Asia Pacific Media Coverage

Transcription

1 Asia Pacific Media Coverage 13 September 2017 Financial Standard: SSGA fund divests tobacco and weapons Investor Daily: SSGA divests tobacco, weapons shares The Australian: Trading Day: ASX surges amid uncertainty toll The articles noted that the State Street Global Index Plus Trust, which invests in global companies and aims to outperform the MSCI World ex-australia Index over the long-term, stripped 12 companies from its investment universe as of 31 July. o The divestment of these shares was due to demands from the fund s institutional investors that SSGA could still meet its objectives without these companies. Jonathan Shead, SSGA Head of Portfolio Strategists for Asia Pacific, said, We are keen to make ethical investing more accessible to all institutional investors, not just the very large ones able to utilise a separate mandate. Australian Financial Review: Back to the future: investors take another look at bonds Australian Financial Review (Print): Bonds go back to the future The article noted that individual investors are moving into bonds for yield as a protective measure against a potential sharemarket fall. It cited Matt Arnold, SSGA Head of Strategy and Research, who said that investors are starting to use fixed income ETFs in their portfolios and that the majority of the ETF AUM in Australia is in core, investment-grade bonds. Financial Observer: SSGA nabs BTFG manager InvestorDaily: SSGA names new SPDR ETFs head for Australia Financial Standard: SSGA hires head of SPDR ETFs The article noted that SSGA has appointed Meaghan Victor as its new Head of SPDR ETFs for Australia. The position was previously held by Shaun Parkin, who relocated to Perth earlier in the year. Victor will report to Rory Tobin, SSGA s Global Co-Head of SPDR ETFs. Money Magazine (September Issue): Catch the next boom The article noted that Australian investors can share the rewards as Chinese and Indian consumers go on spending sprees, investing in stocks, ETFs, direct shares offshore and unit trusts. It named SPDR S&P Emerging Markets as one of the popular emerging markets ETFs that has performed well recently, and noted that the ETF generated a one- year return of 15.33% and a 3three-year return of 7.14%. Ignites Asia: T. Rowe taps SSGA for APAC multi-asset head The article noted that Thomas Poullaouec has joined T. Rowe Price from SSGA. SSGA is currently conducting an internal and external search for Poullaouec s replacement. In the interim, Kevin Anderson, Hong Kong-based head of investments in APAC, and Mark Wills, Sydney-based Head of Portfolio Management in APAC for SSGA s Investment Solutions Group, will provide leadership and oversight for the APAC strategy and research team. STATE STREET CORPORATION 1

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3 Full articles Financial Standard SSGA fund divests tobacco and weapons A State Street Global Advisors Australian-based fund with about $900 million under management is divesting from weapons and tobacco companies. The State Street Global Index Plus Trust, which invests in global companies and aims to outperform the MSCI World ex-australia Index over the long-term, has stripped 12 companies in its investment universe effective July 31. It now invests in 620 companies, 60% of which are US-listed and include Apple, Microsoft and Nestle. Companies specifically involved in manufacturing tobacco, cluster bombs, landmines, chemical and biological weapons, and depleted uranium weapons have been excluded. Established in December 2000, the fund is designed for investors seeking incremental returns above the benchmark at a lower cost than most active funds. It has outperformed the benchmark in 13 of the past 16 calendar years at a management fee of 0.3%. SSGA head of portfolio strategists for Asia Pacific, Jonathan Shead said that removing these companies from the fund won't affect its level of diversification at the country or sector level and investors will continue to get the broad market exposure they are seeking. "We are keen to make ethical investing more accessible to all institutional investors, not just the very large ones able to utilise a separate mandate," he said. The firm's State Street International Equities Index Trust Ex Tobacco Ex Controversial Weapons, which launched last year, also has a similar responsible investment strategy. Funds under management have risen to $229 million. SSGA manages about US$182 billion ($227 billion) in ESG assets out of a total US$2.6 trillion ($3.3 trillion) AUM. STATE STREET CORPORATION 3

4 Investor Daily SSGA divests tobacco, weapons shares Effective from 31 July, the Index Plus Trust has stripped 12 companies from its investment universe, several of which had business activities that involved tobacco, cluster bomb creation, landmines and chemical, biological and depleted uranium weapons, according to a statement. The divestment of these shares was due to demand from the fund s institutional investors that it could still meet objectives without the presence of the companies. There is growing momentum worldwide of investors adopting environmental, social and governance (ESG) considerations into their portfolios, the statement said. We are keen to make ethical investing more accessible to all institutional investors, not just the very large ones able to utilise a separate mandate, said SSGA Asia-Pacific head of portfolio strategists Jonathan Shead. Our analysis suggests that removing these companies from the fund won t affect its level of diversification at the country or sector level and that investors will continue to get the broad market exposure they are seeking. Following the divestment, the fund still holds approximately 620 companies. As of 31 March, SSGA holds US$182 billion in ESG assets under management. STATE STREET CORPORATION 4

5 The Australian Trading Day: ASX surges amid uncertainty toll Fund manager bows to ethical demand If its tabcco, cluster bomb, landmine, chemical or biological weapon exposure you re after, options are becoming increasingly limited as an Australian investor. State Street Global Advisors has become the latest fund manager to do away with the practice of funnelling Aussie dollars to international companies with such dealings, shortly after AMP Capital announced a similar measure on ethical grounds earlier this year. The decision from the same fund manager that brought you Wall Street s new Fearless Girl statue sees 12 of SSGA s Plus Trust Index roster of over 600 ditched amid growing demand from institutional investors increasingly integrating environmental, social and governance considerations into their portfolios. We are keen to make ethical investing more accessible to all institutional investors, not just the very large ones able to use a separate mandate, said Jonathan Shead, SSGA head of Portfolio Strategists, Asia Pacific. STATE STREET CORPORATION 5

6 Australian Financial Review Back to the future: investors take another look at bonds Could bonds be back? There are tell-tale signs that individual investors are moving into bonds as they look for ways to protect their portfolios against a potential sharemarket fall and become increasingly sceptical that high yield stocks will be able to maintain their dividends. "People want yield but they don't want a loss of capital. There might be a bit of re-assessment. We are seeing sentiment turning," says Russell Chesler, director of investments at research house Van Eyck. Even if share prices don't head south, investors are questioning if they will continue to reap the same level of dividends from Australian blue chip companies. The evidence suggests their hesitation is well founded. Analysis by Citi Research found that between June 2015 and June 2017 the payout ratio of Australian companies fell to 72 per cent of profits from 82 per cent. And that was before telecoms behemoth Telstra jolted the market in August with the announcement that it will slash the dividend in the current financial year to 22 cents, down from a total payout of 31 cents last year. Many experts have also been warning that the outlook for Australian banks long considered stock market darlings because of their high payout ratios is weak on the back of softness in the economy and consumer spending, high levels of household debt and higher capital requirements. Topsy-turvy Danica Hampton, head of investment specialists at Citi, sees the trend another way. She notes that between 2014 and 2016 ultra low interest rates led to the peculiar situation where bond markets were generating large capital gains, while income investors were heading to the equity markets in search of assets that would provide a decent, stable return. "That perverse relationship of bonds providing capital gains and shares providing income won't last," Hampton warns. "As we see the normalisation of rates, investors will move to the bond market for yield," Hampton predicts. There is some evidence that this is already happening. Australian Bureau of Statistics data shows that over the past 20 years Australian investors, on average, held 16 per cent of their investments in bonds. Fixed income exposure appears to have hit a low of 9.5 per cent in December 2013, but is now starting to rise. Anecdotal evidence suggests that much of the demand is for corporate, rather than government bonds. "Given the market conditions, most clients have a higher concentration in highly rated corporate debt," Hampton says. STATE STREET CORPORATION 6

7 The other reason to increase exposure to fixed income is to hedge a portfolio, say the experts. Bond returns generally have a low or negative correlation to equities and are less volatile. This means that during periods where investors are incurring losses on global equities, global bond returns are often positive. The Van Eyck Vectors Australian Corporate Bond Plus exchange traded fund (ETF) was launched in May and has raised $65 million to become the fastest-growing ETF in the company's stable. There are 132 bonds in the portfolio, of which at least 80 per cent are rated investment grade. The yield to maturity is 3.3 per cent, says Chesler, noting that the yield is about 1 percentage point above the level investors could expect to earn on Australian government bonds. "This gives an extra uplift for mainly investment grade assets for taking a little bit of extra risk," says the Van Eyck executive. State Street Global Advisors agrees that investors are "starting to use fixed income ETFs in their portfolios." Says SSGA head of strategy and research Matt Arnold: "To date, the majority of the ETF assets under management in Australia is in core, investment-grade bonds. New products coming on stream are providing investors with exposure to emerging market bonds, high yields etcetera. So Australia is pretty much following what we have seen elsewhere. Start with investment grade, get comfortable, open up new areas of the bond market." Offshore opportunities At Citi, Hampton points to a 15 per cent increase in exposure to corporate bonds among the bank's clients since January this year. The clients Citi refers to are so-called wholesale clients, which means they must fit one of several criteria, including having net assets of at least $2.5 million, an annual gross income of at least $250,000 or be a professional investor or large business. They are buying bonds on an individual basis rather than through a fund or ETF. Citi says that demand is highest for Australian-dollar denominated paper on the grounds that interest rates locally are likely to rise more slowly than in countries such as the United States. However, investors are looking at offshore issuers in the financial services sector precisely because those companies are likely to benefit from rate rises. Nearly 60 per cent of the increase in exposure has gone to financials, mainly of the offshore variety, Hampton says. Much of the rest has gone to local issuers in the transport, logistics and infrastructure sectors. "Investors are favouring European offshore issuers," Hampton says, where a "slightly higher yield pick-up" is on offer and the economic trends are favourable. One such name is Landesbank Baden-Württemberg (LBBW), a regional German state-owned bank and the sixth largest bank in the country which operates in one of its most prosperous regions. It is rated Baa2 by Moody's. Indeed more than one third of the increase in bond exposure by Citi clients has gone into LBBW's 2027 issue, which has a yield to maturity of about 4.6 per cent. STATE STREET CORPORATION 7

8 Banco Santander, Spain's largest bank, is another popular name and comes with a yield to maturity of about 4.7 per cent. Global insurer MetLife's secured bond, rated AA-, has gained attention with its 2027 issue yielding about 4 per cent to maturity. Standard Chartered is attractive for investors happy to take on US dollar-denominated debt. Standard Chartered is listed in London, but Asia accounted for about 70 per cent of its 2015 revenues. The bank is well capitalised, although it is exposed to higher risk emerging markets. The yield to maturity is about 4 per cent. Closer to home investors have bought securities in Asciano and Aurizon debt issues. STATE STREET CORPORATION 8

9 Australian Financial Review (Print) Bonds go back to the future STATE STREET CORPORATION 9

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11 Financial Observer SSGA nabs BTFG manager State Street Global Advisors has appointed a former national partnership manager for BT Financial Group (BTFG) as its new head of SPDR exchange-traded funds (ETF) for Australia. In a statement, the asset manager said Meaghan Victor had filled the role previously held by Shaun Parkin, who relocated to Perth earlier in the year. Victor brings 20 years financial services industry experience to the position, having previously held sales roles at Fidelity International and Colonial First State. She worked in a variety of positions at BTFG, which she joined in Victor will report to SSGA global co-head of SPDR ETFs Rory Tobin, who said the new appointment would advance the company s goal of having a strong global leadership team in place. The depth of experience Meaghan brings to this role will allow SSGA to build on the continued success of the SPDR ETF business in Australia and reinforces our commitment to providing investors with a comprehensive suite of investment solutions, Tobin said. Meanwhile, BTFG confirmed its acting chief investment officer, Corrin Collocott, would assume the role permanently. Collocott, who has more than 20 years experience in financial services, joined the group in November 2015 as head of diversified portfolios. BTFG platforms and investments general manager John Shuttleworth said Collocott s appointment would be effective immediately as he had done an outstanding job filling in as CIO. As the superannuation sector continues to grow while facing into a challenging investment environment, it is imperative we have specialist investment services to meet the needs of fund members through all the life stages and into retirement, Shuttleworth said. Corrin s understanding of the capital markets, portfolio construction and investment managers will allow us to seek every opportunity to boost returns, as well as the flexibility to adapt to the ever-changing market conditions. He added that he looked forward to the continued positive momentum in BTFG s investments business with Collocott at the helm. STATE STREET CORPORATION 11

12 InvestorDaily SSGA names new SPDR ETFs head for Australia State Street Global Advisors has announced that Meaghan Victor will take over as the head of the company s SPDR ETF arm in Australia. Ms Victor was previously the national partnership manager for BT Financial Group, prior to which she held a number of sales management and product development roles with companies such as KBC Asset Management and Fidelity International. Rory Tobin, State Street Global Advisors global co-head of SPDR ETFs, said Ms Victor's previous experience will help support the company's strategy. Appointing Meaghan to lead our Australian ETF business advances our goals of having a strong global leadership team in place that is committed to serving our clients," Mr Tobin said. Ms Victor will be based in Sydney and will oversee the growth of the SPDR ETF business in Australia. STATE STREET CORPORATION 12

13 Financial Standard SSGA hires head of SPDR ETFs State Street Global Advisors has named the next head of SPDR ETFs in Australia. Meaghan Victor brings more than 20 years of experience in the financial services industry, including senior leadership roles in asset management and Australian distribution. She joins SSGA from BT Financial Group where she was national partnership manager. Previously she held roles in sales management, strategy and product development at KBC Asset Management and Fidelity International. "Appointing Meaghan to lead our Australian ETF business advances our goals of having a strong global leadership team in place that is committed to serving our clients," SSGA global co-head of SPDR ETFs Rory Tobin said. "The depth of experience Meaghan brings to this role will allow SSGA to build on the continued success of the SPDR ETF business in Australia and reinforces our commitment to providing investors with a comprehensive suite of investment solutions." In her role at SSGA, Victor will be responsible for leading, managing and growing the SPDR ETF business, building new solutions across sales, marketing, capital markets, products and infrastructure. SSGA head of Asia Pacific Lochiel Crafter said: "Our Australian SPDR ETF business is strengthened with Meaghan's appointment and allows us to further develop solutions for our clients." Victor takes over from Shaun Parkin who moved into an institutional role with State Street Perth in April this year. Prior to that the position was held by Amanda Skelly who stepped into the newly created role between 2012 and SSGA has 16 SPDR ETFs in Australia, including the SPDR S&P /ASX 200 ETF. STATE STREET CORPORATION 13

14 Fund manager bows to ethical demand If its tabcco, cluster bomb, landmine, chemical or biological weapon exposure you re after, options are becoming increasingly limited as an Australian investor. State Street Global Advisors has become the latest fund manager to do away with the practice of funnelling Aussie dollars to international companies with such dealings, shortly after AMP Capital announced a similar measure on ethical grounds earlier this year. The decision from the same fund manager that brought you Wall Street s new Fearless Girl statue sees 12 of SSGA s Plus Trust Index roster of over 600 ditched amid growing demand from institutional investors increasingly integrating environmental, social and governance considerations into their portfolios. We are keen to make ethical investing more accessible to all institutional investors, not just the very large ones able to use a separate mandate, said Jonathan Shead, SSGA head of Portfolio Strategists, Asia Pacific. STATE STREET CORPORATION 14

15 Money Magazine (September Issue) Catch the next boom STATE STREET CORPORATION 15

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17 Ignites Asia T. Rowe taps SSGA for APAC multi-asset head tegorylisting&module_order=2 By Ysrael Dumasig T. Rowe Price has named Thomas Poullaouec Hong Kong-based head of multi-asset solutions for Asia Pacific (APAC), effective September 8. In this newly created role, Poullaouec engages with institutional investors in the region on defined outcome investments and delivering targeted investment solutions to meet their needs, the company says in a statement. He reports to Peter Austin, Baltimore-based global head of multi-asset solutions. The APAC multi-asset team will be composed initially of two members, according to a Hong Kong-based company spokeswoman. The company is currently looking for a solutions strategist who will join Poullaouec, the spokeswoman adds. Poullaouec s appointment comes after a series of appointments by T. Rowe Price within its multi-asset division. Earlier in June, the company appointed Lowell Yura as Baltimore-based head of multi-asset solutions for North America and Yoram Lustig as London-based head of multi-asset solutions for Europe, Middle East and Africa. APAC and global institutional investors are increasingly framing their investment objectives in the form of an outcome, not a benchmark return. This has led to a growing demand for customized multi-asset strategies, which draw from a wide opportunity set of investments to provide consistent outcomes, Austin says in the statement. Poullaouec joins T. Rowe Price from State Street Global Advisors (SSGA) where he served for nine years, most recently as Hong Kong-based managing director and head of strategy and research for Asia Pacific. SSGA is currently conducting an internal and external search for Poullaouec s replacement, according to a company spokesperson. In the interim, Kevin Anderson, Hong Kong-based head of investments in APAC, and Mark Wills, Sydney-based head of portfolio management in APAC for SSGA s investment solutions group, will provide leadership and oversight of the APAC strategy and research team, the spokesperson says. STATE STREET CORPORATION 17