Asset Managers

In the turbulent first quarter of 2022, inflation and the pandemic gave way to the Russian invasion of Ukraine, and resurfaced. Yet deep losses were recouped, and some investors even posted double-digit gains. This week in the Morningstar top five: mutual funds in the global large-cap equity category mixed.

Invesco, an asset management firm with a Luxembourg presence in Kirchberg, Invesco Management S.A., said it has expanded its Benelux operation with the hire of a new ETF sales manager.

Jolien Brouwer has joined the Invesco Benelux team as ETF sales manager, based in the Amsterdam office. Previously Brouwer was responsible for the ETF sales at VanEck. She will report to Roel Thijssen, Head of Benelux Distribution.

This week’s relative calm in equity and bond markets is in stark contrast with last month’s turbulence. Investors appear to have put concerns over the war in Ukraine on hold for a while. Some market experts warn however that “sentiment may be too positive”. Illiquid corporate bonds are seen as a safe haven.

The economic consequences of Russia’s invasion of Ukraine gave both equities and bonds a volatile first quarter. Nevertheless, most of the losses incurred were quickly recouped.

Luxembourg’s financial supervisor, releasing its eagerly anticipated guidance for investment funds exposed to Russia, has outlined a range of segregation options to handle stranded assets in Russia. Funds also were reminded to assess if they are potentially in breach of sanctions against Russia and Belarus. 

Financial sanctions against Russia and the exposure of investment funds to Russian assets were widely discussed at the 2022 European Asset Management Conference in Luxembourg, hosted by the Association of the Luxembourg Fund Industry, or Alfi, on 22-23 March.

Tech advisory and investment firm GP Bullhound on Monday said it is opening an Luxembourg office after the national supervisor gave a green light to application for a licence as Alternative Investment Fund Manager, or AIFM. In parallel to the Luxembourg launch, the company is opening a new office in Zurich.

Capital Group and Impax are the asset management firms that won the 2022 Morningstar Awards for Excellence in Investing in Luxembourg, the investment research firm has announced. Funds managed by Fundsmith, Comgest, BlueBay and Capital Group have won individual Morningstar awards. 

The grand duchy of Luxembourg is the second most popular destination for financial services companies seeking to establish themselves in Europe after the UK gave up its membership of the European Union, consultancy firm EY said in a final update of its Brexit Tracker. EY has crowned Dublin as winner for the location of choice for operational moves.

Emerging market bond markets are under pressure. Concerns about whether Russia will make its interest payments this month are leading investors to wonder which other countries are at risk of default.

Billions of dollars of Russian government and corporate bonds are at risk, with as much as two-thirds of the country’s foreign exchange reserves frozen. Russia must make at least $400 million in interest payments over the next ten weeks. Next month, a redemption of no less than $2 billion awaits, according to Bloomberg data.

Even as limited trading resumed on Moscow’s exchange on Thursday, prospects for emerging market funds exposed to Russia remained cloudy as determining accurate asset values continued to be nearly impossible. Fund managers now await guidance from financial supervisors before taking next steps on suspended funds.