slib33
FRIDAY ANALYSTS TICKER: July 25th 2014 - According to Adam Cordery, global head of European fixed income, Santander Asset Management, and fund manager for the Santander Euro Corporate Short Term and Euro Corporate bond funds, “Pricing of risk assets doesn’t offer much of a margin for error at the moment. And now Europe is starting to go on holiday, market liquidity may get poorer than normal, and any buys today may well have to be holds until September. It is always interesting to note what yields are required to attract clients to financial products. Twenty years ago, bond funds offering yields of 10%+ could generally attract lots of client interest very quickly. However as rates have come down over the years, so the yields clients demand have fallen. Now 4% seems to be the new 10%, he say. Cordery thinks that unfortunately, investors often want today the yield/risk mix that was available last year, so the products that get launched, sold and bought in size may be more risky than people think. “Products with 4% yield will sell well today, but to get to a 4% yield in Euro you need to invest in a portfolio with an average rating of single-B, and that is far from being risk-free. I get the impression the conventional wisdom today is to think that interest rates must surely go up soon and the main risk to bond portfolios is an increase in bund yields. Because of this many investors are buying short-duration products and floating rate notes, perhaps viewing them as a safe choice, almost like cash. It is possible however that these products may yet prove to have a considerable sensitivity to changes in credit market spreads and/or bond market liquidity, and may prove to be no protection at all.” - Commenting on the RBS share price jump, Dr Pete Hahn of Cass Business School, says “It's hard to tell whether the RBS share price jump today is more about relief or optimism. The former is about fewer fines, fewer losses on loans, and fewer costs in a shrinking business and possibly dividends for shareholders. And there's the rub, owning shares (as opposed to interest bearing debt) should be about optimism and long-term growth in dividends. But from a shrinking business? Few would argue that RBS' retail and corporate bank had efficiencies to be gained and cash flow that might be converted to dividends; yet like most banks, RBS' cost of equity remains stubbornly and appropriately above its ability to provide a return on that equity. For shareholders, current improvements should mean dividends in the medium term but a recognition that RBS may lack any merit for new investment and delivering any long-term dividend growth - not good. While many large retail banks are getting safer, in some aspects, and we often speak of them in terms of moving toward utility type models, banks take risks, are cyclical, face competition, have new business challengers, and are simply are not utilities. Investors shouldn't get ahead of themselves here.” - According to the monthly survey held by the central bank of Turkey, the country’s capacity utilization (CU) rate declined slightly to 74.9% in July from 75.3% in June. Meanwhile, seasonally adjusted (SA) CU also declined to 74.3% from 74.7% in June, writes Mehmet Besimoglu at Oyak Yatirim Research. As for manufacturing confidence, the index declined to 109 from 110.7 in May. On SA basis, the index also edged down slightly to 106.4 from 107.2. SA capacity utilisation was broadly stable in 1H14, averaging at 74.7%. This is the same level with the 2013 average. Despite the political turmoil and volatility in financial markets, activity has been relatively resilient. Export recovery & government spending supported production in 1H. Following the elections, public spending relatively decelerated. The turmoil in Iraq also decelerated export recovery from June. Nevertheless, we still expect 3.5% GDP growth in 2014, writes Besimoglu.

Transition Management 2012

Transition Management 2012 11 October 2012Gibson Hall 13 Bishopsgate, London EC2N 3BA   http://www.ftseglobalmarkets.com/media/k2/items/cache/18d2fa990243b5f4ec94abbc01e25243_XL.jpg

Transition managers, pension funds, consultants, fund of funds, managed funds, platform providers and the insurance sector examined the key issues driving change and the transition solutions available to the pensions and investment industry at FTSE Global Markets' Transition Management Seminar.

As a facilitator of change it is perhaps not surprising that Transition Managers find themselves at the fulcrum of the evolution taking place in the investment industry. Change is occurring both in terms of where demand for transition managers is originating and also in the types of transitions that are taking place. Whilst the transition business in Europe from pension funds is now relatively consistent, and for the biggest users dominated by panels, most managers are seeing current growth from managed funds, fund of funds and the insurance sector. In the medium to long term the future of the transition management sector lies with the defined contribution sector. Fund managers across Europe are having to employ a multi-asset approach that allow the asset allocation to change as members near retirement. With the first DC pensioners coming online in Europe and retirement patterns changing, fund managers are developing new solutions for the pay-out phase, such as through retirement funds. Insurance companies currently dominate business in the pay-out phase, but changing regulations should allow fund managers to capture a greater share of business. Increasingly the larger providers will also create platforms which allow access for smaller distributors and third parties that do not have the power or resources to develop their own pension solutions nor the ability to attract sufficient assets through wrapped products of their own. The switch from defined benefit to defined contribution will present Europe's transition managers with a large number of new challenges but also the opportunity to be at the centre of one of the largest changes ever to take place in the pensions and investment sector.

The seminar brought together transition managers, pension funds, consultants, fund of funds, managed funds, platform providers and the insurance sector in order to examine the key issues driving change and the transition solutions available to the pensions and investment industry.  Presentations from Key speakers can now be found by clicking here.

Transition management in an era of change

The transition management service set is broader these days. Market challenges abound. Transparency is vital in volatile markets and when extreme changes in asset allocation often call for innovative approaches to portfolio transitions. A strong platform also helps. Michael S Gardner, managing director, global head, J.P.Morgan Transition Management, looks at the problems and prospects for the service set in an era of change.

For more videos on Transition Management, please click here.

Tweets by @DataLend

DataLend is a global securities finance market data provider covering 42,000+ unique securities globally with a total on-loan value of more than $1.8 trillion.

What do our tweets mean? See: http://bit.ly/18YlGjP

Sponsored by

Lead Sponsors

Transition Management Services from JP Morgan

Perspectives in transition management by Russell Investments

 

 

Associate Sponsors

Beta & Transition Management from BNY Mellon

Portfolio solutions from State Street Global Markets