Adam Wethered, co-founder of investment house Lord North Street, explains how his favoured business model apparently allows staff to spend time with clients and offer them a personalised service. Yuri Bender reports

Are the days of open architecture over, or does the third party approach still have a role to play in a landscape scarred by the financial crisis? And what approach is in the best interest of clients? Yuri Bender reports

The guided architecture concept – where bank staff guide customers through funds from six to ten big brand external managers, alongside house products – was introduced to Europe at Commerzbank by Joerg Brock in 2001.

The emerging Asian economies are leading the world out of recession, but valuations are not as generous as they once were, and so investors must be selective when choosing their allocations. Elisa Trovato reports

Emerging markets could well prove to be the engine of global growth in coming years, and the asset class is full of possibilities for investors. Joanna Terret, product investment specialist, GEM at SWIP, takes a look at some of the opportunities on offer

The recent rally in equity markets may have more to do with downsizing measures than growth, but the business world is proving more resilient than many expected, writes Ceri Jones

At this juncture in the cycle, investors are largely positioning themselves in anticipation of an upturn in the markets. “Most of the discussions we have with our clients are about concentrated growth strategies,” says Michael Jones, head of European financial institutions at Janus Capital International.

Investors are showing a renewed interest in structured solutions, but are now looking for simpler and more transparent products with shorter maturities than they would have gone for in the past, writes Elliot Smither

Although questioned in the wake of the financial crisis that unfolded in September last year, structured investments have, in their wide majority, proven a reliable and resilient source of performance for investors. Thomas Carrega explains how they can help investors achieve their goals

While profits at the Julius Baer group have been falling – down by almost half in the first six months of 2009 to SFr219m (E143m) – they have fallen less than the army of analysts following the Swiss banking sector expected.

The bank, Switzerland’s second largest after UBS and Credit Suisse, recently separated its wealth and asset management franchises, now to be listed individually on the Swiss exchange. The figures who have attracted most coverage are Boris Collardi, the young and charismatic private banking boss and protégé of recently deceased veteran chief Alex Widmer; and the enigmatic leader of the funds house, David Solo.

But the bank’s recently appointed chief investment officer, Indian-born Dr V Anantha-Nageswaran (known as Dr Van to his colleagues and clients), is taking an increasingly important role in providing asset allocation guidance for the funds which are flowing out of some rivals into Julius Baer’s coffers. His experience working for Julius Baer in Singapore, as well as the bank’s two main rivals in Zurich, and running a hedge fund in between, should stand him in good stead for the challenge ahead.

“This month we slightly increased our equity allocation, in a still overall balanced portfolio. We bought the IXIS Oakmark Global Value fund and sold some bond exposure. Our portfolio is now more concentrated than before, with a bias toward total return bond funds, corporates and european equities. We reduced the duration of the portfolio selling the AXA Euro Bond 7-10 fund. We think that the recent equity rally has been due to strong governments and central banks support during the last few quarters, but still expect to see confirmation of the economic recovery in the next few months.”

“During July the positive trend at the international stock markets was sustained and even gained momentum towards the end of the month. The most recent economic data from the US indicated a stabilisation of the US housing market. Consumer confidence in Europe and Germany also rose for the third time in a row due to falling prices and the first hints of an economic recovery. Other contributing factors were better than expected quarterly reports. Our portfolio, which is allocated according to C-Quadrat Best Fonds Strategy, increased the stocks and commodity exposure during the last month.”

“Markets continued to recover fuelled by a view that we are now entering a classic V shaped recovery. Given the state of many corporate, consumer and government balance sheets it is unlikely that the recovery will be as quick as previous ones. However, with high volumes of investor cash waiting to enter the market, being overly defensive could be costly in the shorter term. We made no change to the overall split of cash, bonds and equities but made broader changes to the underlying funds. We sold Mainfirst Avant Garde and Thames River High Income and added to funds BlueBay Investment Grade and Gartmore European Absolute Return.”

“The most important shift to our portfolio is an increasing bond share. We bought for additional 22700 Euro the UniEuroRenta and so we are neutral regarding our duration. On the level of 3.6 per cent for 10-year German government bonds we see a real chance for capital gains. The important factor for this is that we do not see an inflation-risk for the next 12 months. At the beginning of the reporting season of the US-Companies we boosted our equity exposures because we expected higher profits. In the following bull-phase we sold the overweighted equity-funds and so on balance we are neutral on equities”

“In July we made no change in the sector and geographic allocation of our portfolio. Furthermore, the allocation between equity and bond funds remained the same. The performance of the fund benefited from funds like M&G; Global Basics and Pictet Japan. Main detractors are Templeton Mutual Global Discovery fund, because of high level of cash in the portfolio, Vontobel US Value, Templeton Mutual European and UBS US Growth. The bond portion of our portfolio remains invested in pure Government bond funds, as we maintain our conservative approach.”

“This month, cyclical bets within our portfolio again benefited from the drop in risk aversion, mostly through our credit exposure. Although the pace of the global economic contraction has indeed slowed, industrial production and firm manufacturing orders have yet to improve and unemployment continues to rise. Even though a recovery is taking shape, growth will remain well below potential. Thus, we’ve introduced an implied volatility strategy (BNP Paribas Euro Long Vol) on the Euro Stoxx 50. This latter is supposed to deliver a resilient performance should the market correct or volatility increase for any other reasons.”

“Some changes have taken place in the portfolio during the summer. We have reduced exposure to fixed income and increased our equity allocation. We have decided to sell our high yield allocation – after the strong rally of the asset class we decided to take our profit. We reduced our exposure to the balanced fund BGF Global Allocation Fund in order to directly reinvest the proceeds in equity funds. We have increased the exposure to emerging markets (with the addition of the Magellan fund) and to US equity. The objective is to benefit from the recovery of the US economy and a potential rebound of the dollar.”

“Emerging markets performed well again in July and we have reduced (tactically) our exposure. We have added Japan back to our portfolios and have opted for the GLG Japan Fund. Following the purchase of SocGen by GLG, it would appear that this team will continue to work together and we believe their experience will help deliver returns in an elusive market for investors. We have also increased our cash holdings slightly and will seek to reinvest in equities should there be any correction following the recent rally.”

“The sharp selloff in January and February has been followed by an impressive rebound on most stock and (non government) bond markets. The physionomy of this rally has been such that very large differences appeared between sectors and countries. And between fund managers as well. The good news is there can be real value added to some active fund managers. But the flipside of it is that undeperformances can be high as well. Two active fund managers have been added to the balance portfolio over the past few months, both on European Equity, a depressed area where a lot of inefficiencies remain.”

“Financial markets have posted a very strong rally since March. Surprising corporate profits, better macroeconomic indicators and zero interest rates at the short end of the yield curve brought investors back to the risky asset markets. Although our analysis shows that many investors have not fully participated in the recent move, some caution is warranted. We take the opportunity to reduce our exposure to equities, commodities and high yield bonds and invest the proceeds in long-term government bonds. This asset class serves as a hedge in case of a correction and is attractive because of the steepness of the yield curve.”

“During July investors continued to ply the ‘risk trade’ and support recovery potential of the equity markets. Funds such as Gartmore European, Schroder UK Alpha Plus and Threadneedle Asia delivered especially strong absolute and relative peer group performance. Gartmore have, however, announced that their star European manager Roger Guy will be standing down from this fund in coming months. Laggards included Polar Capital Japan but James Salter remains a decent manager and Japan as a market has a lower correlation than most.”

“The resumption of the risk trade saw markets grind upward albeit on thin volumes. Unsurprisingly therefore Asia and the emerging markets led the pack rising 12.4 per cent and 10.1 per cent respectively. We took advantage of these moves to adjust weightings, top slicing Nevsky Emerging Markets and IVI European and increasing the tilt to more flexible funds such as the Neptune European and US pairings. Japan, a favoured area for us, was a notable absentee in the risk trade so we added to MW Japan. We remain cautious but aware that the market could run further before fundamentals cause a setback.”

Demand for cross-border funds is booming in Asia, reports Rekha Menon, but the market can be a difficult one for Western fund houses to establish themselves in

Malta has a growing financial services industry, and wealth managers are increasingly attracted by the cost advantages that relocating to the Mediterranean island brings. Yuri Bender reports