Wealth Adviser Newsletter 15.07.22

All change

It was an extraordinary week last week with anyone who listens to the morning media just hearing a stream of governmental resignations – one after another, and then finally an awkward press conference where the UK’s prime minister, Boris Johnson, resigned but appeared determined to stay until the Conservative party’s conference in October.
Since then, former Chancellor Rishi Sunak has come out in front in the first round of voting for a new leader for the party; the Euro and the dollar have reached parity for the first time in two decades; Canada has roared – imposing a 100 bps increase in its base rate – while US inflation has hit 9.1 per cent.
Negotiating around these huge changes is keeping wealth and asset managers busy as investors turn to them for advice and support. News this week sees increased consolidation in the sector, with Progeny out buying things again, and surveys that reveal UK investor inertia. GraniteShares’s latest survey revealed that just 35 per cent say they have put more of their investments into cash accounts since the Bank of England started hiking the base rate in December last year with five increases taking it from 0.1 per cent to the current 1.25 per cent with further increases expected.
The firm writes: "Base rate rises have triggered intense competition among savings providers with rates being increased regularly – but GraniteShares’ research shows regular investors are not impressed."
Our feature this week sees Harriet O’Brien talking to Atlas’s Quentin Dumortier, about his ethos and the firm’s new ESG long/short UCITS fund.
Dumortier says: "I launched Atlas Responsible Investors to offer the first long/short equity strategy radically positioned on responsible investing."
Dumortier believes that the thematic approach to equity investing fits within ESG. "I found that structural sustainability trends were offering fertile ground to source appealing investment ideas. In combination with its fundamental attractiveness, responsible investing is a crucial factor in generating long-term performance. My goal is to capture a source of alpha which comes from long companies that are aligned with major sustainability trends, and short companies that are either going against those trends or are worst in class when it comes to internal ESG practices."
Our In My Opinion this week comes from Mark Corns, Partner and Head of FS Cloud Transformation at KPMG, who writes that, like other sectors, wealth and asset managers are investing more and more in cloud technologies to help transform service delivery and personalisation, through faster and better decision-making and customer responses.
However, he warns: "But for a long time, wealth and asset managers have not realised the financial returns expected from their cloud migrations, with several reports estimating that 35 per cent of cloud spending is wasted on inefficient activities. With the plethora of operational and strategic benefits this technology presents, cloud spending across the sector is only going to accelerate this year. The danger is that as cloud investment rises, so will the amount being spent on technological inefficiencies."
Beverly Chandler, managing editor, Wealth Adviser
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