Solutions
Jade Fu, Investment Manager at Heartwood Investment Management, on current opportunities for commodities investors…
Commodities have underperformed both equity and fixed income markets in the year- to-date, with this trend accelerating in the third quarter. A glut of supply and muted demand against a backdrop of decelerating growth in China and a more self-sufficient US have contributed to price weakness across the commodity complex. Even heightened geopolitical unrest in various parts of the world this year has failed to trigger a sustained rally in commodity prices. However, can investors become too bearish in the short term?
Looking at current
The Depository Trust & Clearing Corporation (DTCC) and Euroclear have created a joint venture that will leverage both companies’ expertise, technology and franchises, focusing on collateral processing.
The newly-created company, DTCC-Euroclear Global Collateral Ltd, will be domiciled in the UK and its operations are subject to regulatory approvals.
Ownership and governance of the joint venture company will be shared equally between DTCC and Euroclear with its board and senior executives drawn from the two firms’ management.
Michael Shipton, Euroclear managing director and head of corporate technology, will assume the role of chief executive officer of DTCC-Euroclear Global Collateral Ltd,
Euronext is reducing client trading fees for transactions in Dutch individual equity and index options.
Fees for all retail investor transactions will be reduced from EUR0.40 cents to EUR0.31 cents as of 1 October, a reduction of almost 25 per cent.
From 1 November, the fee for market orders (orders at the best available price) will be further reduced to EUR0.20 cents, a 50 per cent reduction compared to the current fee.
“By lowering fees for our individual equity and index options, our aim is to respond to retail clients’ needs and promote trading on the central market.
Michael John Lytle (pictured), Chief Development Officer at ETF provider Source, comments on Neil Woodford's view that too many fund managers are over-charging clients…
It is important for investors to choose the right solution for the right problem.
Active management can add value, but most investors only want to invest in the top quartile funds, leaving three quarters of the fund management industry as increasingly unattractive.
In most circumstances it is because the active fund manager has failed to consistently out perform their benchmark. Active managers charge for that alpha, so when you cannot find an active manager who can outperform,
In the last few years, operational due diligence on hedge fund managers has taken on the same level of forensic detail as the hit TV show CSI New York. Given that this has coincided with greater institutional allocations, it is entirely understandable; mom and pop’s pension is at risk.
To be sure, no institutional investor can take a punt on allocating to a hedge fund manager, no matter how stellar their track record, if the operational infrastructure in place simply doesn’t meet the required standard. In a report published by Castle Hall Alternatives earlier this year entitled Six Principles of
Cyber security has quickly become a headline risk for hedge fund managers. On 15 April 2014, the SEC issued its Cyber-Security Risk Alert, a detailed 26-point questionnaire that aims to address various elements of a hedge fund’s technical and operational infrastructure to determine how vulnerable it is to cyber attacks and data theft.
This initiative is being driven by the SEC’s Office of Compliance Inspections and Examinations. It will assess 50 individual firms and based on its findings will draft a set of final guidelines for hedge funds to adhere to. This is essentially a way to address ‘technology risk’
New York-based Liquid Holdings Group has developed a real-time risk analytics solution for those who manage multiple accounts, traders or strategies, and as a result require an aggregate view of market and liquidity risks. The new solution, LiquidFIRM (Financial Intermediary Risk Management), is the latest addition to Liquid’s cloud solutions and services.
“LiquidFIRM is unique in that it allows intermediaries to manage both pre-trade compliance and post-trade risk across underlying mangers and strategies. It empowers the intermediary’s risk oversight desk to do things like limit the buying power of certain managers, put fat finger checks in place and so on,
Hedge fund investors are taking a more measured approach to their allocation process. They want to understand the alpha proposition and the risk-weighted return profile of a manager but, as important as market risk is, they want assurances that operational risk is being demonstrably managed.
This is a big challenge for start-up fund managers: how do they get a robust infrastructure in place in a cost-efficient way and remain viable?
“The reality is if you’re a manager launching with USD5-10m it’s very hard to get a demonstrable infrastructure in place that ticks the box,” says Phillip Chapple of KB
“We’ve risen to the challenge to offer a truly integrated risk management approach with APT Enterprise,” comments Laurence Wormald (pictured), COO and head of research, SunGard APT, adding:
“When you have different systems and you’re trying to estimate a VaR number by combining one number from the equity desk with another number from the rates or credit desk, that is a discredited model. During the financial crisis, too many firms discovered how dangerous it was to do that.”
APT Enterprise was launched in London on 25th September around a series of seminars entitled “The Challenges of Integrated Risk Management”.
Foreign Exchange Professionals Association (FXPA), a new trade body comprised of a cross-section of FX industry participants, is now up and running.
Based in Washington, DC, FXPA’s aim is to engage key US and international regulators, policymakers, the general public and news media, through a combination of education, research and advocacy to advance a sound, liquid, transparent and competitive global currency market.
Diversity of membership is embedded in FXPA’s organisational construct to ensure wide representation of the professional FX market. Founding members include the buy-side, exchanges, clearing houses, trading platforms, MTFs, technology companies, banks and non-bank market participants.
