Pixabay CC0 Public DomainMark Holman, courtesy photo. TwentyFour's Mark Holman (of Vontobel AM) will Talk About Fixed Income at the Investments & Golf Summit 2018
On April 12th and 13th Funds Society will host its fifth Investments & Golf Summit 2018. Sponsors include Janus Henderson Investors, RWC Partners, Thornburg Investment Management, Vontobel Asset Management, GAM Investments and AXA Investment Managers. The event will take place at the Blue Monster in Trump National Doral Club Golf, host of the prestigious PGA TOUR events for the past 55 years.
On April 12th, at the Investment day, sponsored also by Schroders Investment Management, Columbia Threadneedle Investments and MFS Investment Management, participants will be able to take the opportunity to discuss about Global Markets as well as the latest portfolio management strategies and investment ideas from top-performing Asset Managers from the nine sponsors, such as TwentyFour’s Mark Holman.
Fixed Income
Holman, CEO and portfolio manager at TwentyFour, a Vontobel AM’s boutique, will talk about fixed income and its Strategic Income Strategy, which aims to provide an attractive level of income with an opportunity for capital growth. “The fund combines the best sources of fixed income risk from around the globe in one portfolio. It uses unconstrained, no leverage, long only bond funds, managed independent of market indices.” He explains.
The strategy may invest in, or otherwise obtain exposure to, debt instruments from the whole range of fixed income assets including investment grade bonds, high yield bonds, government bonds, asset-backed securities and other bonds as determined by TwentyFour’s view on risk and reward over time.
Mark is one of the founding partners of TwentyFour and serves as the firm’s Chief Executive Officer. He has 29 years of experience in fixed income markets gained across a variety of senior roles Asset Management and investment banking, including positions at Barclays Capital, Lehman Brothers and Morgan Stanley.
For more information about Funds Society’s Investments & Golf Summit 2018 follow this link.
Foto cedidaCourtesy photo. Old Mutual Sold 100% of its LatAm Operations to CMIG International
CMIG International, a Singapore-based holding company, has signed a contract with the South African group Old Mutual to acquire 100% of its business in Latin America. The operation, which is still pending approval by the corresponding authorities, would include, as it has transpired, the companies Old Mutual Mexico, Old Mutual Colombia and the Latin American investment adviser Aiva. It is also speculated if Old Mutual plans to sell its business in China.
The buyer, China Minsheng Investment Group International (CMIG), is a private investment holding company founded in August 2014 with 59 companies and with a registered capital of 50,000 million yuan. CMIG focuses on emerging sectors and actively promotes industrial modernization and economic transformation. The price of the transaction was not disclosed but according to international media, CMIG would have paid close to 400 million dollars in this operation.
The executive president of CMIG International, Kevin E. Lee, wanted to emphasize that “Old Mutual Latin America is a well-managed company with constant and sustained growth. It has always prioritized the interests of its clients, which is aligned with our values as a company. At CMIG International, we have a long-term commitment to strengthen and grow the company in the region. The acquisition of Old Mutual Latin America is an excellent platform for CMIG International and its entry into the regional market, which has great potential.”
In this regard, Lee added that, after carefully analyzing Old Mutual Latin America, “we are very excited about the prospect of becoming its shareholders. Our investment thesis is to find good assets, managed by exceptional teams, in such a way that we can guarantee the continuity of the business.”
According to the firm, Old Mutual’s decision to sell its business in Latin America follows a strategic review of its business, which concluded with the decision to concentrate on its operations in Africa. The presence of the firm in Latin America dates back to 1959 in Mexico, where it began to operate as a reinsurer under the Skandia brand. Subsequently, the company was established as an insurer and an operator and distributor of investment funds under the same Skandia brand; which had a very important growth in Mexico. Now this brand, recognized in the institutional field, will come back to represent the business in the region.
David Buenfil, CEO of Old Mutual for Latin America and Asia, said that “we are very proud to have an international investor of the stature of CMIG International, who believes in the growth potential of our region. This is a well-known company in Asia, and with a very good reputation. We are also very excited to know that they value our much-loved Skandia brand, and that they plan to return it to the market once the transaction is closed.”
Old Mutual Latin America includes pensions, life insurance, mutual funds, a broker-dealer, and an investment advisory with assets under management of over 13.5 billion dollars.
According to Julio César Méndez Ávalos, CEO of Old Mutual Mexico, “this is great news for all our clients, employees, advisors and strategic allies. CMIG International is a company that has valued our great potential and is committed to a continuity of our business model, as well as our human capital and management team, all our clients can rest assured with their investments and products because they will continue under the professional management that has distinguished us in these almost 25 years that we have participated in the Mexican market.”
In late February, President Trump promoted trade policy adviser Peter Navarro to assistant to the President. As a trade policy adviser, Mr. Navarro reported directly to White House Economic Adviser Gary Cohn. It is well known that Mr. Navarro (a Harvard-trained economist who wrote a book titled Death by China) has very protectionist ideals in regards to trade, while Mr. Cohn (the former President of Goldman Sachs) is a proponent of free trade. Effectively, Mr. Cohn served as a buffer between Mr. Navarro and President Trump. However, once Mr. Navarro was placed in a position where he could advise the President directly, we felt that some more extreme trade policies were on the horizon.
In less than a month, Mr. Navarro’s influence on President Trump was plain for all to see. Furthermore, Mr. Cohn resigned from his position following his futile attempt to convince President Trump not to go through with the tariffs. The equity markets suffered an immediate pullback on the announcement of Mr. Cohn’s resignation due to fears that the US would become even more protectionist without the influence of his globalist views. Fortunately for the market, Mr. Cohn’s replacement is CNBC commentator Larry Kudlow. Before embarking on a television career, Mr. Kudlow had been the chief economist at Bear Stearns and is known for having a very globalist view on trade. We believe the market will draw comfort from the appointment of Mr. Kudlow as Economic Adviser rather than Mr. Navarro.
This has happened before
In 2002, the administration of George W. Bush placed tariffs on steel products ranging from 15 to 30% in an effort to save the US steel industry. Back then, several steel producers had declared bankruptcy amidst a surge in steel imports. The government decided it needed to protect the companies of the steel industry for a period of three years to give time to restructure and emerge as more competitive players. Just like now, Canada and Mexico (thanks to NAFTA) were excluded from the tariffs of 2002.
Almost immediately, the European Union imposed tariffs and filed a case with the WTO. Several other countries filed similar cases and the WTO eventually ruled against the US. Following the international backlash and disappointing results for the economy, President Bush rescinded the tariffs only 18 months after their implementation.
“I don’t think it was smart policy to do it…The results were not what we anticipated in terms of its impact on the economy or jobs.” Andrew Card Jr., White House Chief of Staff under George W. Bush
Back in 2002, one of the actions considered by the EU was to place tariffs on oranges from Florida. For those not familiar with US regional politics, Florida is considered to be a swing state and President Bush won the state (and the overall election) by the narrowest of margins in 2000. The EU does not blindly select products on which to place tariffs; it wisely chooses products produced in politically sensitive states.
This time around, the EU is targeting Harley Davidson, which has manufacturing plants in Pennsylvania and Wisconsin, states that were important to Trump’s victory. Furthermore, Wisconsin is the home state of Speaker of the House Paul Ryan. Another product being targeted is Kentucky Bourbon which is made in the home state of Senate Majority Leader Mitch McConnell. The immediate economic impact seems mild but might only be the tip of the iceberg.
To be fair, steel and aluminum represent less than 2% of the country’s imports. Considering solely these two products, the overall impact to global trade should be modest. Unfortunately, these tariffs are not occurring in a vacuum and they might only be the tip of the iceberg as we await the outcome of the pending Section 301 investigation.
The investigation is focused on determining whether China’s actions relating to intellectual property and the forced transfer of technology discriminate against the US. The White House has signaled that there could be an announcement in regards to the investigation within a few weeks. Media reports are already speculating that the White House is considering imposing several new tariffs on $60 billion of Chinese products due to disagreements on intellectual property rights.
In fact, indirect actions against China may have already started. President Trump recently ordered Broadcom to “immediately and permanently abandon” the acquisition of Qualcomm for reasons of national security. The government did not disclose the details of why it is in the interest of national security for Qualcomm to stay independent, but Wall Street analysts are speculating that there was a fear that Broadcom would cut the R&D budget at Qualcomm, allowing Chinese telecommunication equipment company Huawei take the lead in the development of 5G wireless technology.
Pixabay CC0 Public DomainPhoto: Longines Global Champions Tour. The Longines Global Champions Tour is Set to Begin Next Thrusday
The 2018 season of the Longines Global Champions Tour is about to start. Spread over four days, the magical destination of Mexico City will welcome the world’s best horses and riders to the stunning Campo Marte grass arena for what promises to be an electric season opener.
Between march 22nd and March 25th, top riders will compete in Mexico before continuing the tour in Miami, Shanghai, Madrid, Hamburg, St Tropez, Cannes, Cascais, Monaco, Paris, Chantilly, Berlin, Londron, Valkenswaard, Rome, Doha, and Prague. The prizes top over 40 million euros, a new record.
The Mexico program with 1.165.380 in prizes along with each Longines Global Champions Tour and GCL event can be separated into two categories – CSI5* and CSI2* classes. The CSI5* is the top level competition, where the top ranked riders in the world will compete for the highest prize money, over the biggest fences – up to 1.60m which is the highest in the sport. The CSI2* classes are slightly smaller in height, and offer opportunities for many local athletes as well as international rising stars.
All the CSI5* rounds will be streamed live via our website featuring exclusive studio interviews, expert commentary and of course all the action from the arena.
Last year over 20,000 fans watched as the world’s best battled it out for top honours at the spectacular debut of Mexico City, with the grassy picture perfect arena of Campo Marte the stunning setting for the first even of the season. With the top riders in the world hungry to get the season started and lay down an early gauntlet for the 2018 Champion of Champions title, the event promises to be full of fierce rivalry, top entertainment and world-class sport.
Pixabay CC0 Public DomainPhoto: Mark Heslop. Columbia Threadneedle Investments' Mark Heslop Will Shed Light on Investing in Global Small Caps at the Investments & Golf Summit 2018
On April 12th and 13th Funds Society will host its fifth Investments & Golf Summit 2018. Sponsors include Janus Henderson Investors, RWC Partners, Thornburg Investment Management, Vontobel Asset Management, GAM Investments and AXA Investment Managers. The event will take place at the Blue Monster in Trump National Doral Club Golf, host of the prestigious PGA TOUR events for the past 55 years.
On April 12th, at the Investment day, sponsored also by Schroders Investment Management, Columbia Threadneedle Investments and MFS Investment Management, participants will be able to take the opportunity to discuss about Global Markets as well as the latest portfolio management strategies and investment ideas from top-performing Asset Managers from the nine sponsors, such as Columbia Threadneedle Investments’ Mark Heslop.
Global Small Caps
Mark Heslop joined Columbia Threadneedle Investments in 2008 as a smaller companies analyst in the European equities team. He manages the Threadneedle (Lux) Pan European Small Cap Opportunities, the Threadneedle European Smaller Companies Fund and the Threadneedle (Lux) Global Smaller Companies Fund. Before joining the company, he spent nine years as an analyst with Citi. He began his career as an accountant and consultant at PriceWaterhouseCoopers.
The Global Smaller Companies Portfolio seeks to achieve capital appreciation by investing principally in the equity securities of Global Smaller Companies. It invests at least two thirds of its assets in shares of smaller companies worldwide, typically no bigger than the largest company included in the MSCI World Small Cap Index. The Fund invests in what the manager believes to be the most attractive smaller companies investment opportunities globally, providing access to a portfolio of well researched companies from around the globe, with country, sector and industry diversification. It gives access to an investment process with a ‘quality growth’ approach, managed by a team that have broad experience of different market conditions. “Smaller companies can be a source of long-term growth: seeking the industry leaders of tomorrow”, he states.
To learn more about the Investments & Golf Summit, follow this link.
CC-BY-SA-2.0, FlickrPhoto: Neil Kearns, Head of the Corporate Operations Department of the Securities Division at Goldman Sachs. Why has the Goldman Sachs Corporate Trading Desk Just Gone Through the Busiest Two Weeks of its History?
In the midst of market volatility, companies have been increasing their stock repurchase programs, providing unprecedented support for investors. Neil Kearns, Head of the Corporate Operations department of the Securities Division at Goldman Sachs, explains in an interview why 2018 is about to set a new share repurchase record.
Your department helps companies authorize and execute stock repurchase programs, what kind of activity are you seeing at your trading desk?
In the first two weeks of February, we recorded the most active period in the history of our trading desk, with executions (theoretical dollars spent) that increased 4.5 times our 2017 average. Authorizations to repurchase shares have increased by 100 % during the same period. To put this in perspective, it is the fastest start to the year in terms of repurchase authorizations. In fact, this indicates that we are likely to see the highest level of share buyback activity during 2018.
What are the factors that drive activity?
Certainly, the US tax reform and the corporate repatriation of cash that companies have outside the country are significant catalysts. When we analyze the last period of tax exemptions in 2004, for example, we see that the execution of repurchases of the S & P 500 increased by 84% that year and by 58% the next.
Companies are also operating in a business climate that has improved. The economy is strengthening, corporate profits are growing and companies are generating more free cash flow. In addition, any company that is not actively allocating its cash faces the wrath of shareholders who are dissatisfied with the management of capital and the possible unwanted attention of activists.
What other parts of the market will affect the repurchase of shares?
The share repurchase activity is highly correlated with the general volatility of the market, which is why many companies used the market correction of last month as an opportunity to gain an advantage over their repurchase targets for the year. In fact, our colleagues at Goldman Sachs Research recently raised their estimates for total cash spending of the S&P 500 in 2018 to $ 2.5 trillion, with a 23% increase in share repurchases, up to 650 billion dollars, due to the tax reform and the recent market correction.
What are the implications for investors and for the market?
Buy-side investors are very focused on what companies are doing in the market, particularly in response to stock volatility. Given that companies have been the largest net buyers of US stock since 2010, there is obviously a great interest in understanding their general sentiment in light of market fluctuations and commitment to their repurchase plans.
For example, since the 2008 financial crisis, the S&P 500 companies have repurchased about 4.25 trillion dollars of their own shares, which represents approximately 17% of the current market capitalization, situated at approximately $ 24.5 trillion.
Undoubtedly, we see greater interest in corporate behavior with respect to its repurchase programs when the markets are highly volatile. Based on both the pace of repurchase announcements and the actual repurchase activity, investors can take comfort in the fact that stock repurchase programs are very much alive.
Wikimedia CommonsBMV. Vanguard Lists Three UCITS ETFs in Mexico
Vanguard has listed three new UCITS ETFs on the Mexican market. Currently there are 68 Vanguard ETFs in the Mexican Global Market, known as SIC.
The new ETFs, with fees of 0.09%, 0.19%, and 0.29%, are:
Vanguard FTSE 100 UCITS ETF – it looks to replicate the returns of the UK market
Vanguard FTSE Japan UCITS ETF – it is focused on tracking the returns of medium-to-large cap Japanese firms
Vanguard FTSE-All Word High Dividend Yield – it tracks the returns generated by the index of medium-to-large cap emerging and developed market companies that pay high dividends
Juan Hernández, Vanguard Mexico Country Head, said: ‘We are pleased to list our Ucits ETFs on the Mexican Stock Exchange, offering Mexican investors additional opportunities to create a balanced portfolio that meets their investment goals. We are committed to providing durable and effective solutions to Mexican investors, helping them achieve success in their investments.’
The ETFs grant exposure specific international themes that are not offered among its current US-domiciled ETF range. According to the firm, the UK and Japan ETFs offer exposure to two of the world’s most developed countries while the High Dividend Yield ETF combines a diversified stock portfolio with high income, at a competitive price.
Santiago de Chile. Franklin Templeton Opens New Office in Santiago, Chile
Franklin Templeton Investments announced the opening of a new office in Santiago, Chile, to support the sales and client service needs in the country. The firm has also appointed Gonzalo Ramírez Correa as vice president, Sales. Based in the firm’s new Santiago office, he will work to develop tailored solutions for clients in Chile, leveraging the capabilities of Franklin Templeton’s various investment groups. He will report to Sergio Guerrien, director and country manager for South America ex-Brazil, who will oversee the Chile operation.
“We are very delighted that Gonzalo has joined our team in this period of growth in the Chilean market,” said Guerrien. “With the opening of this new office in Santiago, we are committed to strengthening our capabilities in the South American region as our clients look to us to solve their needs for specific investment outcomes while leveraging the comprehensive resources and broad expertise of Franklin Templeton.”
Ramírez Correa brings with him over 10 years of industry experience. Prior to joining Franklin Templeton, he was director of business development for Legg Mason Global Asset Management, focused on sales and based in Santiago. Before joining Legg Mason in 2015, he was an account manager and investment sales specialist for Latin America for Thomson Reuters. Earlier in his career, Ramírez Correa was with HMC Capital in institutional sales, where he was responsible for business relationships.
Franklin Templeton has been serving a wide array of local institutional investors, pension funds, private banks, retail distributors, mutual funds, insurance companies and family offices in Chile since 1995 and is among the top mutual fund providers to the Chilean pension system.
Franklin Templeton has been present in Latin America for over 20 years. The company opened its first office in the region in 1995, and today has a presence in Santiago, Buenos Aires, Bogota, Sao Paulo, Rio de Janeiro, Montevideo and Mexico City.
Marcelo Gutiérrez, Managing Partner for Invertax / Courtesy Photo. The New Law Against Money Laundering in Uruguay will Jeopardize the Offshore Industry
Uruguay has started the year with a new law against money laundering, a regulation that brings together all the provisions that were previously dispersed in different legal instruments. The reform places the country within international standards, in a global context of ever stricter regulations.
According to the new law, approved towards the end of 2017, tax offenses are considered predicate offences to money laundering, which entails a criminal process. Lawyers and accountants must report suspicious transactions, as well as banks, financial advisors, real estate agents, auctioneers, civil associations, casinos, foundations, political parties and NGOs.
After only a few months trajectory, the reform still raises a series of questions and doubts on the part of the taxpayers. What changes is this regulation generating in the Uruguayan financial industry? “The Uruguayan financial industry acquires the new requirement of ‘know your client’. From now on, tax compliance is mandatory,” explains Marcelo Gutiérrez, Managing Partner for Invertax.
“This change is not only occurring in Uruguay, but in many other countries, and is part of the new reality: more transparency, more information exchange. It was under discussion for a long time, but tax evasion is very difficult to support as a moral argument. The discussion on whether governments make good use or misuse of these resources is a different matter,” adds the expert on tax issues.
At Invertax they believe that the Uruguayan financial industry will encounter some difficulties: “As in the rest of the world, and with the end of banking secrecy, the offshore industry in Uruguay is on its way out. At present, only the United States offers traditional offshore services,” says Gutiérrez, Uruguay’s representative at the International Fiscal Association.
The new restrictions raise fears of a decrease in foreign investment, something that Marcelo Gutiérrez plays down: “It depends on what type of investment we are talking about, if we refer to Real Estate in Punta del Este, this new requirement will complicate things for many of the ’traditional’ investors. However, direct foreign investment, such as the pulp mills and other important ones already planned, will not be affected.”
CC-BY-SA-2.0, Flickr Morningstar 2018 Winners. Compass Investments, Scotia and Nafinsa, the Best Asset Managers in Mexico
During the sixth edition of the Morningstar Awards in Mexico, at the W Hotel in Mexico City, representatives of the best asset managers of the country gathered to recognize the three best firms and the six best funds of the year. At the event, Alejandro Ritch, Regional Director of Morningstar for Latin America, highlighted the positive transformation that is taking place in the sector.
He also noted that there is still a significant concentration in the sector: with 69% of the assets under management in the hands of the five leading firms. The executive also pointed to the growth of passive strategies and the consequences this has had on the fund market, mentioning that “the competition that the ETFs have created is real and the managers have lowered their commissions in response to this.”
In the category of Best Funds the winners were:
Short term debt Operadora Mifel
Medium term debt, Actinver
Long term debt, Intercam Fondos
Mixed fund, Principal
Global equities, Operadora de fondos Banamex (recently acquired by BlackRock)
