Nick Hamilton. Nick Hamilton, Invesco Perpetual's Head of Global Equities, Leaves Firm.
Nick Hamilton, Head of Global Equities at Invesco Perpetual, has decided to leave the firm and return back to his homeland country, Australia, where he will be responsible for Business Development in Colonial First State. Invesco Perpetual has informed that Nick Mustoe, CIO of Invesco, together with other team members of the global equity team will take over Hamilton’s duties.
Hamilton, who left Invesco Perpetual in the month of April, worked with Invesco for 10 years, previously as Product Director for UK Equity. Before that he worked at Rothschild Australia Asset Management and Thomson Reuters, according to Citywire.
Wikimedia CommonsBy Kevin.B. ING US IM Appoints Bas NieuweWeme as Managing Director and Head of Institutional Distribution
ING U.S. Investment Management has appointed Bas NieuweWeme as Managing Director and Head of Institutional Distribution. NieuweWeme, who reports to Shaun Mathews, Executive Vice President and Head of the Client Group, will oversee all aspects of the institutional business, setting strategic direction across U.S. and international sales, consultant relations, RFPs, client service and relationship management.
“Bas is uniquely qualified to lead our institutional business and – together with his team – will continue to build on the positive momentum we have achieved across our distribution channels. In the first half of 2013, ING U.S. Investment Management generated third-party net flows of $5.8 billion, and third-party assets under management have grown to $110 billion as of June 30, 2013, compared to $91 billion a year ago”, said Mathews.
NieuweWeme has worked at ING for 13 years, most recently as Senior Vice President and Head of Institutional Sales with ING U.S. Investment Management.
Earlier in his career, NieuweWeme held various domestic and global marketing and sales roles for ING. Prior to joining ING, he worked for the tax consultancy group at PricewaterhouseCoopers. NieuweWeme holds an Executive MBA from the New York University Stern School of Business and a law degree from the University of Amsterdam, School of Law.
ING U.S. Investment Management, which plans to rebrand in the future as Voya Financial, is a subsidiary of ING U.S., Inc. and has approximately $190 billion of assets under management.
Foto: Daniel Christensen . Testa vende Sabadell Financial Center de Miami por unos 190 millones de dólares
Wharton is hosting two events in Miami on August 13th, a Diversity Presentation followed by a General Admissions Presentation for the Wharton MBA program.
Diversity Presentation
Wharton invites you to a private reception with current Wharton students and local South Florida alumni. This event provides a wonderful opportunity for prospective students to learn more about Wharton’s diversity networks for African American, Latino/Hispanic American and Native American students. Afterwards, you can join the general Wharton information session immediately following the reception.
Immediately after de Diversity Presentation, The Wharton Club of South Florida hosts the Wharton Full-Time MBA Admissions presentation. Enjoy an evening with local Miami alumni as they share their personal Wharton experiences and help to answer your questions.
According to preliminary figures from ETFGI’s Global ETF and ETP industry insights report, near record net inflows of US$44.08 billion and strong market performance helped to push global ETF and ETP assets to US$2.16 trillion at the end of July 2013. There are now 4,883 ETFs/ETPs, with 9,925 listings, from 209 providers listed on 57 exchanges.
“Dovish comments from the Fed and positive market performance encouraged investors to put net inflows of US$44.08 billion back into the market through ETFs/ETPs” according to Deborah Fuhr, Managing Partner at ETFGI.
Equity
In July, Equity ETFs/ETPs gathered the largest net inflows with US$41.62 billion. North American/US equity ETFs/ETPs gathered the largest net inflows with US$32.99 billion, followed by European equity indices with US$3.51 billion, and developed Asia Pacific equity with US$1.82 billion.
Fixed Income
Fixed income ETFs/ETPs experienced net inflows of US$5.1 billion. High yield ETFs/ETPs gathered the largest net inflows with US$3.0 billion, followed by government bonds with US$2.2 billion, and corporate bonds with US$868 million, while inflation-linked fixed income ETFs/ETPs experienced the largest net outflows with US$650 million.
Commodity
Commodity ETFs/ETPs saw net outflows of US$2.72 billion. Precious metals ETFs/ETPs experienced the largest net outflows with US$2.19 billion, followed by energy, and agriculture with net outflows of US$223 million and US$175 million, respectively.
Providers
SPDR ETFs ranks first based on July net inflows with US$17.8 billion, and fourth YTD with US$11.8 billion. Meanwhile, Vanguard ranks first based on net inflows YTD with US$36.17 billion, and third in July with US$7.31 billion. iShares ranks in second place for both July and YTD net inflows, with US$10.9 billion and US$32.47 billion, respectively. WisdomTree and PowerShares rank in third and fifth place in YTD net inflows with US$11.85 billion and US$9.61 billion, respectively.
By Almonroth . The Damage Potential of Rising Rates
The initial goals of the Federal Reserve’s “Great Monetary Experiment”— to keep rates low, create negative real yields, spur consumption and cushion the budgetary consequences of fiscal stimulus — have largely been accomplished. Investors could now face the threat of rising bond yields. Various bull and bear scenarios might ensue. What are they and what could trigger them? What are the risks to portfolios?
Duration Described: The Ugly Math of Long Maturity
Duration is a measure of a fixed income instrument’s sensitivity to rising rates. In general, the longer the instrument’s maturity, the longer its duration, and the more sensitive its price will be to changes in market yields. This is because the instrument’s value is the sum of cash flows received (interest payments and principal payments), discounted at the current rate demanded by investors for that instrument until its maturity.
Time Value of Money
When rates rise, an investor has to implicitly discount all interest and principal payments for bonds at a higher rate. And that rate is compounded by the “time value of money”. Thus, if a bond’s interest and principal payments stretch far off into the future, the discount factor becomes large. The market reacts typically by dropping the value of the longer-dated bond much more dramatically than the shorter-dated bond.
Present Value
Consider two bonds with different maturities: a 2-year and a 30-year Treasury. For a $1,000 2-year Treasury bond yielding 1%, the principal to be paid back in 2 years is a large component of the bond’s present value. The interest payments (4 payments of $5 = $20 vs. $1000 principal) are a small part of the present value. Conversely, for the $1,000 30-year bond yielding 3%, the principal payment, made far in the future, is a smaller component of the present value. The interest payments (60 payments of $15 = $900 vs. $1,000 principal) are a much larger portion of the bond’s present value.
Many Interest Rate Scenarios Could Ensue Over the Next Several Months
One “extreme” scenario that some have suggested is the ultimate duration nightmare – a wholesale rout of the Treasury and Dollar markets. This event could transpire if investors lose faith in U.S. political and monetary authorities resulting from an extreme currency debasement and the simultaneous inability to reign in federal deficits. Those who argue we are going down this path may point to the seemingly never-ending rounds of Quantitative Easing and political paralysis on a long-term budget plan. While we sympathize with these concerns, we don’t find them compelling in the near- to intermediate-term for a number of reasons. We do, however, envision a number of different potential rate scenarios unfolding.
Click here to read Pioneer’s Blue Paper The Damage Potential of Rising Rates, which reviews these interest rate scenarios, and the conditions that could invoke them.
Column by Michael Temple Director of Credit Research, U.S, Pioneer Investments
Juan Garrido (above), and Les Baquiran, co-directors of the LatAm Chapter in HFA. Hedge Fund Association Appoints Juan Garrido and Les Baquiran Co-Directors of LatAm Chapter
The Hedge Fund Association has announced new regional leadership appointments. Victor Hugo Rodriguez, the first director of the HFA’s LatAm Chapter, is passing the reins to prominent hedge fund industry pioneers Juan Garrido and Les Baquiran.
Juan Garrido is global head of investment solutions at BBVA Global Private Bank in New York. He has almost two decades of market experience and a sound understanding of asset and wealth management, financial products and services, and infrastructure. Juan oversees BBVA’s Wealth Management’s global investment strategy, asset allocation and recommended catalog of products and services, is a member of the Global Private Banking Steering Meeting, and chairs the Global Wealth Management Meeting.
Les Baquiran was a New York-based principal at Park Hill, an alternative investment placement agent that is part of the Blackstone Group. Prior to joining Park Hill, he was a Managing Director at ISI in Institutional Sales and before that worked at Brown Brothers Harriman as an Equity Research analyst. Les has guest lectured or advised on curriculum on investment management and emerging markets at Yale, Harvard, Stanford, and New York University.
“Victor is clearly a hard act to follow but Les and I both look forward to facing the challenge of further developing the HFA’s activities in the Latin America region,” said Juan Garrido, Co-Director of the HFA’s LatAm Chapter. “I agree wholeheartedly. Whichever metaphor you choose to describe the magnitude of what lies before us, we will both need to be at our best to match, let alone emulate, what Victor has achieved to date,” added Les Baquiran, Co-Director of the HFA’s LatAm Chapter.
Victor Hugo Rodriguez became the director of the HFA’s LatAm chapter when it was launched in March 2011. The founder, president and CEO of LatAm Alternatives, he has over 17 years of experience in management, sales, marketing and business development within the securities industry in the U.S.-LatAm region. He was partner and head of Latin American Prime Brokerage for Merlin Securities and Director of Global Institutional Sales at TradeStation Securities. He has also been a live TV economics news anchor.
“It has been a privilege to head the HFA’s efforts in Latin America over the past two years,” he said. “I know that Juan and Les will strive just as hard to carry on all the good work we have done in that time, and I will of course remain available to help and advise them when and where necessary.”
“These appointments are designed to maximize the impact that the HFA already has in the LatAm region, and I am certain they will do just that,” said Mitch Ackles, HFA President. “The diversity and richness of the talent available to our members in Latin America and around the world never fails to impress me.”
Wikimedia CommonsFoto: AT&T. Morgan Stanley nombra a un ex directivo de AT&T miembro de su consejo de administración
Morgan Stanley announced that Rayford Wilkins, Jr., has been elected to the Company’s Board of Directors, effective August 1, 2013.
Mr. Wilkins, 61, most recently served as CEO of Diversified Businesses at AT&T, a position from which he retired in March 2012. Previously in his career, Mr. Wilkins held several leadership roles at AT&T and its predecessor companies, including Group President of Marketing and Sales at SBC Communications, President and CEO of SBC Pacific Bell, and President and CEO of Southwestern xBell Telephone, among others.
Mr. Wilkins’ appointment will bring the size of Morgan Stanley’s Board to 15 members. He will serve on the Board’s Nominating and Governance Committee.
James Gorman, Chairman and CEO of Morgan Stanley, said: “I am very pleased to welcome Mr. Wilkins to our Board. He brings highly relevant leadership experience, both domestic and international, having managed through extensive change and transformation during his long career. His perspectives will benefit our other Directors, our management and our shareholders.”
Mr. Wilkins currently serves on the boards of Valero Energy Corporation, América Móvil and YP Holdings. He is also a member of the Advisory Council of the McCombs School of Business at the University of Texas at Austin, where he holds a bachelor’s degree.
The summer of 2013 has seen a spate of social unrest episodes across the emerging market space. The riots had two things in common. First, they were sparked by a government decision affecting daily life. In Turkey, it was the government’s decision to change the use of Istanbul’s landmark Taksim Square; in Brazil, it was the decision to hike bus fares; and in Bulgaria and Indonesia, it was higher electricity and fuel prices, respectively. Second, protesters are not affiliated with political parties or movements, and they are well educated members of the middle class.
This was not the first time that the middle class has been at the epicenter of social unrest. The now developed economies suffered a spate of social unrest during the “long nineteenth century”,when the rise of a middle class of traders, entrepreneurs and better educated people fuelled demand for better living standards and more representation in political governance.
This report, signed by Manolis Davradakis, Senior Emerging Economist, AXA Investment Managers, attempts to examine the root causes of the recent episode of social unrest in emerging markets and rank the various emerging economies on the basis of their performance in the area of institutional governance, which matters a lot to the middle class.
The middle class revolution
The world’s middle class is growing and is expected to continue to do so. It is expected to become more populous compared to the poor by 2022, with its size climaxing at 4.9bn people by 2030, doubling its size in 2009, according to the European Union Institute for Security Studies. Middle classes will grow the most in Emerging Asia, followed by Sub-Saharan Africa, MENA and Central and South America (Exhibit 3).
Indeed, high levels of economic development render people more open-minded, leading to more emphasis on self-expression and more participation in the decision-making process.Knowledge societies cannot function effectively without highly educated citizens who are accustomed to thinking for themselves. Beyond a certain point, repressing mass demands for a more open society becomes costly and economically ineffective. Government unwillingness to acknowledge the people’s right to freedom of expression and a voice in decision-making is a source of social unrest.
Everyday problems all the same
As more people join the ranks of the middle class, existing institutional structures prove to be unable to accommodate the aspirations of members of this class for swift economic and social advancement. Middle class members realize that although they earn more now and are wealthier than before, they still face the same malaises as the poorer strata of the population
The crime rate in several emerging markets overshoots that of OECD countries by a large margin. Indeed, the homicide rate is the highest in South Africa, Mexico and Brazil, all three members of the G20 (Exhibit 4).
High crime rates force people to spend a large share of their income to protect themselves and their properties, diverting funds from more productive uses and impeding entrepreneurship.
Also, public spending for education and health care are lagging behind in emerging compared to developed economies.
Investment implications
Social unrest may have implications for emerging market ratings. Specifically, the combination of the current account deficit widening, foreign capital outflows in the aftermath of US Federal Reserve’s QE tapering off, and prolonged social unrest could result in Turkey’s sovereign credit rating outlook and Brazil’srating being downgraded.
Fitch has warned that poorly handled enduring social unrest could put Turkey’s investment grade at risk, while Moody’s has stated that a spike in political risk is a rating negative event. We believe that the two rating agencies will most likely opt for an outlook downgrade at first to prevent the reputation damage that would emerge should they relinquish the investment grade less than a year after receiving it.
The rating action on Brazil could imply a sovereign rating downgrade, most likely by Standard and Poor’s, which downgraded the country’s outlook to Negative in June 2013. In Brazil’s case, rating agencies do not face the same reputation risk that they face in Turkey. A rating action could take place by end- August, within the two-month period after the outlook change by Standard and Poor’s.
Wikimedia CommonsSteven Crosby. PwC 20th Anniversary Global Private Banking and Wealth Management Survey
The upcomingFIBA Wealth Management Breakfast Series is titled “PwC 20th Anniversary Global Private Banking and Wealth Management Survey: Navigating to Tomorrow: Serving Clients and Creating Value”, and will be presented by Steven Crosby – Americas Wealth Leader, PricewaterhouseCoopers LLP.
The Survey questionnaires canvassed the full range of senior management views. Chief Executives, Heads of Business Units, Chief Operating Officers, Finance Directors, Risk Officers and Human Resource Managers all completed specific sections. Acknowledging their crucial role in the client experience, there is also a section dedicated to Client Relationship Managers.
Survey headlines:
Pervasive regulatory pressures are driving cultural change
The quest for operational efficiency and differentiations through technology continues
Traditional approaches to product and service are changing
Understanding the client’s perspective of value is only getting tougher
Wikimedia CommonsNarendra Modi, likely candidate for Prime Minister in the Indian general elections due in May of 2014.
. Tech-Savvy Elections in India
The democratic process in India is famously complex with innumerable caste coalitions and competing interests. With poverty widespread and so many living in remote villages, voter turnout can pose unique challenges.
While growing up in India, I recall politicians ferrying people from the hinterlands to attend political rallies, offering free transportation, lunch and pocket money to those willing to participate—all to ensure a large turnout. But what has changed since then? India’s political parties are now embracing technology to reach out to constituents.
We see a notable difference in an August rally being planned in the southern city of Hyderabad by Narendra Modi, the current chief minister of the western state of Gujarat. Unlike other rallies, this one for Modi, who is expected to be the Bharatiya Janata Party’s nominee for prime minister in upcoming national elections, features online registration, and is seeking voluntary donations of about 8 cents that will go toward charity.
India’s next federal election is expected to highlight the extensive use of the Internet and other electronic media. In a country of 1.2 billion people and approximately 250 million households, it is estimated that 155 million households have television sets. Moreover, the majority of these households have cable TV or satellite connections with access to multiple channels, allowing viewers to hear diverse political viewpoints. In addition, the country has more than 860 million cell phones, which offer politicians more options to reach voters via social media platforms.
Will the winner of India’s next election be the party that can best harness technology to compel voters to action? If so, then Mr. Modi may possibly have an edge. With more than 2 million Twitter followers—the most of any Indian politician—he has been among the early adopters of technology in India’s political arena. (Parliamentary Member Shashi Tharoor is close second with 1.84 million followers.) In recent Gujarat state elections, Mr. Modi also made extensive use of 3D projection, a special audio visual technology, to boost coverage of his rallies.
Whether upcoming elections can be influenced by the strongest online presence remains to be seen. But, hopefully, it can at least help fuel more robust public discourse over India’s most pressing issues.
By Sudarshan Murthy, CFA. Research Analyst, Matthews Asia
The views and information discussed represent opinion and an assessment of market conditions at a specific point in time that are subject to change. It should not be relied upon as a recommendation to buy and sell particular securities or markets in general. The subject matter contained herein has been derived from several sources believed to be reliable and accurate at the time of compilation. Matthews International Capital Management, LLC does not accept any liability for losses either direct or consequential caused by the use of this information. Investing in international and emerging markets may involve additional risks, such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation. In addition, single-country funds may be subject to a higher degree of market risk than diversified funds because of concentration in a specific geographic location. Investing in small- and mid-size companies is more risky than investing in large companies, as they may be more volatile and less liquid than large companies. This document has not been reviewed or approved by any regulatory body
