Mary Oliva, fundadora de International Wealth Protection. Foto: Forbes. Servicio de seguros 'concierge' para los más acaudalados de Latinoamérica
For Latin America’s ultra-high-net worth individuals and families— and for the financial institutions and advisors who serve them—the gateway to culturally tailored wealth protection can be found in Miami, Florida. That’s the home of International Wealth Protection, an insurance brokerage firm unlike any other in the U.S., according to Forbes.
Founder and longtime industry veteran Mary Oliva, who wields 20+ years of international marketplace experience, has traveled extensively throughout Latin America. She understands its wealthiest citizens’ unique needs and challenges; more importantly, she has the knowledge, tools and acumen to effectively address them.
“We work jointly with other wealth advisory professionals who want to fully service their foreign national clients but aren’t familiar with the cultural intricacies and regional realities that complicate plan- ning,” Oliva says. “We’re on the ground in Latin America, meeting with clients on a regular basis. The full scope of service we provide and the way we provide it truly set us apart.”
Managing the Many Facets of Risk
International Wealth Protection provides insurance-based wealth protection and wealth transfer strategies designed to protect clients’ assets, sustain their lifestyles and safeguard their legacies—all in a region too often beset by military insurrection, political instability and currency volatility.
“Ninety percent of Latin American businesses are family owned, yet only 1 percent reach the fourth generation due to a lack of planning,” Oliva says. “We understand our clients’ unique concerns as well as the nature and degree of risk they face, and we’re focused on having the conversations no one else is having with them—what keeps them up at night and the future they envision.”
International Wealth Protection also stays a step ahead of emerging regional trends. “We’ve now entered a global era of transparency and compliance,” Oliva says. “Our firm is pioneering the utilization of life insurance, including private placement policies, to meet Latin Americans’ growing need for tax-planning strategies.”
Protecting Your World: Concierge-Style Service
International Wealth Protection delivers straightforward insurance-based solutions to the highly complex and diversified jurisdiction that is Latin America. With complete understanding of the regulatory and tax environment of the region’s 20 different countries, Oliva is able to implement personalized solutions in a compliant and tax-efficient manner.
These solutions include but are not limited to: general risk evaluation ; multijurisdictional tax planning; charitable giving strategies ; U.S. beneficiary planning ; business continuity ; extraordinary risks ; asset protection ; multigenerational planning .
“Our goal is to help our clients mitigaterisk in a seamless fashion,” Oliva says. “We go to great lengths to provide an excep- tional client experience.”
Black Diamond Capital Management has announced the appointment of Jerome Shapiro as a Managing Director and Structured Product Portfolio Manager.
Mr. Shapiro joined the firm on June 1 at its Greenwich, Connecticut office and has responsibility for structured product investments across the Black Diamond platform.
“Jerome’s hiring expands our structured product capabilities and reflects Black Diamond’s view that structured investment opportunities are an attractive asset class for generating returns for our clients,” said Stephen Deckoff, Managing Principal of Black Diamond. “Jerome is a seasoned professional and his expertise will enable us to continue to enhance our capabilities in this important area.”
“It’s a privilege to join the Black Diamond team,” said Mr. Shapiro. “I’m confident that we have the experience and ability to significantly enhance and grow our structured products portfolio.”
Mr. Shapiro was most recently a Senior Vice President at One William Street, an alternative investment firm, managing an asset-backed portfolio across multiple commercial and consumer sectors. He previously worked at Merrill Lynch & Co. in the Principal Investment Group, co-managing a whole loan portfolio. He also held positions in trading and structuring CMBS and other mortgage products at Bear, Stearns & Co. Mr. Shapiro holds a BS in Mathematics from Tufts University.
Identifying “economic moats,” or structural barriers that protect companies from competition, is the cornerstone of Morningstar’s equity analysis. Similar to the way castles are protected by moats, companies with economic moats are great businesses that can fend off competition and earn high returns on capital for many years. Morningstar’s new book, Why Moats Matter: The Morningstar Approach to Stock Investing, helps investors find superior businesses and determine when to buy them to maximize returns over the long term.
Why Moats Matter outlines the basic idea of economic moats, a concept pioneered by Warren Buffett, and gives investors a fundamentals-based framework for successful long-term equity investing. Why Moats Matter is co-authored by Heather Brilliant, co-chief executive officer of Morningstar Australasia and recently global head of equity and corporate credit research for Morningstar, and Elizabeth Collins, Morningstar’s director of equity research, North America. Other members of Morningstar’s equity and corporate credit and quantitative research teams also contributed to the book. In Why Moats Matter, Morningstar’s experts:
Explain the concept of economic moats and moat trends and the five sources of sustainable competitive advantage—Intangible Assets, Switching Costs, Network Effect, Cost Advantage, and Efficient Scale.
Establish the difference between business quality and undervalued stocks.
Discuss standards for evaluating moats by sector and industry.
Clarify how moats affect stock returns and stock valuation.
Offer portfolio strategies for putting the power of moats and valuation to work.
“When Morningstar started analyzing stocks more than a decade ago, we began with some core principles that guide our research to this day. Then and now, our analytic work has centered on three primary elements—sustainable competitive advantages, valuation, and margin of safety—that we believe are the keys to outperforming the stock market over time,” Brilliant said. “Why Moats Matter delves into each of these ideas and is intended for investors with a long-term perspective. When you focus on a company’s fundamental value relative to its stock price, and not on where the stock price is today relative to a month ago or a day ago or five minutes ago, you start to think like an owner rather than a trader. It’s this mindset that we believe is key to helping people become successful stock investors.”
Why Moats Matter is now available wherever books and e-books are sold. More information about Why Moats Matter, including author biographies and headshots, cover art, and methodology documents, is available at this link. To view a video about economic moats and download sample equity research reports, please visit this site. Morningstar applies this wide-moat philosophy in its Morningstar® Wide Moat Focus IndexSM, which consists of 20 stocks that represent the most compelling values as determined by the ratio of Morningstar’s estimated fair value to the stock’s current market price.
PIMCO and Source announced the listing of two ETFs on the SIX Swiss Exchange. The PIMCO Euro Short Maturity Source UCITS ETF and the PIMCO US Dollar Short Maturity Source UCITS ETF were launched in 2011, initially on Xetra and the London Stock Exchange, and since then have gathered assets of €1.3 billion and US$1.8 billion respectively.
These short maturity funds – known as ‘MINT’ – were the first actively managed ETFs to be listed in Europe and offer investors direct access to PIMCO’s global cash management expertise.
Their aim is to preserve capital and provide the potential for superior income and total returns compared to traditional money market funds. They do this by investing in baskets of short-term investment grade debt securities. The funds are wholly transparent, with full disclosure of holdings published daily.
The fund managers look to take advantage of opportunities in the market by actively managing exposure to duration and credit. Currently, the Euro fund has an effective duration of 0.98 years, while the US Dollar fund has a shorter duration of 0.51 years. Both funds maintain duration of up to 1 year. In terms of credit exposure, the average rating within the two funds is currently A+.
The PIMCO Euro Short Maturity Source UCITS ETF and the PIMCO US Dollar Short Maturity Source UCITS ETF both have an annual management fee of 0.35%.
Now with the world somewhat less fixated on football (or soccer as I’ve learned to call it here in the U.S.), let us reflect on what observations may be made. Since many of my colleagues and I are from Asia, we paid a bit more attention during the matches to the Asia Pacific teams that competed—South Korea, Japan and Australia—as well as to the U.S.
Being from China, I was personally a little disappointed that China did not qualify for this year’s event in Brazil. Even with over 1 billion people, it has somehow repeatedly failed to assemble the dozen or so athletes needed to field a competitive team. In fact, the only time Team China managed to qualify was in 2002, but its World Cup dreams fizzled without a single goal.
By contrast, Japan has perhaps offered a roadmap for others. Although not considered among the world’s top soccer teams, Japan’s achievement has nonetheless been remarkable as a latecomer to the game. Its professional soccer league got its start in just 1993. The J-league, as it is known, is the brainchild of Saburo Kawabuchi, a former center forward on Japan’s national soccer team. When he helped set up the league, he projected that it would take a century to make Japan internationally competitive.
English coach Steve Darby, who has worked throughout Asia was quoted by Australian press as saying, “I would really like Japan to do well on the pitch as they tend to do everything right off the pitch. The Japanese model is the one (for Asian teams) to follow … Japan has long-term goals—unlike many countries who have such short-term ones based purely on immediate results—a strong league, underpinned by an organized systematic youth development program.”
J-League’s focus has been geared toward building a richer sporting environment that goes beyond merely entertainment. Several J-Leaguers have played in top European leagues such as Manchester United, and served as role models back home. And just last month, English champions Manchester City purchased a stake in the Yokohama F-Marinos—a milestone in foreign investment in a J-League team.
While a single World Cup match could potentially make or break a national team, elevating a national team’s overall competitiveness requires a long-term approach. Likewise, in investing, short-term factors drive individual stocks up or down on a daily basis. At Matthews, we believe that taking a long-term view is the correct approach to sound investing. Though our time horizon is not as long as over 100 years, we do constantly ask ourselves what businesses will look like five to 10 years down the road.
For many nations, professional soccer, or indeed professional sports in general, is a low value-added activity. It is only when nations are productive enough to allow a small fraction of their population to play for money that the game can really take off as a business. But more and more of Asia is reaching that stage. And when they do, Asia’s middle class may even celebrate their first World Cup winners.
Opinion column by Beini Zhou, CFA. Portfolio Manager, Matthews Asia
Photo: Dabackgammonator. S&P Dow Jones Indices Will License All of Mexico's BMV Indices
S&P Dow Jones Indices (S&P DJI) has announced that it has reached an agreement in principle with the Mexican Stock Exchange (Bolsa Mexicana de Valores, BMV) to license all of the BMV indices including their flagship index, IPC (Índice de Precios y Cotizaciones) – the broadest indicator of the BMV’s overall performance. The final agreement is subject to definitive approvals.
S&P DJI will assume the marketing and commercial licensing of the BMV indices with the intent to jointly create new indices with the BMV. This agreement allows S&P DJI to eventually calculate all of the BMV indices.
The BMV currently publishes several leading stock market indices, each liquid enough to serve as the basis for potential derivative products and ETFs. “The BMV is the 5th largest exchange in the Americas (ranked by domestic market capitalization) and 2nd largest exchange in Latin America,” said Alex Matturri, CEO of S&P Dow Jones Indices. “With over 140 listed companies trading on the Exchange, it is the premier destination for international and domestic investors seeking access to the growing Mexican equity market. The BMV indices are well recognized internationally as the main benchmarks for the Mexican markets. We are excited to bring the S&P brand, and along with it, our indistinguishable characteristics of integrity, transparency and independence, to the BMV family of indices.”
Luis Tellez, Chairman of the Board and CEO of BMV said: “The leadership of S&P Dow Jones Indices and its worldwide recognition were the most important assets valued by BMV’s Board of Directors in order to have a licensing agreement in place that will broaden our coverage and other strengths well recognized by the market. S&P Dow Jones Indices’ 100+ years of indexing experience adds an important value to BMV in its indices business. The Mexican market and its participants will now have more benchmarks measuring international trends and market health.”
According to the agreement, the BMV will transition index calculation of its indices to S&P DJI over time ensuring a smooth transition that will have minimal impact to existing and new clients. S&P DJI will be responsible for the commercial licensing of the indices and the end-of-day data while the BMV will continue to commercialize real-time index data. As part of the agreement, all current BMV indices will be co-branded S&P.
Outside of branding, no changes are expected to be made in the near future to the methodology of the BMV indices that already are up to international standards. Together both companies will work in developing new indices to satisfy the evolving needs of the market.
Fidelity Investments has announced its 10 passively managed sector exchange-traded funds (ETFs) have surpassed $1 billion in managed assets since trading began eight months ago.
A significant portion of Fidelity’s asset growth occurred in the past three months with individuals and advisors investing more than $500 million in the ETFs. In addition, six of the 10 ETFs have each accumulated more than $100 million in assets under management, including the largest -Fidelity MSCI Health Care Index ETF (FHLC)- at $172 million.
“As investment advisors, we’re looking to provide our clients with solutions that help diversify portfolios and are cost-effective,” said David Haviland, portfolio manager at Beaumont Capital Management. “Sector investing is an effective and targeted approach that we frequently use to gain exposure to specific segments of the economy – whether it is for growth or to manage portfolio risk. With Fidelity’s deep sector heritage and the low-cost sector ETFs, it was clear these solutions would deliver value to our clients.”
“Surpassing the $1 billion milestone in such a short period of time clearly demonstrates the growing demand for sector investments,” said Anthony Rochte, president of SelectCo, Fidelity’s dedicated sector investing division. “We expect interest in sector investing, whether through our ETFs or our 44 actively managed sector mutual funds, to continue as individual investors and advisors seek to diversify their portfolios and use sectors as building blocks to help generate potential alpha and manage portfolio risk.”
As part of its broader strategic relationship, Fidelity, which has $2 trillion in managed assets, uses BlackRock as the sub-advisor for its 10 passive sector ETFs, leveraging the firm’s passive investment management expertise and scale.
Expanded Sector Investing Education and Tools
Fidelity also expanded its extensive suite of in-depth sector research and market commentary for investors and advisors on dedicated micro sites on fidelity.com and advisor.fidelity.com, with the launch of Fidelity’s Quarterly Sector Update. The new report leverages proprietary research from across Fidelity and provides investors a snapshot of the relative performance potential of the 10 market sectors based on five key factors: relative strength, momentum, relative valuations, fundamentals and business cycle. The Q2 2014 report identifies the technology, industrials and health care sectors as best positioned for investment opportunities.
“Fidelity’s strategy will continue to be about offering our millions of brokerage customers and thousands of advisor clients a comprehensive suite of investment products and solutions to help them meet their diverse investment needs,” said Rochte. “Our expansive sector capabilities span from the industry-leading sector line up of ETFs and actively managed mutual funds to Fidelity’s sector research and investing tools and are all at the core of helping advisors and individual investors leverage sectors in their portfolios.”
U.K. investment boutique J O Hambro Capital Management (JOHCM) has announced that it has hired portfolio managers Thorsten Becker, Arun Daniel, and Vincent Rivers and trader Eric Yi to form its new small/mid cap U.S. equity team ahead of the launch of a U.S. small and mid-cap equity strategy later this quarter.
The three portfolio managers and Yi were previously employed with Pyramis Global Advisors, a Fidelity Investments company, where they contributed to the management of a U.S. small/mid cap core equity strategy.
The team will apply a core investment approach, managing a fundamental research-driven best ideas portfolio. Capacity for the strategy has been set at $5 billion. The team will be will be based in Boston, Massachusetts.
“We’re pleased to add this team to our lineup of outstanding money managers,” said Gavin Rochussen, JOHCM CEO. “The appointment of these experienced and proven U.S. equity investors enhances our presence in the United States, a market where we are making considerable inroads. Our success has been founded upon recruiting experienced fund managers with proven investment pedigree. We give those investment professionals the autonomy and incentives that allow them to do what they do best: create alpha in their given strategies.”
The team will also launch a Global small and mid-cap equity strategy in due course.
CC-BY-SA-2.0, FlickrChris Hart, portfolio manager de la estrategia Global Premium Equities de Robeco. Los “tres círculos” llevan a Robeco a identificar más oportunidades entre las mid y large caps
Stock markets that have hit record levels in recent months present a challenge for investors in avoiding the value trap, says award-winning fund manager Chris Hart.
Chris Hart, manager of Robeco Global Premium Equities strategy, warns that chasing those companies which are perceived to be higher growth than others can lead to overpaying for stocks that are already expensive. Instead, Hart prefers a more disciplined approach that is based more on finding those companies that are undervalued relative to their prospects. This avoids simply looking for momentum, where a company is able to grow but much of the potential is already priced in. “A drawback of both the bull market and the low-growth economic environment that we are in is that investors chase growth – and sometimes at a price that isn’t really worth paying. The market is currently paying high prices for momentum, top-line and earnings growth. Small cap stocks globally (under USD 2 billion) seem to be somewhat expensive. The portfolio currently has the smallest percentage of small cap names over the past six years. We’re now finding more opportunity in the mid and large cap range.”
‘A drawback of the bull market is that investors chase growth’
Such is his skill in finding the best stocks that Boston-based Hart has won the Morningstar Awards for the best fund a record nine times in Europe. His fund has consistently outperformed its benchmark, and Hart says this is due to strict adherence to what he calls the ‘three circles’ approach. This targets companies that have a low valuation (relative to peers and company history), positive momentum (the ability to grow) and good fundamentals (the ability to generate free cash flow).
“What we’re really looking for is that dislocation between valuation and fundamentals, and earnings,” says Hart. “Over the last five to six years we have been able to find pockets of opportunity at the industry level – names that were generally cheap. We’re now not really finding pockets any more, but one-off names. For example, advertising as an industry was undervalued for a while. There would be 2-3 advertisers that might be interesting, and now it might be one. So it’s even more security- selection driven because of where we are in the market, and what the market is paying for. Being as disciplined as we are with the application of our three circles philosophy and process, the portfolio will always maintain a quality bias and always own companies that have earnings momentum that is better than the market, with valuation support.” And being strict on principles is key. “We are not going to throw away our discipline and chase momentum and give up our valuation criteria,” says Hart. “The portfolio today has become more value orientated. The level of relative valuation to the universe that we look at is almost as wide as it’s ever been.”
You may access the complete article at Robeco’s Time2Read Magazine
Photo: Shinzō Abe April 2014, Chuck Hagel. It is Dangerous to Assume that Accommodative Monetary Policy Alone Will Cure all Ills
Global equities and global bonds delivered further gains in June 2014, with the MSCI World index up 1.83% in US dollar terms while the JP Morgan Global Government Bond index returned 0.69%, also in dollar terms. Regionally, UK equities were one of the main laggards during the month, as FX-related earnings downgrades weighed on sentiment. By contrast, Japanese equities performed strongly as the recent news that the Government Pension Investment Fund will increase its exposure to equities helped to lift sentiment. The announcement in relation to the GPIF is significant as it has assets of c.$1.2 trillion. Japanese equities were also buoyed by PM Shinzo Abe’s comment in the Financial Times that he is genuinely committed to the ‘third arrow’ of Abenomics (that is, committed to promoting faster rates of economic growth in Japan) rather than focusing solely on monetary and fiscal measures.
For 2014 to date, investors have benefited from low levels of volatility everywhere – which has enabled bonds and equities to rally alongside each other. The question now has to be: how much more peace and quiet can we expect? Recent developments in Portugal, while idiosyncratic rather than systemic in our view, have shown that the banking sector can continue to be a source of unwelcome and unexpected surprises; markets will now await a fuller picture of the health of European banks, which should emerge when the ECB completes its ‘stress tests’ later this year. The geopolitical environment is undeniably worse than it was at the beginning of the year, with ongoing tension between Russia and Ukraine and concerns that Iraq and Syria could be further destabilised by the growing strength of Isis, the jihadist group. In the US, the Fed has signalled that its bond-buying programme will come to an end this year. With the exception of the recent news from Portugal, markets have largely taken all these developments in their stride. While this has suited our pro-equity stance, it has left us somewhat puzzled as the rise in core yields that we expected at that start of 2014 has not materialised.
In terms of where fixed income markets go from here, we still think it is very difficult to be positive on core government markets. The weak Q1 US GDP print may well have provided some support for core bond prices but policy normalisation – albeit at a slow pace – is coming in the US and UK whether fixed income markets like it or not. In our view, corporate credit remains more attractive than government debt but there are clear signs now that non-financial corporates are starting to re-lever their balance sheets. Whilst that is generally positive for high yield (as takeovers often involve a higher-rated firm taking over a lower- rated one) it is not so positive for investment grade. Nonetheless, given the significantly better health of corporate balance sheets when compared to those of sovereign issuers, we still think that credit remains relatively attractive for now.
In equity markets, we remain constructive on the outlook for the remainder of the year, with overweight positions in the UK and Japan in our asset allocation model. UK earnings expectations have faced headwinds recently because of the pound’s strength, but in common currency terms the picture looks more positive. The UK also benefits from an attractive dividend yield, which we believe is likely to remain a favourable characteristic in a low-growth/low-return world. Japanese equities are attractively valued versus developed world equities and the recent comments from Mr. Abe show that he is serious about making Abenomics work. For us, the real challenge will be to ascertain when the valuation re-rating of equities runs out of steam. With the notable exception of the US, earnings growth is simply not coming through fast enough to allow equities to make a lot more progress from current levels. August is traditionally a quiet time for equity markets, due to seasonally low flow and volatility levels, but, as recent events have shown, it is dangerous to assume that accommodative monetary policy alone will cure all ills.
Investment strategy by Mark Burgess, Chief Investment Officer, Threadneedle
