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Will Bartleet, CIO and Portfolio Manager of Pacific Multi-Asset
Who will be the next Governor of the Federal Reserve?

One of the most influential leaders in the world will be appointed soon. You won’t have been able to vote for the candidates, nor will any of your neighbours. But don’t worry, the appointment will be decided by a wise leader, the 45^th President of the United States, Donald Trump. Yes soon, we will know who will be the next Governor of the Federal Reserve.  

FULL PRESS RELEASE
Pacific Asset Management announces launch of new Emerging Market UCITS fund and boosts team with two senior hires, as Multi-Asset Range tops $120 million AUM since launching in January.

Pacific Asset Management (PAM), the asset management arm of Sir John Beckwith’s Pacific Investments Group, confirms that its new Emerging Markets Long Only UCITS fund will launch in November 2017 and also announces two further senior hires to strengthen its existing team. 

Will Bartleet, CIO and Portfolio Manager of Pacific Multi-Asset
Opportunities in Eastern Europe

Contrarian investing is often thought of as being like catching a falling knife: looking for assets that are tumbling and heroically buying into them at the bottom. Like all dangerous games, you can sometimes play and look like a hero, but more often than not you come off worse for wear. Our approach to contrarian investing is not to fight the herd, but rather to look elsewhere for great opportunities that are just off most investors’ radar screens.

One equity market that meets this approach is Eastern Europe, comprising of Poland, Hungary and Czech Republic. Not part of Europe, so ignored by European investors, but not big enough to grab the full attention of many emerging market investors. 

Latest Emerging Market Viewpoints
From Matt Linsey and the North of South Capital team

The big shock for most investors this year has been the weakness of the U.S. dollar. It had become consensus that the U.S. Federal Reserve would begin the process of shrinking its balance sheet and increasing interest rates in a more aggressive fashion in reaction to an expanding economy and aggressive fiscal spending by the Trump administration. 

Will Bartleet, CIO and Portfolio Manager of Pacific Multi-Asset
UK Paycuts – Thanks for your hard work, here's a pay cut

Imagine walking into your manager’s office at the end of a good year and your boss smiles and awards you a pay cut. This is exactly what has happened to workers in the UK this year. Whilst wages have risen 2.1%, inflation is running at 3.6% so in real terms, the average worker is 1.5% poorer than they were last year. Prior to 2008, workers’ pay exceeded inflation by 2.5%, so every year people ended the year better off than they started it. Since then real wage growth has been negative, so on average, after inflation, UK workers are earning less than they were nearly 10 years ago. 
 

Latest Emerging Market Viewpoints
From Matt Linsey and the North of South Capital team

We occasionally get asked to summarize our core investment principles.

As we have previously written, we believe that in Emerging Markets active management has a significant opportunity to outperform the index. This is because our markets are less efficient than developed markets.

In order to take advantage of this, we have to find ways of determining the inefficiencies and exploiting them for the benefit of our investors.
In summary, we invest according to three major Investment Principles:  

Will Bartleet, CIO and Portfolio Manager of Pacific Multi-Asset
The 3-6-3 Rule

Bank managers used to operate on the 3-6-3 rule: borrow at 3%, lend at 6% and be on the golf course by 3pm. Ultra-low interest rates and QE has pushed down the spread between the cost of borrowing and lending which has had a detrimental effect on their net interest margins. Rising bond yields relieve this pressure, and this combined with far fewer fines, an easing of the regulatory environment and cost cutting means that earnings are growing again. 

Latest Emerging Market Viewpoints
From Matt Linsey and the North of South Capital team

Are commodity prices less relevant for our asset class? Over the past ten years the weighting of energy, oil and gas and mining has fallen by more than 50% to less than 15.0% of our index. At the same time technology, including internet stocks, has more than doubled to where it accounts to close to a quarter of our index.   

Will Bartleet, CIO and Portfolio Manager of Pacific Multi-Asset
Mayday

Politics has not lost its power to bamboozle pollsters and surprise markets. What was meant to be an opportunity to secure a strong conservative majority, now looks like a seriously rash move. Theresa May’s conservative government has been forced to attempt to form a coalition with the Democratic Unionist Party to secure a parliamentary majority. If they fail to reach an agreement, there is every possibility that the UK voters will be back at the polling stations later in the summer. 

Latest Emerging Market Viewpoints
From Matt Linsey and the North of South Capital team

The recent search for yield on the part of investors has seen a remarkable compression in spreads over the past year. Highly leveraged Chinese property companies have been amongst the chief beneficiaries of this euphoria, with a gross issuance of more than $14 billion in debt this year.