The Fund Selection Blog

Pictures From Nordic Fund Selection Forum

The pictures from 2011's Nordic Fund Selection forum are now up. Take a look!

Brandes and Sparinvest Join Forces

Earlier this year, two of the world’s specialty value investment firms, Brandes Investment Partners, L.P. in the U.S., and Sparinvest  joined forces to establish corporate bonds funds.

The aim is to have to have to Corporate Value Bond fund to be managed by both Brandes Investment Partners and Sparinvest.

Michael Albrechtslund, Sparinvest's managing director, stated  the press release : “In recent years we have seen the corporate bond market in Europe expand massively, and at the same time, corporate bonds from Europe, the US and most recently the emerging markets have become an increasingly important asset class for investors seeking good portfolio diversification. We strongly believe that the value investment approach can deliver long-term outperformance for corporate bonds in the same way that it does for equities.”

The fund will be invested globally , with an intended 80 to 120 different bond, while using use the Barclays Capital Global Aggregate Corporate Index as its benchmark.

Albrechtslund continued by adding, “'This new fund is a global corporate bonds product that will tap into the experience of two leading exponents of value bonds investment. Investors therefore do not need to make allocation decisions between geographic regions or between investment grade or high yield. It is a one-stop shop for value within fixed income. However investors should be aware that a value strategy can deliver higher short-term volatility than other approaches.”

SPP Launches a New Sustainability Profile

SPP launches a new quality profile for their sustainable investments. The initiative aims to facilitate sustainable investments for the consumer so that they can make smarter more sustainable fund selections. This profile was developed in collaboration with SWESIF, an independent networking forum for organizations working for or with sustainable investment, large investors, as well as other Swedish fund management companies.

Liza Jonson, CEO of SPP Fonder, commented in the company press release: “For many, the concept of sustainable investment or SRI that we in the industry call it is not entirely clear, we therefore need to simplify and become more concrete. Explain what it is we actually do. Working hard to invest responsibly is a matter of course but also a challenge, especially in certain markets.”

She continued by adding,” Recently, we launched a fund that is unique in its kind, SPP Emerging Markets SRI, a fund that invests in emerging markets, but also requiring that the companies it invests in taking environmental and social responsibility."

SPP mentioned that the sustainability profile aims to raise awareness by describing the criteria for each investment. These include issues into account environmental, social responsibility, corporate governance and business ethics.

“We are proud to be one of the companies that are first to help our customers along the way when it comes to this type of information. It is hoped that more people jumping on the bandwagon. This issue needs to go higher up the agenda. We want to help our customers with a smart, long term and sustainable savings. We will deliver long-term, high yield while helping to maintain a favorable world where we can live both now and in the future, "said Jonson.

Storebrand's Delphi Funds Receive Distinctive Ratings

Storebrand’s Delphi Fund Management Team announced that they received ratings from Standard & Poor’s Fund Services. The Delphi fund team, is a part of Storebrand but operates as an autonomous unit, with Storebrand providing the necessary non-investment services.

The three Funds that received ratings were: AA rating to the Delphi Europa fund, an AA fund rating to the Delphi Verden fund and an A rating to the Delphi Norden fund.

Standard & Poor’s Fund Services mentioned that the Delphi team has, “its own unique style of investment to which its managers are clearly committed.”

Susan Sworn, fund analyst, S&P Fund Services, commented on the ratings, “Delphi's distinctive and defined investment process, applied by disciplined managers, is building a strong track record. This process and performance fully supports an AA rating for Delphi Europa and Verden and an A rating for Norden.”

The Delphi Fund Management team use price databases to receive stock pricing’s uptrend of at least three months. The stock selection for the fund team is up to the individual manager. The Europa fund targets calendar-year outperformance of the MSCI Europe benchmark, the Verden fund aims to beat the MSCI World benchmark and the Norden fund looks to outpace the VINX Benchmark Cap Net index. The latter fund may invest in Norwegian, Swedish, Danish and Finnish names.

Stig Tønder, team leader and senior portfolio manager at Delphi Funds, also commented , “We are very pleased with these ratings for our three Delphi funds, which we believe reflects not only on the strong performance of the funds, but also the strength of our investment process which combines trend analysis with fundamentals analysis. We are very committed, and will work hard to maintain or improve our ratings going forward.”

ATP First Quarter Surplus

During the first quarter ATP experienced a profit of approximately DKK 3.8 billion, with reserves of up to DKK 73.8 billion. This result is driven by higher oil prices as well as rising inflation.

Director of ATP Lars Rohde, stated in the company press release :"The results for the first quarter is satisfactory. In a time of great volatility in financial markets, we see that the risk-spreading strategy is appropriate. This time draws especially our inflation secure investment and rising oil prices are the result up. "

For ATP’s investment portfolio the return was approximately 6.7 billion, before tax, equivalent to roughly 1.7%

ATP had a positive return in four out of their five risk classes, these were:

· Risk Klassen Inflation gave a return of 3.7 billion, equivalent to roughly 3.4 per cent. The largest contribution came from linkers primarily caused by an increase in expected inflation in Europe.

· Risk Class Commodities gave a return of 2.8 billion, equivalent to roughly 13.4 per cent. The portfolio consists entirely of oil-related risk and return due to rising oil prices during the quarter.

· Risk Class credit a return of 1.1 billion, equivalent to  roughly 2.2 percent

· Risk Class shares gave a return of 1.0 billion, corresponding to roughly 1.8 per cent.

· Risk Interest Klassen gave a negative return of 2.0 billion, equivalent to roughly -1.3 per cent.

Danish FSA More Inexpensive Investments

The Danish Financial Supervisory Authority has mentioned that all Danish funds must now explain their efforts in order to ensure that that their members have a high return.

Ulrik Nødgaard, the direct of the Danish FSA, stated:  "Approximately five percent of the listed departments are passively managed, which is a relatively low figure when we compare ourselves with other countries. This suggests that overall there is not enough focus on costs."

He continued by adding, "We know that costs are generally higher in the actively managed funds. The actively managed funds have the opportunity to beat the market but there is little evidence to suggest that there is someone who persistently do it. Therefore, the FSA ask the directors of the Danish mutual funds explain what efforts they have made to ensure a better return after expenses to members than if the client funds had been placed in passively managed funds. "

 Nødgaard, mentioned that FSA will also be looking into bank’s advice and mutual funds, but they need to keep in mind the dissemination of investment certificates, as well as the cost that banks will endure. Thus the aim for 2011 is to perform a study about costs that customers receive from banks and investment advice.