CC-BY-SA-2.0, FlickrPhoto: Bradley Weber. The Morning After: What Now For Markets?
In a shocking development reminiscent of Brexit, Donald Trump, the Republican nominee, was elected the forty-fifth president of the United States on Tuesday, 8 November. In addition, Republicans maintained control over both houses of Congress.
Trump’s unexpected victory brings with it a great deal of policy uncertainty, given his lack of specificity during the presidential campaign. Judging by the tone of his campaign, one can surmise that foreign trade will likely be a major focus of the new administration. It is quite unlikely that the Trans-Pacific Partnership will be ratified against the present backdrop, while the North American Free Trade Agreement (NAFTA) could be renegotiated or even abandoned. Uncertainty over immigration policy is likely in the near term, which could potentially impact labor markets.
On the campaign trail, President-Elect Trump vowed to lower taxes and repeal the Medicare tax on investment income. He also promised to repeal the complicated alternative minimum tax, while taxing carried interest as ordinary income. Corporate tax rates would be reduced to 15% from 35%, and repatriated foreign profits would be taxed at a one-time rate of 10%, if Trump’s plan is enacted. Economists, however, question whether this package would spur enough economic growth to offset lost revenue from lower tax rates, which could widen fiscal deficits.
Sectors that may be advantaged under a Trump presidency include:
Fossil fuels: Trump repeatedly promoted US energy independence during the campaign, calling for leasing federal land for energy exploration, repealing some regulations on coal and reviving the Keystone XL pipeline project.
Pharmaceuticals: Price controls will be less of a concern for the industry than they would have been under a Clinton presidency.
Financials: Trump has called for repealing or significantly revising Dodd-Frank. Regulatory burdens could be reduced across the economy, based on his campaign rhetoric.
Trump’s focus on trade during the campaign and the risk that NAFTA might be revisited could pressure the currencies of two of the US’s largest trading partners, Mexico and Canada. Additionally, emerging market currencies will likely be pressured, since any additional US trade barriers would probably further slow the growth of global trade, which could negatively impact both producers of raw materials and of finished goods.
If the US puts trade barriers in place on imports, US exporters may be hurt as a result of trade partners retaliating against US actions. With roughly 40% of earnings from S&P 500 Index companies earned outside the US, there appear to be significant risks to US-based multinationals. A full-fledged trade war would be damaging to growth and employment, and could have ripple effects beyond US borders. Companies whose business is more domestic in nature may fare better against a backdrop of global trade friction. If financial markets have a persistently negative reaction to a Trump victory in the run-up to the December FOMC meeting, odds of an interest rate hike could shrink.
A front-loaded agenda
Given the political ebbs and flows of recent decades, it is reasonable to expect Republicans to try to pack as much policy change into the first two years of a Trump presidency as possible, much as Democrats did in the first two years of the Obama administration. In 2009–2010, Democrats controlled the White House and both houses of Congress and passed a large economic stimulus package and the Affordable Care Act. Oftentimes, when one party controls both Congress and the White House, voters perceive political overreach and seek to balance the scales during the midterm elections.
In 1994, President Bill Clinton’s Democrats lost both the House and the Senate and never regained congressional control during the balance of his two terms. Losing control of one or both houses in the midterms would limit Trump’s ability to achieve his agenda, suggesting that policy change could become more incremental later in his term.
CC-BY-SA-2.0, FlickrPhoto: Federico Mena Quintero
. Maitland Restructures its Institutional Client Team
Maitland, a global advisory and fund administration firm, has announced a major organisational restructure of the leadership team of its institutional client services arm. The management team will now reflect the five fund services products on offer – Traditional Fund Services, Transfer Agency, Hedge Fund Services, Private Equity & Real Estate Fund Services and ManCo Services.
The move reflects Maitland’s impressive expansion over recent years, both in terms of size and geographical reach as well as breadth of internal expertise and talent. The product approach empowers each product head to drive all aspects of the delivery to clients, both in terms of day-to-day service as well as longer-term strategic alignment.
The entire institutional product offering will be led by Jim Clark, who joined Maitland in May 2014 from State Street and brings over thirty years of industry experience to the role. The TFS team will be led globally by Rob Leedham, with Guido Frederico leading the South African business. TA and HFS teams are led globally by Mark Bredell and Ben Pershick respectively while Bruce McGlogan will head up the PERE team as it builds on its current period of success in Europe and South Africa.
Steve Georgala, CEO of Maitland, said: “Maitland is a unique firm in terms of its product capability and breadth of services we are able to offer institutional clients. We are delighted to have a leadership team full of deep industry experience, with each member bringing substantial knowledge and expertise to their domain. Our focus is to stabilise the areas of Maitland that have enjoyed substantial growth recently, whilst continuing to actively grow products and regions where our offering is attracting considerable market interest. Given this, it made sense to restructure our organisation to reflect our client-centric approach, and to empower our business leaders to deliver the best service possible. These are exciting times for the company.”
CC-BY-SA-2.0, FlickrPhoto: Colleen P. How will Bond and Currency Markets React to the US Election Result?
With the latest polls suggesting the race to become the 45th President of the United States is neck and neck. Bond and currency managers around the world are currently trying to assess how a win for either candidate might affect their portfolios. M&G’s Anthony Doyle offers his best estimate as to what might happen.
A Clinton win
A Clinton victory is seen by the markets as a continuation of the current US political environment, particularly if the Republicans retain control of the House of Representatives. This would be the most benign scenario for bond and currency markets as measured by price volatility. Following a Clinton win, the bond market would likely price in a higher probability of a move in interest rates, with the removal of perceived political uncertainty paving the way for a Fed rate hike in December. The US dollar stands to be the main beneficiary of this change in market pricing in the immediate future, though any gains are likely to be measured.
In a Clinton win scenario, bond prices across the Treasury curve would likely remain under pressure in the coming weeks given the high chance of a rate hike, rising inflationary pressures, and the possibility of an easier fiscal policy stance by a Clinton administration. A Clinton win is not likely to radically alter bond investors or economists views on the outlook for the US economy. If Clinton is able to implement easier fiscal policy in the US in the medium term, US growth and inflation would likely increase, meaning a rise in term premiums and a steeper yield curve.
A Trump win
A Trump victory would result in heightened volatility across a number of markets given the uncertainty around what the implications are for the US economy. Following the result, risk aversion would likely increase meaning a rising US dollar, lower bond yields and a weaker US high yield corporate bond market. In the fixed income universe, emerging market bonds and currencies would likely be hit the worst in this environment given Trump’s tough stance on China and Mexico. This market reaction could look similar to previous US risk-off events such as the 2008 financial crisis, the 2011 loss of the US government AAA rating, and the 2013 taper tantrum. Equally, should the Fed push ahead with a rate hike in an uncertain political environment, we may see an adverse reaction in markets similar to the 2014 rate hike.
Turning to credit markets, Trump’s proposal of a repatriation tax holiday would likely be positive for US investment grade corporate bonds at the margin and may lead to a reduction in corporate bond issuance. It is estimated that companies hold almost $1trn offshore, with around 60% denominated in US dollars. The big question is how companies would use this cash: will they pay out special dividends to shareholders? Will they increase capital expenditure and expand their operations? High yield companies would be less affected, as most companies have domestic sources of revenue.
Over the medium term, Trump’s proposals on large tax cuts for all is the equivalent of a large Keynesian injection of cash into the economy which would benefit economic growth but also raise inflation. The implementation of trade barriers would also be inflationary, as import prices rise from current levels. Immigration reform means the already tight US labour market would tighten further, leading to higher wages. Fed policy would need to counteract the rise in inflation, meaning much higher interest rates and a bear market for bond markets. The US treasury market would return to a world of higher yields and a much steeper yield curve. In this environment, the US dollar would likely strengthen given the contrasting monetary policy stance with other developed market economies. A Trump win would be good for government bonds in the short term, bad for bonds in the long term.
The bottom line
A Clinton victory would likely result in lower volatility in the near term relative to a Trump victory. In the immediate aftermath of a Clinton win, there may be some slight risk-on moves from investors but over the medium term much will depend upon the make-up of the United States Congress. Credit markets should prove to be relatively resilient, given that default rates are expected to remain low and the Fed remains cautious in removing policy accommodation, thereby reducing the chances of a policy error. A Trump victory would be seen as a risk-off event in the short-term, resulting in lower treasury yields, a higher US dollar and weaker risk sentiment towards emerging market assets. Given both candidates are advocates of an easier fiscal policy stance, government bond prices are likely to come under pressure in 2017 under both scenarios. Over the longer term, like a Clinton win scenario, the policies that Trump is able to implement given the make-up of Congress will be key to determining the outlook for the economy and consequently bond and currency markets.
The Muzinich Europeyield and Muzinich ShortDurationHighYield funds won the European High Yield and Short-dated Bond categories.
In addition, Muzinich Americayield was highly commended in the US High Yield category and the company was highly commended in Specialist Fixed Income Group of the Year.
The awards were judged using a combination of quantitative and qualitative criteria, based on independent performance data and analysis by a panel of leading industry figures.
Josh Hughes, Managing Director of Marketing & Client Relations at Muzinich said: “We take great pride in the fact that a panel of highly respected industry figures have recognised our success in delivering superior risk-adjusted returns for our investors, which has been the focus for Muzinich & Co for more than two decades.
It underlines the quality and specialist expertise of our credit team, who we believe are among the most experienced in the industry.”
The awards are designed to recognise consistency of returns by asset managers focused on specialist asset classes. Muzinich & Co was also recognised in last year’s awards when it earned four awards and was highly commended in two categories.
The active/passive management conversation doesn’t have to be a debate. Those are better left to the politicians. As MFS Co-CEO Michael Roberge says in his October 18 opinion piece in the Wall Street Journal, investors can choose both. And they may want to consider that, given the potential diversification benefits of having active alongside passive in their portfolios.
With active management facing criticism of late, Mike sheds some light on the rhetoric and how to recognize a manager with skill. He also makes a compelling case for active’s risk management capabilities and the importance of excess return in an environment fraught with return-generating challenges.
Investors know this. In a recent survey conducted by MFS, nearly three-quarters of professional investors surveyed in the US cited strong risk management as an important criteria when selecting actively managed investments
So passive has its place. Active has its advantages. And there are some real merits to a “bipartisan” portfolio. Here’s what Mike has to say:
It is true that flows into passive strategies have picked up. But U.S. advisers are still allocating 70% of their clients’ assets to active investment strategies, according to our recent survey.1 Investment flows can be fickle and aren’t always a good barometer for long-term shifts in sentiment.
Most of it points to the average active manager’s inability to consistently beat their benchmark, net of fees. And while that might be true for average managers, there are skilled active managers who have consistently outperformed their benchmarks over a full market cycle. But how do you distinguish between skilled and average? It really comes down to conviction and risk management.
Investors caught in the active/ passive debate need to under- stand the issues—but stay focused on the outcome. Market returns might look appealing. Excess return will matter more. And managing the downside is essential. Long term, the bipar- tisan portfolio probably wins.
CC-BY-SA-2.0, FlickrPhoto: David Lofink
. M&G to Resume Trading in M&G Property Portfolio
Effective from noon on Friday 4 November 2016, M&G Investments (M&G) will resume trading in the shares of the M&G Property Portfolio and its feeder fund, the M&G Feeder of Property Portfolio. The M&G Property Portfolio is a broadly diversified fund, which after all sales, will invest in 119 UK commercial properties across retail, industrial and office sectors on behalf of UK retail investors.
The decision was taken in agreement with the Depositary and Trustee and the Financial Conduct Authority has been informed. The fair value adjustment originally applied on 1 July 2016 has also been removed in full.
M&G announced a temporary suspension on 5 July 2016 after investor redemptions rose markedly due to high levels of uncertainty in the UK commercial property market following the outcome of the European Union referendum.
William Nott, chief executive of M&G Securities, says: “Suspending the fund wasn’t a decision we took lightly, but we felt it was the only way to protect the interests of investors in what were very unusual circumstances in the aftermath of the referendum. Suspension created an environment more akin to normal conditions, allowing us time to choose the most appropriate assets to sell at the right price in order to preserve the integrity and future of the fund. As such, the fund manager has kept higher quality assets while reducing the exposure to assets deemed riskier than their prime counterparts, putting the portfolio in a good position for any further volatility that may be experienced in the lead up to Brexit.” As confidence returns to the market, 58 properties have been sold, exchanged or placed under offer for a total of £718 million.
Meanwhile, and effective January 1st, 2017, Sam Ford will be the new manager of the £598 million M&G UK Select Fund given the incumbent manager, Mike Felton is leaving M&G. Until the end of the year, the fund will be managed by co-deputy managers Garfield Kiff and Rory Alexander.
CC-BY-SA-2.0, FlickrPhoto: Allie_Caulfield
. Singapore Tops The Charts As Best Overall Destination For Expats
For the second year in a row, Singapore takes the top spot in HSBC’s Expat Explorer country league table. Expatriates in Singapore enjoy some of the world’s best financial rewards and career opportunities, while benefiting from an excellent quality of life and a safe, family-friendly environment.
More than three in five (62%) expats in Singapore say it is a good place to progress their career, with the same proportion seeing their earnings rise after moving to the country (compared with 43% and 42% respectively of expats globally). The average annual income for expats in Singapore is USD139,000 (compared with USD97,000 across the world), while nearly a quarter (23%) earn more than USD200,000 (more than twice the global expat average of 11%).
Overall, 66% of expats agree that Singapore offers a better quality of life than their home country (compared to 52% of expats globally), while three quarters (75%) say the quality of education in Singapore is better than at home, the highest proportion in the world (global average 43%).
Now in its ninth year, Expat Explorer is the largest and one of the longest running surveys of expats, with 26,871 respondents sharing their views on life abroad including careers, financial wellbeing, quality of life and ease of settling for children.
The 2016 Expat Explorer report also reveals:
Millennials are drawn to expat life to find more purpose in their careers Nearly a quarter (22%) of expats aged 18-34 moved abroad to find more purpose in their career. This compares to 14% of those aged 34-54 and only 7% of those aged 55 and over. Millennials are also the most likely to embrace expat life in search of a new challenge: more than two in five (43%) say this, compared with 38% of those aged 34-54 and only 30% of those aged 55 and over. Millennials are finding the purpose they seek, with almost half (49%) reporting that they are more fulfilled at work than they were in their home country.
Expat life accelerates progress towards financial goals Far from slowing progress towards their longer term financial goals, expats find many are fast tracked by life abroad. Around two in five expats say that moving abroad has accelerated their progress towards saving for retirement (40%) or towards buying a property (41%), compared to around one in five (20% and 19% respectively) whose move abroad has slowed their progress towards these financial goals. Almost a third (29%) of expats say living abroad has helped them to save towards their children’s education more quickly, compared to only 15% who say it has slowed them down.
The top expat destinations for economics, experience and family are:
Dean Blackburn, Head of HSBC Expat, comments: “Expats consistently tell us that moving abroad has helped them achieve their ambitions and long-term financial goals, from getting access to better education for their children to buying property or saving more for retirement. Most expats also find that their quality of life has improved since making the move – and that they are integrating well with the local people and culture.”
Photo: Pictures of Money. Diagnosing the Health Care Selloff
Health care stocks have suffered as political rhetoric heats up around health care reform. Heidi suggests the sector may have been over-penalized.
No sector has been a victim of election antics and volatility like health care, the third-largest sector weight in the S&P 500 Index. The S&P 500 Health Care Index is down a little more than 2% this year and the S&P Biotechnology Select Industry Index has plummeted over 15%, while the S&P 500 has notched a decent 6% gain, according to Bloomberg data.
This should come as no surprise: A key factor in the recent selloff has been investor concerns that new regulations could impact the prices of drugs. These concerns are exacerbated by political rhetoric connected to the presidential election, and we think the likelihood of significant reform remains low. Although both U.S. presidential candidates have very different approaches to health care, each has proposed significant changes to the current system. And as politicians suggest plans to rectify an imperfect system, many health care companies feel the heat, particularly biotechnology companies, which then see weakened stock prices.
However, despite the potential for near-term political headwinds, there are positive fundamental and structural factors that suggest some health care companies are being over-penalized.
In recent years, U.S. equities overall have generally seen their stock prices gain from multiple expansion, rather than significant earnings growth. In other words, investors have been willing to pay more for the same dollar of earnings. But the health care sector is an exception; its earnings have been overlooked. The cheaper the stock prices get, the less the stocks are loved. See the chart below.
So why have health care and biotech stocks been left out in the cold? The market selloff in biotech began last year when Hilary Clinton commented on drug price gouging and the need for increased regulation. In a single day, the Nasdaq Biotech Index dropped almost 5% (source: Bloomberg).
I think this is a classic example of investor behavior driving stock prices rather than investment fundamentals. For now, this reform talk is all rhetoric. Actual reform measures affecting drug pricing would likely take years to legislate and implement. I won’t speculate on whether Congress would remain under Republican control, or which candidate would become president, but I believe that there is a strong likelihood of continued political divisions and gridlock. This suggests that the power to push through major reforms will be limited.
Markets in autumn have historically seen an uptick in volatility, according to Bloomberg data. Given that we are in the final weeks before the election, we expect volatility to continue in the health care sector. In fact, the issue is top of mind for voters. In a 2016 national survey of registered voters, health care ranked number four on the list of importance behind the economy, terrorism, and foreign policy. With so much focus on the sector, health care companies could continue to pay the price for political rhetoric in the near term.
The need for health care
But it’s important to remember that in addition to valuations and earnings, lifestyle and demographic factors support health care over the long term. First, while we can postpone discretionary purchases like a car or new appliances in dire times, health care is one thing we cannot live without. Meanwhile, an aging baby boomer population means demand for health care services will likely continue to grow. And as advancements in technology ensue, so will the average age in life expectancy, thus furthering the need for health care.
Some options to think about
Stocks in the biotech industry have a history of volatility, and given the election, nothing is certain. Yet, the industry is experiencing a wave of innovation. Within this context, it may make sense for some long-term investors to consider how biotech stocks may fit into their portfolio. Investors with a higher risk tolerance and/or a longer-term investment horizon may want to think about taking advantage of market volatility to find select opportunities in health care and biotech. To gain exposure to health care or biotech companies, investors may want to take a look at the iShares Nasdaq Biotechnology ETF (IBB) or the iShares U.S. Healthcare ETF (IYH).
Build on Insight, by BlackRock written by Heidi Richardson
CC-BY-SA-2.0, FlickrPhoto: Ministerio de Cultura de la Nación Argentina. Investing in the Age of Populism: a European Equities View
Populism is on the march. The unexpected UK vote to leave the EU, rising support for right-wing politicians in several other European countries, and the surprisingly strong showing by politicians such as Donald Trump are starting to cause jitters amongst investors. Not least because several of these politicians and political movements support ideas that range from mildly damaging to economically illiterate, such as greater government intervention in business, criticism of central bankers and restrictions on immigration and protectionism.
Despite increasing popular support for these unattractive ideas, equity markets have so far held up reasonably well, with the US market still trading near record levels. European markets have also snapped back from their post-Brexit vote blues, but is this stance complacent? And what are the potential investment implications of this populist movement?
Discontent with the status quo
First we should consider what is behind these votes and polls. Popular dissatisfaction with general economic development since the global financial crisis is palpable, caused by stagnation or falls in real disposable income for middle or lower earners. And discontent has been further sharpened by the realisation that almost all of the economic rewards go to a tiny elite. Mostly, these are the failings of globalism, which has delivered cheaper goods but also a deflationary impact on the bargaining power of semi-skilled and unskilled labour in developed countries, as products and services are moved offshore.
But the key point is that this discontent is being directed at national governments, because of the belief that politicians can ‘do something’. More unscrupulous politicians have realised that they can exploit these discontents to further their careers, even if they have no clue how to solve the underlying problems. Remember how prominent Brexiteers in the UK promised that the UK could control immigration and retain full access to the single market – a false claim that was exposed fairly quickly after the vote.
Thankfully, no politician has the power to roll back the effects of globalism – otherwise someone might propose that we all buy locally made clothes or rear our own chickens. Perhaps that sounds like a lovely idea. But on a more serious note, there is still a risk that politicians could come up with increasingly outrageous ideas to try to appeal to voters and to make a difference in a low-growth world. The Brexit debate is a case in point. Is the UK really likely to be a more prosperous place if it becomes significantly less attractive to foreign investors?
The politics of pragmatism
So the key task is to identify politicians who might do real damage and to assess if they really will be in a position to do that damage. The resilience of markets in the face of Brexit and other factors is explained by the expectation (or hope) that relatively sensible people are likely to end up taking decisions, or that the most foolish ideas will not actually be enacted.
In the case of the UK, the finance ministry is being run by the first man to have some actual business experience in at least a generation. And although much of the public rhetoric in the UK seems to be anti-business, a good part of this is probably pre-Brexit negotiation tactics aimed at securing a good deal. There is a difference between what politicians feel they need to say to justify their positions to discontented voters and what they are likely to enact in practice. It is also overlooked that the UK could well remain inside the European customs union – even if it leaves the single market.
If you work on the basis that the most extreme politicians will not get their hands on the controls and that mildly daft ones will be reined in by bureaucrats, then the current market view looks more realistic. There are risks that relatively sensible politicians could try and spend their way out of low growth, especially because we seem to be close to the limits of what central banks can do via quantitative easing (QE) and negative interest rates.
But it is more likely that a few high-profile infrastructure projects or housing schemes will be announced (maximum publicity for the least money) and that much riskier ideas such as ‘helicopter money’ – an alternative to QE that could be anything from payments to citizens to monetising debt – will be avoided. Fears that the EU will fall apart because of Brexit also seem misplaced: history means that other European countries have a completely different view of the institution.
Why pay for nothing?
Back to investment. If you want to get a return on your capital, no-one likes the idea of paying to lend money to a company (thanks for the offer, Henkel and Sanofi, which have both offered debt at negative rates). This only makes sense if you think someone else will buy the debt for an even more negative return.
So it seems that equities are one of the few places that can offer the potential of a real return. And within equities, there are some sensible steps to follow that can help to identify the types of company that should be able to ride out the next few years in a resilient way:
Look for basic products and services (tyres, lubricant, shampoo, food)
Look for recurring revenues or long-term contracts
Don’t overpay for growth – it might disappoint!
Find niche products with pricing power
Avoid regulatory/tax risk
Avoid dependence on a few products or countries
Identify beneficiaries of low interest rates (infrastructure)
Look for contractors with specialist infrastructure skills (tunnels, bridges)
Locate ‘self-help’ stories
Although valuations in Europe are significantly higher than they were two years ago, it is still possible to find solid businesses capable of delivering a cash yield of 6–7% and with opportunities to grow. Unless the political situation really deteriorates, those prospects are some of the best available in a world where low growth and negative rates are likely to continue for some time to come.
Simon Rowe is a fund manager in the Henderson European Equities team.
CC-BY-SA-2.0, FlickrPhoto: Joe Cheng. Eaton Vance to Acquire Calvert Investment Management
Eaton Vance recently announced the execution of a definitive agreement to acquire the business assets of Calvert Investment Management, an indirect subsidiary of Ameritas Holding Company. In conjunction with the proposed acquisition, the Boards of Trustees of the Calvert mutual funds have voted to recommend to Fund shareholders the approval of investment advisory contracts with a newly formed Eaton Vance affiliate, to operate as Calvert Research and Management, if the transaction is consummated.
Calvert is a recognized leader in responsible investing, with approximately $12.3 billion of fund and separate account assets under management as of September 30, 2016. The Calvert Funds are one of the largest and most diversified families of responsibly invested mutual funds, encompassing actively and passively managed U.S. and international equity strategies, fixed income strategies and asset allocation funds managed in accordance with the Calvert Principles for Responsible Investment. As a responsible investor, Calvert seeks to invest in companies that provide positive leadership in their business operations and overall activities that are material to improving societal outcomes.
Founded in 1976, Calvert has a long history in responsible investing. In 1982, the Calvert Social Investment Fund (now Calvert Balanced Portfolio) was launched as the first mutual fund to oppose investing in South Africa’s apartheid system. Other Calvert innovations include the first responsibly managed fixed income and international equity funds, and pioneering programs in shareholder advocacy, corporate engagement and impact investing.
“I am extremely pleased that Eaton Vance has chosen to make Calvert the centerpiece of its expansion in responsible investing,” said John Streur, President and Chief Executive Officer of Calvert. “By combining Calvert’s expertise in sustainability research with Eaton Vance’s investment capabilities and distribution strengths, we believe we can deliver best-in-class integrated management of responsible investment portfolios to investors across the U.S. and internationally. Eaton Vance is the ideal partner to help Calvert fulfill its mission to deliver superior long-term performance to clients and achieve positive impact.”
“As part of Eaton Vance, we see tremendous potential for Calvert to extend its leadership position among responsible investment managers,” said Thomas E. Faust Jr., Chairman and Chief Executive Officer of Eaton Vance. “By applying our management and distribution resources and oversight, we believe Eaton Vance can help Calvert become a meaningfully larger, better and more impactful company.”
Completion of the transaction is subject to Calvert Fund shareholder approvals of new investment advisory agreements and other closing conditions, and is expected on or about December 31, 2016. Because the transaction is structured as an asset purchase, liabilities in connection with Calvert’s previously disclosed compliance matters and other pre-closing obligations will remain with the seller. Terms of the transaction are not being disclosed.
