A company can differentiate itself from the competition, establish a solid reputation, and add value by using branding to give their business a distinct personality. Here is how a strong brand will impact your business:

Helps In Getting Recognition

Acquiring recognition is largely dependent on branding. Your brand defines every element, including e-promos, corporate design, photography, and websites. Every interaction offers a chance to strengthen customer loyalty and raise brand awareness.

Builds Trust

Building trust is achieved through branding. Since it offers a company significant competitive and financial advantages, developing a strong brand with devoted customers is vital. Businesses that present themselves well have a far higher chance of doing business with others.

Builds Financial Value

Branding is a valuable asset. Branding increases the monetary value and brings in new business. Brands increase market share growth, drive demand and sales, and increase differentiation from competitors while increasing shareholder value.

Generates Referral Business

A strong brand generates referral business, bringing you new clients. People enjoy recommending companies to others when they have a good experience with them.

Motivate Staff

Strong brands attract talent and motivate staff, giving them something to believe in and to stand behind.

“The foundation of any business is its brand. Establishing your brand’s values is essential. What your clients and future clients think of you is your brand. A brand’s experience is something you would want to have, so it is important to be conscious of it. Customers will choose you over your competitors when you have a strong brand because it highlights and sets apart your goods and services. Strong brands are the result of careful planning, patience, and effort. Being experts in a particular area of the business, we are in a unique position to offer advice on how to help clients stand out,” Ella Yuen, freelance brand manager, said, Best&CO reported.

The post The importance of branding in financial services appeared first on International Finance.

Over three years’ worth of data from CAMRADATA Live (its online data platform) on 31^st March 2017 was analysed to produce the reports and some key investments trends emerged in Q1.

Overall, the global equity markets enjoyed a good start to the year, extending last year’s robust performance as investors shrugged off political uncertainty and focused on positive economic data.

Macroeconomic data coming out of the US, continued to be supportive of a growing economy. US equities performed well as the S&P 500 increased a further 6.1% over the quarter, and the Federal Reserve increased base interest rates for the second consecutive quarter by a further 0.25% at its March meeting.

There was a similar growth story in the UK. The FTSE All-Share continued to march upwards and gained a further 4.0% over the quarter amid growth prospects in the global economy. The Bank of England upgraded its 2017 GDP growth projection from 1.4% to 2.0% due to stronger than expected consumer spending following the EU referendum result.

In the Euro market, the period started on a weak note, with negative returns in January, the stock markets picked up as the quarter progressed. The MSCI European Economic and Monetary Union index ended the quarter up 7.2%. Economic data coming out of the Eurozone was largely positive. The European Central Bank updated its 2017 and 2018 growth and inflation forecasts but pledged to keep stimulus in place until next year.

Commenting on the data, Sean Thompson, Managing Director, CAMRADATA said, “A lack of follow-through on protectionist trade policy from the Trump administration supported risk appetite in the emerging markets and the rejection of anti-euro politicians in recent European elections receded fears of political instability and an imminent breakup of the Eurozone, with Eurozone equities delivering robust gains as a result.

“Article 50 was triggered at the end of the period, signalling the formal start of the UK’s process of leaving the EU and an extraordinary period of uncertainty for the UK economy. We expect the impact of this will be in evidence in Q2’s data, as well any fallout from the UK’s general election on 8^th June.”

Thompson also points out that Asia ex-Japan equities had a strong first quarter. And in China, stocks gained strongly and had their best first quarter in over 10 years, fuelled by solid industrial production figures and continued strength in the property market.

Diversified Growth Funds

Assets under management (AuM) in Diversified Growth Funds (DGF) have increased by nearly £5.5bn since Q4 2016 and now total just under £176bn as at 31 March 2017.

DGF products saw slightly less quarterly inflows than the last quarter, standing at £2.7bn across the universe. In fact, it is the lowest amount of inflows seen in DGFs during a quarter since Q3 2014.

Q1 2017 continued to see an increase in positive performance outcomes within the DGF universe, with 97% of products achieving a breakeven or positive return. The lowest quarterly return produced is -1.17% and the best performing product achieved 6.43%, giving a spread of just over 7.6% between the top and bottom performer.

Looking at the three-year spread of annualised returns; all bar one product achieved a breakeven or positive return. The lowest annualised return produced is -1.35% and the best performing product achieved 16.15%, giving a spread of around 17.85%pa between the top and bottom performer.

UK Equities

Assets under management (AuM), in these UK Equity products, now total £165.77bn, providing a £2.41bn increase since Q4 2016. However, the asset class continued to see outflows with £3.18bn having been withdrawn during the quarter. In fact, the last time the UK Equity universe saw a positive net inflow was in Q1 2014.

Although the UK Equity universe saw negative asset flows in Q1 2017, the range of quarterly returns saw 99% of products achieving a breakeven or positive. The lowest quarterly return produced is -0.65% and the best performing product achieved 13.48%, giving a spread of over 14.13% between the top and bottom performer in just one quarter.

The range of annualised returns for the 3 years to 31 March 2017 saw all products achieve a breakeven or positive return. The lowest annualised return for this period is 1.57% and the best performing product achieved 13.77%.

Global Equities

Assets under management (AuM), in these Global Equity products, total $553bn as at the end of Q1 2017, which is nearly $8bn less than it was at Q4 2016.

The Global Equity universe continued to see outflows during Q1, making it the 7th quarter in a row that investors have reduced their allocation in Global Equities. That said some managers have seen inflows this quarter.

Goldman Sachs Asset Management International took the first spot in the asset manager inflows table seeing $1.70bn added to their AuM. Causeway Capital Management LLC came in second place with $1.17bn of inflows followed by Hexavest Inc.; Tweedy, Browne Company LLC and AB (AllianceBernstein).

Q1 2017 saw a significant increase in the number of managers producing a breakeven or positive return with nearly 100% of products achieving this. The lowest return produced is -6.7% and the best performing product achieved is 18.78%.

In comparison, looking at the three-year period, just over 98% of managers achieved a breakeven or positive annualised return, with the range of annualised returns starting from -13.11% and the best performing product achieved 15.1%.

Emerging Market Equities

In Q1 2017 all managers achieved positive returns in the Emerging Market Equity universe, which contrasts with Q4 2016 which witnessed a largely negative range of returns.

Moreover, when looking over a three-year period, 90% of managers achieved a breakeven or positive return in this asset class. The lowest annualised return achieved was -4.31% and the highest was 19.33%, which highlights the importance of the asset manager selection, the style and the size cap decision process in this asset class.

Multi Sector Fixed Income

The Multi Sector Fixed Income (MSFI) market continued to post positive results. The Assets under Management (‘AuM’) in the MSFI Absolute Return universe sits at just over £75.6bn as at 31 March 2017.

In Q1 2017 MSFI Absolute Return products achieved positive inflows of £1.5bn across the universe. This was a slight reduction from the previous quarter which saw £2.3bn of inflows.

TCW had the largest asset inflows totalling £897m, in converted sterling, during Q1 2017. TCW was followed by Insight Investment Management (Global) Limited; BlackRock; Payden & Rygel and Morgan Stanley Investment Management.

In the MSFI market, over 92% of products achieved a breakeven or positive return in the first quarter. Whilst 95% of products achieved a breakeven or positive return over a three-year period, highlighting that the MSFI Absolute Return universe continues to provide positive outcomes

Emerging Market Debt

The Emerging Market Debt products saw net inflows of just over £1bn across the universe, which made Q1 2017 the first quarter in seven quarters to experience positive flows.

Neuberger Berman had the largest asset inflows totalling $750m during the quarter. They were followed by GAM, Goldman Sachs Asset Management International; Franklin Templeton Investments and Amundi.

Nearly 100% of products achieved a breakeven or positive return in the EMD universe this quarter, a dramatic difference from the 5% in Q4 2016. Whereas just under 73% of products achieved a breakeven or positive return over a three-year period.

The lowest return reached in Q1 2017 was -0.63% and the best performing product achieved 9.02%, giving a spread of just over 8.39% between the top and bottom performer.

The range of annualised returns for the 3 years to 31 March 2017 in USD EMD is -4.5% to 9.04%, giving a spread of 13.54% between the top and bottom performer, which highlights the importance of the asset manager selection process in this asset class.

Sean Thompson concluded, “Our quarterly investment reports are essential reading for those looking for critical data and analysis on the latest trends. This year has started off with slightly less volatility than had been anticipated in both the USA and Eurozone, which has been reflected in the largely positive economic data in these markets.

“However, with Theresa May triggering Article 50 on 29^th March the markets may become increasingly turbulent as the results of the negotiations become clearer. Investors and asset managers can stay ahead and monitor the markets through CAMRADATA Live to ensure they make the most informed investment decisions, in what is likely to be a tricky period ahead, particularly in the Eurozone markets.”

The post Good start in 2017 in major equity markets appeared first on International Finance.

Yet despite its heft, the British banking giant had a tepid 2016. Its profitability fell sharply and its total assets fell in U.S. dollar terms, the company’s reporting currency.

Overall, 2016 was a volatile year for European currencies, particularly the British pound following the U.K.’s vote in the summer to exit the EU. At the end of 2016, £1 bought €1.171, compared to €1.357 at the end of 2015. The euro bought $1.055 at the end of 2016, compared to $1.086 a year earlier, while the British pound fell to $1.235 from $1.474 over the same period.

The drop in the pound spurred a €225.36 billion drop in the asset size of London-based Barclays Plc, which nevertheless retained its position at number five in the ranking. At the end of 2016, the bank’s assets were worth €1.418 trillion, but would have been worth €1.644 trillion using the year-end 2015 conversion rate. Similarly, the drop in the pound versus the euro helped to knock number nine Lloyds Banking Group Plc and number 10 Royal Bank of Scotland Group Plc below the €1 trillion mark at the end of 2016.

Banco de Sabadell SA would have climbed a spot to number 37, but the adjustment for the pending sale of its U.S.-based subsidiary Sabadell United Bank NA caused it to fall to number 39 from number 38.

Germany has seven banks among the top 50, the most of any country, while France, Spain and the U.K. are each home to six.

In this ranking, company total assets were adjusted for pending mergers, acquisitions and divestitures, as well as M&A deals that closed after the end of the reporting period used through March 31 on a best-efforts basis. Assets reported by non-euro filers were converted to euros using period-end exchange rates.

The majority of banks were ranked by total assets as of Dec. 31, 2016. In the previous ranking published on April 19, 2016, most company assets were as of Dec. 31, 2015 and were adjusted for deals through April 15, 2016. No adjustments were made for differences between GAAP and IFRS filings.

The post Europe’s 50 largest banks by assets appeared first on International Finance.

What is your take on the electoral result in the Netherlands?

After the annus horribilis in which several elections resulted in unexpected outcomes (admittedly without the much feared negative impact on asset prices), this time we have had a result that is in line with recent polls and will not lead to a tremendous change in the policy and political approach of the country involved. That said, a negative aspect is the fragmentation across parties of the result (also expected), which will likely be a source of instability and difficulty for the government.

It remains to be seen how the incumbent premier, Mark Rutte, will try to form a new government. It seems clear that any coalition will involve at least four parties, ranging from the center-to-right to the left of the political landscape (generally, ‘Pro-Euro’); during the campaign, he repeatedly ruled out any possibility of repeating a coalition with Geert Wilder and his anti-immigration Freedom Party.

Do you think this could influence the outcome of elections in France?

Success breeds success: this was apparent last year with the rise of the ‘populistic’ movements across the globe.  This result could, therefore, suggest that a peak in the appeal of these ideas is behind us and that a more constructive approach to policy and politics and, above all, to Europe is gaining momentum. So, yes, in our view, it could have a positive influence on the French vote.

What is your assessment of the risk of a Euro break-up and how has it changed over the last few months?

A break-up of the Euro is, economically speaking, an unacceptable event. European Central Bank President Mario Draghi abruptly clarified this concept when he stated the fact that any country exiting the Euro would need to clear its Target2 balances first (which for Italy amounts to around €390 billion).

But what if Euro-sceptic forces start taking the lead in a number of countries? We think a useful analogy here is to imagine the Eurozone and Europe are a cyclist that is going uphill. They cannot stop pedaling until they reach the top of the hill (i.e., when everything is in order, and clearly we are not there yet) otherwise they will start to go backwards and will, eventually, fall down in a heap. This may appear a bit extreme: on some issues, the progresses and benefits of the currency and Union are clear; but there are other mechanisms, particularly in the field of sharing risks, solidarity and common policies, that still have to be resolved. And these have been put under severe pressure given the scale of the recent crisis. The cyclist must arrive at the top of the hill and commence the downhill journey before the next crisis arrives. Yet, if Euro-sceptic forces gain appeal and power in the Eurozone and Europe, we see an increased likelihood that our cyclist stops pedaling.

Last year, starting with Brexit, the probability of a ruinous standstill in Europe rose materially, although it is still considered a tail event. Higher spreads between OATs (the 10 year French government bond) and BUNDs (the 10 year German government bond) are the market’s assessment of that probability (which does not including credit risk or sovereign default risk). Meanwhile, the issue of a Euro exit, or adoption of a different currency, is a recurrent theme – most recently in the electoral positioning of political parties in Italy – is another perilous sign.

The Dutch electoral result has enabled this risk to recede a little, but there are a number of political issues ahead: elections in France, Brexit with the complication of a second Scottish independence referendum, the still unresolved Greek question, and possible political instability in Italy to name a few.

How can investors deal with geopolitical risk within a multi-asset approach?

Geopolitical risk remains, in our view, the main factor for investors to watch over the next few months. Financial markets are too complacent ahead of the wave of elections in Europe: equity volatility is reaching new lows even though the probability of a country leaving the Euro, as highlighted by the Sentix Euro Break-Up Index, is trending towards post Brexit levels.

If we also consider the uncertainties related to the execution of Trump’s policies in the US, and of his potentially unfriendly foreign policy for some Emerging Markets, we see significant risks of disappointment for financial markets. This also considering extended valuations in many developed equity and credit markets.

Therefore, we believe investors should consider implement hedging in an effort to partially offset the negative effects of geopolitical risk. There are multiple strategies available for investors: lowly correlated assets, such as gold; currencies that tend to behave as ‘safe havens’, such as the Swiss Franc, and, especially in case of rising risks in the Eurozone, the US dollar; or the use of derivatives to try to protect risk asset exposure. A multi-asset approach, which includes hedging among its investment strategies, can be beneficial in a period of rising geopolitical risk. It can efficiently combine the most effective hedging techniques, determining cost-efficient strategies for those risk events deemed most likely and impactful.

The post ‘Dutch election result hint at more constructive approach to policy’ appeared first on International Finance.

March 17, 2017: CAMRADATA, a leading provider of data and analysis for institutional investors, has published its latest investment research reports charting the performance of investments and asset managers in Q4 2016 across six asset classes, including Global Equity, Emerging Markets Equity, UK Equity, Diversified Growth Funds, Multi Sector Fixed Income and Emerging Markets Debt.

Over three years’ worth of data from CAMRADATA Live (its online data platform) at December 31, 2016 was analysed to produce the reports and some key investment trends emerged.

The fourth quarter saw bond valuations fall as inflationary expectations picked up and the increase in US interest rates put upward pressure on global yields.

However, most equity markets continued to perform well, particularly in the financial and energy related sectors, and the oil price recovered. US equities performed well over the quarter, with the S&P 500 Index returning 3.8%.

UK equities performed in a similar fashion, the FTSE All-Share Index returning 3.9% over the quarter, reaching an all-time high at the end of the year. European equities also performed strongly over the quarter, the FTSE World Europe (ExUK) Equity Index returning 6.0%.

Commenting on the data, Sean Thompson, Managing Director, CAMRADATA said, “US equities remained buoyant over the fourth quarter, despite uncertainty about the US presidential elections and Trump’s subsequent victory dominating the news agenda. UK and European equities all showed strong performance. In the UK, we saw that fears about the potential negative economic impact of the Britain’s decision to leave the EU have receded, with domestic growth rates exceeding expectations and consumer spending remaining resilient. However, sterling fluctuated over the period, falling sharply in early October after suggestions from the Prime Minister of a ‘hard Brexit’, but it recouped some of its losses after the Bank of England upgraded UK growth projections, and the High Court ruled parliamentary approval was required to start the EU exit process.”

Thompson points out that while Donald Trump’s proposals to boost fiscal spending were largely seen as a positive for the US economy, suggestions of increasingly protectionist trade policies have had a detrimental effect on some Emerging Markets.

Diversified growth funds

DGF products saw the lowest quarterly inflows of 2016 in Q4 2016, standing at £3.3bn across the universe. However, 2016 has the highest inflows overall for the last three years totalling £28.2bn.

Q4 2016 continued to see an increase in positive performance outcomes within the DGF universe, with nearly 68% of products achieving a breakeven or positive return.

Looking at the three-year spread of annualised returns; all bar one product achieved a breakeven or positive return. The lowest annualised return produced is -1.1% and the best performing product achieved 15.97%, giving a spread of around 17%pa between the top and bottom performer.

UK equities

Whilst the UK equity universe achieved positive return in Q4, the asset class continued to see outflows with £2.8bn having been withdrawn during the quarter. In fact, the last time the UK equity universe saw a positive net inflow was in Q1 2014.

Although the UK equity universe saw negative asset flows in Q4 2016, the range of quarterly returns saw just over 90% of products achieving a breakeven or positive. The lowest quarterly return produced is -4.24% and the best performing product achieved 12.34%, giving a spread of over 16.58% between the top and bottom performer in just one quarter.

The range of annualised returns for the 3 years to December 31, 2016 saw all products achieve a breakeven or positive return. The lowest annualised return for this period is 1.28% and the best performing product achieved 12.77%.

Global equities

The global equities report tells a different story. Despite growth and good returns, investors reduced their allocation in the market for the 6th quarter in a row, with outflows during Q4 totalling $1.6bn.

Q4 2016 saw a decrease in the number of managers producing a breakeven or positive return with just fewer than 50% of products achieving this; this is down from 97% in Q3 2016. The lowest return produced is -9.12% and the best performing product achieved is 11.67%.

In comparison, looking at the three-year period, 94% of managers achieved a breakeven or positive annualised return, with the range of annualised returns starting from -9.2% and the best performing product achieved 12.32%.

Emerging market equities

Q4 2016 witnessed a largely negative range of returns in the emerging market equity universe with less than 5% of managers achieving a breakeven or positive return.

Moreover, when looking over a three-year period, only 29% of managers achieved a breakeven or positive return in this asset class. The lowest return achieved was -6.93% and the highest was 15.3%, highlighting the importance of the asset manager selection process in this asset class.

Multi-sector fixed income

The Multi Sector Fixed Income (MSFI) market continued to post positive results. The Assets under Management (AuM) in the MSFI Absolute Return universe sits at just under £76bn as at December 31, 2016. In Q4 2016, MSFI Absolute Return products achieved positive inflows of just under £2.3bn across the universe.

For the second quarter running, Western Asset Management had the largest asset inflows totalling £375m, in converted sterling. BlueBay Asset Management LLP achieved the largest percentage growth, seeing its assets increase by 29.69% over the same period.

In the MSFI market, nearly 77% of products achieved a breakeven or positive return in the fourth quarter. Whilst 97% of products achieved a breakeven or positive return over a three-year period, highlighting that the MSFI Absolute Return universe continues to show positive outcomes.

Emerging market debt

The emerging market debt products also experienced negative flows across the fourth quarter, with net outflows of just under £6.7bn across the universe. This made it the sixth quarter in a row that experienced negative flows. That said, there were some asset managers who saw inflows during the quarter.

Less than 5% of products achieved a breakeven or positive return in the EMD universe this quarter whereas nearly 70% of products achieved a breakeven or positive return over a three-year period.

The lowest return reached in Q4 2016 was -7.35% and the best performing product achieved10.19%, giving a spread of just over 17.69% between the top and bottom performer.

The range of annualised returns for the 3 years to December 31, 2016 in EMD is –6.2% to 10.37%, giving a spread of 16.57% between the top and bottom performer, which highlights the importance of the asset manager selection process in this asset class.

Sean Thompson concluded, “Our investment reports provide critical data and analysis on the latest investment trends. This information is vital given the continued volatility in the markets and the fact that markets are still adapting to the new political and economic landscape in the USA. In Europe, the Brexit negotiations and elections in the Netherlands, France and Germany will also have an impact on global markets.”

The post Good returns for major equity markets in Q4 2016 appeared first on International Finance.

March 7, 2017: As part of its plans to grow its business in the Netherlands, risk and due diligence expert Clayton Euro Risk has announced a strategic alliance with The Dutch Mortgage Consultants (TDMC). The move will support Clayton Euro Risk’s strategic focus on the residential mortgage market in the Netherlands.

Clayton Euro Risk is Europe’s leading provider of risk analysis on mortgage and asset finance. The firm believes that its expertise and reach will be enhanced by TDMC’s substantial knowledge of the Dutch mortgage market, credit, regulations and conditions to provide value and solutions which will be market-leading.

From the start of January 2017, Clayton Euro Risk’s and TDMC’s teams have worked together closely to establish the relationship. The first project for a Dutch client has already started.

Simon Collingridge, strategic delivery director, Clayton Euro Risk, said, “It is important for our clients that we have local presence in the Dutch mortgage market. We believe that by combining our capabilities, expertise and resources with those of TDMC, we’ll gain an even deeper understanding of the risks and opportunities faced by mortgage players and funders in the Netherlands. We can then deliver solutions tailored to those needs whether in support of origination, servicing, portfolio sale, acquisition or securitisation. Working with TDMC will ensure that we have people with real, practical experience of all aspects of Dutch mortgages supporting our delivery of those solutions. This, we believe, will bring a unique and invaluable offering to what is a dynamic mortgage market.”

In a press release, Jaap van Raak and Michel van der Sluis, partners of TDMC, said: “Working with Clayton Euro Risk will give us a unique opportunity to be their local presence in the Netherlands mortgage market and to add real value to their Dutch clients.”

The post Clayton Euro Risk announces alliance with The Dutch Mortgage Consultants appeared first on International Finance.

February 1, 2017: Ohpen has gained approval from the Financial Conduct Authority (FCA) to carry out its regulated activities in the United Kingdom (UK). The approval enables Ohpen to provide its software and outsourcing services to asset managers, banks and insurance companies in the UK under its new British company, Ohpen Operations UK Ltd.

“The FCA authorisation allows us to deliver an alternative for financial services companies to digitalise and outsource their entire investments and savings accounts operations,” says Angelique Schouten, Ohpen UK’s CEO.

The company provides both incumbent financial services companies and new market entrants with a ‘bank-out-of-the-box’ solution to fully outsource their operations. Founded in Amsterdam in 2009, Ohpen currently services five of the largest financial services companies in the Netherlands, administrating billions of assets under administration. The move to the UK marks the company’s first overseas operation as part of its international expansion strategy.

“We made it our focus to innovate in the core banking space to enable asset managers, banks and insurance companies to outsource their entire IT infrastructure, software, back office operations and customer contact centre,” explains Schouten.

Drawing on their expertise as former retail bankers, the founding team redesigned all processes and built the service from scratch resulting in a ‘bank-out-of-the-box’ solution that is digital- and API-first.

Ohpen aims to present a fully-digital alternative to the market that is dominated by just a few providers traditionally designed around a paper-based customer experience.

“We are very excited that the FCA has granted Ohpen its full authorisation. I think it says a lot about Ohpen as a business, having gained its FCA authorisation within little over half a year of applying for it. We are poised to challenge the mostly inert core FinTech & outsourcing market with a fresh, innovative, bold and colourful alternative,” concludes Schouten.

The company was founded in Amsterdam in 2009 by former bankers. It delivers IT services and technology to outsource the back- and front-office operations of banks, asset managers and insurance companies. The offering combines fully cloud-based SaaS technology with BPO services that enables financial services companies to launch propositions, digitalise their services quickly and easily, and benefit from lower costs of a unique all-in-one pricing model.

Ohpen administrates hundreds of thousands of retail accounts and billions of euros in assets with a team of more than 70 domain experts across their offices in the Netherlands and the United Kingdom. It established its UK office close to the Silicon Roundabout in 2016, with plans to significantly expand the local team over the next two years.

The post Ohpen gets FCA authorisation to operate in the UK appeared first on International Finance.

October 15, 2015: The desire to pursue new, sophisticated investment strategies generates conflicting objectives. All firms wish to increase their business agility and shorten time to market. This must be weighed against the need to manage a growing body of complex data that is also growing in complexity. On top of this, there is a stringent requirement to demonstrate good data governance to stakeholders and the regulator. All of this must be achieved without increasing costs, or at lower costs.

Feedback from the market suggests there are many elements of data management costs. Visible costs, such as license fees, increase in line with use and are normally predictable. But, in our experience, rising external data licensing costs have often diverted attention from the escalating internal challenge of getting data fit for purpose to suit specific business processes, such as portfolio management, risk management or performance measurement. Across the industry and within all firms, many more people perform data management tasks than those in data management teams.

Often, heavy costs begin to accrue once the data is on board. This is especially true for specialist data types, such as index data and benchmarks that are complex and difficult to manage. Such costs relate as much to governance and management of the data as to data validation and quality assurance and can add up to a multiple of the visible data costs.

In our experience, many firms struggle to identify precisely where costs occur, as they are hidden elsewhere in the organization, such as the front or middle office. In practice, additional data management is performed out of sight, and therefore not understood or quantified. Business users often regard data management as an unavoidable part of their job, even if it is low value adding. Firms that fail to manage data effectively incur hidden costs but also significant opportunity costs reflected in impaired business agility and weakened competitiveness.

At RIMES, we believe that a managed data service offers a fresh approach to data management that helps firms identify and reduce hidden costs and prepare for strategic growth.

Hidden costs exposed

Asset management firms incur hidden costs throughout the data management process. Although these are not new, they are exacerbated by the need for tighter data governance and increased regulatory oversight. Sources of hidden costs include:

People. In most firms, many people have to perform data management tasks is addition to their own job, such as a portfolio manager or risk analyst.

Market data systems. Some firms have implemented systems to support the data management process, including reference data management systems, data warehouses, ETL tools and hubs.

Service providers. Asset management firms often enlist help with data management from third party providers, including custodians, back-office outsourcers and managed service providers.

Other systems. Many firms use additional systems, add-on tools and services to acquire, cleanse and deliver market data.

The above costs are confirmed by an independent study (Cutter Associates, The True Cost of Market Data: Operational Impacts, June 2014) that measures these in terms of Full Time Equivalents (FTEs). Asset managers in the survey sampled had, on average, 7.5 FTEs in IT and Data Management dedicated to ‘business as usual’ activities. However, this figure doubles to 15 FTEs when staff from other departments, such as the front and middle office, who also perform data management, are included.

In practice, the 15 FTEs doubles to 30 FTEs when staff involved in periodic implementations of systems and solutions for managing market data are included, for example to comply with new regulations. So, the actual number of FTEs involved in data management is four times greater than those in dedicated data management functions. This figure is confirmed by our own interactions with the industry.

Benefits of a managed data service

Many of our conversations with RIMES clients and prospects revolve around the benefits of a managed data service. All firms wish to improve data quality and timeliness for key business functions but they also need to quantify hidden costs in order to build a business case for investing in a managed service. To that end, we commissioned Forrester to conduct a study to assess the total costs and benefits of RIMES MDS for an individual firm.

The study adopted Forrester’s proven methodology to assess the Total Economic Impact^TM (TEI) of a managed service. It offers a robust framework that helps firms identify and quantify hidden costs and to estimate the TEI of RIMES MDS on any individual firm.

How the benefits accrued:

In addition to improved operational efficiency of up to 20% within core areas of data operations and IT, the composite client experienced the following benefits:

• Improved ability to scale, leading to cost avoidance of additional headcount
• Faster time-to-market, resulting in improved front-office productivity
• Reduction in third-party legacy vendor fees.

We have discussed the Forrester Findings at several client forums and several organizations have run the calculation based on their own data.

Next steps

The Forrester TEI framework has been designed to calculate the potential benefits of managed data services for any asset management firm. We are encouraged by its power and flexibility and would like to help you measure the potential benefits for your own organization.

The RIMES Managed Data Service (RIMES MDS)

RIMES MDS provides our clients with the means to address their key buy-side data management challenges. It can improve service levels, ensure quality data for disparate business functions consuming data, manage the TCO (Total Cost of Ownership) of the full data management workflow and provide the business intelligence required to implement effective data governance processes and procedures.

Read more at www.rimes.com/forrester and http://www.rimes.com/what-we-do.

Email: info@rimes.com to receive a copy of the Forrester TEI study.

Also read

Data management getting attention at executive level

The post Real cost of data management appeared first on International Finance.

February 24, 2015

Indonesia has the largest Muslim population in the world. How is the Sharia Fund doing in the country?

The first Sharia Mutual Fund in Indonesia was launched in 1997 and the Jakarta Islamic Index, the first Islamic Index in Indonesia, was launched in 2000. Growth of the Sharia Fund growth is not as fast as that of non-sharia funds. The total Asset Under Management for the Sharia mutual fund industry at the end of December 2014 is only around 5 percent ($950 million) of the total ($18.6 billion).

What are the opportunities and challenges for Sharia investment in Indonesia?

Sharia based investment has very good prospects in Indonesia. Indonesia’s economic growth is above the average of the world economy. At present, Indonesia is headed by an elected president Joko Widodo. It makes Indonesia very attractive for investment in the capital markets. We believe that the growth of Islamic stock market will be more than 15% in 2015 and growth will continue for the next few years.

The challenge for Sharia investment in Indonesia is lack of understanding. Some of Indonesia’s investors consider the stock market as ‘gambling’. Hence, they are reluctant to invest in the capital markets. Investors need education.

What should you do to grab the opportunity?

The role of an investment manager is to educate the community about Sharia investment. We will also try to create more Sharia investment alternatives as the number of instruments in the market is limited.

Meanwhile, we will continue to manage our Sharia Fund, perform consistently and deliver good performance.

How you see the investment opportunity in 2015?

There are two major investment themes in 2015: falling oil prices and possibility of the Fed hiking interest rate. A fall in oil prices should be positive to Indonesia’s effort in lifting unproductive subsidies. It also increases consumer purchasing power through lower energy prices and benefits companies’ profit margin, especially sectors that have significant energy cost.  Therefore, consumer, automotive, telecommunication, infrastructure, construction and basic industries sectors, which represent more than 75% of the Jakarta Islamic Index, will benefit. On the other hand, the possibility of interest rate hike by the Fed this year will hurt financial and property sectors, which have very low weightage in the Jakarta Islamic Index. We believe Islamic funds will deliver a good performance in 2015.

You have won the IFM award for Best Islamic Equity Fund in Indonesia. What does this recognition mean to you?

We had never thought that our Cipta Syariah Equity (CSE) fund would get recognition at the international level. CSE Mutual Fund has got several domestic and international awards. However, this is the first time we received recognition from a major institution like International Finance Magazine. We are confident of supporting the Islamic mutual fund industry, especially in Indonesia and have a great chance to grow rapidly in the future.

About Ciptadana Asset Management PT Ciptadana Asset Management (CAM) is one of first investment companies licenced by Bapepam (Indonesian Capital Market Regulatory). It was established in 1991 and received its investment management licence from Bapepam in April 14, 1992.

It manages various mutual funds that invest in Indonesian equities, fixed income instruments, as well as providing structured funds management services, tailor-made for each client, whether high net-worth individuals or institutions. Investment strategies are designed to reflect each client’s financial assets, obligations and risk appetite, and to achieve their investment goals.

In 1992, CAM launched Indonesian Growth Fund, which is a pioneer in the Indonesian mutual fund industry. In 2012, it launched DIRE Ciptadana Properti Ritel Indonesia, which was a pioneering real estate investment opportunity in Indonesia.

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Joel Kukemelk

February 11, 2015: As a Europe-based GCC equity fund manager, we are well-aware of the international investors’ views, questions, hopes and doubts when it comes to investing in the Arabian peninsula. So far, global investors have overlooked the fast growing Gulf region – partly also because over the last decade, energy rich Middle Eastern countries have built up a reputation as a source of funds for foreign companies, not as a place where foreign investors should invest themselves. But foreign investors are finally starting to notice the region. However, as the majority of the potential foreign investors don’t have any previous experience at all with the region, it’s a slow process and a lot of education has to be done.

MSCI upgrade to the UAE and Qatar in 2014 has definitely helped to garner more interest for the region (combined weight of 1.6% in MSCI EM index). Dubai winning the opportunity to host EXPO 2020 (first time ever in the Middle East), its airport eclipsing London’s Heathrow in international passenger traffic, Qatar hosting the football World Cup in 2022 (first time ever in the Middle East) are small but necessary milestones in demonstrating to the world that this part of the Middle East has reached an inflection point.

With traditional big emerging markets – BRIC countries – struggling to show growth, international investors are more willing to look at alternative places for long-term investments. GCC’s strong economic growth numbers coupled with sound fiscal management grabs the attention of the new foreign investors.

But nothing comes easy or quickly. Many European investors have developed strong perceptions when it comes to the Middle East and these are related to war, unrest, instability, constant geopolitical tensions, different culture, harsh desert climate, huge oil revenue dependency etc. To make matters worse, many foreign investors put all the Middle East countries in the same regional risk basket despite countries being completely different from each other. To break these dogmas, asset managers need to spend a lot of time introducing the region, but of course the GCC countries could help as well by distinguishing themselves more from the broader Middle East region.

GCC has a lot to offer to foreigners Let’s look at the numbers. GCC countries have 10% of MENA population but 50% of GDP. They hold 45% of world oil reserves and 20% of gas reserves. They have current account and budget surpluses though it is true that the 40+% fall in oil prices in 2014 might force them to tap their huge $2 trillion reserves (more than 100% of GCC GDP) in 2015 for the first time in many years, strong reserves built from energy wealth revenues, fixed currency rates, fast economic growth, multi-year long investment programs, young and growing demographics are exactly what long-term investors are looking for.

Even better, GCC stock markets have low correlation to other world stock markets making them an ideal component to a diversifiedinvestment portfolio. The biggest risks are sudden unexpected energy price falls (unlikely, but for example the 40% oil fall witnessed in 2014 continuing at the same pace in 2015) and escalations in geopolitical tensions. Potential benefits, however, strongly outweigh these risks.

GCC stock markets are already sizeable. The total market cap exceeds $1 trillion, i.e. 2% of global stock markets. Saudi Arabia makes up half of that and with the Kingdom expected to open up its stock market to foreign investors in the first half of 2015, investors can’t turn a blind eye to the region any more.

Foreign investors’ exposure to the region is light years away from what it should be going by the market capitalisation. Some emerging and frontier markets that are smaller have managed to attract much more foreign investor attention. For example, stock markets in Russia, Turkey, Indonesia, Singapore, South Africa are all smaller than GCC combined stock market cap, yet foreign investors are much more familiar with those countries. Due to long-standing active interest, there are a number of international ETFs and country-specific mutual funds being offered in the market.

If energy rich GCC countries want to attract more foreign investors, then proceeding with the integration process within the union and distinguishing themselves more from the wider MENA region can make foreign investors look at the Middle East differently and unbundle some countries from the others. This would mean lower risk premiums for countries with stronger macro numbers and long-term prospects.

Foreign vs regional-based GCC fund managers

Joel Kukemelk	Should foreign investors prefer regionally-based funds or international funds? Practice shows that when we are talking about country-specific funds, usually preference is given to locally based funds. But for a regional fund, it becomes trickier.First of all, a fund with a regional mandate can’t be locally-based since it can’t be simultaneously present in all of the countries. Secondly, if a regional fund is based in one member country, the investment manager is likely subject to home-market bias.

Thirdly, practice has shown that for a regional fund being based in one member country doesn’t guarantee better returns compared to the funds that are run outside of the region.

And lastly, when international investors are investing money in a far-away region whee they don’t have experience with a local manager, they might feel considerably more unease than investing in an internationally-based regional fund where a fund manager understands the needs of the local investment climate.

For example, European asset manager might be willing to invest in the Middle East more willingly when they can deal directly with fellow European asset management companies who can demonstrate long-standing experience in investing in the region. In short, an unknown region with a known asset manager is better than an unknown region with unknown asset manager.

The market for regional funds based outside the region itself has existed already for a long time and for a good reason. With growing foreign investor interest towards the GCC stock markets, it’s possible that additional foreign funds will be launched but today’s investment climate also offers a valuable opportunity for all the existing GCC fund managers to market themselves and the long-term potential of the whole GCC region among foreign investors.

Joel Kukemelk is Fund Manager of LHV Persian Gulf Fund

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GCC can weather the fall in oil prices

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