The shifting dynamics of the German funds market place will be debated during the latest stage of the PWM roadshow, which visits Frankfurt on the afternoon of June 18. The keynote speaker at the German language event, to be held at the Japan Tower, has been confirmed as Stefan Seip, director general of BVI, the German funds association.

Big name players are offering the same product range across the globe, reports Elisa Trovato

The richest thousand people in Britain may be worth E500bn, but only a fraction is available to the wealth management industry, writes Ted Wilson

Elisa Trovato reports on calls for Italian funds to carry out a “soul searching” exercise to try and identify the causes of the continuing decline of the industry, and to find ways of turning things around

Bringing new funds onto the market and a simplification of the product range to meet the needs of investors were among the solutions identified to combat the losses taken by the fund industry over the past 18 months

With only 30 per cent of Italy’s potential clients currently using a private bank, the industry is confident that the good times are set to continue, while today’s market conditions represent big opportunities

While the heady days of Santander’s record-breaking product push are now a distant memory, there is still hope for future success and innovation, María Dolores Ybarra tells Elisa Trovato

When it comes to choosing the right products and managers, it is often hard not to look at past performance. But performance isn’t everything, and it is just as important to understand how the fund is managed, writes Elisa Trovato

The global fixed income markets have seldom offered more attractive opportunities than investors will find in today’s environment. Since the summer of 2007, trading activity has been far from normal in many fixed income sectors as concerns about the US housing market and economy set off a widespread flight from almost every form of credit risk.

With investors looking for less risk than the market offers, and disappointed by hedge funds that aren’t really ‘hedged’, absolute return products are starting to come into their own. And the Ucits III regulations have meant they now have a much broader audience, writes Yuri Bender

Put simply, many clients are absolute return investors, and they will increasingly seek out the houses that demonstrate the absolute capability that enables them to achieve their goals, writes David Tiller

Hedge fund indices have turned into investable assets for EU harmonised investment funds, write Joachim Kayser, Alexander Lindemann and Robert Kissner

The flow of assets into emerging market debt and strong economic growth has led fund managers to believe that the asset class offers attractive value, although there are a number of risks invloved, writes Simon Hildrey

Middle-Eastern oil wealth has been pushing demand for sharia-compliant investment products, but can investors be certain that products will meet their religious requirements in what is still a non-standardised market? And is there any scope for demand outside the Arabic heartland? Martin Steward reports

Mass affluent and retail investors tend to take a wait and see approach to market turbulence, but there are opportunities for the more sophisticated private clients. Nat Mankelow reports on the structured products that aim to take advantage of turbulent conditions to increase market share

“Global conditions are still very challenging. We maintain a much diversified exposure to equity products and a significant allocation to emerging markets bonds and spread products. We are still exposed to energy and commodity related funds that have low or negative correlation with the MSCI World. Due to uncertainties over the inflation outlook, we have reduced exposure to euro bond markets by selling part of the AXA WF 7-10yr and have introduced the Parvest Absolute Return Bond. We still keep significant exposure to Asian and Japanese markets.”

“International equity markets have shown light signs of recovery during the month of April 2008. Investors around the world turned their focus yet again to the United States, where the FED cut the key interest rate by 0.25 percentage points. The rate cut is in line with a series of cuts amounting to 3.25 per cent to date since September 2007 in response to the subprime crisis. We reacted to this market environment by building a European real estate position in the equity part of the portfolio, which performed better than global equities on a year-to-date basis.”

“While a high degree of uncertainty remains associated with the severity of the economic downturn, there are signs that the credit crunch is easing and this month saw global equity markets recover some of the previous month’s lost ground. The previous month’s fund switches into Melchior Select Japan Advantage and Martin Currie North American Alpha proved to be good trades as both funds were positioned well to capture the upside, finishing the month within the top quartile of their respective sectors. However the sharpness of the market recovery does raise some concerns and we have reduced our equity weighting in favour of cash.”

“The portfolio returned 2.5 per cent in April. The best performing fund was Danske Fund Europe, which returned 8 per cent. The worst return was posted by Pictet Asia local Currency Debt., which lost 1.35 per cent in line with fixed income funds in general. To take advantage of this we have added another 5 per cent of the portfolio to this fund. ING Senior Secured Loan seems to have turned the corner after a few difficult months. Senior bank loans now trades at LIBID + approximately 6 per cent. We have also added JPMorgan Global Convertibles (EUR), and Blackrock Absolut Return Strat, a closed end fund of hedge funds traded daily at London Stock Exchange.”

“In the last month we removed from the portfolio Axa Optimal Income fund, DWS TR Bond fund, Raiffeisen Euro Liquidity fund, CA Arbitrage VaR4 fund and Legg Mason Global Value fund. We introduced two new funds, Templeton Mutual European and Janus US Strategic Value. The weight of bond funds in the portfolio has been reduced in favour of equity funds. We are always monitoring the market, looking for new funds that could be included in our portfolio. Each potential change in the portfolio will derive solely from fund picking.”

“Over the past month, Asian equities have led the global market’s recovery. Threadneedle Asia Growth returned over 8 per cent, outperforming our European funds. On the other hand, as risk aversion decreased further in April, our holdings of government bonds and volatility positions suffered again. We introduced AXA HY US Short Term Duration to benefit from the excellent carry. This defensive approach aims to deliver regular performance through bond selection in short duration paper. Having chosen a compartment hedged into euros, we are currently also benefiting from the positive US/Euro rate spread.”

“In April, following a manager review we sold our holdings in the Invesco Perpetual High Income Fund. While we have a lot of respect for the manager, we believe the number of mandates and assets is simply too large. The manager is responsible for some 19 billion GBP across numerous mandates and retail funds. In addition to this, we were looking to reduce our allocation to UK equities. We believe the outlook for the UK economy is negative (high debt levels, falling house prices, high dependence on financial services) and that better opportunities exist elsewhere.”

“Our balanced portfolio remains pretty much unchanged month on month, still as low as 35 per cent on equity funds. Some risk has been added on the fixed income side: our holding in high yield corporate has been brought from 5 per cent to 7.5 per cent. On the equity side of the portfolio, the 2.5 per cent holding in JOHCM Europe SV has been replaced by a similar holding in US Growth stocks, managed by Edgewood. Opportunities are emerging in major markets, most of which are discounting a severe recession, making valuations attractive. But it can be very costly to come back in too early.”

“We have noted some positive first steps in a potential global stock market bottoming process. However, the percentage of markets above their long-term average has not recovered enough to confirm an end to the long-term global downtrend. We are therefore maintaining our cautious bias and our significant exposure to alternative investments, through multi-strategy funds of hedge funds. It is worth mentioning that special care is taken on operational due diligence as the credit environment remains uncertain. Most of the markets that behave well are from resource-based and emerging markets confirming the sustainability of the commodity demand theme.”

"During April, fears of a systemic financial collapse seemed to have been dismissed by investors, especially by equity market participants. This led to a strong bounce in the higher beta funds like Threadneedle Asia and JPM Emerging Markets, where it is hoped that underlying growth in economic and corporate terms might be most resilient, relative to the Western or Developed World. These funds both appreciated by around 10 per cent over the month. Whether these gains/levels prove sustainable is a moot point."

“In our fund selection process we make a distinction between actively managed funds and ETFs – depending on the underlying market. In emerging markets, we see that outperformance is possible. One major exception is the Latin America region. Due to the enormous weighting of Petrobras, more than 15 per cent of the MSCI Latin America, active funds under UCITS III rule cannot track the index. In times when Petrobras beats the broader market index, most of the active LatAm funds underperform – and vice versa. Thus for this region, we prefer an index ETF to keep the active risks under control.”

“Risk was rewarded again in May as the pattern of good month/bad month/good month continued. Within the rally, risk was rewarded, as we suggested it might last month, and the Nevsky Global Emerging Markets fund was our best performing holding rising 9.9 per cent. This was followed by Asia ex-Japan positions and then a little less predictably by Japan which finally looks as if it may be shaking off its pariah image. Whilst it is encouraging to see markets have a strong month, the volatility this year still leads us to pursue a balanced portfolio, albeit overweight the emerging areas of the equity markets.”

Each month in PWM, 12 top European asset allocators reveal how they would spend E100,000 in a fund supermarket for a fairly conservative client with a balanced strategy

Target 2 Securities means CSDs will have to change their business models, and Link Up Markets is designed to facilitate the shift, reports Peter Guest