Welcome to our asset management marketing focus
This week’s round up brings you a fund-themed musical medley, future trends in investments, MacCoins, robots, and the entrance of zero-fee funds.
Movers & Shakers
Is now ➜ Sales Director at Nordea Asset Management
Was: Senior Product Specialist at Nordea Asset Management
Is now ➜ Director – Distribution at Frostrow Capital LLP
Was: Senior Client Portfolio Manager at Standard Life Wealth
Is now ➜ Head of UK Institutional Clients at DWS
Was: Head of Client Relationship Management at Hermes Investment Management
Kurtosys expresses their best wishes to all starting in their new positions.
Funds in Focus: Fidelity Investments
Just when the palaver over asset managers lowering their fees seems to have reached a height in the presence of low-cost providers and ETFs, now things are set to be taken to the next level, courtesy of Fidelity Investments.
That’s right, two new funds from the investment firm are set to be launched today in the United States: the Fidelity ZERO Total Market Index Fund, and the Fidelity ZERO International Index Fund. This will carve Fidelity out to be the first firm of its kind to offer a fund with absolutely no management fees. None. Nunca. Zilch. Squat.
Both passive and active funds are experiencing competition to drive their costs further and further into the ground, and whilst these two funds have a 0% expense ratio, there is also no minimum investment for either of them. It’s part of Fidelity’s mantra to remain committed to giving their investors opportunities that cannot be found anywhere esle, and this drastic drop is certainly looking to shake up the industry.
So much so, in fact, that the firm’s rivals have experienced stock drops on Wednesday, as reported by the Financial Times, with pressure mounting as investors blow their celebratory trumpets. The cost cuts are possible as the funds will track Fidelity’s in-house equity indices. It’s a risky investment strategy, however; investors will be able to generate revenue from securities lending which will only generate large income when done on mass scale.
The fund world watches to see how other providers will respond to this monumental moment as the low-fee battle erupts with full force.
Fund Manager in Focus: A Fund Medley
There have been many great medleys in musical history; the multiple offerings from Weird Al Yankovic, or Beastie Boys’ seminal B-Boy Bouillabaisse. So this week, we present a medley of successful funds from Abby Glennie, a small-cap market master.
Citywire Wealth Manager have interviewed Glennie to see what her best bets have been in the past couple of years since running the Standard Life Investments UK Opportunities Fund. Looking into “quality, growth, and momentum” as key factors for investment, and using an in-house screening tool, the fund has returned 18% over the past year, which is 10% up on the sector average; a continually well-performing fund for sure.
And it’s certainly a diversified portfolio, featuring such products as Fever Tree, the tonic water company which has also enjoyed a spell of good investment publicity of late, and Purple Bricks – an online estate agent which has taken itself beyond the UK’s choppy shores to the US and Australia.
In the article, Glennie goes on to suggest exactly why these companies were chosen, and how they have performed. Most notably is the rogue IPO of cult-like video games company Team17, with changes in the space causing a surge in investment. I for one am extremely fond of Team17’s wonderful Worms series from my former days; whether that makes for a worthy investment decision is another matter.
It’s time to take a look into the funds industry from a very global perspective, with this recent report from ALFI – the Association of the Luxembourg Fund Industry.
Expanding their wings from their homeland, the association looks here at fund distribution across the globe, up to July 2018. A free PDF is available here. From cross-border distribution to the AUM growth in various countries, this document is a valuable insight into the state of the industry, and wholly holistic, looking at every world market, and data trends sourced as far back as 2004.
There’s plenty of statistical ranking tables and pie charts to feed the most insatiable data appetites, and yet it still lends itself to highlighting Luxembourg’s pivotal role within the global investment ecosystem.
Do Advisors Dream of Electric Cars?
Futurists unite! Whilst some pessimists argue that predictions are a pointless activity, elsewhere other investment hopefuls are already looking towards the future of the fund world.
RBC Wealth Management have teamed up with Citywire Wealth Management to present what they believe are the new-found, world-changing investment opportunity trends.
For instance, the furthering of technology may result in 50 billion devices being online in the next two years, whilst millennials ESG investments and a focus on pharmaceuticals and healthcare remain pertinent due to the longer ages of the human race. There’s also the problems of sustainable energy, water shortage and waste management to think about if we are to survive, and entertainment needs, such as the (aforementioned) gaming industry. AR and VR which comes into play here is transcending into financial services at an ever-increasing rate.
Some remain just a pipe-dream, whereas others seem almost inevitable to take off, or are already established. The future is out there, and we can hope that it isn’t bleak.
Speaking of AI…
…further futurisms from the wealth management sector.
April Rudin, CEO of The Rudin Group has interviewed William Trout, senior analyst at Celent for his two cents on how artificial intelligence is more than simple hearsay in the industry, instead already permeating the services of many companies.
Think: hedge funds and quant funds using predictive analysis to discover trends; Salesforce’s Einstein intelligence for its Financial Services Cloud; CRM systems using AI to generate insights. All these are financially specific applications of robotics which present competition and opportunity in tandem for traditional players.
There’s a great amount of useful nuggets about the overwhelmingly positive usage of AI already in play, and the potential that it has, as well as possible dangers which require the supervision of humans. Don’t let those robots start understanding nuances, now. You can read the interview over at WealthManagement.com.
More than your average ETF
It’s all well and good to launch an ETF nowadays. But, given the saturation of the market – how can you truly make an ETF stand out, besides a funny name?
Courtesy of Gregory FCA is this interview looking at how to maximise the marketing efforts of an ETF post-launch. It’s a committed effort, looking to leverage the abilities of marketing and sales teams and having a resolute PR strategy.
As well as offering some useful facts (124 ETFs launched in 2018 so far?!) in an article style which is well worth a read, there’s also a bitesize video format to present the information, which you can see below.
Fintech News: Banks & Bets
We’ve already taken a look at one financial firm pushing the boat out this week, and here’s another relating to technological matters: Northern Trust.
As reported by Forbes, the $10.7 million AUM-holding manager is looking to open its fund administration services to hedge funds placing their bets on blockchain and Bitcoin. Northern Trust’s corporate and institutional services president Pete Cherecwich sits down to discuss the plans with Forbes here, highlighting that the age-old institution sees it as a necessity to diversify portfolios with cryptocurrency investments.
And while Northern Trust isn’t specifically taking direct custody of cryptocurrencies right now, instead it is looking towards the potential for ‘digital tokens’ to gain a valuable place on the blockchain to be issued.
12 technology and private equity specialists were brought on board by Northern Trust to develop the blockchain services, over the course of 6 months, and the firm is taking things even further by perhaps transforming themselves into a software provider using two patents: the first using biometric data to give permissions (filed in 2017), the other for hosting investor meetings, and relying on the former.
Regulatory matters may be accountable for firms remaining cautious in the face of crypto, but the race for digital services transformation is well underway with even the most traditional of outfits in the lead.
But very much looking to be gaining huger strides in the world’s tech pack is Alibaba’s financial technology arm Ant Financial – ranked the numbero uno fintech firm in the world.
The Wall Street Journal has looked into the most recent controversies surrounding the fintech, at least from the banking world, who have never felt more under threat from a platform which handled more payments than Mastercard last year, causing branch and ATMs closures aplenty. As noted in the piece, a state-owned TV channel referred to Ant as “a vampire sucking blood from banks” in regards to its money-market fund.
Investments into Ant Financial keep pouring in, with much of the speculation as to why its success is so profound being due to the fact that other players were simply sleeping with only one eye open, allowing the tech startup to tap into China’s hefty mobile-first user base. Although this piece also brings into question how much China’s regulators will look to assist traditional financial companies, whilst similar Chinese tech giants JD.com and Baidu Inc. have opted to provide service platforms for banks rather than setting up direct financial services.
It’s a company which continues to thrive, scale, and take fintech news by storm. And if that’s at the detriment of China’s banking system, more news of the vie for power will certainly arise.
…for the anti-crypto and Maccy D fanatics, here’s the news that – as part of the Big Mac’s 50th anniversary – the fast food conglomerate is issuing REAL gold coins to trade for free burgers.
You read it correctly: the MacCoin currency was rolled out yesterday, a Whopping (irony indeed) 6.2 million brass coins being distributed around the world. Who said that physical money was dead, anyway?
That’s all for this week, but be sure to check back soon for more asset management marketing highlights and fintech snippets from Kurtosys.