|Bid||3,140.00 x 0|
|Ask||3,141.00 x 0|
|Day's Range||3,120.00 - 3,168.00|
|52 Week Range||2,289.00 - 3,226.00|
|Beta (3Y Monthly)||1.10|
|PE Ratio (TTM)||18.88|
|Forward Dividend & Yield||1.14 (3.74%)|
|1y Target Est||3,276.00|
Liquidity resurfaced as a worrying theme in the fund industry as GAM, Woodford Investment Management and H2O were jolted by panicky investors charging for the exits. GAM, Woodford and H2O were all hit by massive client redemptions in the past year, prompting the first two companies to block investors from withdrawing cash from popular funds in order to give themselves time to sell illiquid assets. In the wake of those scandals, the chiefs of rival asset managers are grappling with how they might cope if similar problems arise. Yves Perrier, Amundi’s chief executive, last month said Europe’s largest asset manager could use its own balance sheet to prop up investment funds in the event of a liquidity crunch.
Schroders has reshuffled a number of senior roles as it seeks to strengthen its core investment management team in the face of mounting competition from larger rivals such as BlackRock and Vanguard. Charles Prideaux has been promoted to global head of investment, a position that has been vacant since Peter Harrison moved up to the role of group chief executive. Mr Prideaux will be responsible for Schroders’ investment platform and will lead the effort to build environmental, social and governance capabilities across the business.
(Bloomberg) -- The global debt rally is no longer justified by economic fundamentals but escalating trade war risks are keeping the managers of one of Australia’s top-performing bond funds from exiting long positions.Bonds are pricing in a recession which is not likely in the near term, according to Simon Doyle, head of fixed income and multi-asset at Schroder Investment Management Australia Ltd., and Stuart Dear, deputy head of fixed income. While they have turned more defensive, the fund managers still favor long-duration exposure in the U.S., Australia and to a lesser extent Europe.“In some ways you can argue yields have probably gotten a little bit ahead of fundamentals and it’s being driven by sentiment,” Doyle said in an interview in Sydney. “But we are still on the long side at the moment until we see something change on the trade side.”The pair’s A$2.5 billion ($1.7 billion) Schroder Fixed Income Fund/Australia has beaten 97% of its peers over the last year.Intensifying fears of a synchronized global slowdown amid the worsening U.S.-China trade dispute has sent investors piling into the safety of government bonds in recent months. In August, U.S. Treasuries saw their strongest rally since the height of the 2008 financial crisis as 10-year yields tumbled below 1.5%. Bond yields also slid to record lows in Europe and Australia.Zero RatesSchroders hasn’t ruled out the possibility that rates could move “significantly lower,” Doyle said. Still, for U.S. yields to hit zero, it would probably require a recession, something that is only likely on a one-to-three year view, he added.“Zero is not out of the realms of possibility, but there are a few things that need to happen for that to occur,” he said. “It’s not a given that this all kind of flows into recession, so we are keeping an open mind. We are playing it from the long side, from the long duration side.”Schroders has trimmed some of its holdings slightly into the bond rally, and one of the reason that it remains long duration is because risk assets were fully priced, according to Doyle.“If you work your way through markets there’s not really a lot of risk premium being embedded in asset markets anywhere,” he said. As yields head lower, “it gets harder and harder. You are not going to see those returns repeated,” he said.Long SterlingThe fund manager sees corporate bonds from transport companies and REITs as attractive, as well as infrastructure securities and inflation-linked notes. In currencies, it favors being long yen and short the Australian dollar, and has a small long position in sterling.“We think it’s discounted pretty bad scenarios and notwithstanding the machinations of the U.K. parliament, it hasn’t really moved that much,” Doyle said. “It is so cheap that if you do get even a semi-positive resolution to Brexit that it does have quite a lot of upside.”\--With assistance from Nancy Moran.To contact the reporter on this story: Andreea Papuc in Sydney at email@example.comTo contact the editors responsible for this story: Christopher Anstey at firstname.lastname@example.org, Cormac Mullen, Joanna OssingerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Who knew there was investor appetite for subordinated Greek bank debt?Because of the relentless hunt for returns in yield-starved Europe, Piraeus Bank SA, one of Greece’s big four lenders, has been able to brave the European capital markets for the first time since the financial crisis.Piraeus isn’t opting for senior bonds, and is instead plumping for Tier 2 subordinated debt (which sits midway in the capital structure between top-rated debt and equity-like capital). This means the notes would be fully subject to investor bail-in rules, where bondholders take a financial hit should the bank fail.While the bank has been bolstering capital by offloading bad loans and selling assets, this issue will help it meet its commitments to the European Central Bank. Last year, the ECB asked the company to raise much as 500 million euros ($560 million) as part of its strategic recovery plan. It’s notable, nonetheless, that the lender has found plenty of takers despite all the well-known risks around the Greek banking system.Piraeus has raised 400 million euros from the 10-year subordinated security, with an issuer call option after five years. The very high 9.75% coupon was clearly attractive to buyers, but it carries danger signs too. Paying that much interest to bondholders will be a heavy burden for the bank’s business to support.Indeed, this might be a deal too far for wiser investment heads (regardless of all the hedge funds piling in here). Just because government yields are plunging doesn’t mean credit risk is improving; it usually means the opposite. In fairness, this issue is for bank capital specialists only but there’s always a deal that corrects the market’s over-enthusiasm for the diciest assets.The offer would have been unthinkable a year ago, and comes courtesy of a sustained decline in Greek sovereign yields, with five-year yields falling below their Italian equivalents, and a sixfold rally in Piraeus Bank's share price since February. It helps that imminent national elections are expected to deliver victory to the pro-business New Democracy Party. For Piraeus, it makes sense to strike now and the books were more than twice covered.Still, a big leap of faith is required to believe that that this ultra-high risk, CCC-rated junk bond will be repaid at that call date in five years time. Investors won’t want a repeat of what happened when Italy’s Banca Monte dei Paschi di Siena SpA issued a similar bond in January 2018. That now trades at close to half its initial value. Piraeus’s non-performing loans make up more than half of its total lending, despite its offloading of 500 million euros of them to private equity buyers this month. Even after the share price rally, the stock only trades at a price-to-book ratio of less than 0.2. The path to easing the bad debt burden will be arduous.As part of Piraeus’s strategic plan, the bank sees non-performing loans dropping to about 9% of the total by 2023, which requires the elimination of 21 billion euros of exposure. It has signed an agreement with Intrum AB, a Swedish debt collection specialist, to help manage its bad debt pile. However, the speed at which Greece’s lenders will be able to clean up their loan books is uncertain. The government and the Greek central bank have two separate, not entirely complementary, initiatives to help banks do this but they’re still obtaining European Union approvals.Piraeus’s plan to improve its fee income by 33% by 2023 looks ambitious too. As the biggest private lender to SMEs in Greece, its growth is tied ultimately to the country’s nascent economic recovery. A shareholder group that includes the EU-backed Hellenic Financial Stability Fund – as well as John Paulson, Vanguard, Blackrock Inc. and Schroders Plc – offers some reassurance. While success would be another important milestone in Greece’s long road to recovery, you’ll have needed nerves of steel to jump on this one.To contact the authors of this story: Marcus Ashworth at email@example.comElisa Martinuzzi at firstname.lastname@example.orgTo contact the editor responsible for this story: James Boxell at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Marcus Ashworth is a Bloomberg Opinion columnist covering European markets. He spent three decades in the banking industry, most recently as chief markets strategist at Haitong Securities in London.Elisa Martinuzzi is a Bloomberg Opinion columnist covering finance. She is a former managing editor for European finance at Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
LONDON (Reuters) - Jupiter Fund Management has appointed Wayne Mepham as its new chief financial officer, poaching the executive from rival money manager Schroders in the latest major change to its leadership ...