Spy has been enduring the summer heat and reckless cyclone with assistance from his favourite cooling agent, ice-cold beer, and in the process has been learning about the pleasure of delayed gratification. One outstanding hostelry on Kowloon leaves fresh glasses submerged in icy water for a full five minutes, as prescribed by Belgian beer experts. While the five minutes wait seems agonising for your desperate and thirsty Spy, he will acknowledge the added chill is worth it. Perhaps fund investors (and fund selectors) would do well to take a few tips from the master brewers in Bruges, Ghent and Antwerp – be patient, wait a little and let time be your friend. The returns will be worth it.
It seems that Stephen Grundlingh, the Singapore co-CEO of Franklin Templeton, has been listening to the Beach Boys’ hit “California Dreaming”. News reaches Spy that after a decade-long stint in Asia, Stephen is moving to HQ in San Mateo to take up a new role with FT as channel head of institutional strategy within their international advisory services (IAS) division, which covers all sales outside of the US. He is going to be replaced by the current head of Franklin Templeton’s business in Central and Eastern Europe and the Middle East, Adam Quaife. Stephen is expected to make the change some time in October. Franklin Templeton has made some other changes within IAS: Vivek Kudva has been appointed head of EMEA and India; Andrew Ashton has been appointed head of Americas. Mark Browning will continue his role as head of Asia-Pacific.
Spy has heard that Calvin Ng has stepped down from his sales role at Pioneer Investments in Asia. No word yet as to where Calvin is going or even if he is staying within the wealth management industry. Dawn Foo remains in place at Pioneer. Pioneer, owned by Unicredit, recently had its $400m merger with Santander Asset Management called off.
Another item Spy has come across is that Asian asset management giant Eastspring has had a change of strategic direction in its expansion plans outside of Asia. Efforts to raise assets in the UK, Europe and the US remain unchanged. However, Eastspring is closing its small Dubai rep office at the end of August. Existing and new clients in the region will now be served from Singapore and London. Spy commented last year that sovereign wealth funds in the Middle East have reputedly been sellers rather than buyers of late, and with the oil price languishing in the $40s, perhaps that is unlikely to change any time soon, making life a little challenging for institutionally-focused managers in the region.
What have fund buyers in Hong Kong been looking for? According to Morningstar's list of most searched for funds in June, funds in healthcare, gold, biotech, China, mining, EM, energy and total return have cracked the list. Funds on the top ten list include: First State’s China Growth, Invesco’s World Health Care, AB’s Emerging Market Multi-Asset and Schroders’s International Selection Global Energy among others.
Spy has been keeping an eye on Bento, the Robo-adviser set up by the former head of fund selection at Bank of Singapore, Chandrima Das. Word among Spy’s sources is that the business is quietly making progress, but as articulated in a June blog-post, building a full scale, pure-algorithmic platform is unrealistic and hugely expensive. Clients should therefore expect some “human” touches in underlying portfolio construction. Spy suspects this will be the model adopted by many robo-advisers – technology screening with human preferences and intervention. The question becomes, for all robo-advisers, are you simply getting a smart beta-style portfolio?
So, Mark Carney, governor of the Bank of England, has decided to not only leave the punch bowl out at the free-money party but has added some more vodka to the mix, too. Despite a dramatic plunge in sterling post Brexit, which should be a huge positive for the UK tourism sector as well as exports, he has also cuts rates, giving the UK more stimulation. Play another record, Mr. DJ. It has been said by the wonks and statisticians it was the silver-haired pensioners who voted for Brexit and now it seems they are getting nicely punished as their savings rates drop further. Karma, perhaps?
Have you got savings money with HSBC wonders, Spy? Almost every single fellow Hong Konger is going to answer in the affirmative, he guesses. Well, choose your currency carefully. In a recent account provision, HSBC HK Consumer Bank has warned customers that it may charge negative interest rates. The text states, “we may impose negative interest on credit balances on any Savings Account, Current Account, Time Deposit Account, Investment Services Account and any other account under the Master Account that are denominated in a currency to which negative interest rate applies.” British pounds may join Danish kroner soon in the negative rates club. The great rate crash continues unabated, thanks to Mr Carney.
Goldman Sachs, no stranger to disrupting markets itself, is getting excited about the investment potential of market-disrupting technology and trends. In a GSAM equities outlook report, the US asset manager is favouring cloud technologies, REITs that house logistics operators, and “asset light financials” such as stock exchanges, asset managers and payment companies. Spy admires Goldman for hunting for disruptors because they are notoriously hard to spot. Did any analyst, at any asset manager, call the Pokémon Go phenomenon?
Spy is a little hard of hearing, and, if his domestic-commander-in-chief is any guide, he “imbibes a bit too much and too frequently”. This combination may indeed contribute to Spy’s unreliability and dodgy sense of humour at times. A good example would be strong counter-claims from the market post- last week’s column about Christy Goh at First State. It appears the rumour of her departure, are, to paraphrase Mark Twain, “greatly exaggerated” and nothing more than summer gossip. Rumours, which are always indicated as such by Spy, should always be treated as suspect until confirmed with a more sober authority. If something comes up that needs correction, please email email@example.com.
Until next week…