The multi-boutique model being developed by ING is to be based around people’s skills rather than asset classes, reports Elisa Trovato

The new management team at UBS is charged with continuing the Swiss bank’s recovery, and if successful, the recently-appointed leaders can provide an example for others to follow, writes Sebastian Dovey

Bob Parker, vice-chairman at Credit Suisse’s asset management arm, tells Yuri Bender that the industry may be under threat, but those providing the right advice and matching products to clients will come out on top

The global economic crisis has opened up huge opportunities for investors, writes Yuri Bender, but how should private clients apportion their assets?

At the centre of all questions of asset allocation at Credit Suisse is the Multi Asset Class Solution (Macs) unit, which not only decides optimal allocations, but also populates them and manages the investments for the Zurich-based private bank and other, third party customers. Yuri Bender talks to Michael Krinner, the Macs product specialist responsible for structuring and running the private banking mandates

A more predictable market environment means we could start seeing some consistent returns from hedge funds in 2009

Hedge funds have received a bad press of late as investors hoping for absolute returns were disappointed with their performance. But these vehicles can still offer uncorrelated alpha and the industry is responding to calls for greater openness, writes Elisa Trovato

The relentless market volatility of the past year has sparked new interest in strategies that can help manage downside risk but maintain growth potential, says Michael T. Buckius

As more and more investors and asset managers are looking to diversify their portfolio to include holdings in alternative asset classes which combine low volatility and stable growth, so longevity assets are steadily gaining traction, write David Rawson-Mackenzie and Pollyanna Wan

With nervous investors choosing to remain in the safety of government debt, managers are looking to make certain of the credit quality of their issuers, writes Ceri Jones

“The portfolio for February has changed little from the previous month. We sold some equity exposure in favour of more corporate bond exposure (AXA and Schroder corporate bond funds). We sold the Parvest Abs Return Bond due to poor performance. We think that Central Bank interventions are helping credit markets - money markets liquidity has already been improving in the last few months and corporate spreads seem to be stabilising. The overall portfolio remains conservative, with exposure to gold and high dividend stocks.”

“During February, international stock markets were once again influenced by weak economic forecasts. Particularly the negative news flow from the automotive and the financial sector caused a high degree of insecurity among investors and, as a consequence, almost all stock indices fell below the low levels of November 2008. Additional uncertainty originated from the worsening economic situation of state economies in Eastern Europe. In our portfolio, which is allocated according to C-Quadrat Best Fonds Strategy, equities, commodities and cash were reduced in favour of bonds.”

“We are growing increasingly worried about the Euro zone’s economic backdrop. We have reduced our allocation by reducing the Mainfirst Avant Garde fund and increasing our US weight by buying the JPM US Select 130/30 fund. Unlike some 130/30 funds this model has a successful historical track record having been run for US domestic investors since 2004. The fund provides us with flexibility to benefit from the current market volatility as well as providing us with sector diversification and a broad footprint in US large cap equities. Not only will this position increase our total US weight but it will blend along side our other US managers.”

“We reduced the equity exposure once more because of the muddy outlook for the worldwide economic activity and the downtrend with company-earnings. The temporary positive development of the economics sentiment indicators has proved to be wrong. We reduced over private equity because the outlook for the branch is still very dodgy. Given the current exchange rate of $1.25-Euro, we think that the potential for the US-currency is very limited. Therefore we adjusted the US-equity hedged position in relative terms. We still see high potential in the corporate bond market this year.”

“During the last month we removed AllianceBernstein Global Value and increased the weight of M&G; Global Basics and Franklin Templeton Mutual Global Discovery. In spite of this, we kept both sector and geographic allocation unchanged and in line with the benchmark of the portfolio. We also made no changes to the allocation between equity funds and bond funds. The performance of the portfolio got a positive contribution especially from Franklin Templeton Mutual Global Discovery and from European equity funds, like Templeton Mutual European, Nordea European Value and M&G; UK Recovery.”

“The markets continued to suffer losses in February with global equity markets falling to levels not seen for 10 years. This reflects heightened concerns over the corporate profit outlook for 2009 and whether the stimulus packages will be successful. The MSCI AC World fell 10 per cent in US dollar terms and the MSCI Emerging index dropped 5.7 per cent. Volatility remains high, but has stabilised under 50 per cent. Returns on our portfolio suffered from the correction on global markets while it benefited from our exposure to euro government fixed income through the Petercam’s core vehicle. We were penalised by widening spreads on US corporate credit.”

“During last month, we have made no changes to the portfolio. On a year to date basis, most of our funds have delivered decent performance versus their respective benchmark index. Moreover we maintain our conviction in the different managers. On the allocation side, we keep the small allocation to convertible and high yield funds. We believe that the recent spread widening offers attractive opportunities going forward.”

“This will go down in history as one of the worst bear markets ever. As almost all assets fall in value, good fund managers should be able to identify opportunities. This is especially true in the high yield bond markets, where large volumes of forced selling appear to have created attractive prices. We have allocated to this area via a specialist fixed income credit manager: Bluebay. On the equity side, we sold our entire holding in Schroder Tokyo and replaced this with an allocation to the UK equity market. This is partially a currency play, given the fall in Sterling, and has already yielded good returns.”

“February has been particularly tough for most markets. On this adverse backdrop, both our European and US equity funds have outperformed their respective markets. The only changes to our balanced portfolio are asset-allocation-related, rather than fund picking-related. Going forward, we will keep a strong emphasis on sticking with the more reliable fund managers, both with regards to their management skills and to the soundness of their firms. This is one reason why the part of the portfolio invested with boutiques has been reduced for some time. For the next few weeks, major fund managers should remain the main part of our holdings.”

“Expectations for a stabilisation of financial markets based on the policy response of Obama’s administration have been violently disappointed. The global economy and financial markets are on an accelerating downward path. The few active risk takers in the market have had a hard time across all asset classes. We reduced the equity allocation by 5 per cent (Europe and Japan) and kept the proceeds in cash. We continue to hold our significant credit exposure in fixed income high yield, emerging markets and convertibles. We believe that current credit spreads compensate fairly well for the risk taken.”

“February was another volatile month for investors, with only Dexion Absolue making any sort of progression but much of this was down to discount closing as a result of the tender offer.”

January’s losses extended into what turned out to be a difficult February for markets. Despite our defensive strategy, a lower equity exposure would have been desirable. This was especially the case as bonds lost money with the exception of the Thames River Global Bond fund. Our absolute selections also found the going tougher than normal. However when the fund selections are examined within their peer groups, it was an excellent month for relative performance within our strategy, and it is this that will stand us in good stead over the medium term we believe. No changes are made to the portfolio this month.”

Each month in PWM, 12 top European asset allocators reveal how they would spend €100,000 in a fund supermarket for a fairly conservative client with a balanced strategy

A current challenge for managers in the Sharia-compliant fund space is to respond to investors’ aversion to risk by offering fixed-dividend products and property investments, writes Ceri Jones

Much has been said recently about Sharia compliant investment opportunities, particularly in the context of abundant liquidity in the Middle East and hence a growing Islamic investor base. It therefore makes sense, writes Marc Damoiseaux, to consider how the market has developed for Islamic investors over time, and also how product development has been keeping pace

The wealth management industry has been hit hard by the downturn but technology can be used to counter some of the effects, from using greater levels of automation to drive down costs to using online services to target the mass affluent sector, writes Rekha Menon