Wealthy individuals are failing to use asset allocation tools and are reluctant to diversify, writes Paula Garrido

Janus Capital subsidiary secures twin mandates from Barclays Bank to manage funds aimed at UK retail market. Paula Garrido reports

BNP/Axa link-up

Axa Investment Managers has joined forces with BNP Paribas to boost sales of its EasyETF range of exchangetraded funds. Axa’s regional offices have been reluctant to sell the range.

At the end of last year, Credit Suisse Group announced plans to undertake a root and branch reorganisation aimed at fully integrating Credit Suisse First Boston (CSFB) within the group. In what Oswald Grübel, chief executive of Credit Suisse Group, called a “one bank” initiative, the idea is to unify the structure with various operating divisions. This will allow the bank to present one face to its clients with a full suite of services drawn from the different divisions. Mr Grübel has also hinted that the First Boston name will finally be dropped.

Philippe Collas, CEO for asset gathering at Société Générale, talks to Yuri Bender about developing a factory-style approach to private banking and how he will revitalise rusty internal sales channels in the retail branch network

For private banking customers, fund selection is carried out through a specialist fund selection unit in Guernsey, constructed by James Ellis of the group’s SG Hambros subsidiary. The ability of this regularlyupdated electronic database of 10,000 products to pick mutual funds and construct portfolios for clients has been extensively demonstrated to PWM . There are few rival institutions with such an advanced fund selection tool.

Yuri Bender visits the famous Swiss bank as it celebrates its bicentenary and finds out that distributors are the key to a long-term plan designed by managing partner Rémy Best

With investor confusion over industry initiatives such as depolarisation and open architecture growing, banks must make greater efforts to respond to the needs of clients – while at the same time investors must get used to the idea that quality advice comes with a price tag. Paula Garrido explains

So far we have discussed how OA is forcing distributors to listen to what their clients want when offering third-party products through their internal networks. The question is now to find out what manufacturers need to do in order to get their products across in the most effective way. For some, going directly to distributors or using distribution platforms is proving to be the best way of doing business. This is not the approach followed by the Ixis Asset Management group.

When defining a strategy for third-party fund distribution it is important to look at the needs of clients first

Client service and open, in-depth communication with regard to products, investment market expectations and company strategy are key preconditions of any successful long-term partnership between an asset management firm and its distribution partner

Higher earnings growth expectations, the recovery in M&A activity and disparate economic growth within the EU point to a favourable year

Aware of what it’s up against, Malta still has aspirations to become a part player in the European fund administration business. Paula Garrido reports

A degree of immunity to the euro’s strength as well as declining labour costs across the continent make European small caps a good bet. Simon Hildrey explains

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.

“No major changes have taken place in the selection of the underlying long-only managers. We also maintain our strategic allocation to equities, fixed income and hedge funds. The hedge portion of the portfolio consists of directional strategies, European long/short strategies and market neutral Strategies. Our market neutral portfolio benefited strongly from the recent M&A; activity in Europe. Within the directional portion we further diversified our exposure to CTA managers by adding Winton Futures to the portfolio.”

“Quite a few changes have taken place this month regarding fund selection. We have concentrated our exposure to Asia and Japan equities by selling Nouvelle Croissance Japon and Nouvelle Croissance Asie and introducing Comgest Asia, which is invested in both areas according to stock-picking opportunities. We also sold our position in Capital International Global Equities and introduced Axa World Talents and OPA Monde. Both funds are more concentrated on their main convictions.”

“Speculation has centred on how quickly the US Federal Reserve will raise interest rates and how this will impact on the dollar/euro rate. Fed Chairman Alan Greenspan should lift the target rate to 3.5 per cent at the end of 2005. We expect the dollar to continue weakening against the euro. Therefore we partly hedged our US-exposure by replacing the Merrill Lynch US Small Cap Value with the euro-hedged Pioneer US Mid Cap Value fund.

“Equity market rallies have given way to a less certain mood in the new year. Factors include the oil price rebound, the twin deficits in the US, Iraqi elections, together with stronger US employment growth which will maintain upward pressure on interest rates. US Q4 profits have beaten expectations but outlook statements point to tougher conditions in 2005. Markets should resolve these concerns, but it may be reasonable to wait for confirmation of the outlook before setting sail.”

“Investors have had a good start to the year in most markets, with Japan, the UK and the emerging markets leading the way and equities outperforming bonds. Laggards have been North America and continental Europe. This generally suited our portfolio over and underweight. Fund selections have performed well in general too and the exceptions that underperformed did so in character so we have no concerns at this stage.”

“Although it sounds unfashionable for a fund manager to say he has not done much to reshape his portfolio, lately, this is exactly what we have been doing since the very beginning of November. Today more than ever, the trends are our friends. Europe is where the markets seem to offer the more upside potential, because it is cheaper and gives investors a better dividend yield. And we are staying pretty much biased toward our natural resources funds, which add up to 15 per cent of our portfolio.”

With low interest rates, improving property prices and local consumers readily spending, Asia Pacific is steadily attracting new assets. Paula Garrido reports

State Street’s Italian private equity head is set to use ultra high net worth products as a first step to unlocking institutional bounty. Yuri Bender reports