Market Commentary

Anton Murray - Market Commentary

Sugar the next target for responsible funds

Posted by Anton Murray Consulting on . Posted in Funds Management MC, Funds Management News, Investment Banking MC, Investment Banking News, Market Commentary, News

InvestorDaily

Speaking in Sydney, Martin Currie Australia portfolio manager Will Baylis said while sugar was not being negatively screened in their income strategies at present, it could escalate as an issue in years to come. “I would suspect, down the track, that sugar may well become quite topical,” Mr Baylis said. In March 2017 AMP Capital released a report that found sugar was emerging as an investment risk for the global food and beverage industry.

“UNPRI (the United Nations Principles for Responsible Investment) are starting to raise the issue of sugar. So that is something that we would have to consider down the track, but we don’t today,” Mr Baylis said. Extending further, Mr Baylis said junk food could similarly become negatively screened, but that it was harder to screen for junk food than it was for sugar. “To my mind it may well be someone who manufactures and distributes junk food, but how do you define junk food?” he asked. According to Mr Baylis, sugar was more easily defined.

The rest of this article can be found at investordaily.com.au.

Demographics will propel India: Nikko AM

Posted by Anton Murray Consulting on . Posted in Funds Management MC, Funds Management News, Market Commentary, News

InvestorDaily

Just as China’s economic growth looks to be slowing down, India is positioning itself for 20 years of strong growth, says Nikko Asset Management. Speaking in Sydney yesterday, Nikko Asset Management Asian equities senior portfolio manager Robert Mann pointed towards India as the world’s fastest-growing major economy and the nation of growth for the next 20 years. “India, in many ways, looks like China did in 2000,” Mr Mann said.

In Nikko AM’s 2017 foreword, Adapting Thinking in a Changing Investment Landscape, Mr Mann attributed this growth to “a strong capitalist democracy” that resulted in “strong private companies that are innovative” as well as globally competitive. Additionally, he deemed India’s demographics as “very positive” at a time when it was a concern for the rest of the globe. However, Mr Mann said India’s growth would not look like China’s and that it was not possible for a nation to grow the way China did.

The rest of this article can be found at investordaily.com.au.

Hedge funds must evolve amid tech disruption

Posted by Anton Murray Consulting on . Posted in Funds Management MC, Funds Management News, Market Commentary, News

InvestorDaily

Hedge fund managers will need to update their business model in order to compete with new strategies offered by disruptive and innovative technology providers, writes Quandl’s Abraham Thomas. 

Marc Andreessen famously said “software is eating the world”, and nowhere is this truer than in the hedge fund industry.

Niche strategies are being replaced

A decade ago, my colleague Tammer Kamel was a portfolio manager at a large hedge fund company. In this role, Tammer got to inspect and dissect the strategies employed by the world’s leading hedge funds at close range – the perfect job for a curious quant.

One common strategy he investigated at the time was called factoring, which capitalised on the large windows of firms’ accounts receivable. Hedge funds would advance the creditor 90 per cent of the receivable instantly, wait three months for the full 100 per cent payment from the debtor and pocket the 10 per cent spread. It’s a low-risk, high-return way to make profits, and at the time dozens of hedge funds did it, but that’s no longer a common strategy and technology is one of the main reasons this is happening.

The rest of this article can be found at investordaily.com.au.

Hedge funds outperform equities in 2016

Posted by Anton Murray Consulting on . Posted in Funds Management MC, Funds Management News, Market Commentary, News

InvestorDaily

Hedge funds outperformed equities and bonds on a risk-adjusted basis according to a new report from the Alternative Investment Management Association. Using data provided by alternative asset intelligence company Preqin, the association found hedge funds delivered a Sharpe ratio of 1.45 for 2016, placing them ahead of the S&P 500’s 1.1 and the MSCI World Index’ 0.68. “The analysis, based on a database of more than 3,000 funds, found that hedge funds also outperformed stocks and bonds on a risk-adjusted basis over three years and five years,” the Alternative Investment Management Association (AIMA) said.

AIMA said that hedge funds returned 7.4 per cent on an absolute basis in 2016, based on the Preqin All Strategies Hedge Fund Index, with the net gain in asset value estimated at $120 billion. “As markets responded to the unexpected events of 2016, hedge funds were able to show their worth and generate their best returns for three years,” said Preqin head of hedge funds Amy Bensted. “Investors, however, are looking for hedge funds to produce more than high returns; as this study shows, hedge funds have delivered solid risk-adjusted returns over the short and longer terms.”

The rest of this article can be found at investordaily.com.au.

Volatility drives decline in equities popularity

Posted by Anton Murray Consulting on . Posted in Funds Management MC, Funds Management News, Investment Banking MC, Investment Banking News, Market Commentary, News

InvestorDaily

Investor confidence in equities fell significantly in the first half of 2016, suggesting investor sensitivity to volatility, according to research from Colonial First State Global Asset Management. The company’s Equities Preference Index (EPI) declined by a total of 29 per cent in the first six months of the year Colonial First State Global Asset Management (CFSGAM) said, compared with only 3 per cent and 9 per cent declines respectively in the second and first halves of 2015. “The decline was relatively evenly spread from January to May, averaging about 5 per cent per month, suggesting investors took some time in reacting to the market weakness and volatility early in the half,” the company said.

“Surprisingly, the decline in June ahead of the Brexit vote was smaller at just 1 per cent, however this may be because investors already reduced their positions ahead of the vote.” CFSGAM said the sizeable decline in preference for equities was significant due to the “already low starting point” from which it fell. The company’s research also highlighted “a significant difference in equity preference by age”, with younger investors (aged under 35) increasing their preference for the asset class by 3 per cent, where those between 50 and 59 years of age decreased theirs by 39 per cent.

The rest of this article can be found at investordaily.com.au.