Open architecture could have a bright future in Spain, reports Elisa Trovato, but clients need to overcome their reservations

Social networking sites such as Twitter could become valuable business tools for the wealth management industry, write Graham Harvey and Karl von Bezing, but a focused strategy is imperative

European institutional investors share common concerns, although country-specific differences may drive investment strategies. Ceri Jones reveals the results of our investor survey

Alfonso Gómez Garcimartín, head of BBVA private banking, believes the development of long-term client relationships and use of open architecture makes the bank stand out against its Spanish rivals, writes Elisa Trovato

Two changes of ownership in 2009, plus the fallout from the financial crisis, means that Kleinwort Benson had an extremely unsettled year, but the management are optimistic going into the new decade, writes Yuri Bender

With private clients in both traditional and emerging markets looking for investment opportunities, asset and wealth managers are once again scouting for new markets in which to distribute their products, writes Yuri Bender

Capital guaranteed products appeal to both high net worth and retail investors, writes Elisa Trovato, but it is vital that the client knows just how the funds work and the issues they are likely to encounter

There may be concerns about the immediate prospects for the asset class, but emerging market equities remain a compelling long-term investment, writes Ceri Jones

Environmental, social and governance (ESG), or sustainable investing, are words frequently used in the press, but what do they mean? Andrew Ness, investment director at SWIP, explains, and examines why they are of particular inportance in developing economies

The fund of hedge funds model has been challenged by the current climate and is struggling to win back clients, writes Yuri Bender, but does the concept still have a place in private client portfolios?

“While it is now clear that the stimulus provided by the authorities has helped the world avoid an outright global depression, what is not clear is what will happen in the longer-term once stimulus measures are removed. However, in the shorter-term both the economic numbers and earning updates continue to positively surprise. We took profits out of the BlackRock UK Absolute Alpha, replacing it with the more benchmarked but defensively positioned JOHCM UK opportunities. This should allow the fund to capture more market upside without dramatically increasing the overall downside risk.”

“This month we are reducing the fixed income portion of the portfolio, selling the Deka Euro Renten Total Return fund. We are maintaining the same equity portfolio as in the previous month and adding to the alternatives positions with the HSBC GIF-GL Macro, which is a Uicits III compliant tactical asset allocation fund. The overall estimated duration of the portfolio remains low, with a bias toward credit risk.

The equity portfolio is still concentrated in value and large caps. The geographical composition of the portfolio shows a preference for European equities and euro denominated bonds.”

“During early 2009, international stock markets underwent a heavy correction, followed by a broad technical recovery starting in March. The global economic pressure was mostly relieved through comprehensive liquidity supports from governments and central banks. However, the financial crisis should not be underestimated as the repercussions on the real economy will be felt well into 2010. Our portfolio, which is allocated according to C-Quadrat Best Fonds Strategy, increased its equity and bond exposure during last month.”

“On the equity side we made small changes to the allocation. We sold the Japan-equity fund and a little of Euroland equity in favour of emerging markets funds, where we see more potential in 2010 because of the stable economy. On the current level of 3.4 per cent for the 10-year German government bonds, we still hold the duration below a neutral level but begin to reduce the under weightings. On levels of 3.6 per cent we would think about another increase of our Government positions because we do not see a major inflation risk in coming months. We increased our position in corporate bonds.”

“This month we made a change to the portfolio, adding the Generali Euro Bond fund. Despite the change in fund selection, no changes have been made in the sector and geographic allocation of our portfolio. This month the fund registered a performance in line with the benchmark, receiving a positive contribution to the performance from UBS US Growth, UBAM Neuberger Berman US Equity Value and Janus US Strategic Value. The main detractors have been Templeton Mutual European, Templeton Mutual Global Discovery and Nordea European Value. The bond portion of our portfolio remains invested in pure Government bond funds.”

“Over November and December the equity markets maintained their upward trend. Government bond interest rates remained steady, anchored by accommodative monetary policy. Given this environment, our equity, credit and convertibles exposure did well. We are expecting economic growth to gradually reach its potential in the US and Europe, so have increased our holdings on equities through the Franklin Mutual Beacon fund, our US equity bet, and BNP Paribas Convertibles Europe. We trimmed euro government bonds, considering the risk to be asymmetric given the low level of long-term rate.”

“Last year we saw strong positive performance posted by the most risky assets. Equity in general and emerging market in particular, but also corporate bonds and hedge funds, all delivered double digit returns. We expect 2010 to be more challenging for asset allocators, even if there are still a lot of opportunities in the market. We have therefore decided to reduce our allocation to both fixed income and hedge funds and invest the proceeds in commodities through a new allocation to a fund specialised in equity linked to the energy sector.”

“We have made no changes to our portfolios over the past month but continue to monitor underlying managers as many rotate portfolios towards more defensive names. We agree with this decision. The outlook is unclear and we remain pragmatic. Our equity positions are balanced by government bonds and hedge fund managers such as Crispen Odey and Chris Rice, both of whom remain very wary of the recent equity market rally. Our objective is to lose as little as possible if markets have a relapse.”

“Equity and bonds allocations remained unchanged month on month, even though the risk profile changed somewhat. On the equity side, we increased the emerging Asian exposure some more. A new holding has been added to the portfolio: a European long-short sector-focused Ucits; with a live track record over up and down markets, the skills of the team have been successfully tested. Their proven ability to keep their risk profile under control helps switch some low risk assets to this vehicle. On the fixed income side, a slightly shift out of long-dated euro government was implemented.”

“Market participants remain rather optimistic for risky asset classes. This statement is not based on surveys of investment views or aggressive positioning of investment managers but on the analysis of the respective price trends. Verbally, many participants are cautious but the price trends suggest something different. We believe that there are still significant risk premiums to earn in many areas, not least because equities realised a dreadful performance in the last decade. We trimmed the allocation to nominal government bonds by 6 per cent and increased inflation protected bonds and commodities by 3 per cent each.”

“A rally in the US dollar in December meant that our American funds performed well in absolute terms. The fact that all three were above their sector averages was an added benefit – Findlay Park, the high achieving smaller company fund, was particularly strong. Asia and emerging market holdings were also strong. Dexion Absolute, the fund of hedge funds, also continued its recovery as the underlying market/asset class has stabilised.”

“As we suspected, the risk trade was back on in December as thin seasonal volumes and year end book tidying saw equities rise across the world. The weakening of the euro flattered returns for international equities, particularly in the US which saw the dollar gain around 4.5 per cent. As a result, the Findlay Park American Smaller Companies fund was by far the best performing fund held. The recent shift from absolute to European equities in December was a positive one. We remain cautiously positive with a keen eye on fourth quarter company and economic announcements to set the tone for the new year.”

European banks looking to drive down costs are embracing greater levels of automation and standardisation in fund processing, writes Elisa Trovato, but the goal of a single access point remains some way off