period, with the largest portion of investors (22%) seeing the greatest investment return in that asset class. Stocks and precious metals, each selected by 19% of investors, were not far behind.
In Mexico, the expected top-performing asset classes in 2013 and over the next decade are:
2013 Expectations
Top-Performing Asset Class
10-Year Expectations
Top-Performing Asset Class
Precious Metals (61%)
Precious Metals (57%)
Real Estate (56%)
Real Estate (54%)
Non-Metal Commodities (39%)
Non-Metal Commodities (43%)
By comparison, Mexican investors ranked stocks fourth, after the asset classes noted above, for 2013 and 10-year expected returns
Foto: NASA. El Grupo deVere abre su primera oficina en el Caribe en las Islas Caimán
The deVere Group Caymans Ltd will mark the company’s first office in the Caribbean and will be headed by Chief Executive Officer Mr Nigel Green and long-time deVere Executive, Mr Simon Pratt, said the firm in a statemtent.
The deVere Group Cayman Islands presence is expected to be established on West Bay Road in Grand Cayman – in the heart of the Cayman Islands‘ financial industry. The deVere Group Caymans Ltd will specialise in Insurance Brokerage, whilst delivering yet another promise to its clientele to be wherever they choose to live around the world. Nigel Green expects the ‘final touches’ to be finalised shortly, as the company is looking to obtain the operating licence in the coming weeks.
“Until now, despite the Cayman Islands‘ attraction as a tax haven for wealthy individuals, few financial advisers have sought to base themselves in the British territory. For this reason, we believe that this venture will help us bridge the gap in the market, whilst keeping in line with the company’s growth objectives.”
“The deVere Group is the world’s largest independent international financial consultancy. International investors and expatriates employ us to find financial services products that suit their medium to long term requirements for investments, savings and pensions. With in excess of US$9 billion of funds under administration and management, deVere has more than 70,000 clients in over 100 countries”, said the firm in a statement.
Keith J. Gardner. WAMCO Considers Peso Denominated Investments as a Seeking Alpha Alternative
Keith J. Gardner, Head of Emerging Markets at Western Asset Management (WAMCO), one of the world’s leading fixed income managers, talks with Funds Society about their expectations for Mexico, the firm’s investment process and the possibility of increasing their dedicated Mexican product offering.
“Amongst emerging markets Mexico is one of our favorites,” says Gardner, mentioning Mexico’s strong fundamentals, and the positive prospects that could come about if the reforms are approved. He also mentions that at WAMCO, they are excited about the fact that all three parties are aligned when it comes to the reform agenda, which he believes could propel México to the next level and separate them from countries like Brazil. They also believe that the reduction of the informal economy, a stronger competitive landscape in the telecom, and various key industries, as well as a stable currency and low interest rates could be beneficial for both the government and the private sector in the short run. Of particular interest is the energy reform, which if properly paired with the fiscal reform, could have an immediate impact on GDP.
Speaking about their process, the executive mentions that as Dollar based investors, the positions they take in Peso denominated assets– normally on the 10yr part of the curve- in the Mexican market allows them to get alpha by having off benchmark investments. “We consider local bonds the most attractive, because even at current levels, they still offer an interesting pick-up. We continue to be constructive on the peso” mentions Gardner.
When it comes to evaluating a potential investment at WAMCO, besides considering historical yields, the various teams -located in Pasadena, Hong Kong, London, Melbourne, New York, São Paulo, Singapore, Tokyo and Dubai- check and ponder the relative value compared to the region’s and the world’s.
Keith J. Gardner has over 30 years experience in analysis and portfolio management. He started his career as analyst in Salomon Brothers in 1983, and has been managing portfolios since 1985. He joined Western Asset Management in 1994 after a two year tenure at Legg Mason. He currently serves as Head of Emerging Markets at WAMCO.
Foto: Thomas Bresson. . La minera Coeur distinguida en México como Empresa Socialmente Responsable
Coeur d’Alene Mines Corporation announced that its Mexican subsidiary Coeur Mexicana was recognized with the Socially Responsible Business Distinction Award for 2012 (“Distintivo Empresa Socialmente Responsable 2012”) for its Palmarejo silver-gold mine operation in Chihuahua, Mexico.
“We are honored that the Mexican Centre for Philanthropy has once again recognized Coeur for its dedication to corporate social responsibility in Mexico”
Coeur Mexicana received this national award for the fifth consecutive year in recognition of its demonstrated leadership excellence in corporate social responsibility, environmental stewardship and sustainability in Mexico. The award also recognized the way Coeur Mexicana personnel conduct business in Mexico and the positive working environment Coeur Mexicana creates for employees and contractors.
“We are honored that the Mexican Centre for Philanthropy has once again recognized Coeur for its dedication to corporate social responsibility in Mexico,” said Mitchell J. Krebs, Coeur’s President and Chief Executive Officer. “We are solidly committed to conducting all of our operations in a socially and environmentally responsible manner that respects our workers, the environment and our host communities.”
Each year the Mexican Centre for Philanthropy (“Centro Mexicano para la Filantropia”) recognizes companies that have demonstrated responsible corporate ethics and governance practices as well as a dedication to improving the social and environmental landscapes in which they operate.
The Palmarejo mine, located in the state of Chihuahua in northern Mexico, is a silver and gold mine commissioned in 2009. Mining at Palmarejo is conducted both underground and on the surface. Coeur’s operations in Mexico employ over 880 people.
Coeur d’Alene Mines Corporation is the largest U.S.-based primary silver producer and a growing gold producer. Coeur has four precious metals mines in the Americas generating strong production, sales and cash flow in continued robust metals markets. Coeur produces from its wholly owned operations: the Palmarejo silver-gold mine in Mexico, the San Bartolomé silver mine in Bolivia, the Rochester silver-gold mine in Nevada and the Kensington gold mine in Alaska. Coeur also owns a non-operating interest in a mine in Australia, and conducts ongoing exploration activities in Mexico, Argentina, Nevada, Alaska and Bolivia. In addition, Coeur owns strategic investment positions in eight silver and gold development companies with projects in North and South America.
Foto: Erik A. Ellison . Glenn H. Schiffman se une a Guggenheim Securities como senior managing director
Guggenheim Partners today announced that Glenn H. Schiffman has joined Guggenheim Securities as a Senior Managing Director. A seasoned investment banker with well over $100 billion in executed deals over his career, Mr. Schiffman brings with him significant transactional, leadership and managerial skills and will assist in the continued build out and growth of Guggenheim Securities’ Investment Banking platform.
“Over the years, I’ve had the opportunity to work with Glenn on both sides of the table in numerous projects, and have witnessed first-hand his client impact and ability to serve as a trusted advisor,” said Alan Schwartz, Executive Chairman of Guggenheim Partners. “Glenn’s track record both in building and managing successful businesses and in advising clients in major transactions is unmatched, and I am very pleased to have him join our growing team. His extensive experience advising across domestic and international situations will be invaluable to Guggenheim and to our clients.”
A 20-year veteran of Wall Street, Mr. Schiffman joins Guggenheim from The Raine Group, where he was a Partner. Prior to The Raine Group, Schiffman served as Head of Investment Banking for the Americas and CEO of Nomura Securities North America as well as Head of Investment Banking Asia-Pacific for Nomura and previously Lehman Brothers. At Lehman and subsequently at Nomura, Schiffman led teams that achieved number one rankings in Asia-Pacific M&A and was named Atlas Awards Asia M&A Banker of the Year in 2009. Before that, Mr. Schiffman was Co-head of the Global Media Group at Lehman Brothers
Foto cedidaJesús Zabalza, new CEO of Santander Brasil. Jesús Zabalza named CEO of Santander Brasil; Javier San Felix replaces him as head of the Americas division
Marcial Portela, head of the Group’s businesses in Brazil, has resigned from his executive role at Banco Santander Brasil. However, he will continue as chairman of the board of directors. Jesús Zabalza will be the new CEO of Santander Brasil. Javier San Felix will head the Americas division, replacing Jesús Zabalza. The Americas division comprises Grupo Santander’s businesses in Latin America excluding Brazil.
Marcial Portela (Vigo, 1945) managed the integration of Santander Brasil and Banco Real, which was acquired from Dutch group ABN Amro, and has been head of this subsidiary for the last three years.
Jesús Zabalza (Baracaldo, 1958), who has in-depth knowledge of the Latin American financial market, has held executive roles in BBV, Argentaria, La Caixa and, since 2002, as senior executive vice president of Banco Santander in the Americas division, which he has headed since last year.
Javier San Félix (Madrid, 1967), senior executive vice president at Banco Santander and Banesto’s CEO until its merger with Banco Santander, will head the Americas division. He joined Santander Consumer Finance in 2004, where he took up responsibilities as director of strategic planning, head of the non-euro business area and head of integration of mergers and acquisitions. In May, 2012, he was appointed CEO of Banesto, which will complete its legal merger with Banco Santander in the next few days.
The appointments of Marcial Portela and Jesús Zabalza are subject to the relevant regulatory approvals in Brazil.
Foto cedidaStuart O'Gorman, Director de Tecnología Global en Henderson. ¿Tiene Apple en su portafolio? O’Gorman de Henderson comparte su opinión sobre el valor
Apple reported its first drop in profit in a decade but at the same time announced plans to more than double the amount of cash it returns to shareholders via share buybacks to $100bn by the end of 2015. Quarterly revenue was up 11% on a year ago and the dividend was increased by 15%.
“We currently hold around a 4.5% weight in the Tech funds which is significantly less than the benchmark weight of approx. 10%”, explains Stuart O’Gorman, Head of Global Technologyin Henderson, signaling that the underweight position has benefited relative returns in the strategy as Apple has fallen over 40% from its peak to its current price. “The 15% increase in the dividend leaves the stock yielding 3% providing valuation support,” he adds.
Despite the attractive valuation, O’Gorman is concerned that Apple’s revenue growth and earnings will remain under pressure due to slowing demand for iPhones and greater competition from peers such as Samsung. “Margins have fallen from over 47.4% a year ago to 37.5% as competition intensifies and they add cheaper products, such as the iPad Mini. Guidance implies more of the same”, O’Gorman explains, adding that CEO Tim Cook announced that new products are in the pipeline for later this year and 2014, without giving specific details, leaving investors wondering if the company can continue to innovate as successfully and at the same pace as they have over the last decade.
“Our thesis historically, when we were positive on the stock, was tied to a belief in the advantages of their platform, underpenetrated markets, scale advantages and – to a lesser extent – innovation edge and brand. A lot of this has eroded.” On O’Gorman’s view, Western smartphone markets are increasingly fully penetrated and Samsung has the advantage on scale. Regarding the platform, this remains a significant barrier to entry for existing customers but no longer appears an edge for attracting new users
“Protecting the stock on the down side is their huge cash balance, continued very strong free cash flow generation and attractive valuation against these metrics. Their increased willingness to return cash to shareholders is also a positive.” On balance, Stuart O’Gorman’s team remains neutral to negative on the outlook for the company and feels no need to add to positions, despite the stocks sharp fall, “given that we can find more interesting investment opportunities elsewhere”, he concludes.
MOAT concludes its first year of trading with roughly $180 million in assets under management (AUM), securing its place as the fourth most successful U.S.-listed equity ETF launched in the one-year period ending March 31, 2013, according to Morningstar data.
“The result of Morningstar’s analysis is an index comprised of high-quality stocks with the potential for long-term success”
MOAT seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Morningstar® Wide Moat Focus IndexSM. Morningstar’s wide-moat analysis, on which the index is based, seeks to identify the 20 most attractively priced companies possessing sustainable competitive advantages derived from sources such as intangible assets, cost advantage, switching costs, network effect and efficient scale.
“The result of Morningstar’s analysis is an index comprised of high-quality stocks with the potential for long-term success,” said Brandon Rakszawski, product manager with Market Vectors ETFs. “It’s a simple idea – take part in the growth of attractively priced companies with the potential to outperform due to structural competitive advantages – but the true value comes in the quality of the underlying research. With MOAT, a liquid, transparent ETF, investors gain access to the companies that Morningstar’s equity analyst team believes to be best-positioned based on the moat criteria.”
As of March 31, 2013, MOAT held Bank of New York Mellon, Berkshire Hathaway, Exelon, General Electric, Intel, Microsoft and other well-known, high-quality companies.
Foto cedidaHernando de Soto, Marc Faber, Kishore Mahbubani, Jim Walker and Martin Mlynar. According to Dr. Doom “the rich will have to pay more”: lessons learned from the Robeco World Investment Forum
Social inequality emerged as a key worry among guest speakers and other participants at the Robeco World Investment Forum. But what other geopolitical risks are keeping investors awake at night?
Here’s a question. How many of the delegates at the Robeco World Investment Forum—a mix of key clients and senior Robeco people—voted that social inequality was the number one geopolitical risk facing the world today? 5%? 25%? 50% even?
Not close. It turned out that 75% of participants agreed that this was the main issue.
That was one of the eye-opening takeaways from the Forum, which took place at the Hotel Okura in Amsterdam on 19 & 20 April.
De Soto concerned about Muslim exclusion from economic opportunities
One of speakers to address the issue of social inequality was Hernando de Soto, the economist and chairman of Peru’s Institute for Liberty and Democracy. He did so by discussing the widespread sense of exclusion felt in the Muslim world. De Soto spoke of Tarek al-Tayeb Mohamed Bouazizi, the Tunisian street vendor widely felt to have set the Arab Spring in motion when he set himself on fire in December 2010 in protest at the confiscation of his goods.
But de Soto also noted that there were a total of 64 people across the Arab world who self-immolated in the same period. And the evidence from the 25 of the 64 who survived was that all of them were businessmen who acted when they felt their rights had been trampled on: they suffered from what de Soto called “expropriation”.
“This is a revolution of a lot of small entrepreneurs,” said De Soto.“Just because they don’t wear striped suits, it doesn’t mean they aren’t on our side.”
“The rich will pay more” says Marc Faber
According to Marc Faber, the Thailand-based Swiss contrarian investor, social inequality is a warning signal pointing to a bursting of the bubble in asset prices. “Asset prices are going up, but the standards of living of the typical household in Europe and the US is going down,” he said.
And he sees only one way out of this situation: “the rich will have to pay more,” he said. “When the masses of the poor grow more than the power of the few, the rich have to pay. Usually history solved this problem through taxation to distribute to the poor or by revolution.”
He added that the Cyprus bail-out, which saw brutal haircuts for savers with over EUR 100,000, was a first step in this process. “The writing is on the wall,” he said.
Kishore Mahbubani fears the rise of Islam
But the disruptive potential of social inequality was by no means a unanimous viewpoint. One guest speaker who rejected it was Kishore Mahbubani, Professor in Public Policy at the National University of Singapore.
“It is absolutely wrong to say that social inequality is going to be a geopolitical risk,” he said. “It is going to be a major challenge but, paradoxically, the rising concerns about social inequality will lead to geopolitical stability. That’s because the priorities of all governments are domestically focused.”
So what geopolitical risk does worry the author of The Great Convergence: Asia, the West and the Logic of One World? Mahbubani—who offered three upbeat predictions for the region: there will be no major interstate war in east Asia, Asia’s major economies will continue to grow and the Asian middle class will experience an “explosion” in numbers over the next few years—worries about a clash between Islam and the West.
“There’s a very strong emotional divide between Islam and the West. That has been very badly mishandled by the West,” he said. The problem will intensify as Islamic countries such as Indonesia and Turkey become increasingly successful, he believes. “As the Islamic world becomes more successful economically and more assertive politically, then you’ll see a real challenge for the West,” he cautioned.
Aging time bomb worries Jim Walker
The key issue for Jim Walker, Managing Director atAsianomics, was demographics. More specifically, he is concerned about “the coming war between the old and the young, because we’ve got too many old people in Europe, in China and in Japan to pay for them. The only people who can pay for them are the young, who are much better with guns than people my age.”
Systemic risk still on the table for Mlynar
Corestone Investment Managers’ Martin Mlynar was also worried about what he called “the generation aspect”. But he added two others geopolitical concerns. “I’m still worried that the problems in a number of countries might lead to a systemic financial failure. We still don’t understand the effect of Bernanke’s bond buying or of the monetary policy in Japan. I’m not sure that we are out of the woods in terms of systemic risk.”
Mlynar’s third worry was food and water. “Food and water shortages—water especially—might lead to a number of wars,” he said.
But the final word goes to Jim Walker. “20 people around the world are causing us the most incredible pain and probably the biggest economic crisis in history in five years’ time.” He admitted he couldn’t remember all their names but warned: “Just remember: head of central bank.”
Wikimedia Commons. EFG International completa la venta de EFG Financial Products a Notenstein Private Bank
EFG International has completed the sale of its remaining stake of 20.25% in EFG Financial Products to Notenstein Private Bank, a subsidiary of Raiffeisen Switzerland,for CHF 70.2 million (1,350,000 shares at CHF 52 per share). The transaction, which was announced on 12 March 2013, was closed on 23 April 2013.
EFG International’s representatives on the board of EFG Financial Products – John Williamson, Giorgio Pradelli and Frederick Link – stepped down upon completion. The completed sale is in keeping with EFG International’s desire to focus on its core business of private banking.
EFG International is a global private banking group offering private banking and asset management services, headquartered in Zurich. EFG International’s group of private banking businesses operates in around 30 locations worldwide, with circa 2,000 employees.
