In between the markets dropping on the back of panic over the future of China’s economic health, there’s been time for the funds industry to do some other things, such as M&G Managed Growth getting a new manager and Mirabaud announcing a new European small- and mid-cap strategy.
To save you from having to look over a week’s worth of asset management news, FE Trustnet has rounded up the biggest stories of the week for you to read in one handy package.
Woodford says China crash was no surprise
Neil Woodford offered his opinion on the Chinese market sell-off, yuan devaluation and interest rate cut earlier this week, saying that little of the country’s weakness comes as a surprise.
Global equity markets have been rattled over recent weeks by a plunge in Chinese mainland shares and fears that the world’s second largest economy was growing at a much slower pace than expected, prompting the People’s Bank of China to lower its benchmark lending rate once again.
The manager of the CF Woodford Equity Income fund has spoken in the past about how his current investment strategy takes account of slower global growth, driven by a weaker Chinese economy and its impact on commodity prices.
Performance of fund vs sector and index since launch
Source: FE Analytics
“Little that we have seen recently with respect to macro fundamentals has come as a surprise, including the policy response in China (lower rates and more liquidity) or for that matter renminbi devaluation,” he said.
“We remain cautious of the global growth outlook and, on balance, believe that interest rate increases, both in the US and here in the UK, are further off than consensus has hitherto believed. Weak global growth and productivity, deflation and excessive debt remain our principal concerns.”
Dave Fishwick to take over M&G Managed Growth
Dave Fishwick, the “architect” of M&G’s multi-asset investment approach, is to take over the £881m M&G Managed Growth fund as current manager Randeep Somel steps back to focus on the £2.2bn M&G Global Basics fund.
Fishwick, who is head of macro and equities investment at M&G Investments and also runs the M&G Episode Macro fund, will take over the portfolio on 1 September. There will be no changes to the fund’s objectives or investment policy.
Performance of fund vs sector and index over manager tenure
Source: FE Analytics
M&G says that “over time” Fishwick will bring M&G Managed Growth in line with his team’s top-down investment approach, enabling it to benefit from both the stock picking investment approach of M&G’s equity funds and the asset allocation capabilities of the group’s multi-asset team.
Graham Mason, head of retail equities, fixed interest and multi-asset at M&G Investments, said: “With more than two decades of experience investing across the full range of asset classes and his intimate knowledge of M&G’s fund range, Dave is in the ideal position to take on the management of the M&G Managed Growth fund.”
Fed official plays down chances of Sept rate rise
A senior Federal Reserve official has lowered expectations that the central bank will make its first interest rate hike in September, after the turmoil in China spread to global markets.
William Dudley, president of the New York branch of the Federal Reserve and vice chair of the rate-setting Federal Open Market Committee, said the argument for a rate rise now “seems less compelling” than it did a few weeks ago.
“International developments have increased the downside risk to US economic growth somewhat,” he said.
“The slowdown in China could lead ... to a slower global growth rate and less demand for the US economy.”
However, Dudley also said that the Fed was “a long way” from launching a fresh bout of quantitative easing to support the US economy.
Most commentators had expected the central bank to announce an interest rate rise – which would be its first since the financial crisis – at its meeting on 16-17 September, but this was before the global sell-off in stock markets prompted by slowing Chinese growth.
However, Dudley did not completely rule out a September rise, saying the case for it “could become more compelling by the time of the meeting as we get additional information on how the US economy is performing and ... international financial market developments”.
Mirabaud to launch European small- and mid-cap fund
Mirabaud Asset Management is to unveil a European small- and mid-cap strategy after hiring former Standard Life Investments’ manager Ken Nicholson.
Nicholson left the asset management house, where he ran the Standard Life Investments European Smaller Companies SICAV, in July last year. He had worked at the group for 15 years, alongside Harry Nimmo.
He will be joined on the team by Trevor Fitzgerald, previously at Credit Suisse where he was responsible for pan-European small and mid-cap equities sales.
Paul Boughton, head of sales and marketing for the UK and Northern Europe at Mirabaud, said: “Mirabaud is delighted to have attracted Ken and Trevor to join the firm. They are well regarded in the market and will be an excellent addition to the existing stable of talent we have built over the past few years.”
“In addition to many other strategies, we are also well known for our expertise in small and mid-cap equities in the Swiss and Spanish markets; to have this strategy in our fund range is a natural evolution.”
BlackRock buys US robo-advice firm
BlackRock’s US arm has acquired an automated adviser as part of plans to increase its reach in the “mass affluent” market.
So-called ‘robo advice’ – or a type of financial adviser where portfolio management is carried out with minimal human interaction – is growing increasingly popular in the US and is expected to gain greater traction in the UK as investors focus more on the cost of advice.
FutureAdvisor will sit within the BlackRock Solutions technology and risk business and will be made available to banks and advisers for them to offer to their clients. It will offer clients “holistic” personalised advice and will link to BlackRock's multi-asset model portfolios and investment products, but will also be able to recommend other products.
Tom Fortin, head of retail technology at BlackRock, said: “As demand for digital wealth management grows, we believe that our combined offering will accelerate our partner firms' abilities to serve the mass affluent in a convenient, scalable way.”
A recent report by AT Kearney predicted that around £1,600bn of assets will be managed by robo-advisers in the US by 2020, moving from the current 0.5 per cent of total investable assets in 2015 to 5.6 per cent.
