NEWS SCAN
As Industry Consolidates, Trillion-Dollar Money Managers Abound
The 50 largest asset managers accounted for more than US$38 trillion in assets under management at the end of 2012. This is a full US$4 trillion more than the year before, even as the biggest firms in the industry continue to enlarge, according to The Cerulli Report: Global Markets 2013.
Eleven money managers have assets in excess of US$1 trillion (compared with nine a year ago), and there are twice as many firms with more than US$2 trillion in assets (four compared with two, previously). BlackRock is still the only global firm with assets in excess of US$3 trillion, according to the annual report.
While the trend for consolidation in the asset management industry is not a new one, "there has definitely been a quickening of pace since the financial crisis," said Shiv Taneja, the firm's London-based managing director for international research in a statement. "Big firms can do many good--and not so good--things. Regulators have a huge role to play here, and in their desire to boost investor protection (a good thing) should ensure they do not make it tough on smaller firms," added Taneja.
Chief Operating Officer Leaving Calamos
Calamos Investments, a global investment management firm, announced the planned departure of James Boyne, President and Chief Operating Officer, effective September 30, 2013. Until that time, Boyne will act in an advisory role and assist the company in the orderly transition of his duties and responsibilities.
Boyne joined Calamos in 2008 and served in several executive positions since then. He is pursuing a leadership position in the non-profit sector, focusing on the betterment of children and young adults.
"I appreciate Jim's leadership during his tenure at the firm and wish the best to him and his family," said John P. Calamos, Senior Chairman, Chief Executive Officer and Global Co-Chief Investment Officer in a statement.
The firm does not plan to replace the role of President and COO, and Boyne's responsibilities will be assumed by other senior leaders at Calamos, including the firm's Executive and Operating Committees.
RESEARCH
Morningstar: Wealth Management Companies Poised for Success
Morningstar published its inaugural issue of Financial Services Observer, a research report examining the competitive shifts in the U.S. wealth management industry, companies responses to industry changes following the financial crisis, and which companies Morningstar equity analysts think are poised to be a boon for shareholders.
Notable points from the first Financial Services Observer issue, "Differing Strategies Will Contribute to the Evolution of Moats in Wealth Management," include:
- Financial services firms with the strongest economic moats are those that serve ultra-high-net-worth investors--those with more than $20 million in investable assets. Northern Trust and Morgan Stanley are two such players in this segment;
- The high-net-worth customer segment--with between $1 million and $20 million of investable assets--is increasingly competitive;
- Raymond James is a financial services firm that is well positioned to compete in the high-net-worth customer segment, because of the firm's unique business model in employing advisors; and
- Charles Schwab is considered as a more successful wealth manager for the mass affluent customer segment--those with less than $1 million in investable assets--while Bank of America's large size and scope of services could create a strong competitive advantage for serving both high-net-worth and mass affluent clients.
"Our research team views wealth management as a profitable business with high shareholder returns, because these firms tend to have wide economic moats, or strong competitive advantages, which we attribute to long-standing client relationships and falling costs as production increases," Jim Sinegal, Morningstar's director of financial services equity research, said in a statement.
Estimated Long-Term Mutual Fund Flows Down
Total estimated outflows from long-term mutual funds were $7.71 billion for the week ending Wednesday, August 28, 2013, as reported by the Investment Company Institute.
Equity funds had estimated inflows of $300 million for the week, compared to estimated inflows of $1.34 billion in the previous week. Domestic equity funds had estimated outflows of $1.00 billion, while estimated inflows to world equity funds were $1.30 billion.
Hybrid funds, which can invest in stocks and fixed income securities, had estimated inflows of $1.15 billion for the week, compared to estimated inflows of $1.11 billion in the previous week.
Bond funds had estimated outflows of $9.16 billion, compared to estimated outflows of $11.14 billion during the previous week. Taxable bond funds saw estimated outflows of $6.26 billion, while municipal bond funds had estimated outflows of $2.91 billion.
PRODUCTS
Turner Introduces Turner Emerging Markets Fund
The Turner Funds have introduced the Turner Emerging Markets Fund, which invests in about 60-100 growth stocks of all market capitalizations from issuers tied economically to emerging markets.
The no-load Turner Emerging Markets Fund is offered in both Institutional Class shares (TEEEX) and Investor Class shares (TFEMX).
Invesco Rolls Out New Share Classes
Invesco has launched a variety of share classes to provide financial advisors with greater access to Invesco Global Markets Strategy Fund for their clients.
Effective August 28, 2013, the fund is now available through Class A, C, R, R5, R6 and Y shares. The fund's original H1 shares, launched September 26, 2012, converted to Y shares.
First Trust Announces Name Change for First Trust ETF
First Trust Advisors L.P. announced that the Board of Trustees of First Trust Exchange-Traded Fund IV, has approved a name change for First Trust High Yield Long/Short ETF, a series of the Trust. Effective September 4, 2013, the Fund's name changed to "First Trust Tactical High Yield ETF." The Fund's ticker symbol (HYLS) will not change.
The Fund is an actively managed exchange-traded fund that seeks to provide current income as its primary investment objective. The Fund's secondary investment objective is to provide capital appreciation. Under normal market conditions, the Fund invests at least 80% of its net assets (plus the amount of any borrowing for investment purposes) in high yield debt securities that are rated below investment grade at the time of purchase or unrated securities deemed by the Fund's advisor to be of comparable quality.
ARRIVALS
Loomis Sayles Welcomes New Head of Emerging Markets
Loomis, Sayles & Company announced that Peter Marber has joined the company as head of emerging markets investments.
Marber's duties will encompass emerging markets fixed income and equity investing. He will report to Jae Park, chief investment officer.
"As emerging markets have grown in importance we have continued to add investment professionals focused in this area. Peter's depth of experience and expertise will help ensure we bring the full power of our firm's resources to bear in identifying emerging markets investment opportunities for our clients' portfolios," said Park in a statement.
Manulife Names New MD To Institutional Sales Team
Manulife Asset Management announced that Scott S. Eversole has joined the firm as Managing Director on the institutional sales team. Based in San Francisco, Eversole reports to Frank Saeli, Senior Managing Director and Head of U.S. Sales and Relationship Management.
Eversole, whose appointment is effective immediately, is responsible for institutional asset management sales in the western U.S.
