Lenneke Arts

Product launches for Article 8 and 9 funds, sustainability funds and ESG funds are all over the place, but there is no insight into which fund houses are actually putting a lot of assets to work sustainably. Enquiries with Morningstar show that it is certainly not (only) the usual names that have the most assets in sustainable funds.

In the search for yield, some high yield investors are shifting to a broader mandate to invest in “below B”, the riskiest segment of high yield. PGIM recently repositioned two high yield funds to invest in CCC and CC bonds.

Fund selectors are by no means in pause mode around the introduction of the next level of sustainability regulation, now that SFDR level 2 has been postponed by six months. They are busy collecting data, against a background of seemingly increasing complexity, according to responses to Fondsnieuws from chief operating officer Monique Molenaar-Vader of IBS Capital Allies and chief investment officer Kees Verbaas of Altis Investment Management.

“Although we are number twelve in the world in order of assets under management, we are a relatively unknown player. Come to think of it, we’re probably the biggest asset manager people have never heard of,” said Simon England-Brammer (pictured), senior managing director EMEA and APAC of Nuveen. 

With a return of 46 per cent year-to-date, the ACATIS Datini Valueflex is on a roll this year. The 10 per cent allocation to cryptos, via an investment in three crypto ETFs and a direct investment in Coinbase, have helped considerably. But at the top is vaccine maker BioNTech, which is responsible for 11 per cent of the return, according to a conversation with fund manager Hendrik Leber (pictured), who called the fund the “chilli pepper of an investment portfolio”. 

The ongoing, rapid consolidation in asset management is exposing problems around rebranding. “Crucial” is untangling one’s own story from broader sector narratives, in this jumble of mergers and acquisitions. 

For five years, a group of students from Erasmus University in combination with three Robeco researchers scoured hundreds of financial newspapers from 1866 to 1926. They looked for prices, dividends and market capitalisations of almost 1500 American shares. Based on the entirely new dataset this led to, Robeco now concludes that the momentum, value and volatility (beta) investment factors also existed during those 61 years. 

Qontigo has already built more than ten thousand indices, commissioned by asset owners such as APG and Willis Towers Watson and asset managers such as BlackRock. Institutional investors increasingly want a customised index that is in line with their own investment objectives, according to Arun Singhal of Qontigo.

Investors have a greater need for insight, transparency and control, he explained. “That’s what “we” have in everyday life too. So why not about our investments?”

During negotiations on the fee that asset managers charge institutional investors for the management of a mandate, providers give an average discount of 5 to 15%. However there is no transparency about the average price that providers actually charge for mandate management, explained Duncan Higgs and Kathryn Saklatvala, following the publication of their research into fund house fees last week.

There is still no uniform European investor protection as envisaged by MiFID II, according to research conducted by Ronald Janssen of Ortec Finance and Tom Loonen of the Free University of Amsterdam in a survey of 25 European private banks. Their research shows that private banks in Europe have different approaches to the concept of Know Your Customer (KYC) and use different levels of detail in implementing it. Also, that none of the banks has a fully digitalised process.