Investment Officer Luxembourg

In the United Kingdom, the National Employment Savings Trust, known as Nest, is the country’s leading  defined contribution workplace pension scheme. It was set up to facilitate automatic enrolment as part of the government’s workplace pension reforms under the Pensions Act 2008. It has 11 million members with 24 billion pounds in assets under management.

“We are really strong advocates of stewardship,” said Nest CEO Helen Dean (pictured), speaking at a recent World Pensions Council conference in Paris.

Social responsibility, sustainability, ESG and SRI are more than buzzwords for the world’s leading pension funds. While some still question the current classifications, taxonomies and regulatory timelines, many of these major institutional investors see it as a way to provide stewardship, being a long-term stakeholder in society. “So are we going to be good ancestors? Or not?”

Pressed by persistently high inflation in the eurozone, the European Central Bank on Thursday may opt to double up on the 25 basis point rate hike that it has flagged already. Financial markets are increasingly bracing themselves for such a major increase, citing among others the euro’s recent weakness against the dollar.

Barely seven of the first 35 companies in the US S&P 500 index to release their second-quarter results subsequently have raised their earnings per share forecast for the third quarter. Are earnings expectations and analysts still too optimistic?

Some 77 percent of those companies saw their Q3 2022 expectations revised downwards. The average estimated change is -3.0 percent, according to The Earnings Scout. 

Ratings agency Fitch Ratings has affirmed  its assessment of Luxembourg’s government debt with a ‘AAA’ rating and a stable outlook.

A recent European Union agreement to crack down on the “wild west” in international crypto markets is “not a threat for the Luxembourg crypto market,” according to a senior official at international fund services firm Apex Group.

Representatives of the European Council and the EU parliament have reached a political agreement on the Markets in Crypto Assets proposal, known as MiCA, which covers issuers of unbacked crypto-assets, and so-called stablecoins, as well as the trading venues and the wallets where crypto-assets are held. 

When it comes to ESG, those who confine themselves to the paper reality may believe that asset managers are becoming increasingly similar. Those who look deeper however see a different picture: European asset managers not only remain in the lead, but are also converting their paper promises into actual ESG integration. 

As US companies revise their earnings forecasts en masse and fears of recession-induced defaults increase, some investors feel it’s a good moment to get into high yield corporate debt. The key question: what will be the nature of the upcoming recession?

“A rare opportunity to get into high yield,” noted bond strategist David Furey of State Street Global Advisors in a market review last week. “A fantastic buying opportunity for US high yield,” said Dutch investment advisory firm Candoris. 

Luxembourg’s banking association ABBL is encouraging its members to overcome their reluctance and embrace the cloud computing revolution in order to remain “agile and innovative”, especially now that the CSSF has improved its regulatory framework for cloud banking.  A recent ABBL-KPMG survey shows that banks in the Grand Duchy are slow to take up cloud services.