The latest Ucits directive should stimulate merger activity, but national preferences remain a barrier, writes Elliot Smither

The private banking industry would do well to study the example of luxury goods manufacturers when devising their strategies to enter the Chinese market, writes Karl von Bezing

HSBC’s Chris Meares tells Yuri Bender about the renewed drive to recruit relationship managers to the private banking division and the importance of growing the bank from a local level

Michael Green discusses why he believes that American Century Investments’ focus on growth equity investing will be an advantage as the firm expands into the European asset management arena, and explains why it should be seen as a boutique fund house, rather than a global player. Elisa Trovato reports

The fallout from the financial crisis means that investors are taking a greater interest in portfolio construction and engaging with their wealth managers more than ever, writes Elisa Trovato, and it is those products that prioritise liquidity and transparency that are proving the most attractive

Exchange traded funds continue to prove incredibly popular, writes Elisa Trovato, but as the evolution in this space brings the possibility of more complex products, are these developments really in clients’ interest?

What are exchange traded funds?

Both managers and consumers are concerned about Europe’s economic situation and prospects for growth, which are hampered by issues such as high levels of debt and possible currency devaluation, writes Ceri Jones

Giuseppe Di Stani, managing director at Morgan Stanley, looks at the options available to European Equity investors looking for stock picking strategies in 2010

There are substantial opportunities for investors looking to make a play on volatility in currency markets, with hedge funds providing an effective way in, but it is not a market for the faint hearted, writes Yuri Bender

The Ucits III regulated funds provided by Allfunds Alternative should tap into the concerns felt by conservative investors, writes Yuri Bender

Improving levels of data availability mean that those looking to invest in the Asian growth story can now evaluate which companies are run in a sustainable manner, thus reducing risk, writes Elisa Trovato

“There are no major asset allocation changes to the portfolio in what is proving to be a turbulent period. We expect the recent pick up in volatility to continue for much of this year but feel that this environment will create opportunities for talented stock pickers. With this in mind we have switched out of the more thematic based Walker Crips UK High Alpha for the more stock focused and highly active GLG UK Select fund. Within US equities we have increased our position in the concentrated strategy Martin Currie North American Alpha by taking profits within the more core diversified product JPM US Select 130/30.”

“This month we are maintaining the same portfolio of the previous month, with a neutral bias toward equity markets and a preference for absolute return funds over bonds. The credit component of the portfolio is still invested in the Axa Euro Credit Plus fund. The portfolio maintains a small duration in an economic environment where the high level of indebtedness of governments and the strong monetary stimulus make it risky to be long in maturities. We still like the gold theme as a diversifying strategy and the dividend theme as a conservative equity exposure.”

“The most important driving factor of equity markets in 2009 was the quantitative easing policy adopted by international central banks. When market participants realised that a collapse of the global financial system was improbable, the demand for stocks started to increase and the value of equities rose. January 2010 started weaker than investors had expected. Possible reasons are, among others, the cooling of the Asian economy and concerns regarding the potential default of Greece. Our portfolio, which is allocated according to C-Quadrat Best Fonds Strategy, increased its cash and money market exposure during the last month.”

“Influenced by the uncertain environment, we reduced our equity exposure and bought a Euroland Government Bond Fund. On balance, we are still overweight equities and, within equities, the Euroland position. We hold on to the currency stability of the US-equity fund, but perhaps currency developments indicate a new trend for the US dollar. For emerging markets we still expect a very good development in 2010 because of the stable economy. On higher levels of government yields we would think about increasing government positions, because we don’t see major inflation risks in the next months.”

“This month we didn’t make any change to the portfolio and no changes have been made in the sector and geographic allocation.

The best contributor to this month performance was Tom Stubbe Olsen, manager of Nordea European Value Fund. Other good performances came from Vontobel US Value Fund, Franklin Mutual Global Discovery Fund and Vontobel Global Value ex US.

The bond portion of our portfolio remains invested in pure Government bond funds, as we maintain our conservative approach.”

“Over the month of January, equity markets fell, reversing last year’s rising trend. Given this context, our equity and convertibles exposure detracted from performance resulting in a negative contribution from mid-month. Nevertheless, we are still expecting economic growth to gradually reach its potential in the US and Europe. Thus, we’ve decided to increase our stance on US high yield debt, favouring existing holdings on Axa IM US High Yield Short Duration. This will enable us to benefit from strong carry, limiting the impact of eventual spread widening.”

“As expected, the beginning of 2010 has been shaky for investors. Equity markets have been rather volatile and questions about the public deficit of some European countries have recently amplified the trend.

While our position in emerging market suffered, our diversified position in small cap funds and our exposure to Bgf Global Allocation have been quite supportive. In the short-term, we recommend to rebalance the portfolio but not to change the allocation which is appropriate to this environment. ”

“For European investors, the decision to underweight the euro has yielded results and may well continue to do so this year. We added to our sterling exposure by including an allocation to Bill Mott’s Psigma UK Income Fund. The manager is known to us for some time and we believe his current strategy should contribute positively to returns. We have reduced our equities and raised cash to 5 per cent. We made no changes to the alternatives or fixed income allocation and it was encouraging to see the hedge funds deliver in January despite market falls.”

“Our fund selection fared reasonably well for the first month of 2010. Each in a style of his own, the fund managers coped with an adverse sentiment backdrop, starting by mid January. The two changes made to the balanced portfolios are much more about asset allocation moves than fund picking. First, the corporate high yield holding has been redeemed, after an impressive run for next to one full year. Second, the energy holding has been trimmed, due to the negative environment for most cyclical stocks. Going forward, there should be plenty of scope for managers to perform, provided they are allowed enough benchmark deviation.”

“We believe the correction of risky asset markets in the second half of January to be rather short-lived. Short-term interest rates will of course be raised at some point in time. Contrary to many other investors, we consider this not to become a major issue any time soon. The level of short-term interest rates is extremely low and raising rates would come only with continued economic revival. Given the spectacular performance of convertible bonds – based on collapsing credit spreads and strong equity markets – we reduced the allocation by 2 per cent. We increased the vehicle that follows a buy-write strategy on the S&P; 500 to 6 per cent.”

“The second half of January was a difficult period for the markets, with both equity and bond markets under pressure. At the stock level we decided to switch Fidelity European with Cazenove European on a money for money basis. Chris Rice, the manager of the latter, has developed a solid track record, with a ‘business cycle’ approach which results from a strong macro economic overlay discipline. The resulting portfolio has recently tended to be ‘value/defensive’ orientated, leading to decent out performance when markets struggle. After a strong run in the markets since last March, this move seems to make sense to us.”

“January proved to be a month of two halves with the positive moves of December continuing until mid January at which point, despite positive fourth quarter company earnings announcements, economic fears caused investors to step back. The euro was weak, with the overall result being a negative month for all markets except Japan. The Johcm Japan fund was the best performer of the selection. The volatility that we have seen so far this year is set to continue in our opinion and we remain focused on using this environment opportunistically where we can going forward.”

The financial crisis and the effects of major frauds in the wealth management industry have highlighted the role which the once humble custody bank will play in the future development of the industry.

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