According to the latest research from Cerulli Associates, “U. S Retail and Investor Advice 2015: Aligning with Investors Goals”, digital advice tools should be seen as an opportunity, not a threat for the traditional advice market in the United States.
«Many industry stakeholders assume that ongoing advances in digital advice platforms will empower investors to handle their financial affairs without the assistance of traditional financial advisors,» states Scott Smith, director at Cerulli. “We believe that while technology innovations will transform how services are delivered, there will be an ongoing, and potentially increasing, demand for personalized financial advice delivered by humans.»
The report focuses on the relationship between investors and financial services firms, and also examines how investors choose their providers, segmenting investors into those who use an advisor, and those who invest through direct providers.
Most households in the U.S. do not have the fundamental understanding of financial topics that allows them to feel comfortable making decisions solely by themselves. An increase in the availability of online tools to help these investors explore their options will drive demand for personalized advice as investors gain a greater understanding of the vast inputs affecting their long-term outcomes.
«Instead of seeing digital advice tools as threats, traditional advice providers will be better served by adopting these tools as introductory elements of their brand that allow prospective investors to better understand the variety of options they are facing,» Smith explains.
«The ubiquitous growth of digital advice platforms is exactly the catalyst needed to accelerate the development of traditional advice providers to serve their clients moving forward,» Smith continues. «Instead of perceiving the growing prominence of digital tools as a threat of disintermediation, traditional advice providers have an exceptional opportunity to encourage their advisors to fine-tune their practice model to capitalize on identified best practices and use technology to enhance their client relationships.»
With China hogging the emerging markets limelight in recent months, it has been easy to lose track of developments elsewhere. With China worries calming now, it seems a good time to review just how bad things have become in Latin America’s biggest economy. President Dilma Rousseff has suffered a series of painful setbacks since her election victory last year, and in many ways is now in political exile despite being nominally in power – approval ratings signal how rapidly the situation has deteriorated (chart 10). The corruption scandal at Petrobras and allegations over accounting irregularities in her campaign and government finances leave the president weakened even as the economy continues its tailspin. The combination of political and economic paralysis has seen a wave of growth and credit downgrades for Brazil, and it is hard to see a rapid turnaround. According to Schroders, it could be years before Brazil recovers meaningfully.
The Petrobras scandal (commonly referred to as the Lava Jato, or ‘Car Wash’), has continued to spread, contaminating larger and larger swathes of the corporate and political sectors in Brazil. It has now reached Dilma’s current political nemesis, Eduardo Cunha, speaker of the Lower House. Unlike much of the scandal to date, this revelation presents a possible boon to Dilma. Cunha is spearheading attempts to impeach the president, and his removal from office would provide an opportunity for Dilma to rebuild relations with the lower legislature. One tentative olive branch, in the form of a cabinet reshuffle which ceded more political power to the party of vice president Temer – the PMDB – appears to have backfired by angering other smaller parties in coalition with the PMDB, which were not included in the largesse. They have now splintered from the PMDB, creating a more fractured Lower House which will be even more difficult to reconcile. The reshuffle, which removed a key ally of the president, also leaves Dilma increasingly isolated within her own government, with former president Lula steadily building control in what some have dubbed a virtual regency (though Lula holds no position of power de jure, he remains influential within the ruling party and popular in Brazil at large). There are concerns that Lula’s next step will be to push for the removal of finance ministerLevy, who has bought the governmentwhat little fiscal credibility it has. Rumors of his resignation on Friday 16th October prompted downward pressure on Brazilian assets but have since been quashed – likely reflecting assurances from Dilma to Levy that the government would continue to back his fiscal consolidation efforts. This drive by Lula is also likely a result of the Lava Jato scandal, which has begun to implicate family members. Political analysts at Schroder’s Eurasia Group suggest that Lula’s only chance of avoiding prosecution would be if he could portray the investigations as an attempt to undermine the left, and that to do this he needs to reinvigorate his traditional electoral base. Attacking fiscal consolidation is one way to do this. It was mentioned above that the rumors around Levy fueled volatility in Brazilian assets. More generally, the backdrop for all of this power broking has been an increased likelihood of impeachment for Dilma, forcing the concessions discussed above. This has generated a good deal of volatility across Brazilian markets, with participants seemingly hoping for an impeachment and fresh government.
Dilma is increasingly powerless and under siege from enemies and allies alike. The corruption scandal is engulfing an ever growing share of the political class and ensuring political energies are focused upon the investigation rather than reform efforts or fiscal consolidation, while those politicians so far untainted are currently deeply unhappy with Dilma – in part because they are being egged on by the Lower House speaker, Cunha. As things stand it is difficult to see how Dilma can lead Brazil out of the mire. Even if Cunha is forced to step down due to the corruption allegations he faces, it is not certain that the new speaker will be any more amenable – there is a strong incentive for the main coalition party, PMDB, to push for impeachment. Vice president Temer, of the PMDB, would then assume the presidency. Though good for the PMDB, this would not necessarily be good for investors, given the exposure of that party to the Lava Jato scandal – so more of the same political paralysis. What would be a good outcome? One possibility is that Dilma’s re-election is declared void. The country’s highest court has authorized an investigation into the president’s re-election accounts, following revelations that kickbacks from a construction firm were paid into the campaign’s coffers. If compelling evidence is found that serious electoral violations took place and were significant enough to impact the race for the presidency, the election result could be revoked. Though obviously a disruptive event, this would clear the way for a more market friendly, and scandal free, government to be elected. They would find they had plenty to do.
The undead economy
Activity continues to flatline, with corporate investment moribund in the wake of the Lava Jato scandal, consumers crushed by their debt burdens (chart 12), and government spending squeezed by attempts at fiscal consolidation. Yet despite this, inflation has continued to climb, in hideous parody of a booming economy. The Brazilian zombie economy, lifeless and yet animated, is enough to make policymakers hide behind the sofa.
Certainly, the current trend is a negative one, as reflected by the recent S&P and Fitch downgrades, which take the country’s sovereign debt within a whisker of junk status, driven by concern over the fiscal consolidation process. Schroders has written many times, too, on the supply side issues plaguing the economy, contributing to the persistent inflation problem, and the ‘Dutch disease’ inflicted by the multi-year commodity boom, which drove up unit labor costs and rendered Brazilian industry uncompetitive. On the fiscal and supply side concerns, there is little hope for immediate relief. The political situationall but guarantees a lack of productive legislation until a new government comes to power, unencumbered by corruption allegations and infighting. However, market forces are beginning – if only by a war of attrition – to generate an improvement in other metrics. For example, unit labour costs (chart 13) have finally begun to decline as unemployment builds, which ought to lead to an improvement on the trade balance, as seems to be happening (chart 14).
All in all, Brazil’s horror story is far from its final act, but perhaps a glimmer of hope is becoming apparent on the very distant horizon. There can though be no painless resolution; perhaps the best case scenario is an early exit for Dilma followed by new elections that allow a purging of the rottenness seemingly embedded at the political core and a new energy with which to pursue reforms.
Sailesh Lad, Senior Portfolio Manager within AXA Investment Managers’ (AXA IM) global emerging markets fixed income team and Olga Fedotova, Head of Emerging Market Credit at AXA IM, discuss their outlook for emerging markets, including the main triggers that could create buying opportunities next year and where the opportunities currently lie for the asset class.
On the future for emerging markets (EMs) Sailesh Lad comments: “While emerging market growth is unquestionably slowing, EMs are still growing at a faster pace than developed markets (DMs). Arguably investors had come to expect growth closer to 5% over the past 20 years, and will in time acclimatise to levels of 3-4% growth. So I think that EM growth will pick up, and will continue to be stronger than DM. Similarly, EM currencies have depreciated a lot in the past year or two, but having appreciated too quickly in the past, we may now see appreciation reoccurring albeit at a slower pace. The fundamental background growth story is still there for EM, and these countries will continue to develop.
“People tend to talk about EMs as a group of very basic countries with little infrastructure, but what is now classed as emerging markets are actually very developed economies in absolute terms, that happen to retain the label.”
Olga Fedotova added: “We are also seeing broad investors become more familiar with EM corporate names now. Investors have moved from a top-down approach to more bottom-up, fundamental analysis, and will increasingly distinguish strong companies that perform well, even in the current currency climate. Ultimately, the strong names will become stronger and therefore more expensive – and weaker companies will continue to struggle.”
Looking ahead to 2016, Saliesh Lad highlighted: “Current market conditions suggest there will be three main triggers that could create buying opportunities and lure investors back to the EM market next year. This includes:
The Federal Reserve will have to provide some clarity on the rate cycle. We think this will start gradually, but with cash levels at four-year highs, ultimately the cycle just needs to start. Investors can identify potential opportunities, but lack the conviction to invest right now because of the persistent uncertainty for interest rates.
China will remain a burning issue, but investors should start to acclimatise to the reality of the economy making a structural shift from an industrial economy to a consumer led one and growth being closer to 6% than 7%. Clarity from China’s authorities on future central bank policy will also be welcomed by investors.
Commodity prices need to stabilise. Ideally we would like to see 3-6 months of stability, particularly in oil and metals, to settle the dynamics for countries with high export dependencies.”
Looking to the more immediate future, Sailesh Lad continues to see solid opportunities in EMs: “While it might be quite a consensus view, I still think that India is a strong growth story. The closed nature of its economy means it is relatively insulated from China’s growth worries. It’s an EM that is still growing, and this insulation provides safe-haven qualities while also promising the potential of attractive returns.”
Olga Fedotova added: “I like Russian and selective Brazilian credits for completely different reasons. The Russian credit story is very robust over a longer time horizon, and technical conditions for Russian corporates remain supportive because of local investors. Russian corporates are also low leveraged, natural exporters, and can comfortably serve their debt, thanks in part to sharp rouble depreciation, prudent cost cutting and more conservative financial policies. Some Brazilian companies are also attractive, but you have to be very careful, as they have underperformed DM and EM alike at the overall level. Stronger names, that are not exposed to oil and gas, with relatively low debt levels and a high proportion of export revenues (for example food, paper and pulp producers) will benefit from cheaper valuations as investor sentiment towards EM is improving.”
According to Detlef Glow, Head of EMEA research at Lipper, assets under management in the European exchange-traded fund (ETF) industry increased from €427.97 billion to €464.15 billion during October.
After performance drove down European ETF’s AUM in September, this increase of €36.18 billion in October has much to thank to it. The underlying markets’ performance accounted for €30.36 billion, while net sales contributed €5.8 billion to the overall growth of assets under management in the ETF segment.
In terms of asset classes, bond funds (+€3.7 billion) enjoyed by far the highest net inflows for the month, followed by equity funds (+€2.8 billion), and alternative UCITS products (+€0.1 billion).
The best selling Lipper Global Classifications in October where:
Equity US with €62.8 billion
Equity EuroZone with €47.2 billion
Equity Japan with €38.3 billion
Amongst ETF promoters, iShares with €4.1 billion (iShares accounts for 49.45% of the overall AUM with €229.5 bn), db x-trackerswith €0.5 billion and Amundi ETF €0.4 billion, were the best selling ones.
The best selling ETF for October was the iShares Core EURO STOXX 50 UCITS ETF, which accounted for net inflows of €460 m or 7.90% of the overall inflows
Foto: jacinta lluch valero
. Para el 80% de los inversores los beneficios de sus co inversiones superan a los de sus inversiones en fondos
El ultimo informe de Preqin sobre gestores de fondos e inversores examina el creciente apetito por co inversiones por ambas partes y descubre que el 80% de LPs (Limited Partners, por sus siglas en inglés) ha visto como sus co inversiones superaban los resultados de los fondos de private equity, con hasta el 46% de ellos obteniendo un margen superior en más del 5%. Estos resultados son el mayor atractivo para los inversores, con 2/3 de ellos citándolos como el mayor beneficio al co invertir.
Las oportunidades de co inversión ofrecidas por las gestoras de fondos (GPs) también se están haciendo más frecuentes, y hasta el 87% las está ofreciendo en la actualidad o considerando ofrecérselas a sus clientes. No sólo eso, sino que el 30% de los managers incluye derechos de co inversión en más del 80% de sus nuevos fondos. Para los gestores, las co inversiones son vistas como una manera de mejorar su relaciones con las LPs, obtener acceso a más capital para operaciones y mejorar las oportunidades de levantar fondos con éxito.
“La motivación más común para la co inversión, entre las LPs, más allá de sus compromisos con sus fondos habituales, es la previsión de mejores retornos, con muchos esperando resultados muy superiores a los sus fondos de private equity tradicionales.
La mayor parte de las LPs encuestadas ha visto resultados muy superiores en sus co inversiones, aunque muchas reconocen que es demasiado pronto para aventura un resultado final. La inversión directa, incluyendo las co inversiones, se están convirtiendo en una parte de las inversiones en private equity. El significativo interés, por parte de las LPs ha sido correspondido con mayor cantidad de oportunidades por parte de las gestoras. Dado que las LPs cuentan con suficientes recursos disponibles, las oportunidades de co inversión deberían mantener su atractivo dados su menores costes y su mayores retornos potenciales” dice Christopher Elvin, responsable de productos de Private Equity de Preqin .
KKR announced the appointment of Marcus Ralling as a director in KKR’s Real Estate team. In his role, Mr. Ralling will be responsible for the asset management of KKR’s European real estate portfolio.
Prior to KKR, Mr. Ralling was at Pramerica, as managing director and head of U.K. and European asset management, and joint head of asset management at Threadneedle Property Investments.
Guillaume Cassou, head of European real estate at KKR, said: «I am delighted that Marcus is joining the team based in London. As we continue to build our real estate effort in Europe and scale our real estate portfolio, Marcus’s knowledge and experience in asset management will be of great value.»
Marcus Ralling commented on his appointment: «I am excited to join an investment firm with such an outstanding global reputation. KKR’s growing presence and ambitions in real estate across Western Europe are particularly attractive.»
Since launching a dedicated real estate platform in 2011, KKR has committed over US$ 2.5 billion to 50 real estate transactions in the U.S., Europe and Asia as of September 30, 2015. The global real estate team consists of over 30 dedicated investment professionals.
Mirova, the Responsible Investment division of Natixis Asset Management, has published “Investing in a low-carbon economy», a guide for investors to become COP21 compliant. Mirova’s study provides an in-depth analysis highlighting the challenges of climate change and presents methods for investors to effectively measure their carbon footprint. Mirova offers a unique range of investment solutions promoting energy transition across all asset classes.
COP21: mobilising private investors is a necessity
To maintain the economy in a “2 degree” trajectory, it is vital to redirect savings towards companies and projects promoting energy transition.
Philippe Zaouati, Head of Mirova explains: “The energy transition can only succeed if we manage to mobilise private investors’ savings. The success of COP21 therefore also depends on the ability of asset management firms to propose solutions in response to the climate challenge, whilst delivering the returns expected by investors”.
Accurately measuring your carbon footprint
In response to growing demands on investors to make greener investments, Mirova, in partnership with the leading carbon strategy specialist consultant Carbone 4, has developed an innovative methodology to measure the carbon footprint of an investment portfolio. This decision-making tool assesses a company’s contribution to the reduction of global greenhouse gas emissions (GGE).
Hervé Guez, Head of Mirova Responsible Investing, comments: “Measuring the overall impact of a business on the environment is an essential step towards acting against global warming. Assessing the carbon footprint is therefore a indispensable stage in the construction of portfolios contributing to energy transition”.
Low-carbon investments across all asset classes
In order to redirect capital towards investments promoting energy transition, Mirova is proposing solutions involving all asset classes:
Renewable energy infrastructures: 100% low carbon allocation. For more than 10 years now, Mirova has provided European institutions with access to investments in project companies based on renewable energy assets in France and Europe. Mirova’s renewable energies funds have generated 730 MW of new production capacity and contributed to avoiding 1.4 million of CO2 emissions.
Green bonds: a direct link between financing and projects: Mirova was one of the first asset management firms in the world to launch a green bond product. By financing tangible assets and ensuring transparency regarding the deployment of the capital raised, green bonds enable issuers to diversify their investor bases, while enabling investors to actively participate in financing the energy transition.
Listed equities: committed theme-based asset management: Mirova proposes fundamental conviction-based asset management covering European and global equities, focusing on companies providing sustainable development solutions.
Foto de Ron Frazier. ¿Dónde están las oportunidades en los Commodities?
Durante el año pasado, las mercancías o commodities han sido la clase de activo con los mayores retos. Un crecimiento global más lento, expectativas de inflación más bajas y un dólar fuerte son algunos de los factores que afectan a su precio. Considerando que la mayoría de estos factores son propensos a mantenerse por el resto de este año, los precios de los commodities podrían bajar aún más o, tendríamos que ver una mejora importante en los fundamentales antes de que la clase se convierta en una ganga, razón por la cual, muchos inversores están en conflicto acerca de cuáles deben ser sus próximos movimientos.
Aparte de un menor crecimiento, baja inflación y la fortaleza del dólar, el exceso de oferta de muchos productos básicos ha contribuido con la de la caída de los precios. Entre los commodities, los cíclicos -como el petróleo y los metales industriales, han sufrido más. La oferta del sector energético también ha jugado un papel clave en estas pérdidas. Hoy en día, los Estados Unidos producen cerca de 700.000 barriles de petróleo por día más que hace un año.Mientras tanto, tras el acuerdo nuclear tentativo con Irán, muchos Estados del Golfo están aumentando su propia producción. Según la Agencia Internacional de Energía (AIE), a la que México acaba de solicitar su entrada, los inventarios de petróleo en los países desarrollados se han expandido a un récord de casi 3 mil millones de barriles debido a la excesiva producción de paises tanto dentro como fuera de la OPEP. Así que, sin una fuerte reducción en la producción, es difícil imaginar una recuperación en el corto plazo, aunque para los inversores a largo plazo, algunas oportunidades están comenzando a emerger. Aún así, hay que tener mucho cuidado, ya que mientras las valoraciones parecen baratas en relación con la historia y mercados en general, todavía no está claro si han tocado fondo. Por ejemplo, si los precios del petróleo caen, normalmente los márgenes de las refinerías se ensanchan, al menos inicialmente. Así, con menores costos y ventas similares, las ganancias presentan una tendencia positiva y sus valuaciones podrían parecer baratas. Lo mismo ocurre con las empresas de recursos naturales.
A la hora de buscar exposición a los commodities, uno tiene que ser muy selectivo. Hoy en día la mayoría de los sectores relacionados con los commodities parecen baratos, pero en muchos casos la caída de las valoraciones simplemente refleja la caída de los ingresos y la rentabilidad. ¿Cómo puede un inversor evaluar si las empresas de commodities están baratas o baratas por una razón?
Históricamente las valuaciones miden la rentabilidad, según el ROE. Comparando la rentabilidad y las valoraciones en los sectores de energía y materiales se puede inferir que la caída en las valoraciones de estos sectores está en línea con la caída de la rentabilidad. Sin embargo, al nivel de la industria, al parecer, las empresas de almacenamiento y transporte siguen sobrevaloradas con respecto a la caída en el patrimonio neto, mientras que aquellas dedicadas a la perforación y las compañías integradas parecen baratas.
En la industria de materiales, es menos obvio cuando las valoracionesse apartansignificativamente dela rentabilidad,pero las compañías demetal y la mineríaparecen las más baratas.
No hay que olvidarque,laincertidumbre que rodea alos pisos del mercado, sobre todo paraun sectorproclivea la volatilidad, así como a cambiosabruptos enla oferta yla demanda,hace que sea difícil el confirmarque se ha alcanzadoel punto más bajo.Además, dado quelas materias primasson vistos porlos inversorescomo una coberturacontra la inflación, las expectativasde inflación más bajaslimitannaturalmentedemanda de materias primas, y los inversoresparecenasumir que cualquieraumento de los preciosenlos próximos 5-10años será muy ligero, en el mejor de los casos.
Aunquelas perspectivas a cortoplazopara la mayoría delos commoditiessiguen siendo modestas,si la curvade futuros escorrecta,en algún momento,posiblementeel próximo añoo así, la creciente demandacomenzará a llevar a los mercados a un equilibrio.Hasta entonces, todavía esprobablemente demasiadopronto para decir que se ha tocado fondo.
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Este material es para fines educativos únicamente y no constituye asesoría de inversión, ni oferta ni invitación para comprar o vender valores en jurisdicción alguna (o a persona) donde dicha oferta, invitación, compra o venta sea ilegal conforme a las leyes de valores de dicha jurisdicción. Si algunos valores o fondos están referenciados o inferidos en este material, dichos valores o fondos puede ser no registrados ante los reguladores del mercado de valores de cualquier país en Latinoamérica y Ibérico, y por tanto, dichos valores no puedan ser objeto de oferta pública dentro del territorio de dichos países. La veracidad de la información contenida en este material no ha sido confirmada por el regulador del mercado de valores de ningún país dentro de Latinoamérica y Iberia.
While the International Monetary Fund will decide later this month if the Renminbi (RMB) joins their Special Drawing Right (SDR) basket this year, Axa Investment Management’s Aidan Yao and Jason Pang think the Chinese currency stands a very high chance (80%) of being included in it, making the RMB the fifth reserve currency.
According to the analysts, “this will trigger a direct rebalancing of the SDR portfolio, but we think the seal of approval by the IMF on the RMB’s reserve currency status will also affect the investment decisions of other investors.” They estimate, subject to significant uncertainties, and contingent on the unfolding of their baseline case of economic soft-landing without large scale financial crisis, that inclusion would trigger an aggregate inflow of up to $600 billion from supranational, official and private investors over the next five years. Averaging $120 billion per year starting from 2016.
Pang and Yao believe that the capital inflows will likely have an important impact on China’s currency, money and bond markets in the coming years. In regards to currency they anticipate that in the short run, the RMB will maintain some degree of stability in normal market conditions and that in the longer run, there is a chance the exchange rate will mutate from the semi-crawling peg to a managed float as the end-game. While when it ocmes to the Bond Market, the analysts’ base-case scenario is a constructive outlook for the bond market, driven by increased demand from the SDR inclusion, and supported by lower GDP growth and policy easing.
The IMF’s executive board will vote on inclusion on November 30.
You can read the full report in the following link.
Foto: Evan Jackson
. Private Equity: suben salarios y bonus, mientras las compañías compiten por el talento
El ultimo informe de Preqin sobre empleo y compensación en la industria del private equitymuestra que el 74% de las firmas encuestadas incrementaron sus salarios base de forma general en 2015, con respecto a 2014, y que el incremento medio fue del 7%, con hasta un 14% de las compañías realizando subidas de más del 10. Con respecto a las previsiones, hasta el 76% de las gestoras encuestadas indica que planea hacer crecer los salarios base de todo el equipo, mientras el 22% no predice cambios en sus nóminas y el 2% prevé recortes.%.
Casi la mitad (46%) de las compañías aumentó sus bonus ligados a perfomance en 2014, un 26% más que el año anterior y el incremento medio fue del 20%, frente a un 16% de compañías que declaró haber recortado los bonos pagados a empleados.
El informe también señala que las firmas de private equity en Asia Pacífico son las que mayor proporción de mujeres tienen, con un total del 40% de su equipo, mientras en Europa y Estados Unidos suponen el 35 y el 33%, respectivamente, y en Sudamérica sólo el 15%.
“2015 parece un buen año para los empleados de las firmas de private equity, con salarios y bonus en aumento. En los niveles más altos, las grandes firmas ofrecerán paquetes de compensación que las firmas pequeñas igualarán con dificultad. También la ubicación, estructura y estrategia de una firma puede afectar al talento disponible y las oportunidades reales. Con muchas firmas pensando incrementar su plantilla y los salarios base, de nuevo en 2016 veremos competencia para captar talento, ya que las firmas quieren atraer nuevos profesionales y mantener a los que ya tienen”, dice Selina Sy, manager de publicaciones Premium de la compañía.
625 nuevos fund managers entraron en el mercado del private equity con un vintage fund y, en este momento, hay más de 7.400 firmas de private equity en activo seguidas por Preqin, incluyendo más de 600 de deuda privada. En su conjunto, las gestoras de private equity emplearon a unas 145.000 personas en el mundo, de las que el 68% se concentraron en firmas de buyouts, venture capital y real estate. Otro dato, la plantilla media de las firmas con 10.000 millones o más en activos bajo gestión es de 160 empleados, mientras que las firmas con menos de 250.000 dólares cuentan con 14 profesionales.
El informe «2016 Private Equity Compensation and Employment Review» interrogó a casi 200 firmas de private equity para recopilar tendencias y cifras relacionadas con la compensación y platillas en la industria.
