The FSA Spy market buzz – 05 Feb 16

By FSA Spy

Added 5th February 2016

Kettles and pots at Blackrock; Lombard Odier hires; Speculation at T. Rowe Price; Premier League football structured notes; Schroders 0, Gold 1; Fed interest rates explained; Year of the fire monkey, and much more.

The FSA Spy market buzz – 05 Feb 16

Spy has been given permission to partake of the drinks cabinet once again after a doctor’s visit confirmed his blood pressure has dropped to non-lethal levels. He celebrated with a bottle of Château Léoville-Barton Bordeaux 2000. It is a wine so lush and delicious that if you have the chance to drink it, you might just forget about the current market turbulence.

Lombard Odier Investment Management has hired a new head of wholesale distribution, hears Spy. Paul Liu has joined from UOB Asset Management. Paul also had stints at Axa IM and Franklin Templeton. He is based in Singapore, reporting to Emmanuel Roulin. LOIM is promoting its smart beta, high conviction, absolute return and multi-asset strategies to Asian clients.

Spy’s ear to the wall hears speculation that T. Rowe Price has hired Gerald Koh to be its local head of wholesale distribution. Gerald has recently left PIMCO, which, of course, has a strong fixed income heritage, something that T. Rowe is also known for. Gerald also had a stint at Schroders and is a well-known face in Singapore. Unconfirmed, but seems likely.

Larry Fink, enthusiastic and pugnacious CEO of BlackRock, was in the news this week. He has penned a letter to all S&P 500 company chief executives, encouraging them to think differently about quarterly reporting. Apparently he wants them to worry less about exact quarterly revenue estimates and more about progress against the bigger picture of the company’s growth plan. This prompted wry smiles, Spy heard, from BlackRock’s Asian sales teams, who continue to have just as much pressure as before to hit monthly, quarterly and weekly sales targets. A case of the kettle calling the pot black(rock)?

Spy is all for financial innovation and providing investors with interesting ways to profit from global commercial developments. He does, however, raise an eyebrow when unusual structured note opportunities present themselves in the marketplace with lively language. Swiss-Asia, the wealth and asset management boutique, is promoting a “football finance note”, which allows investors (speculators?) to purchase “TV rights income from English Premier League football clubs at a discount”. According to the teaser, investors can buy this “structured receivable deal collateralised by guaranteed global income streams of the Premier League [which] offers a unique and highly attractive investment opportunity with a very compelling risk/return ratio”. What is the proposed return for this note that is so compelling? 6%. Sounds about as reliable as Wayne Rooney’s left leg…

Most investors know that gold has has been a horrible investment for years, but Schroders has managed to find a way to make investing in gold even more depressing. The Schroder Alternative Solutions Gold and Precious Metals Fund, marketed in Singapore and Hong Kong, has managed to underperform its benchmark for five straight years every single month. According to the latest factsheet, “Fundamental analysis forms the core of our investment process to which we compliment with quantitative, technical and sentiment analysis to achieve optimal returns over time.” It might be time for a new approach, boys. The fund is now down 45.6% since the 2008 launch to the end of December 2015, with the benchmark negative by “only” 25%.  The fund has two new managers who took over in July, just as global volatility began to spike, and Spy will be watching. For the contrarian, it might be worth taking a look. Gold was $1,060 an ounce on 31st of December 2015 and has rallied to $1,156 as of this morning. About 9% in a month.

Spy's photographers caught Invesco riding a Hong Kong bus:


How does one explain the global interest rate story from 1979 to today, simply? Spy tips his hat to the artist below who put it so succinctly and has been shared on social media.


Finally, Spy and all the team at Fund Selector Asia wish our readers a very happy Chinese New Year. Kung Hey Fat Choi and Gong Xi Fa Cai to everyone. 2016 is the year of the fire monkey, who is said to be ambitious, wily, irritable and naughty.

According to Chinese astrology, those who outsmart the clever monkey will reap strong rewards. Apt words of advice for investors in 2016.



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