Institutional Asset Manager Newsletter

NEWSLETTER | 6 Nov 2020

Treasuries, tech stocks rally as US election uncertainty continues

Three days in, and the US election continues to loom over financial markets as Joe Biden and Donald Trump both expect victory.

The pollsters have had to beat a shame-faced retreat as Biden’s knife-edge lead in votes counted so far made a mockery of their near-unanimous predictions that a ‘blue wave’ would sweep the US political landscape.

A Democratic sweep now seems unlikely, and so does result this week. The Trump campaign is taking the battle to the courts, claiming that "illegal votes" from dead people and non-residents are being counted.

Spectators have watched the dramatic rise and fall of investors’ ‘blue wave’ bets play out across financial markets over the past week. One of the lynchpins of an anticipated Democratic landslide that many in the markets were apparently expecting was an immediate stimulus package to boost asset prices – a plan which may scuppered if the Republican Party ends up holding the Senate.

This has turned the tables on cyclical assets, sending investors flooding back into ever-green government bonds and tech stocks. Yields on 10 year US Treasuries have tumbled thanks to rising prices, and fund managers say yields could go even lower.

Climate change is another key issue that hangs on the outcome of the Presidential race. The US formally pulled out of the Paris Agreement on Wednesday, and if elected, Biden has said he would re-join in the hopes of limiting the rise of global temperatures to under two degrees above pre-industrial levels, in addition to spending USD2 trillion on green infrastructure.

Sustainability has seen a boost in the investment industry, as American investor Fidelity joined European firms Actiam, Aviva Investors, and Robeco in a new campaign to halt commercial deforestation, using satellites to identify companies with deforestation in their supply chains and track their progress.

ESG equity funds are far outstripping the market, garnering GBP542 million in inflows in October, compared to GBP625 million of outflows for non-ESG funds.

Equity funds are as a whole struggling in Europe and the UK, where financial markets are adjusting to a 1.5 million strong surge in cases of Covid-19 in one week, and economically ruinous national lockdowns have become the new normal.

maddy taylor signature.png

Madeleine Taylor
Editor, Institutional Asset Manager

maddy.taylor@globalfundmedia.com

Investors use satellites to target companies with deforestation in supply chains

Fri | 6 Nov 2020, 11:59

A coalition of investors including Fidelity International, Aviva Investors, and Nomura, with a total of EUR1.8 trillion in assets under management, are calling on companies to end deforestation in their supply chain and improve transparency.

Fri | 6 Nov 2020, 11:59

As countries worldwide rally financially to offset the economic effects of the Covid-19 crisis, CAMRADATA’s latest whitepaper on Emerging Markets focuses on the developing markets and considers opportunities in both the equity and fixed income arena of this dynamic region.

Fri | 6 Nov 2020, 11:59

Bloomberg has launched the Bloomberg Barclays Liquid China Credit (LCC) Index, which is designed to track the liquid, tradable portion of the RMB-denominated credit bond market.

Fri | 6 Nov 2020, 11:59

Delta Capita, a global provider of managed services, solutions, and consulting, has partnered with GBST to launch a financial transaction tax solution, Syn~FTT.

Fri | 6 Nov 2020, 11:59

AxiomSL, a provider of risk and regulatory reporting solutions, has developed a new solution to address Net Stable Funding Ratio (NSFR) reporting requirements.

BtcTurk makes USDt tokens available on BtcTurk | PRO

Fri | 6 Nov 2020, 11:59

BtcTurk, Turkey’s largest cryptocurrency exchange, and Tether, a blockchain-enabled platform that powers the largest stablecoin by market capitalisation, have made tether (USDt) tokens available on BtcTurk | PRO.

Fri | 6 Nov 2020, 11:59

Prime Capital AG, an independent asset manager and financial services provider, wich manages and administers EUR 17.7 billion in various asset classes, is broadening its shareholder base with immediate effect with 70 per cent of Prime Capital shares being transferred to a total of 10 executives. Company founder and Chairman of the Supervisory Board Wolfgang Stolz will retain 30 per cent of the shares.

Fri | 6 Nov 2020, 11:59

20-20 Trustees, one of the UK’s leading independent trustee firms, is continuing to deliver on its ambitious growth strategy with the acquisition of Steve Southern Trustees Limited (SSTL) and the further recruitment of several leading industry figures.