UBS believes that the bull market remains intact, valuations look compelling and there is scope for positive surprises, whereas Thesis believes years of healthy returns for bond investors, fuelled by low rates and inflation, could be about to reverse as the fixed-income market heads towards bear market territory.

The Swiss wealth manager said despite recent equity market sell-offs, it has increased its overweight in global equities versus high-grade bonds.

Maturing bull

Caroline Simmons, deputy head of UBS Wealth Management’s UK investment office, said: “The market fall in October and further sell-offs in recent weeks represent a correction in the context of an ongoing bull market, rather than the start of a bear market.

“We acknowledge that the bull is maturing, and this stage of the cycle is typically associated with both higher volatility and more modest scope for further gains. But we think that the value offered by global stocks justifies tolerating the potential for higher volatility.

“While markets remain fragile, the recent sell-offs represent a buying opportunity. Even using our own cautious earnings estimates and factoring in the first rounds of US-China trade tariffs, valuations still look favourable, and there is certainly room for the market to move higher.”

UBS’s change in position comes after it downgraded global equities to a small overweight in August 2018. At the time, the company said trade tensions were likely to persist, but it now sees greater potential for positive upside.

Negative returns

Thesis, however, has a different opinion when it comes to the end of the bull market.

The asset manager said bond investors should brace themselves for pain as the era of low interest rates and inflation come to an end.

Ryan Paterson, research analyst at Thesis Asset Management, said: “Most government bonds markets have generated negative total returns over the last 12 months and we think a bond bear market is on the horizon, given robust growth and rising inflationary pressures.

“We also think that market expectations are underestimating the pace of monetary policy tightening further ahead and this leads us to believe there is more pain ahead for fixed-income investors.

“While US treasuries have been the primary driver of the bond bear market, yields across the globe are starting to get dragged higher. We are therefore remaining short duration and underweight government bonds.”

Paterson also believes that the corporate bond market is another area for investors to be cautious of.

He added: “The credit market doesn’t look that enticing either, having already benefitted from a supportive corporate environment of low default rates and a relatively buoyant earnings backdrop.

“We feel the compression in corporate bond spreads is now behind us, and the fixed-income space leaves little space to hide.”

Thesis will provide IFAs with direct access to its model portfolio team, managed by Steven Richards, as well as its fund research team, headed up by Matthew Hoggarth.

The Thesis team will work closely with IFA business owners to support them with the “suitability of investment advice” as well as helping them create customisable investment solutions based around their clients’ needs, objectives and risk profiles.

Lawrence Cook, director of Thesis Asset Management, said: “Clients come in all shapes and sizes, so matching them with the right investment solution and managing ongoing suitability can be a difficult and time-consuming task.

“We know there is an ever-increasing focus on showing the value of advice and the importance of financial planning, so we want to help advisers meet this.”

Stages of discovery

The Tracs team will work with advisers to go through five stages of discovery:

• Business level decisions – regulatory permissions, branding, client service and nominee versus platform;
• Investment philosophy – the criteria for the centralised investment process;
• Operational arrangements – how Thesis would work with the advisers day to day and the creation of an investment committee if required;
• Implementation – discussing how introducing a centralised investment process would impact on working relationships with clients; and
• Review – ensuring that the service is working for the advisory business.

Cook added: “We have been working closely with IFAs to support them in many ways and listening to their feedback, so introducing this service felt like the next logical step.

“This service can work flexibly to assist advisers in whatever way they want us to, and we consult with them regularly to ensure the correct solutions are being implemented correctly and efficiently.

“Tracs allows advisers to make more effective use of their time, by releasing a number of people in the firm to help provide good quality advice to clients.

“By being consultative with advisers this solution will provide them with the confidence that their investment solutions will meet the increasing regulatory burden and not compromise on the quality of service they offer.”

But while these funds are gaining traction with some investors, Yousafzai argued it has taken time for some in the industry to acknowledge the significance of ESG investing, particularly when it comes to the younger generation.

He said: “I believe ESG is becoming more and more mainstream due to increased consideration of ethics as well as profit. Practitioners ignore ethical investment at their peril; it has gathered a great deal of momentum. All the investment managers at Thesis are now discussing ethical considerations with their clients.”

Adviser frustration

However, recent research by HSBC Global Asset Management showed that advisers are seeking more information on ESG but are frustrated by the current ratings available to them.

The study found that 57% of IFAs would like a greater supply of ratings for ESG products, while just 13% believed the current ratings are sufficient.

Among IFAs who said that they had seen less or no change in demand over the past year, only 9% stated that investing in an ESG strategy might mean sacrificing returns, suggesting that the vast majority of IFAs believed ESG strategies were good investment opportunities that could help meet client objectives.

Table 1 – Reasons affecting demand for ESG products

Investor values driving interest in ESG products

According to one-third (33%) of IFAs, increased interest in social concerns, such as diversity, human rights, consumer protection and animal welfare, was the main reason for increased ESG demand.

One in five (28%) believed the interest was due to a combination of factors, rather than a single reason.

Table 2 – Drivers of investor interest in ESG products

Daniel Rudd, head of UK Wholesale, HSBC Global Asset Management, said: “Investor interest in ESG issues continues to grow rapidly. However, what we’ve found is a considerable lack of information to adequately explain these issues and their impact on companies and, in turn, investments. Given the complex and diverse ways of implementing ESG, it can be difficult for financial advisers to effectively inform their clients without detailed information and robust ratings.

“Our research shows that there is a significant opportunity to better equip IFAs.”

Corporate responsibility is the norm

Yousafzai added: “In financial services, when you are speaking to clients, you should naturally touch upon ESG. Advisers or investment managers who avoid that conversation are running the risk of losing some of their client base. The body of opinion behind investing this way is too strong now to ignore.

“When I started in this part of the industry nearly 30 years ago, companies did not even return a questionnaire about their ethical policies. They simply were not interested.

“Now most blue-chip firms will have a corporate social responsibility (CSR) manager and policy, and know that they will be held to account if they don’t have one. Companies that are commercially astute will have CSR objectives as the norm, whereas those that don’t are seen as behind current thinking these days.”

River and Mercantile has shaken up its top team and promoted its asset management founder to deputy group chief executive.

James Barham’s newly created role gives him responsibility for all the commercial business lines of the group, including Solutions and Asset Management.

Barham founded River and Mercantile Asset Management in 2006 and was its chief executive until 2014, when the firm merged with investment consultant and fiduciary manager P-Solve, recently rebranded to River and Mercantile Solutions.

Barham will continue to report to Mike Faulkner, group chief executive, whose focus will remain on accelerating investment research and development.

Jack Berry, head of River and Mercantile Solutions, moves to a new role “designed to leverage the group’s macro thinking around markets to help design strategies for clients with more complex needs to exploit these conditions most effectively”. Berry set up River and Mercantile’s Derivatives business. He now reports to Barham.

Kevin Hayes, chief financial officer, will add the leadership of the global solutions business to his responsibility.

Matthews Asia

Lindsay Wright has joined Matthews Asia as head of Asia and global chief operating officer.

Wright joins from BNY Mellon where she was co-head of investment management and head of distribution, Apac for BNY Mellon.

In this newly created role, Wright will be responsible for overseeing the firm’s Asia-based businesses.

Based in Hong Kong, she will help develop and execute the firm’s long-term strategic plans and assume responsibility for the oversight of its business activities and operations in Asia.

Investec

Investec Asset Management has appointed Richard Haxe as managing director of the firm’s European client group, demonstrating Investec Asset Management’s commitment to its growing client base across the region as it continues to expand its presence in Europe.

Haxe will lead Investec’s European business and presence. He will be responsible for business development, client management and investor engagement across Europe.

He joins from Wellington Asset Management, where he served as head of relationship group for the Emea region.

FCA

The UK’s Financial Conduct Authority (FCA) has appointed Sheldon Mills as its director of Competition.

Mills is currently senior director, mergers and state aid at the Competition and Markets Authority.

Neuberger Berman

Investment manager Neuberger Berman has created the role of head of southern Europe to persuade Alberto Salato to leave BlackRock.

Based in Milan, Salato oversees client coverage across Iberia and Italy, reporting to Dik van Lomwel, head of Emea and LatAm.

For Blackrock Investment Management, Salato was managing director and head of institutional of the Italian business for more than a decade.

Prior to that, he was with Franklin Templeton Investments, having begun his career with JP Morgan Private Banking in Milan.

BNP Paribas

BNP Paribas Asset Management (BNPP AM) has named Florian Schoeps as ETF and Index Solutions Sales Trader.

Based in Munich, Shoepps reports to Claus Hecher, head of business development for Germany, Austria and the German-speaking areas of Switzerland.

Schoeps joined BNPP AM from MAEG Munich ERGO Kapitalanlagegesellschaft, where he was a senior relationship manager.

Berenberg

Berenberg has hired fund manager Tim Albrecht. Currently at DWS, Albrecht will join Germany’s oldest private bank as head of German equities in wealth and asset management on 1 January 2019.

Thesis

Thesis Asset Management has appointed Hannah Holden as head of marketing from WHIreland group.

Holden oversaw the development and launch of a marketing strategy for both the wealth management and corporate & institutional broking divisions of WHIreland. Prior to that, she led the Emea marketing team for Wells Fargo Asset Management.

Holden reports into director of marketing and business development Lawrence Cook.

PIMFA

The UK’s Personal Investment Management and Financial Advice Association has appointed Tracy Davidson, Myles Marmion and Penny Lovell to its board.

Tracey Davidson is currently the chief executive of Heartwood Wealth Management Limited, a Handelsbanken Group subsidiary.

Myles Marmion is chief financial officer for Ruffer.

Penny Lovell is chief executive of The Private Office and the Sanlam UK executive committee in 2017.

Sarah Dunnage, head of finance for RL360, has been appointed interim chief executive of Ardan International.

She assumes the role for an initial period of six months following the departure of Richard Preston.

Dunnage has been part of the Ardan management team since the platform was acquired by International Financial Group – the parent company of RL360 – in late 2016.

Amundi

Asset manager Amundi has appointed David Harte as chief executive of Amundi Ireland.

Harte is also deputy head of the operations, services and technology division, reporting to Guillaume Lesage and is a member of Amundi’s Executive Committee.

Based in Dublin, Harte was previously global chief commercial officer of Pioneer Investments, Ireland, having joined the firm in 2003.

Thesis Asset Management

Lawrence Cook and Giles Marriage have been appointed to Thesis AM’s board of directors with immediate effect.

The moves complete the senior management changes at the discretionary investment manager following its management buyout in 2017.

Cook, who is currently director of marketing and business development, will add client services to his brief, while Marriage will continue to head up Thesis’ investment committees and the firm’s Lymington office.

This news follows a decision from client services director Tony Gammon to step down from the board following 23 years. Gammon, who joined Thesis in 1980, will continue to lead the Brighton office in the interim while the business looks to find a successor.

Bank of Singapore

Rajeev De Mello has been appointed chief investment officer at the Bank of Singapore after quitting Schroders earlier this year due to differing views about the direction of the firm’s Asia fixed income strategy.

He will replace Johan Jooste, who has been appointed as the bank’s head of rates.

De Mello will oversee the bank’s research and investment strategy teams that produce Bank of Singapore’s house views across all asset classes. He will also be chairman of the bank’s investment committee that decides on the global strategic and tactical asset allocation calls for clients.

Vistra

Global fund administration, trusts and corporate services provider Vistra has named Scott Kraemer as managing director, alternative investments in North America, effective immediately.

In this role, Kraemer is responsible for the development and executive of the alternative investment strategy for the region, including operations, key account management, strategic partnerships and resource allocation.

He will be based in New York, reporting to Onno Bouwmeister, group managing director of alternative investments.

He joins from State Street, where he was most recently senior vice president in the private equity and real asset fund services group, overseeing the New York and New Jersey offices.