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Do fund managers do what they say? Well, it seems not. At least when it comes to the frequency they change portfolio stocks.
Some equity fund managers have higher portfolio turnover rates than they claim, according to Investment Horizons, a report by Mercer, the consultants, and New-York based Investor Responsibility Research Center Institute.
Angelien Kemna will effectively be responsible for the pensions savings of a quarter of all Dutch employees. FTfm’s Face to Face interview looks at the task ahead of APG’s new chief investment officer.
It has often been observed that investors can make more money by buying shares in fund management companies than by buying their funds.
On this basis, Affiliated Managers Group, a US quoted company with $231bn under management, could be a particularly good investment. It holds stakes in a range of asset management boutiques, taking a share of revenues in return. Today, it revealed a deal with Artemis Investment Management, the UK-based fund manager that has passed through the hands of ABN Amro and Fortis Investments (now a subsidiary of BNP Paribas).
The Bogleheads forum is buzzing with news that Vanguard has set up an Alternative Strategies Fund in Dublin and filed for “exemptive relief” to allow its US Managed Payouts Funds to invest in the newfangled creature.
Vanguard is cherished by its investors partly for sticking to simple investing formulas that keep costs as low as possible. It is unsettling for them to see the mutual fund group setting off down a path labelled “alternative”. It smacks of hedge funds and other horrors.
FTfm’s Steve Johnson looked into the debate over active vs passive management in our last issue, with reference to Norway’s state pension fund. He also interviewed Yngve Slyngstad , chief executive of Norges Bank Investment Management, the arm of Oslo’s central bank that manages the fund. Mr Slyngstad thinks there is no debate. Here’s Steve’s investigation for FTfm’s Big Picture.
By Steve Johnson
Like death and taxes, the debate over the relative merits of active and passive investment will probably always be with us.
But the spat in Norway over the future direction of the Nordic country’s NKr2,500bn (£266bn, €307bn, $433bn) oil-powered Government Pension Fund has helped illuminate the debate, at least as it applies to large institutional funds.
FTfm’s new forum is under construction, but some of the fine details are taking longer to iron out than originally thought. So, rather than leave the blogosphere altogether, we will be continuing with our old format until we’re ready for our re-launch.
Apparently more than a thousand amendments have been tabled for the Alternative Investment Fund Management directive, Brussels’ attempt to bring private equity and hedge funds under its loving control.
This unprecedented level of rewriting during the legislative process is a testament to the inexorable sway of the alternative asset management industry. The original, draconian, draft of the AIFM was seen as a shy at the ever popular Aunt Sally of hedge funds, or ‘locusts’ as they are known in Germany. The usually painstaking and thoughtful asset management unit of the European Commission’s internal markets division had apparently come under political pressure to bring out a hardhitting draft directive in a hurry.
At leisure, however, even the European Parliament found regulating a European hedge fund industry too harshly might not be that good an idea. Its own impact study found implementation of the proposed directive as it stood could result in a 0.2 per cent contraction in the combined GDP of the European Union.
Possibly, however, the initial announcement and pained squawks for the industry were enough to satisfy the hedge fund haters, and now the tedious work of actually piecing together something actually workable can be done out of the glare of the media spotlight.
Certainly the number of journalists prepared to dig through all 1000+ amendments is likely to be as slim as the number of readers prepared to read about them.
FTfm staffing levels will drop over the festive season as the team try to use up their left-over entitlements before the holidays expire. So we won’t be blogging much… if at all.
When we are all back in January this blog will be migrating to a new platform that will hopefully accommodate the way we have noticed you using it. Topics that interest you will stay open, and visible, for longer. You will also be invited to add your comments to columns written by our regular contributors.
We’ll let you know more as soon as we’re back. And, in the meantime… Best wishes for Christmas and the New Year from FTfm!
The exchange traded fund industry has been feted as offering low cost access to a wide range of investment opportunities. It has occasionally had its knuckles rapped for getting over-enthusiastic about short and leveraged products that may not track in the way investors expect. But generally, the plain vanilla FTSE 100 or S&P 500 ETFs have been seen as A GOOD THING.
Now along comes Watson Wyatt to throw a bucket of cold water on the ETF party. The consultant says institutional investors can get a better deal elsewhere. There are institutional index products with lower fees, a better tax structure, and less or no counterparty risk.