The seeds of the next debt crisis

Date published: 04 March 2020

John Plender in London

The shock that coronavirus has wrought on markets across the world coincides with a dangerous financial backdrop marked by spiralling global debt. According to the Institute of International Finance, a trade group, the ratio of global debt to gross domestic product hit an all-time high of over 322 per cent in the third quarter of 2019, with total debt reaching close to $253tn. The implication, if the virus continues to spread, is that any fragilities in the financial system have the potential to trigger a new debt crisis.

Read more ...

Pension fund giants team up in attack on ‘short-termism’

Date published: 04 March 2020

Leo Lewis in Tokyo and Patrick Temple-West in New York

Japan’s $1.6tn state pension fund has joined forces with the California State Teachers’ Retirement System and UK-based USS Investment Management to launch an attack on “short-termism” by companies and asset managers.

Read more ...

Federal Reserve should not try to fight the coronavirus

Date published: 01 March 2020

Karen Petrou

At the end of last week, Federal Reserve chairman Jay Powell cryptically assured markets that the US central bank would do the “appropriate” thing to counter Covid-19’s plague on equity prices. This is a carefully crafted promise of nothing specific, ensuring that the Fed can do anything it wants.

Read more ...

Why the Japanese stock market is like a toxic blowfish

Date published: 18 February 2020

Leo Lewis

When Japan’s stock market opened on Monday this week, it had much in common with a fugu puffer fish: expensive, delicious only to fanatics and absolutely riddled with danger.

Read more ...

UK active fund managers suffer bloodbath in 2019

Date published: 25 January 2020

Attracta Mooney and Siobhan Riding

Invesco, Standard Life Aberdeen, M&G and Schroders have topped a ranking of the worst-selling fund houses in Europe in 2019 as high-profile scandals in the sector intensified investor aversion to traditional stockpickers.

Read more ...

How a herd of cows trampled on human stockpickers

Date published: 21 January 2020

Robin Wigglesworth

Investing is hard. So hard, in fact, that even highly-trained professionals who have dedicated their lives to mastering markets often fail. An unusual experiment in Norway, pitting pros against livestock, underscored just how tricky it can be.

Read more ...

Wall St banks escalate asset management battle

Date published: 18 January 2020

Chris Flood

The competitive challenges faced by the asset management units of the big US banks against the might of BlackRock and Vanguard was underlined this week as US banks unveiled mixed 2019 results for their investment units.

Read more ...

Credit ratings, like dodgy boilers, can still blow up the house

Date published: 13 January 2020

Patrick Jenkins

The world is awash with conflicts of interest. The plumber you call to fix the boiler insists it needs replacing, at vast cost to you and benefit to them. The car mechanic says your head gasket has blown. But has it really?

Read more ...

Biggest asset managers attacked over role in climate change

Date published: 11 January 2020

Attracta Mooney

The world’s biggest investors are coming under intense pressure over the role they play in climate change, as the focus on tackling global warming moves beyond oil, gas and mining to the companies that finance fossil fuel producers.

Read more ...

If the threat of war cannot shake stock markets, what can?

Date published: 11 January 2020

Michael Mackenzie

There has been little shortage of market drama to mark the new year, sparking hefty swings in oil and havens such as gold. For long-term investors, the sudden and — it is to be hoped — shortlived escalation in tensions between Iran and the US provides a lesson in the importance of waiting out passing tempests and focusing on gauging the outlook for the global economy and corporate profits.

Read more ...

Apple’s heady rise highlights perils of concentration

Date published: 10 January 2020

Richard Henderson

Stock markets set a curious record last year: Apple gained more in equity value than any other company in history. But rather than gawp at the rise, equity investors need to consider whether the size of the company, and that of its brethren among the top five in the US — Microsoft, Amazon, Facebook and Google’s parent Alphabet — presents a growing risk to their portfolios.

Read more ...

Index funds break through $10tn-in-assets mark amid active exodus

Date published: 08 January 2020

Robin Wigglesworth in Oslo and Alex Janiaud in London

Assets managed by global index funds have smashed through the $10tn level, buoyed by rising markets and an investor exodus from pricier, actively managed funds that often struggle to beat their benchmarks.

Read more ...