BSCH takeover bid has has no effect on investment programme

European markets to out-pace US, says ABN Amro

Yuri Bender reports on the French bank’s attempt to compete with consultants

After a period of five years where technology providers found the pickings slim in global wealth management, the appetite for solutions is picking up, particularly in Europe and North America. Budgets appear to have been allocated by many of the major European private banking houses for 2005 onwards to upgrade their systems, according to research by IDC.

A look across neighbouring borders reveals what’s hot, what’s not and who’s making hay in the world of selling funds. Bella Caridade-Ferreira of FERI FMI reports on the changing marketplaces in Europe and America

Yuri Bender studies the recent changes at Credit Suisse and finds a company committed to open architecture, as CSAM’s vice chairman explains

The idea of embedding CSAM within CSFB, together with investment banking, means Bob Parker’s efforts can have a direct impact on group earnings and share price. The medium term objective over three to four years is for CSAM to contribute 10 per cent of group profits. CSAM currently manages $335bn (E270bn) of the $970bn group total, but over three years, Mr Parker hopes to hit $500bn. In order to achieve this profitably, he believes, CSAM must be expanded globally, through integrated platforms, rather than the old system of managers running their own fiefdoms.

Whether seeing to the pruning of the less-than-effective distributors, or staring down the competition, Massimo Tosato knows what’s best for business. He speaks to Yuri Bender

Investment fund distribution technologies are not working as

efficiently as planned – partly because distributors need to be more involved with setting up these systems in the first place. Paula Garrido and Yuri Bender report on the latest transfer agency developments

European distributors know the benefits of enhanced cash products. Now it is the alternative investment community which is turning to money market funds

No longer simply a safe haven to store money, cash products have a real role to play in an investor’s portfolio, especially if that investor is risk-averse

Portfolio managers aiming to make the most of cash find inspiration in the special features of tracker funds

Secure and simple, liquidity funds are a useful way to take care of excess cash and a must-have product for asset managers and distributors

Debt funds are benefiting as emerging markets show good economic growth. Simon Hildrey explores the asset class as it approaches maturity

“We are keeping our equity weight at 60 per cent of the portfolio unchanged. But, once again, we have biased our holdings towards a more defensive stance. First, we have added to our more defensive funds both in Europe and the US - typical value or stockpicking focused on dividend paying stocks. We sold our Asian and tech funds in order to increase our commodity holdings, and, in particular, a fund focused on the oil and gas sectors - this sector is valued using $20 a barrel whereas we hardly imagine it below $25.”

“July brought more difficult conditions for investors with most markets losing ground - the UK being the safe haven in euro terms. The worst hit was Japan due to yen issues and worries over small caps and domestic growth. This month we take the opportunity to increase our exposure to Continental Europe as valuations look better in the short term against a more stable interest rate outlook for the EU.”

“Investors are driven by worry with the continued rise in the oil price. The price has continued to rise to the current level of just below $41 for Brent Crude, although we believe the price could fall quite sharply. Recent employment figures from the US indicate that the economic recovery is no longer creating jobs. This could lead to concerns that US economic growth will slow. On balance, we believe that the growth story is still in place and recommend no changes to the portfolio.”

“The market’s uncertainty vanished with the Fed’s interest rate rise of 25 basis points. We expect interest to be at 2 per cent by year-end. We made two changes to the portfolio. First, we replaced the DWS Vermoegensbildungsfonds I with the more attractive M&G; Global Leaders fund. Second, we switched half of the Amex Global High Yield Euro fund into the Amex Global Emerging Markets Liquidity fund.”

“Interest rates are likely to rise over a six to 12 month horizon. Therefore, the drop of US and euro 10-year government bonds yields over the past month should be deemed as an interesting opportunity to reduce further our exposure to fixed income products and introduce Reverse International Bond, a fund with a negative sensitivity to interest rates. Our scenario of the main equity indices evolving within a tight trading range over the next weeks is still intact.”

No major manager changes took place in the long-only section of the portfolio and also the structural asset allocation weights (30 per cent IdB MM Zeus, 42 per cent equity managers and 28 per cent fixed income managers) have remained intact. Changes were made to the portfolio of the multi-strategy absolute return fund IdB MM Zeus in the same period. The exposure to credit arbitrage was reduced rigorously and within the long/short segment we increased our exposure to the US.”

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.

Paula Garrido examines the finely tuned hedge fund manager selection process in place at the Swiss bank

Judging from the data, equity markets are a no-go area at the moment but shrewd, quantitatively-driven asset allocation decisions still have their place