NOTE: Members of FOX receive active hyperlinks to the documents
referenced in FOXConnects. The hyperlinks in this sample edition
have been de-activated.
Intellectual Capital For The Wealth Management
Community
Member Login
September
Headlines
Special
Topic: Commodities
Industry
Trends and Issues
Investment
Planning
Integrated
Planning
Managing
Risk and Liability Exposure
International
Trends
Business
Owner Issues
Family
Continuity & Governance
Strategic
Philanthropy
Lifestyle
Management
Technology
Trends
Family
Education
Special
Topic
Commodities
Should wealthy
investors include commodities as part of their strategic asset
allocation? What is driving the current bull market in commodities,
and how sustainable is it? FoxConnects rounds up a number of
contributions on the topic.
A study by Ibbotson Associates
on behalf of PIMCO examines the role of commodities in strategic
asset allocation. Using data from 1970 - 2004, a composite commodity
index is found to produce the highest historical return of a range
of bond-/stock-related asset classes. Commodities are also found to
have the lowest average correlation to the other asset classes. The
authors conclude that the inclusion of commodities enhances the
risk-return characteristics of the efficient frontier.
- Click here to read "Strategic Asset Allocation and
Commodities"
return to top
According to SEI,
high commodity valuations have been driven by both supply and demand
fundamentals, as well as increased investment flows associated with
the "institutionalization" of the asset class. The authors offer a
cautious view over the near term, based on pressures arising from
dynamics of the global business cycle.
- Click here to read "What's Fueling the Commodity
Freight Train?"
return to top
A
research note by UBS examines the case for commodities, with
detailed commodity reviews in the areas of energy: base metals,
precious metals, steel and raw materials, and other materials. It
argues that, while the case for commodities has become less
promising, economic development in Asia should continue to support
the sector, particularly in relation to energy.
- Click here to read "Commodity Connections - Q3 2006"
return to top
A
paper prepared by GFMS Limited for the World Gold Council examines
the link between commodity prices and the US dollar. It also makes
the case for gold as a superior hedge against the dollar compared to
other commodities.
- Click here to read "Commodity Prices and the
Influence of the Dollar"
- (Requires free registration to read article)
return to top
Industry
Trends and Issues
Venture Capital Continues To
Go Global
A global survey on venture capital, sponsored
by Deloitte Touche Tohmatsu, offers insights into the attitudes and
intentions of venture capitalists around the world. It paints a
picture of an industry in robust health, characterised by increased
cross-border cooperation and investment. Over half of all
respondents stated they were intent on global expansion in the
coming year - although among European respondents, the overwhelming
interest was to invest in Continental Europe.
- Click here to read "Global Trends in Venture Capital
2006 Survey"
return to top
Investment
Planning
Using
Asset Allocation to Achieve Alpha
This article written
from a US perspective offers generic pointers on the importance of
asset allocation:
Unlike a typical
institutional investor, most wealthy families pursue multiple goals
that change over time. Their assets also tend to be dispersed across
a range of accounts and investments, with differing tax
implications. It is a challenge to construct an asset allocation
that meets with a family's goals with a high level of probability. A
paper by Glenmede examines the issues, advocating what it terms a
Total Optimization Approach to ensuring an efficient asset mix.
- Click here to read "Asset Allocations For Wealthy
Families"
return to top
The Case For Investing in Emerging Market
Equities
With a number of emerging economies in a state
of transition, characterised by financial reform, increasing
transparency and reasonable asset valuations, Ashbridge Investment
Management argues the case for making opportunistic growth-oriented
investments. It cautions against a permanent allocation to emerging
equity markets, however, and recommends highly liquid and
diversified positions.
- Click here to read "Emerging Markets Policy, Tactics
and Manager Selection at Ashbridge"
return to top
A Guide To
Mezzanine Investing
Private equity is a hot topic, owing
to strong recent performance, the increasing size of deals, and the
creation of publicly listed, retail vehicles in the US . However,
for the private investor, there are a number of pitfalls. Pictet has
written a newsletter advising private clients on the key issues
relating to investing in private equity - not least wider
discrepancies in performance between good and bad private equity
managers than are seen in other asset classes.
- Click here to read "Mezzanine Market Overview 2006:
Clowns To The Left Of Me, Jokers To The Right"
return to top
Private
Equity - Issues For The Private Investor to Consider
Mezzanine investors typically seek to invest in
securities that have the downside protection of bonds, coupled with
the upside potential of equity. A paper by PCG Asset Management
offers an introduction to the mezzanine market which, the authors
argue, is currently seeing a compression of returns as a result of
surplus capital supply. At least in the short term, PCG believes
that the risk reward profile of mezzanine investment will remain
unattractive.
- Click here to read "Private Equity For Private
Investors"
return to top
Integrated
Planning
Transparency in
Commercial Real Estate Grows Worldwide
Commercial real
estate has become more transparent in many parts of the world, with
owners, investors and lenders demanding more information, consistent
regulatory treatment and higher ethical standards. According to the
latest Jones Lang LaSalle Real Estate Transparency Index, ten
countries now achieve its highest "Tier 1" transparency level, up
from six in 2004. Around the world, foreign investors are not at a
disadvantage to domestic investors in areas such as building and
planning codes, according to the authors - however, they are at a
disadvantage when it comes to taxation.
- Click here to read "Real Estate Transparency
Index"
return to top
The Importance of Real
Estate as an Asset Class
More than half of all the
assets in the world are estimated to be in real estate. A special
paper by Deutsche Bank Private Wealth Management argues the
importance of real estate as an asset class and portfolio building
block around the world. In particular, it highlights investment
vehicles characterised by low correlation to traditional asset
classes such as equities and bonds, allowing investors to improve
the risk-return ratio of their portfolio by adding real estate.
- Click here to read "Real Estate - A Versatile
Investment Building Block"
return to top
Managing
Risk and Liability Exposure
Portfolio
Diversification
Diversifying a financial portfolio by
adding international investment improves its risk-return
characteristics. A technical academic paper by Kate Phylaktis of the
Sir John Cass Business School examines the relative importance of
benefits arising from country-specific factors (such as different
policy and legal regimes) and national industrial compositions. The
authors find that industry effects have been growing in importance
relative to country effects - suggesting that diversification across
sectors may offer more benefits than compared to regional
diversification.
- Click here to read "The Changing Roles of Industry
and Country Effects in the Global Equity Markets"
return to top
International
Trends
Emerging Economies Set To
Reshape The Global Economy
India and China both have
massive populations, but their economic structures, sources of
growth and areas of competitive advantage are quite different. A
paper by Deloitte offers thoughts on the future direction of India
and China , the risks and opportunities of doing business in each
country, and the likely impact they will have on the global
economy.
- Click here to read "China and India: The Reality
Beyond the Hype"
return to top
A paper by PwC estimates GDP
growth rates to 2050 for a number of emerging countries. It finds
that "E7" economies (China, India, Brazil , Russia, Indonesia,
Mexico and Turkey) will be around 25% larger by 2050 than the
current G7 at market exchange rates. The paper also contains
thoughts on opportunities and challenges confronting the OECD.
- Click here to read "How Big Will the Major Emerging
Market Economies Get and How Can the OECD Compete?"
return to top
Jim O'Neill, Head of Global Economic
Research at Goldman Sachs, introduced the acronym "BRICs" to the
world back in 2001, with a view that Brazil, Russia, India and China
would become major world economic powers by 2050. Here O'Neill
presents a webcast discussing progress made by each, with thoughts
on future potential.
- Click here to view the webcast
return to top
Business
Owner Issues
Governance in Successful
Family-Controlled Businesses
A paper originally
published by the Family Business Review seeks to understand why some
major, publicly-traded family controlled businesses outperform other
types of business, while others perform poorly. Its analysis is
based on four governance choices facing family businesses: level and
mode of family ownership; family leadership; the involvement of
multiple family members; and the participation of later
generations.
- Click here to read "Family Governance and Firm
Performance: Agency, Stewardship, and Capabilities"
return to top
Guide To Managing Risk
Following an IPO
All businesses must manage risk, but
newly listed companies confront additional risks - ranging from
presenting unexpected results to the markets, uncertainties relating
to new initiatives, and infrastructure, systems and compliance
issues. A short paper by Ernst & Young discusses the key issues.
- Click here to read "The Essential Guide to: Risk
Post-IPO"
return to top
Family
Continuity & Governance
How to Avoid the Midas Curse
It has been estimated that 90% of affluent families squander
their wealth by the end of the third generation. A paper by Northern
Trust discusses the best way of ensuring the family preserves its
wealth for generations to come. The key: a family's "financial
values", which should be passed on to future generations as well as
financial assets.
Strategic
Philanthropy
Effective Family
Governance
By its very nature, family philanthropy draws upon
the passions, knowledge and skills of many family members, but
marshalling this together can prove difficult and time consuming. A
paper by the National Center For Philanthropy explains how an
understanding of the principles of family governance can help.
- Click here to read "Family Governance. A Primer for
Philanthropic Families"
return to top
Lifestyle
Management
New Online Magazine for
Women
Coutts has launched Coutts Woman, "the online
magazine for successful women". This month it talks to Jo Wood,
founder of Jo Wood Organics, and Ella Heeks, managing director of
organic food delivery service Abel & Co. Also includes articles
on topics ranging from concierge services, the threat of kidnap, and
returning to work after a career break.
- To read the September issue of Coutts Woman, visit
www.Couttswoman.com
return to top
Spending Habits of the "New Jet
Set"
Membership of "the New Jet Set" is determined by
outright or fractional ownership of a jet, the new accessory of the
extremely wealthy, so claims Russ Alan Prince in his analysis of the
spending habits of the wealthy. The report includes insights into
the luxury consumption patterns of three "personalities":
Trendsetters, Winners, and Connoisseurs.
- Click here to read "The New Jet Set - A
Psychographic Analysis of Luxury Spending"
Note: This file is a Zip or Compressed file. You'll need Winzip to open it.
return to
top
Technology
Trends
Misconceptions
About Computer Security
A paper by Risk Control
Strategies examines some popular misconceptions among computer users
who believe they are protected against viruses and other online
threats. Its conclusion: rather than any one piece of software, it
is "vigilance and education" that are key to protecting yourself.
- Click here to read "Five Misconceptions Relating to
Computer and Information Security, and How You Can Protect
Yourself"
return to top
Family
Education
Secrets of Happiness - From
1902
Language, style and customs may have moved on over the
last century, but have the dynamics behind being happy also moved
on? A recent e-book contains lla Wheeler Wilcox's "The Heart of the
New Thought", originally published in 1902. The book comprises 31
short chapters on topics such as "Old Clothes," "Eternity," "The
Philosophy of Happiness".
- Click here to read "The Heart of the New
Thought"
return to top
C 2006 Family
Office Exchange
FOX members
can subscribe by sending an e-mail with "Subscribe To FOXConnects"
in the subject line to fox@familyoffice.com, or by clicking here.
If you no
longer wish to receive this broadcast e-mail from Family Office
Exchange, please click here: UNSUBSCRIBE
To FOXConnects and send the e-mail that is
generated.
|
