Funds Hub
Money managers under the microscope
Did Neil Woodford cause the BP oil slick?
Well, no. Of course he didn’t. And if pressed, he’d probably rather the southern seaboard of the United States wasn’t slowly turning into a necklace of slippery brown beaches.
But he is one of very few to benefit from the avalanche of political opprobrium, escalating costs and reputational damage that has engulfed BP in the last month, sending the shares 30 percent lower and leaving the pension pots of poor grans and grandads looking markedly less healthy.
Woodford, of course, sold out of BP (and Shell), back in October last year. Not in anticipation of a sunken Gulf of Mexico oil rig and a tough-to-tap pipe head, but for fear of tumbling oil prices and rising exploration costs.
Over the last month he has reaped the benefits of that call. His funds are the only ones in the UK equity income sector to turn a profit in the month to close of business on Wednesday.
Morning Line-Up: CIC told to buck up; brisk bidding for Buffett
News and views on the hedge fund industry from Reuters and elsewhere:
China SWF put under pressure to post better returns - Reuters
Pictet unveils High-Dividend Selection portfolio - Fund Strategy
Buffett lunch bid tops $900,000 - Reuters
Which Investment: Commodity futures or producers? - Morningstar
UBS faces Lux probe over Madoff funds - Reuters
from Global Investing:
Too much correlation
Globalisation is evident in this graphic put together by James Bristow, a global equities portfolio manager at BlackRock. It shows the correlation between the U.S. S&P stock index and counterparts in Europe, Australasia and the Far East.
Basically, what happens these days on Wall Street is matched everywhere else, or vice versa.
Morning line-up: BT battered shares, Madoff alarm ignored, McKinsey’s bill
News and views on the hedge fund industry from Reuters and elsewhere:
Market watches battered BP shares – Reuters
Santander’s Optimal overlooked Madoff concerns - Reuters
McKinsey emerges as beneficiary of Pru/AIA failed deal- Daily Telegraph
Morning Line-Up: Fundies face tax hike; still time to bid for Buffett
News and views on the fund industry from Reuters and elsewhere:
US Senate jobs bill would hike fund manager tax - Reuters
Aberdeen launches LatAm trust - Fund Strategy
RLAM creates first PAIF - Fund Strategy
Buffett lunch bid tops $200,000 - Reuters
Morning Line-Up: Buffett bear market as ADM looks to Kazakhstan
News and views on the fund industry from Reuters and elsewhere:
Aussie pension funds need to look overseas - Reuters
Flows to mutual funds will tail-off - Reuters
ADM Capital launches Kazakhstan-focused fund - HedgeWeek
Aviva Investors bolsters convertibles team - Fund Strategy
Buffett lunch auction picks up after 15-hour bear market - Reuters
Morning Line-Up: Calstrs, SWFs and the continuing rise of passive
News and views on the fund industry from Reuters and elsewhere:
SWFs likely to add private equity exposure-Carlyle - Reuters
US pension fund Calstrs okays commodity investing - Reuters
Bond benchmarks go back to the drawing board
With the euro zone facing a fiscal deficit nightmare, passive bond investors have been forced to think hard about whether following a simple market cap-weighted benchmark is a good idea. Traditional bond indices have the biggest weighting to the largest borrower — so investors end up lending more money to those desperate to borrow it.
“Passive investing in a traditional sense in fixed income doesn’t make a lot of sense,” said Paul Abberley, CEO of Aviva Investors UK. “The market caps of equities broadly correlate with underlying economic growth but it doesn’t work that way with bonds. For example, you would have been steadily increasing your exposure to Greece as they borrowed more and more.”
Got those zombie company covenant lite blues
One of the big drivers of the debt balloon that imploded so spectacularly was the trend for covenant “lite”, which has allowed zombie companies to stumble on long past the point at which it would have been useful for creditors to intervene. This has sharpened the appetite for stronger corporate governance around covenants and persuaded investors that they need to take more of an active interest in what companies are actually doing with their money.
Enter the engaged bond investor – for a long time the domain of equity investors with a social conscience, socially responsible investing (SRI) is now being applied to bond portfolios by asset managers Aviva Investors and F&C.
Morning line-up: FSA – new CEO, first criminal case lost, bank levy
News and views on the hedge fund industry from Reuters and elsewhere:
Headhunters look for FSA’s new CEO – FT
UK Chancellor unlikely to get global bank levy breakthrough – Independent
FSA loses insider dealing case – Reuters
