Analysis

New studies from two big-name consulting firms show the global funds industry struggled to increase profit margins in 2020 despite reporting bumper growth in assets under management (AUM). Reports from both EY and the Boston Consulting Group (BCG) found double-digit expansion in global funds management AUM during 2020. The BCG study says AUM increased year-on-year…

A key and enduring theme of the work of the Australian Custodial Services Association is the search for ever-greater efficiency in financial markets. Custodians need always be prepared for the next ‘Uber moment’. The latest such moment came in February last year when Magellan Financial Group launched the first quoted managed fund, on behalf of…

The flow of money into ‘dedicated sustainable investing’ will accelerate over the next four years, with global assets hitting US$13 trillion (A$17.8 trillion) by 2050. But there are steep hurdles for fund managers hoping to take part. According to a study by Casey Quirk, a US-based Deloitte business, the four-fold predicted increase from the US$2.8…

Failing to take advantage of the recovery trade looks bad. But with Alibaba, Magellan missed a risk you could see from space. Hamish Douglass, Magellan chairman and chief investment officer, has been much maligned in recent months for something that’s probably his fault but not actually his problem: missing the market rally in late 2020….

Trustees need to be wary of seeing everything through the lens of super, according to Chant West’s Ian Fryer. Engaging with controversial ideas around its uses can be a boon for member outcomes. As the big banks and their superannuation products copped a hiding in the Hayne royal commission , the rivers of gold correspondingly…

Trustees should consider “pre-mortem” stress tests and a whole of portfolio approach to the YFYS performance benchmarks to avoid underperformance, according to Willis Towers Watson (WTW). Jonathan Grigg, WTW director for investments, says avoiding test failure will be a high priority for funds, but not one that can override the obligation to act in members’…

To most market observers, Mainstream Group shareholders struck the jackpot with the takeover battle for the company. While happy with the result, it was not quite like that for the three founders. Judged on a world stage, they believe, the final $415 million bid represents about fair value. Sure, they recommended a lower bid worth…

There is a growing fear that the post-YFYS landscape will be dominated by a handful of megafunds, with competition – and differentiated member outcomes – disappearing. Super funds are about to experience a quick and bloody cull. With the first underperformance results expected on September 1, and letters to be sent out soon after advising…

With 128 fund managers having signed up for the Net Zero Asset Managers initiative commitments, one of them has spelled out just how difficult the path to net zero will be for both managers and investors. Martin Currie, the global equities manager, says in a report published last week (July 15), ‘Quantifying Decarbonisation‘, that it…

They are two hot topics of analyses in the investment world. What is not so well known is that the coming round of inflation will likely be exacerbated by ESG strategies. The obvious element to cause a spike in prices in many areas comes from the fight against climate change. But it is not only…

Every cloud has a silver lining. Alternatives may benefit from both the trend to ESG strategies and the extra inflationary pressures which ensue, according to the mid-year outlook from Franklin Templeton. Two of Franklin Templeton’s affiliate managers, Clarion Partners and ClearBridge Investors, say in the outlook report that accelerating growth and reflationary environment will benefit…

The asset management colossus believes three key themes will shape a post-covid world of rising climate risk and extraordinary economic imbalances. Ben Powell, the chief investment strategist for Asia Pacific at BlackRock’s Investment Institute in Singapore, said: “To state the obvious, the last 18 months have been rather unusual. It hasn’t been a normal slowdown…