The Ucits structure of HSBC’s new fund of hedge funds promises greater levels of liquidity, but how closely will it replicate the performance of the offshore hedge funds it tracks? Yuri Bender reports

Although UBS continues to suffer outflows, the bank’s efforts to rein in costs are starting to take effect. Total assets under management have risen due to investment performance and it is well positioned to take advantage of the expanding wealth management sector in emerging markets, writes Sebastian Dovey

Andreas Wölfer, head of UniCredit Private Banking, is tasked with bringing the myriad brands under his control together to provide a more centralised model, but this is likely to meet with some resistance, writes Yuri Bender

In order to prevent rivals poaching staff, Mediolanum decided any new training programme had to be “legendary”. Oscar Di Montigny is the man in charge of the result, a corporate university, and he talks to Yuri Bender

Private bankers are having to reposition themselves to win back the confidence of clients following the financial crisis, with changing fee structures and increased allocations to emerging markets featuring in revamped business models, writes Yuri Bender

The premise behind thematic investing, picking the long-term winners from global trends such as reducing carbon emissions and ageing populations, strikes a chord with wealthy investors, writes Elisa Trovato

Web 2.0

For many people today, life without the internet would be unthinkable. The internet is now a means of accessing knowledge, creating/running new businesses (e.g. cloud computing), shopping, socializing and being entertained.

Money market funds are struggling with the impact of low interest rates as investors look to higher returns in the equity and bond markets, although the safety of the more conservative funds does offer an alternative to bank deposits. Ceri Jones reports

With portfolio stability a key concern among investors in today’s post-crisis world, non-traditional portfolio managers from the Natixis Global Asset Management group discuss how alternative strategies make asset allocation more complete

Kathleen Hughes, Head of Global Liquidity, EMEA, JPMorgan Asset Management, takes a look at money market funds, including the importance of screening underlying investments and the benefits associated with the larger funds

Sharia investments emerged largely unscathed from the financial crisis and the market is clearly expanding, writes Ceri Jones, but the strict guidelines that surround these vehicles are off-putting to some

“After the retreat in markets from mid January to early February, appetite for risk returned. The equity content within the portfolio was the best performing asset class in February. While equities remain our preferred asset class we have opted to reduce the risk in the portfolio after equity markets rebounded over recent weeks. We have sold our position in the J O Hambro Capital Continental European Fund and reinvested the monies into the existing holding in the Gartmore European Absolute Fund.”

“This month we are decreasing the duration of the fixed income portfolio a bit, selling part of the BlackRock Euro Bond fund and increasing the Vontobel Abs Return Bond Fund. We keep constant exposure to the fixed income markets, where government bond spreads have been moving in very diversified manner in the last few months, opening trading opportunities for absolute return investors.

On the equity market we maintain the previous exposure, with a bias toward value and Europe. We are not changing the alternative investment position.”

“During February, equity markets continued their volatile sideways movement. Towards the end of the month weaker than expected US consumer confidence data fuelled investors’ concerns about the markets, while the euro showed remarkable weakness against the US dollar. Two main reasons caused this: Greece’s budget deficit problems and the fact that the Federal Reserve increased its discount rate from 0.5 to 0.75 per cent. Our portfolio, which is allocated according to C-Quadrat Best Fonds Strategy, reacted to this rather difficult market environment by substantially increasing its commodity exposure throughout last month.”

“In this uncertain environment, we reduced our equity exposure again. On the current yield-rates for German-Government bonds, we reduced our exposure in the euroland government bond fund. We bought an absolute-return fund as an alternative to the absolute cash position. On balance, we are now neutral in the equity position and here we overweight euroland. We hold on to the currency stability of the US-equity fund, but perhaps the latest developments indicate a new trend for the US-Dollar. We still see a very good development for emerging markets because of the stable economy in the region.”

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

All European equity funds contributed quite well to the performance, while contribution from US and global equity funds has been on average disappointing. The bond portion of our portfolio remains invested in pure government bond funds, as we maintain our conservative approach.”

“Equity markets performed erratically in February. The US market contributed to performance, whereas European markets were almost flat, held back by poor economic figures and sovereign debt stress.

Overall, our equity and sovereign bond exposure generated positive returns. As our credit positions appreciated strongly, we took some of our profits and used the proceeds to open a commodity position. This should benefit both from emerging economies growth and to a lesser extent from the recovery in the developed market.”

“Equity markets have continued their volatile behaviour over February, but succeeded to conclude the month with a positive trend. Our small cap bets have been strongly positive in Europe since the beginning of the year. We believe it is the right time to reduce such types of allocation, especially if doubt about recovery in Europe rises again. As we would like to increase our direct exposure to US equities, part of the proceeds will not be reinvested into European equity.”

“When measured in euro, the S&P; 500 is up almost 7 per cent this year. The European markets are down over 2 per cent. For our US allocation we have switched into a passive vehicle given the difficulty of finding managers in this area who can consistently add value. We continue to add to the developed markets and reduce emerging market exposure. We have maintained a 25 per cent allocation to alternatives. Schroders closed their commodity fund in February, an action which causes an issue for us as we must allocate new capital to an alternative fund. We must then decide if we keep the closed fund or not.”

“Only one asset allocation move has been made during February, which was redeeming the remaining energy holdings. Apart from this, we continue to emphasise broad based mandates which we give to skilled managers or teams, under the ‘alternative’ label. We have appointed three of them, by now. The alternative label which here refers to hedge funds, makes clear they do not fit within a single asset class, neither equity nor bonds. On the equity side, an extra fund manager has been added: again he is enjoying a mandate that is very lightly constrained, though limited to the eurozone, on any market capitalisation size.”

“Risk asset markets have resumed their uptrend after the brief correction into February. As we expected, the debate regarding monetary exit strategies – quantitative easing and/or interest rate hikes – did not disturb equity markets for long. The level of short-term rates is simply too low to be worried about now. We sold the remaining 3 per cent position in the convertible fund after the spectacular performance of the asset class, and invested the proceeds in the Market Vectors Gold Miners ETF. Gold and goldmines should benefit from concerns regarding public finances and currency devaluations.”

“February represented a subdued period in performance terms for stock markets, perhaps overshadowed by events in the currency markets. With regard to fund performance, the ‘evergreen’ Findlay Park US smaller Cos added the most value in absolute and relative peer group terms. The fund is obviously not a core product but year after year it seems to churn out exceptional performance, with its ‘defensive/value’ style of stock picking. The two Schroder Funds (UK Alpha and European Alpha) also did well.”

“Dollar strength was the key factor for European investors – as Cazenove European manager Chris Rice put it to us recently ‘has the Euro now spent its three months in the sin bin?’. On balance with 42 per cent of our equity exposure in dollar based economies, and one third of our bond exposure heavily betting on the dollar, we feel well placed either way, but would expect further dollar strength at some point over the coming months. Japan, and the Yen, continue to strengthen relative to European markets and we choose to leave our overweight here too.”

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

Private banks are embracing new technology to cater for clients’ increased demand for transparency on their investments. However some players could struggle to meet the costs of the necessary upgrades, writes Elisa Trovato