What is next for Japan? 25/11/2014 Ever since his election in December 2012, Japan’s Prime Minister Abe has put into action an ambitious economic revival strategy articulated around three arrows: monetary policy with massive liquidity injections, fiscal policy with expansionary additional spending and economic policy with structural reforms. Of the three arrows, only the monetary policy has fully lived up to expectations with a massive depreciation of the yen of around 30 percent. Support from the fiscal policy has been diluted by hiking VAT in April 2014 from five to eight percent that counterbalanced the benefit of supplementary public expenses, while the third arrow of structural reforms has been morphed into a policy of thousand needles of positive but not game changing decisions. Labour reforms have been timid with a continued reluctance to create more flexibility for workers in large corporations, as well as to open Japan to needed immigration workers. The trade negotiations within the Trans Pacific Partnership – a US-led trade agreement involving 11 major pacific economies - have come to a standstill.
ETFs more popular than ever – UBS 20/11/2014 ETFs are becoming increasingly popular, with issuers continually developing products and new launches becoming ever more frequent. According to research firm ETFGI, ETFs/ETPs listed in Europe gathered $8.7 billion in net new assets (NNA) in October 2014 and a record $56.2 billion in NNA year-to-date, which surpasses any full year NNA for the European-listed ETF/ETP industry. thewealthnet caught up with Andrew Walsh, head of UBS ETF sales for UK and Ireland to find out the latest news in the sector and at UBS in particular.
The active versus passive battleground 19/11/2014 Ten years ago, analyst Huw van Steenis predicted that investment management would polarise into commoditised beta and high alpha products. The middle ground – those active fund managers offering benchmark-led products, seeking to generate a few percent of annual outperformance – would be squeezed. Is this a fair interpretation of the market development over the past decade? Or has it held some surprises?
Japan – This time is different, or is it? 18/11/2014 Investors seldom feel like talking about Japan. A geographic outlier relative to other global developed markets, the world’s third largest economy has many times emitted false recovery signals. It is hard to fathom that not too long ago, keiretsus, Japanese conglomerates, were dominant global players. Japan’s weighting in the MSCI World Index in 1987 was roughly 40 percent, twice that of Europe and 10 percent higher that of the US. Today its weighting in the popular market capitalisation equity index is around 8 percent. After 20 years of stagnation we believe that the current combination of policy and reform – Abenomics - may just be creating the right conditions for the economy to reinvent itself and become a lot more relevant on a global scale.
Half Full Or Half Empty? 17/11/2014 Is a half-filled glass of water half full or half empty? Some people see it one way, and some the other, the same way markets can frequently, and quickly, flip from optimism to pessimism – and back again.