The UK fell into deflation this week, although it is expected to be short-lived, and there’s been a raft of manager moves and fund launches filling the headlines.
So you don’t have to trawl through a full week of investment industry news, we’ve pulled together a quick summary of what’s was going on this week.
Jason Pidcock leaves Newton for Jupiter
Asian equities manager Jason Pidcock is to launch a new Asian income strategy at Jupiter after leaving current home Newton.
Pidcock has managed the £4.4bn Newton Asian Income fund since launch in 2005, over which time it has achieved a total return of 184.64 per cent. As the graph below shows, this is outperformance of both its FTSE Asia Pacific ex Japan benchmark and the IA Asia Pacific ex Japan sector.
Performance of fund vs sector and index since launch
Source: FE Analytics
After joining Jupiter later in the year the manager will help build an Asian income strategy, which will focus on the large-cap part of the market and complement the growth-orientated and multi-cap strategies already in the firm’s emerging market product range.
Stephen Pearson, head of investments at Jupiter, said: “We have been working to develop our expertise in emerging markets for some time, most notably through the recent recruitment of Ross Teverson as head of strategy, global emerging markets.”
“Jason’s focus on a combination of income and growth, typically found among large capitalisation stocks across the Asia Pacific region will add a new dimension to our offering, dovetailing with our existing strategies and giving us the ability to provide clients with a broader range of products to suit their investment objectives.”
Earlier in the week, FE Trustnet took a closer look at three possible alternatives to Newton Asian Income for those investors who are seeking to change their positioning after the news.
Kames launches two absolute return bond funds
Kames Capital has launched two absolute return bond funds designed to offer retail and institutional investors with positive returns regardless of the wider market conditions.
The launch of the Kames Absolute Return Bond Global and Kames Absolute Return Bond Constrained fund follows the asset management house’s move to actively marketing its Kames Absolute Return Bond fund earlier this year on the back of capacity constraints.
Kames Absolute Return Bond Global will be co-managed by John McNeill, Sandra Holdsworth, Nicholas Chatters and Paul Dilworth, with the aim of outperforming three-month GBP Libor by 2.5 per cent a year net of fees over a three-year rolling period.
Co-managed by Euan McNeil and James Lynch with support from Paul Dilworth, Kames Absolute Return Bond Constrained has the target of outperforming one-month Euribor by 1 per cent a year net of fees over a rolling 36-month period.
Kames chief investment officer Stephen Jones says: “These latest additions to our growing absolute return franchise are aimed at the low risk end of both the professional retail and institutional markets, where investors are looking for positive returns regardless of the market conditions.”
Banks hit with record fines for forex manipulation
Five of the biggest banks in the world have been hit with fines totalling $5.7bn (£3.6bn) after regulators moved to punish them for rigging foreign exchange markets.
JPMorgan, Barclays, Citigroup and RBS have agreed to plead guilty to US criminal charges while UBS will admit guilt in rigging benchmark interest rates. UBS was given immunity on other charges for being the first to report the manipulation of the foreign exchange markets.
Barclays was given the largest fine at £1.5bn by five regulators, including a record £284m by the UK’s Financial Conduct Authority, after it did not join other banks in settling investigations by UK, US and Swiss regulators in November.
Regulators said several traders at the banks formed a cartel and used chat rooms to manipulate prices in their favour between 2008 and 2012. They used a number of strategies to manipulate prices and unfairly profit from currency markets.
Georgina Philippou, the FCA’s acting director of enforcement and market oversight, said of the Barclays fine: "This is another example of a firm allowing unacceptable practices to flourish on the trading floor.”
“Instead of addressing the obvious risks associated with its business Barclays allowed a culture to develop which put the firm’s interests ahead of those of its clients and which undermined the reputation and integrity of the UK financial system.”
F&C’s Nichols joins Columbia Threadneedle
Columbia Threadneedle Investments has hired F&C Asset Management’s Mark Nichols for its European equities team.
Nichols had managed the £385.4m F&C European Growth & Income fund since November 2011, over which time it has outperformed both its sector and benchmark with a 78.42 per cent return.
Performance of fund vs sector and index over manager tenure
Source: FE Analytics
The manager will join Columbia Threadneedle’s 11-strong European equities team, which is headed by Philip Dicken and manages a total of £17.8bn in retail and institutional money.
Dicken, head of European equities at Columbia Threadneedle, said: "We are pleased to welcome Mark to the European equities team and to expand our capabilities in this area. His strong track record and experience will further enhance our client proposition and help build on our success to date.”
David Moss, head of European equities at F&C, will take over F&C European Growth & Income, having previously been deputy manager on the portfolio.
UK inflation turns negative for first time
The UK’s consumer prices index (CPI) has gone into negative territory for the first time on record after the recent oil price slump continued to add deflationary pressure on the economy.
Data from the Office for National Statistics this week showed CPI dropped to -0.1 per cent for the year to April, following two months of being at 0 per cent. CPI has not been negative since official records were started in 1996.
Falling prices in the transport services, caused by lower air and sea fares, acted as the largest downward contribution to inflation, while declines were also seen in the housing and household services, clothing and footwear, furniture, household equipment and routine maintenance sectors.
Samuel Tombs, senior UK economist at Capital Economics, said: “The UK’s deflation is likely to last for one month only. CPI inflation should return to positive territory in May, as the effect of the shifting timing of Easter ceases to depress it and as the negative contribution from energy and food prices starts to fade.”
The Bank of England is expecting a sharp uptick in inflation “around the turn of the year” after lower oil and food prices fall out of the CPI calculation, its latest quarterly Inflation Report said.
