Latest figures from Luxembourg show investment by high net worth and retail investors have helped maintain the centre’s reputation as number one destination for pan-European products, writes Roxane McMeeken.

Brussels, Paris put on e-derivatives map

Euronext.Liffe is set to roll out electronic derivatives trading throughout Europe. The UK-based exchange, formed after Euronext’s purchase of the London International Financial Futures and Options Exchange at the end of 2001, is due to transfer the Brussels and Paris derivatives markets onto its electronic trading platform Liffe Connect this month and next month respectively.

Merrill fund offers clients access to elite managers

Merrill Lynch has launched a new suite of investment funds for wealthy, non-US clients, allowing them access to external managers previously available only to institutional investors. Merrill Lynch Global Selects Portfolios has been structured as a multi-compartment fund, registered in Dublin under European Union Ucits legislation for cross-border marketing.

Every day it is possible to read about mis-selling of financial products. Dissatisfaction arises because investments fail to meet clients’ expectations. In many cases, investors have simply bought a product rather than receiving advice as part of a co-ordinated wealth management strategy.

Not everyone agrees with the findings of a survey carried out by Fitzrovia. One manager maintains increased turnover can provide the key to outperformance.

Investors and their advisers are ignoring a key factor impacting costs of investing. Wide differences in portfolio turnover levels have been revealed by London-based research firm Fitzrovia International.

John Pauly quits Dexia to spearhead distribution at Moventum.

Famously outspoken European fund industry personality John Pauly has thrown in the towel after nearly 25 years at the Dexia group. Mr Pauly exclusively revealed to PWM that he has quit his role as managing director of the Franco-Belgian banking giant’s Luxembourg-based transfer agency subsidiary First European Transfer Agent (FETA) in order to “get closer to distribution”.

Key to success in France is local market presence

Foreign fund promoters seeking a significant share of the French market must establish a local base, a recent survey claims.

iShares plans to list Europe’s first corporate bond ETF on further exchanges, in line with demand.

Europe’s first corporate bond exchange-traded fund (ETF) has hit the German market. iShares, the ETF operation of Barclays Global Investors (BGI), has launched iBoxx *Liquid Corporates with E750m of capital.

Roxane McMeeken reports from Luxembourg on Lombard’s sale techniques.

Leading Luxembourg life assurer Lombard International is advocating a sometimes neglected distribution model for Europe. The firm’s executive chairman John Stone said at the recent Luxembourg fund industry association (Alfi) conference that private banks and fund managers could sell more funds by teaming up with life assurance companies – a model he calls privatbancassurance.

ICE CAPS, JPMorgan’s newest investment offering, promises distributors more say in how the product is constructed.

JPMorgan Securities in London has revealed plans to roll out a series of white label investment products aimed at European distributors.

With plush new quarters on the rue de Berri, tucked behind the Champs Elysées, CDC Ixis has wasted no time launching its new European distribution model for the high net worth market, reports Yuri Bender.

Managers’ selection bias and their perceived lack of transparency will make it increasingly difficult for fund providers to justify going the fund of funds route. Akram Ben analyses survey results related to open architecture and risk management across Europe.

One of the most significant trends in European fund management over the past few years is the growth of funds of funds as investment vehicles.

Yuri Bender goes to Milan to find Mediolanum boss Ennio Doris making plans to spread his company’s philosophy into every part of Europe.

Ennio Doris is a very persuasive man. Back in 1981, he convinced an up-and-coming young businessman called Silvio Berlusconi to take a 50 per cent share in his new financial services direct sales venture.

Why do the biggest banks in Europe all want to sell Fidelity products? Yuri Bender researches how the multi-channel model works for Fidelity.

“We’re gonna be the biggest! We’re gonna be the best! We’re gonna be the greatest!” enthused the flamboyant American, as he worked the corridor between two banks of unreceptive journalists on a specially chartered red-eye flight between London and Luxembourg.

Back-office boffins are promoting the latest technology designed to take over record keeping and other transfer agency tasks. Roxane McMeeken reviews their offerings.

Transfer agency (TA) was long-regarded as “something best left in a dusty cupboard at the back of the back office”, admits one insider at State Street, the world’s largest fund services provider.

Fixed income does not mean low risk. Improperly measuring it may give the wrong impression that a portfolio has a low risk profile, which can lead to unpleasant surprises. Riskdata explains why this is so.

There is essentially a three-stage process to constructing a fixed income portfolio for private clients, involving fund selection, strategic risk control and risk aggregation.

Following the runaway success of equity exchange-traded funds comes the fixed income version. iShares describes how fixed income ETFs work and how to derive the best possible benefits.

Europe’s first equity exchange-traded funds (ETFs) were launched in 2000. They have been received positively by investors, despite the severe bear market which has stacked the odds against them.

Midway between the danger of equities and the safe cocoon of cash is the corporate bond, which is still less risky than stocks but offers better returns than government bonds. JPMorgan is offering a ‘white label’ guaranteed product to distributors who can customise it to match an investor’s specific requirements.

The range of fixed income products on the market means investors’ portfolios can be matched to prevailing conditions, according to Credit Suisse Asset Management.

Stockmarket declines over the past three years have seen a number of investors reconsider their asset allocation mix and risk/return objectives.

Roxane McMeeken looks at Ashmore’s designs on Brazil, Mexico and Russia.

Emerging markets experts Ashmore Investment Management have launched a new debt fund focusing on Brazil, Mexico and Russia. Until recently, defaults in Russia and devaluations in Brazil and Mexico meant these countries were the pariahs of the bond world. Now, they are moving into the mainstream as emerging market debt performance across the globe is far outstripping that of equities. While the S&P; 500 was 23 per cent down at the end of last year, emerging markets debt returned 14 per cent.

With so many funds available, asset managers must ensure that they have the right mix to attract strong alliances with banks. Simon Hildrey reports.

European investors are faced with a daunting choice of investment funds. Not only do investors in each European country have thousands of domestic funds to select from but they can also buy those products distributed cross-border.

Northern Trust’s small but effective team literally picks fund managers by hand, writes Yuri Bender.

Northern Trust is slowly but surely boosting its multi-manager investment team in a bid to enhance its European visibility.

Each month in PWM, six top European asset allocators reveal how they would spend E100,000 in a fund supermarket for a fairly conservative client with a balanced strategy.

Roxane McMeeken checks out the Gartmore attitude to stock selection and product rankings.

The Gartmore Capital Strategy Continental Europe fund is a core holding in two of the model portfolios of our experts on the Funds Focus panel. Gartmore is based in London and manages E68.5bn.

Whether it’s a bear market, bull market or neither, hedge funds earn their keep in any serious portfolio.

The idea has lodged itself in the heads of investment managers that equities are the superior long-term inflation hedge. This dovetails nicely with historical studies showing that stocks exhibit “superior” returns over the long term.

In spite of current low demand, the city of romance still holds real estate attraction, writes Roxane McMeeken.

“In a matter of months, the French government has transported the property industry from obscurity to acclaim,” gushes a recent report from Deutsche Bank Real Estate.

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