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Merryn Somerset Webb on fund management – why you often don’t get what you pay for

Writing for the Financial Times, Merryn Somerset Webb questions the value of actively managed funds in today’s economy. While the fund management industry used to be able to point to the fact that their expertise were a safe way to provide investors with long-term outperformance over the market as a whole, recent studies show that today it is almost impossible for a fund manager to maintain high performance over any stretch of time. In fact, one of the key indicators of a fund manager being in the bottom quartile over a 5 –year period is having been in the top quartile in the previous half of the same decade.

Fund management

She goes on to suggest that the traditional mindset which assumes the most important factor for the success of a fund is the skill of those managing it is actually not the case.  Recent research by Russel Kinnel, Director of Research at Moring Star suggests that cost – not skill – is the key indicator for a fund’s success. He found the cheapest funds to be up to here ties more likely to succeed than the priciest funds.  So it seems that buying cheap will mean you have a significantly higher chance of making money than if you invest in a more expensive fund. In other words, you don’t get what you pay for!

Buying cheap passive funds and holding them long term appears to be a sound alternative for individuals. In this scenario, one still gets any benefits from good fund manager practice, without incurring the costs associated with a more expensive fund. Read the full article published by the Financial Times ‘Fund management – why you don’t always get what you pay for

For more information, or to book Merryn for an event of conference, please get in touch wth Gus at gus@chartwellspeakers.co.uk

Dambisa Moyo urges “It would be premature to conclude that traditional banking has yielded to new financial platforms”

Dambisa Moyo speakerWriting for Project Syndicate, international economist, Dambisa Moyo discusses the state of traditional banking in a world of transforming technological innovation.

Digital startups have penetrated areas traditionally dominated by the financial industry, and banking. Moyo urges that financial-services companies are not safe from the transformations wrought on by technological innovation, however there is reason to believe that finance will prove resilient.

Startups such as, Acorns, which is an app that automatically allocates a proportion of everyday purchases to a preselected investment portfolio, are rapidly expanding and transforming the investment and savings market. Moyo explains, “According to research by the digital ad agency Fractl, approximately 85% of millennials are saving a portion of their paycheck – a larger percentage than their predecessors.” The process of lending is also being transformed by the surge of digital technology. Crowdsourcing, and peer-to-peer lending give borrowers the opportunity to circumvent many hurdles of the traditional banking system, such as credit ratings.

Moyo explains that these startups do have significant constraint on the size and type of financial transactions they can offer, and “as a result, the digital revolution’s assault on the traditional banking industry is by no means overwhelming. In finance, at least, technology firms should not be viewed simply as a threat, but as a source of productivity-boosting innovation.”

Click here for full article.

For more information on how to book Dambisa Moyo as a keynote speaker for your conference or client event, please get in touch with Jeana Webster at jeana@chartwellspeakers.com or call on +1 972 385 1021.

Adair Turner set to publish highly acclaimed new book ‘Between debt and the Devil’.

Adair Turner speakerLord Adair Turner was made Chairman of Britain’s Financial Services Authority just as the global financial crisis hit in 2008.  Since then he has played a leading role in redesigning the global financial regulatory system.  In his new book, ‘Between debt and the Devil’, he sets the record straight about what really caused the crash – our addiction to private debt.

Lord Turner challenges the belief that we need credit growth to fuel economic growth, and that rising debt is ok as long as inflation rates remain low.  Moreover, he argues that most credit is not actually needed for economic growth, and is more likely to drive unsustainable real estate booms and busts, financial crises and depression.  He goes on to explain why public policy must manage the allocation of credit creation, and why debt needs to be taxed as a form of credit pollution.

Paul Volcker – former chairman of the U.S. Federal Reserve – describes Turner’s book as ‘A masterwork! Insightful, scholarly, and persuasive. Adair Turner has provided a convincing analysis of what has gone wrong before, and what could go wrong again, among the intertwined complexities of money, credit, and misguided theories of finance.”

If you would like to book Lord Adair Turner for a conference or event please get in touch with leo@chartwellspeakers.com

Expert economics commentator Curtis S. Chin discusses Alibaba and China’s need for capital market reforms

Curtis S. Chin speakerWriting in the Japan Times, Curtis S. Chin, the first Asia Fellow of the Milken Institute, makes the case that as “equity markets from Tokyo to New York enter more volatile times, it’s worth taking a pause to reflect on the need for continued capital market reforms, particularly in China.”

Using the example of Alibaba’s Initial Public Offering (IPO), New York equity markets have seemingly hit their peak and have been trending downward ever since. Curtis points out that the “storyline is no longer a straightforward one of China’s and Chinese companies’ rise.”

Curtis argues that as Alibaba’s listing took place in the United States, it “speaks volumes about how much further China must go to liberalize its capital markets and ensure greater domestic access to capital to finance further innovation.”

He goes on to say that whilst Jack Ma, founder and chief executive of Alibaba, may well be one of a kind in China for now, with the right policy environments he could well be one of many future Chinese entrepreneurs who become household names in and outside of their own country. To do this, Curtis believes that China needs to foster an “environment marked by rule of law and access to both domestic and international capital and financing.”

Click here to read the full article.

For more information, or to book Curtis S. Chin as a keynote speaker for your conference or event, please contact Leo von Bülow-Quirk at leo@chartwellspeakers.com or call 0044 (0) 20 7792 8000.

Curtis S. Chin explores Asia’s growing inequality

Writing in Phnom Penh Post, Curtis S. Chin explores the rise of inequality in Cambodia. Ahead of upcoming elections, Curtis suggests more introspection is needed on the impact of foreign investment and development programs, that have successfully grown both the economy and rates of inequity within the nation.

He suggests, more than poverty, companies entering growth markets also need to think about inequality.

An illuminating read.

Click here to read “Phnom Penh Post: Wanted: a level playing field”.

For more information, or to book Curtis S. Chin as a keynote speaker for your conference or event, please contact Leo von Bülow-Quirk at leo@chartwellspeakers.com or call 0044 (0) 20 7792 8000.

Dr. Nasser Saidi appointed deputy chairman of Eureeca

Expert on Middle Eastern finance and economics Dr. Nasser Saidi has been appointed deputy chairman of the Dubai-headquartered website Eureeca. Designed as a regional and internationl business platform, the site “operates as a marketplace for both businesses looking for funding and crowd investors seeking new investment prospects.” With a lower investment barrier to enter, Eureeca offers a wider pool of investor potential.

Nasser’s extensive business and financial experience make him an ideal deputy chairman for the website which was founded by experienced entrepreneurs and former investment bankers. Commenting on its launch last month, he said “Eureeca provides an alternative solution that addresses the persistent needs of entrepreneurs and SMEs for growth capital and has the potential to become a significant catalyst in developing the SME sector in the region and globally.”

Click here for more information on Eureeca

 

 

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