Warren Enskat Group

Invesco hopes its independent status will help it gather assets in Italy, where the US house recently participated in a joint promotional tour with Fidelity, BlackRock and Schroders.

Sergio Trezzi, managing director and Italian country head at Invesco, says the fund company participated in the month-long “road show” because executives liked “the concept of having a road show dedicated only to independent asset management”.

“It makes sense to go on a road show with just independent asset managers,” Mr Trezzi says. “We do not have any conflict of interest. We think this is a very important element.”

He says Invesco believes the time is right for an Italian tour because flows are beginning to recover after a difficult couple of years.

“We strongly believe that flows will come back again into funds,” Mr Trezzi observes. “And we strongly believe that more and more people are going to choose independent asset managers. That’s why we believe there are opportunities for companies like ours.”

Investors could be driven back to funds in part by the quest for alpha. Mr Trezzi says the equity market will be more complex in 2010 as the economy continues to strengthen, making professional stock-picking all the more important.

As investors in Italy return to funds, they will choose to invest by the brand of the company and not only by the individual fund, he predicts.

Invesco and other independent asset managers could benefit from distributors trying to win back the trust of cautious Italian investors, says Daniel Enskat, global head of consulting at Strategic Insight.

Fund distributors are looking for organisational stability and a “back to basics” investment process, he explains.

“A lot of the big European distributors lost a lot of the goodwill and trust of the investors,” Mr Enskat says. “They lost their bread-and-butter business and now need something to re-connect with clients. Italy is a good example.”

He adds, “If you have an independent asset manager that can help you rebuild credibility, then that’s a great thing, and some distributors are embracing that and trying to sell based on that.”

Italy’s investors are largely focused on safety first, studies show. Capital security is the main concern of 72 per cent of Italian investors, according to a survey conducted in June on behalf of Italy’s national asset management association, Assogestioni. That compares with 60 per cent before the subprime crisis and 53 per cent prior to 2001.

Reputation is a prized asset for money managers, but success ultimately depends on a company’s investment record and performance, says industry consultant Burt Greenwald of Philadelphia-based BJ Greenwald Associates.

By Marc Hogan
To read the full article, go here.

Strategic Insight, the New York-based research firm, says 29 funds from Asia-Pacific have made it this year into its annual ‘billionaires fund club’, which tracks those mutual funds that reach over $1 billion of flows.

Together, 14 bond funds enjoyed inflows of $29.1 billion and 10 equity funds raised $17.4 billion. Including balanced and ‘other’ funds, the 29 from the region saw a combined haul of $54.2 billion. (These are funds raised in Asia; the investments include both local and global exposures.)

Strategic Insight’s data goes to end September, so there’s still room for more to join the club; for example, SMBC Nikko’s New World bond and equity funds raised over $2 billion in October, which isn’t reflected in the consultancy’s figures.

Volatility was high, however, with 10 funds from the region experiencing huge outflows to the tune of -$19.2 billion, of which most (8 funds, -$14.4 billion) came from fixed income.

Daniel Enskat, senior managing director at Strategic Insight, notes the bigger firms are winning the biggest slices of net inflows. To see consolidation in action, see the December edition of AsianInvestor magazine, which tracks those fund management companies receiving assets from clients based in Asia-Pacific.

The biggest winner from Asia this year has been, hands down, Nomura Asset Management. Its series of US high-yield bond funds with various currency tranches, including the popular Brazilian real, has raised a total of $9 billion (for details, see AsianInvestor magazine, July 2009). The first version raised $1.2 billion in January. JP Morgan Asset Management was sub-advised to manage a second version of the fund; launched in May, this proved to be the true blockbuster, raising $4.5 billion as of September.

Nomura also launched the top-selling global bond fund, the Nomura Pimco US High Yield fund, which topped $1 billion in September.

Although the Asia business is often driven by new product launches, there were quite a few existing funds that enjoyed strong sales in 2009. These include the Birla Sunlife Savings Fund ($4.2 billion), the HDFC Cash Management Fund ($2.8 billion) and the Diam World Reit ($2.2 billion).
The top new launches, aside from Nomura’s high-yield triumph, have been exchange-traded funds, including the ChinaAMC CSI 300 Index Fund (which raised $4.1 billion) and the E Fund CSI 300 Index Fund ($2.5 billion). Overall Asia fund sales were surprisingly strong.

Globally, including Asia, 170 long-term funds made Strategic Insight’s billionaires’ fund club in 2009, gathering over $450 billion in net new money, while 60 funds suffered a combined $120 billion of net outflows.

The biggest swings have been in fixed income, with 85 bond funds reaching nearly $280 billion in cash contributions, with the majority in the United States.

The biggest gainers were Pimco’s Total Return fund (over $40 billion of inflows so far this year), Carmignac Patrimoine ($12 billion) and Nomura’s high-yield series ($9 billion).
In Asia, money flowed to high-yield bond funds and Asian equity funds, with sizeable flows also to real estate funds. It has exited global bond funds and balanced funds. In other words, Asian investors continue to chase yield.

This is very different to Europe, where the major product launches have been in guaranteed or protected funds, in European bonds, and in balanced products.
Strategic Insight calculates there is now close to $1.5 trillion invested in Asian bond funds and over $700 billion in Asian equity funds, sourced from investors globally. Net inflows were up in 2008 but it was the worst year in a long while, with total flows in 2009 nearly $30 billion, or triple what was achieved in 2008.

The research firm estimates 2010 should see net flows to Asia funds rise to $350 billion.

by Jame DiBiasio

For the full article, go to Asian Investor Magazine.

Socially responsible investments (SRI) account for only a tiny sliver of the European fund industry, but they are selling proportionally faster than funds overall, according to Strategic Insight data.

European SRI funds have gathered net inflows at roughly three times the rate of the industry as a whole, relative to assets, says Daniel Enskat, global head of consulting at Strategic Insight.

Investors have poured some $10bn (€6.7bn) into European-domiciled SRI funds year-to-date, although such funds represent only $146bn in assets under management. By comparison, investors have shifted $148bn into European funds overall, but the industry as a whole has about $7 trillion in assets under management.

Firms have launched 100 new SRI share classes and funds in Europe this year, by Strategic Insight’s count. Those funds have seen about $1bn in net inflows, Mr Enskat says.

The European SRI industry is also growing faster than the US marketplace. Net inflows into US SRI funds, across all categories, amount to little more than zero, Mr Enskat says.

Still, SRI as a general concept continues to make more sense for institutional investors than for individuals, he says. Institutional investors can pick and choose where to invest, but a mutual fund must satisfy investors who have potentially wide-ranging preferences when it comes to tobacco, climate and other SRI concerns.

To that end, firms have been launching SRI funds with more finely tuned definitions in recent years.

“The methodology and the definitions are becoming more segmented,” Mr Enskat says. “If you have a more clearly defined climate change product, then investors can more associate with that and say: ‘Climate change, I get it.’ SRI doesn’t mean much to people. That has always been the crux of it.”

…

A small but growing proportion of retail investors are becoming interested in SRI and other themed funds, agrees Amin Rajan, CEO of Create Research. But the future success of such funds may depend on their performance.

“The track record of these funds is not long enough to deliver a convincing story as yet,” Mr Rajan says. “If and when the record gets better, SRI could become very appealing to theme investors.” He adds: “It’s worth emphasising that performance is the product: the theme is only the icing on the cake for those who value it.”

A growing body of research shows certain environmental, social and corporate governance factors can have a positive effect on portfolio returns, according to a new report by human resources consulting firm Mercer.

Of 16 recent academic studies, 10 show a positive relationship between such factors and companies’ financial performance, while four show a neutral relationship and two show a neutral-to-negative relationship, Mercer finds.

“The report’s really about trying to move the debate from ‘SRI or RI always underperforms’ to ‘it can provide competitive performance or outperformance,'” says Craig Metrick, US head of responsible investment within Mercer’s investment consulting practice. “Let’s focus the debate on how to do it right.”

20 November 2009, for the full article, click here.
By Marc Hogan

BASo spent an amazing weekend in Santiago de Compostela, Spain and Porto, Portugal, to perform at Salsorro 2009.

In addition to our Friday and Saturday repertory company showcases, BASo choreographed a piece with our friends Dave and Zoe (Paradizo Dance) to live Spanish folk music of Paloma Suanzes.

The showcase ended up in the newspapers and on Television – check out the vlog/blog for more details, including the video footage of the opening ceremony.

MANAMA, Oct 19 (Reuters) – The Gulf Arab region is struggling to develop a local fund industry as it lacks a strong retail investor base, executives and experts said on Monday.

The region has provided a portion of its oil wealth to international fund managers but is yet to develop its own fund industry, which would help provide the depth regional capital markets need to better absorb economic shocks.

Most mutual funds in the region only manage $10 million to $15 million and the industry is highly fragmented.

“The mutual fund industry is driven by middle-income investors and you don’t have that (market segment) here in the Middle East,” Daniel Enskat, senior managing director at Strategic Insight, a mutual funds consultancy, told Reuters during an industry event in Manama.

He said about $150 billion was invested in mutual funds in the region, only 5 to 10 percent of which came from retail investors.

Enskat said the region’s assets were highly concentrated with its sovereign wealth funds and a few rich individual investors, forcing asset managers to accept low fees.

“International fund managers are coming here just to have established relationships when that retail market begins to grow,” he said.

By Frederik Richter

Full article and other related articles can be found at:

–Reuters

–Forbes

–Finanznachrichten

–Yahoo Business Singapore