MyPrivateBanking Blog
Daily Comments on the World of Wealth Management

Archive for October, 2010

Millionaires on Facebook

Thursday, October 21st, 2010

Robert Frank blogged yesterday on WSJ’s Wealth Blog about a new survey about millionaires using Facebook. The bottomline: Yes, they are on Facebook, but unfortunately they have too little time to use it regularly. I guess they soon will have to find the time  - as Facebook and other social media are growing in importance for all kinds of critical information and debates.

This gives me also the opportunity to announce that MyPrivateBanking will soon publish an extensive report about the role of social media in wealth management. This new report will continue and build on our report on “How Wealth Managers Can Win Clients Online”. Stay put.


Weekend Tips: ETF Price War & Product Innovation

Friday, October 15th, 2010

As more and more traditional fund firms are entering the ETF market and issuing new products, the market is driving down prices. Vanguard has fueled a price war in the United States by issuing 20 new ETFs undercutting Black Rock and others, Bloomberg reports today:

“Vanguard’s U.S. ETFs pulled in a net $25.6 billion this year through Sept. 30, 26 percent more than BlackRock and State Street combined, according to Chicago-based Morningstar Inc. Vanguard last month offered 20 new ETFs, taking on the bigger companies for the first time with funds that track Standard & Poor’s and Russell indexes, including the S&P 500 Index.(…) Fees charged by BlackRock and Boston-based State Street, which oversees $216 billion in ETFs, are on average about double those of Vanguard and Schwab of San Francisco.”

But competition drives also innovation. The latest thing being bullet bond ETFs, as read in today’s Wall Street Journal:

“One of the exchange-traded-fund industry’s latest innovations aims to answer a longstanding criticism of bond mutual funds: that these investments never mature and so investors can’t lock in attractive yields as they can with individual bonds. Two ETF providers, BlackRock Inc.’s iShares unit and Guggenheim Partners LLC, have begun offering “end-date” or “bullet” bond ETFs in the past year. The new funds hold a portfolio of bonds all maturing in the same year.”

This seems to me among the more sensible innovations in the ETF market. It’s reassuring to see that in some areas of the financial services world market forces actually do work.


The Herd is on the Run Again

Tuesday, October 12th, 2010

Reuters titles “Emerging markets rush turning into secular move”. I am just wondering how long “secular” is for Reuters? Seculum is commonly defined as “a generation, an age, a century”. I suspect that the emerging markets seculum will face a much shorter life span - at least in the sense of the outrageous valuations that many emerging market stocks, real estate and some bonds have already reached.

“It has become almost indiscriminate. It used to be Growth At the Right Price. Now it’s almost Growth At Any Price. We’re moving from emerging markets as an option to a permanent feature in asset allocation portfolio.” says Michael Power, global strategist at Investec Asset Management.

If you had the opportunity to listen to global strategists in the year 2000 or 2006 you can easily replace emerging markets with tech or real estate in southern California.I also love the word SEISMIC with respect to the latest investor fad:

“Market capitalization remains small and the majority of global investors have only a fraction of EM exposure within their portfolios, despite the fact most major indices generated very little in the way of returns over the past decade,” said Craig Farley, investment manager at Ashburton. “We believe we are witnessing the start of a seismic shift in the other direction.”

Can please somebody stand up and spell the word BUBBLE  to these gentlemen?


Buffett and Jay-Z On Success And Giving

Tuesday, October 5th, 2010

Highly recommended!