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EMERGING MARKETS AND EUROPE SHOW STRONG PERFORMANCE IN CAMRADATA’S Q3 2017 INVESTMENT RESEARCH REPORTS

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EMERGING MARKETS AND EUROPE SHOW STRONG PERFORMANCE IN CAMRADATA’S Q3 2017 INVESTMENT RESEARCH REPORTS

CAMRADATA, a leading provider of data and analysis for institutional investors, has published its investment research reports for Q3 2017, charting the performance of investments and asset managers across six asset classes – Global Equity, UK Equity, Emerging Markets Equity, Diversified Growth Funds, Multi Sector Fixed Income and Emerging Markets Debt.

Over three years’ worth of data from CAMRADATA Live (its online manager research platform) at 30 September 2017 was analysed to produce the six reports and key investments trends emerged.

In Q3 2017, US dollar weakness, a pickup in commodity prices and continued momentum in the Chinese economy helped emerging market stocks lead the way in performance over the quarter, whilst the European markets enjoyed steady growth as economic data remained robust.

Global equities performed well in Q3 and stocks rose amid a brighter outlook for the global economy backed by better than expected corporate earnings, plus several key market indices reached record highs during the quarter.

Sean Thompson, Managing Director, CAMRADATA said, “In the USA in February, May and September 2017, the S&P 500 reached all-time highs, breaking the records previously set. During Q3, corporate earnings continued to improve and the news that the economy grew at a healthy 3.1% in the second quarter (annualised) supported returns.

“In Europe, a stable global growth outlook helped UK equities over the period but uncertainties surrounding Brexit and a hawkish tone from the Bank of England meant returns lagged global equities. Eurozone stocks advanced over the quarter as key economic indicators continued to improve and diminishing political uncertainty comforted investors.

“Economic data in Europe remaining healthy as economic growth was confirmed at 2.3% in the second quarter (annualised) and many companies reported better than expected earnings growth,” adds Mr Thompson.

Global Equities

Assets under management (AuM), in these Global Equity products, total just under $720bn as at the end of Q3 2017, which is $39m less than it was at Q2 2017.

The Global Equity universe continued to see investors reducing their allocation in Q3 2017, which saw outflows total -$5.1m. This universe has not seen any positive inflows in 12 months. However, some managers have still managed to achieve inflows during Q3 2017 despite the overall loss.

T Rowe Price took the first spot in the asset manager inflows table seeing $1,455m added to their AuM, with Evermore Global Advisors coming in second place with $600m of inflows, followed by Sustainable Growth Advisors, Nordea Asset Management and Capital Group.

Q3 2017 saw over 98% of managers producing a breakeven or positive return, which follows the trend in returns from Q1 and Q2 2017 which reached 100% and 98% respectively. The lowest return produced is -5.12% and the best performing product achieved is 12.93%, giving a spread of 18.05% between the top and bottom performer in just three months.

In comparison, looking at the three-year period, just under 99% of managers achieved a breakeven or positive annualised return, with the range of annualised returns starting from -12.9% and the best performing product achieved 21.45%, giving a spread of 34.35% pa between the top and bottom performer.

UK Equities

Assets under management (AuM), in these UK Equity products, now total just over £150.87bn showing a £3.66bn decrease since Q2 2017. The asset class continued to see outflows this quarter with another £5.2bn having been withdrawn. In fact, taking into account all of the products the UK Equity asset class has seen outflows of assets in each of the past 12 quarters.

Although the UK Equity universe saw negative asset flows in Q3 2017, the range of quarterly returns saw just below 95% of products achieving a breakeven or positive. The lowest quarterly return produced is -4.47 % and the best performing product achieved 10.84%, giving a spread of over 15.3% between the top and bottom performer in just one quarter.

The range of annualised returns for the 3 years to 30 September 2017 saw 99% of products achieve a breakeven or positive return. The lowest annualised return for this period is -3.37% and the best performing product achieved 22.3%.

Emerging Market Equities

At the end of Q3 2017, assets under management (AuM), in these Emerging Market Equity products, total just over $572.6bn as at the end of Q3 2017. This is an increase of just over $41.5bn assets from Q2 2017.

In Q3 2017 nearly 100% of managers achieved positive returns in the Emerging Market Equity universe. The lowest return produced is -3.89% and the best performing product achieved 15.44%, giving a spread of over 19.33% between the top and bottom performer in just one quarter.

Moreover, when looking over a three-year period, nearly 99% of managers achieved a breakeven or positive return in this asset class. The lowest annualised return achieved was -13.83% and the highest was 16.75%, which highlights the importance of the asset manager selection, the style and the size cap decision process in this asset class.

Diversified Growth Funds

Assets under management have decreased by just under £1.2bn since Q2 2017 and now total £187.1bn as at 30th September 2017.  For the first time in 3 years the DGF universe experienced net outflows of £9.5m in Q3 2017.

Q3 2017 continued to see an increase in positive performance outcomes within the DGF universe, with 89.8% of products achieving a breakeven or positive return. The lowest quarterly return produced is -1.06% and the best performing product achieved 5.43%, giving a spread of just over 6.49% pa between the top and bottom performer.

Looking at the three-year spread of annualised returns; all products achieved a breakeven or positive return. The lowest annualised return produced is 1.62% and the best performing product achieved 13.44%, giving a spread of around 11.82% pa between the top and bottom performer.

Multi Sector Fixed Income

The Assets under Management (‘AuM’) in the MSFI Absolute Return universe sits at just over £77bn as at 30th September 2017. This is an increase of assets by just over £3.6bn since Q2 2017.

In Q3 2017 MSFI Absolute Return products achieved positive inflows of just under £3bn across the universe. This was more than double from the previous quarter which saw just over £1.3bn of inflows.

Western Asset Management had the largest asset inflows totalling £681m, in converted sterling, during Q2 2017. They were followed by BlackRock, M&G Investments, Pictet Asset Management Ltd and Morgan Stanley Investment Management.

As in Q2 2017, Western Asset Management had the largest asset inflows, totalling £1,059m in Q3 2017 in converted sterling. They were followed by BlackRock, TCW, Brandywine Global Management, LLC and Pictet Asset Management Ltd.

In the MSFI market, just over 91% of products achieved a breakeven or positive return in Q3, up from 88% in Q2. Looking at the three-year spread of returns 97.5% of products achieved a breakeven or positive return, highlighting that the MSFI Absolute Return universe continues to provide positive outcomes.

Emerging Market Debt

The Assets under Management (‘AuM’) in the EMD universe sits at $268.8bn as at 30 September 2017. This means the EMD universe has seen its assets increased by almost $20.4bn since Q2 2017.

The EMD products continued to see net inflows of just under £12.3bn across the universe within Q3 2017. Franklin Templeton Investments had the largest asset inflows totalling $1.6bn during the quarter. They were followed by Ashmore Group, T Rowe Price Group, Inc., Neuberger Berman and BlackRock.

100% of products achieved a breakeven or positive return in the EMD universe this quarter, and just over 96% of products achieved a breakeven or positive return over a three-year period, proving that the Emerging Market Debt universe continues to provide positive returns.

The lowest return reached in Q3 2017 was 0.87% and the best performing product achieved 6.95%, giving a spread of just over 7.82% between the top and bottom performer.

The range of annualised returns for the 3 years to 30 September 2017 in USD EMD is -2.5% to 10.09%, giving a spread of 12.59% between the top and bottom performer.

Overall, EMD products in USD have overall been far less volatile in their distribution of returns than the MSCI EM U$ – Total Return Index over the last 3 years. For instance, the EMD Median has achieved monthly median returns in the range of -5% to 5%, whilst the benchmark has ranged from -8% to +10%.

Sean Thompson concluded, “Our latest quarterly investment report highlights a better than predicted picture of the global economy which prompted stocks to rise, global equities to perform well and several market indices reaching record highs.

“However, there continues to be political concerns in the USA, not least the situation in North Korea and the ongoing Brexit negotiations, which are still creating great uncertainty. These are likely to impact the stability of the markets over the coming months.

“It’s important for investors to keep abreast of what’s happening globally to ensure they make the right investment decisions. CAMRADATA Live is an invaluable tool for monitoring the strategies of asset managers, keeping investors up to date on what’s happening across hundreds of asset classes,” adds Mr Thompson.

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Australia says no further Facebook, Google amendments as final vote nears

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Australia says no further Facebook, Google amendments as final vote nears 1

By Colin Packham

CANBERRA (Reuters) – Australia will not alter legislation that would make Facebook and Alphabet Inc’s Google pay news outlets for content, a senior lawmaker said on Monday, as Canberra neared a final vote on whether to pass the bill into law.

Australia and the tech giants have been in a stand-off over the legislation widely seen as setting a global precedent.

Other countries including Canada and Britain have already expressed interest in taking some sort of similar action.

Facebook has protested the laws. Last week it blocked all news content and several state government and emergency department accounts, in a jolt to the global news industry, which has already seen its business model upended by the titans of the technological revolution.

Talks between Australia and Facebook over the weekend yielded no breakthrough.

As Australia’s senate began debating the legislation, the country’s most senior lawmaker in the upper house said there would be no further amendments.

“The bill as it stands … meets the right balance,” Simon Birmingham, Australia’s Minister for Finance, told Australian Broadcasting Corp Radio.

The bill in its present form ensures “Australian-generated news content by Australian-generated news organisations can and should be paid for and done so in a fair and legitimate way”.

The laws would give the government the right to appoint an arbitrator to set content licencing fees if private negotiations fail.

While both Google and Facebook have campaigned against the laws, Google last week inked deals with top Australian outlets, including a global deal with Rupert Murdoch’s News Corp.

“There’s no reason Facebook can’t do and achieve what Google already has,” Birmingham added.

A Facebook representative declined to comment on Monday on the legislation, which passed the lower house last week and has majority support in the Senate.

A final vote after the so-called third reading of the bill is expected on Tuesday.

Lobby group DIGI, which represents Facebook, Google and other online platforms like Twitter Inc, meanwhile said on Monday that its members had agreed to adopt an industry-wide code of practice to reduce the spread of misinformation online.

Under the voluntary code, they commit to identifying and stopping unidentified accounts, or “bots”, disseminating content; informing users of the origins of content; and publishing an annual transparency report, among other measures.

(Reporting by Byron Kaye and Colin Packham; Editing by Sam Holmes and Hugh Lawson)

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GSK and Sanofi start with new COVID-19 vaccine study after setback

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GSK and Sanofi start with new COVID-19 vaccine study after setback 2

By Pushkala Aripaka and Matthias Blamont

(Reuters) – GlaxoSmithKline and Sanofi on Monday said they had started a new clinical trial of their protein-based COVID-19 vaccine candidate, reviving their efforts against the pandemic after a setback in December delayed the shot’s launch.

The British and French drugmakers aim to reach final testing in the second quarter, and if the results are conclusive, hope to see the vaccine approved by the fourth quarter after having initially targeted the first half of this year.

In December, the two groups stunned investors when they said their vaccine would be delayed towards the end of 2021 after clinical trials showed an insufficient immune response in older people.

Disappointing results were probably caused by an inadequate concentration of the antigen used in the vaccine, Sanofi and GSK said, adding that Sanofi has also started work against new coronavirus variants to help plan their next steps.

Global coronavirus infections have exceeded 110 million as highly transmissible variants of the virus are prompting vaccine developers and governments to tweak their testing and immunisation strategies.

GSK and Sanofi’s vaccine candidate uses the same recombinant protein-based technology as one of Sanofi’s seasonal influenza vaccines. It will be coupled with an adjuvant, a substance that acts as a booster to the shot, made by GSK.

“Over the past few weeks, our teams have worked to refine the antigen formulation of our recombinant-protein vaccine,” Thomas Triomphe, executive vice president and head of Sanofi Pasteur, said in a statement.

The new mid-stage trial will evaluate the safety, tolerability and immune response of the vaccine in 720 healthy adults across the United States, Honduras and Panama and test two injections given 21 days apart.

Sanofi and GSK have secured deals to supply their vaccine to the European Union, Britain, Canada and the United States. It also plans to provide shots to the World Health Organization’s COVAX programme.

To appease critics after the delay, Sanofi said earlier this year it had agreed to fill and pack millions of doses of the Pfizer/BioNTech vaccine from July.

Sanofi is also working with Translate Bio on another COVID-19 vaccine candidate based on mRNA technology.

(Reporting by Pushkala Aripaka in Bengaluru and Matthias Blamont in Paris; editing by Jason Neely and Barbara Lewis)

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Don’t ignore “lockdown fatigue”, UK watchdog tells finance bosses

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Don't ignore "lockdown fatigue", UK watchdog tells finance bosses 3

By Huw Jones

LONDON (Reuters) – Staff at financial firms in Britain are suffering from “lockdown fatigue” and their bosses are not always making sure all employees can speak up freely about their problems, the Financial Conduct Authority said on Monday.

Many staff at financial companies have been working from home since Britain went into its first lockdown in March last year to fight the COVID-19 pandemic.

One year on, the challenges have evolved from adapting to working remotely to dealing with mental health issues, said David Blunt, the FCA’s head of conduct specialists.

“During this third lockdown, there has been a greater impact on mental well-being, with many people struggling with job security, caring responsibilities, home schooling, bereavements and lockdown fatigue.”

Bosses should continually revisit how they lead remote teams, he said.

“The impact of COVID-19 is creating a huge workload for those considered to be high performers, while the remote environment potentially makes it much more challenging for those who were previously considered low performers to change that perception,” Blunt told a City & Financial online event.

Companies should consider “psychological safety” or ensuring that all employees feel confident about speaking out and challenging opinions.

“We’ve heard varying reports of how successful this has been,” Blunt said.

Pressures in the financial sector were highlighted this month when accountants KPMG said its UK chairman Bill Michael had stepped aside during a probe into comments he made to staff.

The Financial Times said Michael, who later apologised for his comments, had told staff to “stop moaning” about the impact of the pandemic on their work lives.

Blunt was speaking as the FCA next month completes the full rollout of rules that force senior managers at financial firms to be personally accountable for their decisions to improve conduct standards.

There have only been a “modest” number of breaches reported to regulators so far as firms worry about being “tainted” but more cases will become public as sanctions are revealed, Blunt said.

“Regulators won’t be impressed by lowballing the figures.”

(Reporting by Huw Jones; Editing by Mark Heinrich)

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