| As mutual fund managers have learned through bitter experience, the bursting of the tech bubble did more than dent investment portfolios. It also caused a crisis of confidence in the industry and left many investors feeling they had been badly advised over their fund selections in the first place. James Charrington, head of international retail business at BlackRock Merrill Lynch Investment Managers, acknowledges that investors feel aggrieved. “We have had to rebuild consumer confidence in the financial services industry as a whole, and we are still working very hard at it,” he says. BlackRock Merrill Lynch itself is well-placed to be at the forefront of the drive to demystify mutual funds and ensure they become a key part of every investors’ portfolio, whether “a few thousand euros or tens of millions”, says Charrington. The company is in its first full year as a business entity following last September’s merger between BlackRock and Merrill Lynch Investment Managers, bringing together more than €750bn in assets under management. “We are now a truly global asset manager with complementary skills,” says Charrington. “Previously BlackRock was focused almost exclusively on fixed-income products, while Merrill Lynch was better known for equities. “Between now and 2009 we will be using the combined name and branding, but it’s an interim move; after that, we will be known as BlackRock. Merrill Lynch is our biggest single shareholder with 49.8%.” Charrington believes the move in Europe over the past few years to the “open architecture” system of selecting funds from the “best of breed”, rather then being stuck with a limited range from one bank or insurer as in the past, suits strongly performing managers such as BlackRock. He also promises that there will be no flashy or “flavour of the month” funds. Rather, the emphasis will be on pan-European promotion of BlackRock’s existing stable, including the Emerging Europe fund, which makes the most of the group’s in-house investment expertise. Co-managed by Alain Bourrier and Plamen Monovski, Emerging Europe invests in Russia, the Commonwealth of Independent States, new EU member states and Turkey. "The region's biggest economy, Russia, will start to grow less dependent on commodity-related revenue streams" According to Monovski, “Each country in the region offers a compelling investment opportunity. From the ongoing convergence story of the new EU member states to the emergence of the ‘frontier’ economies of the former Soviet Union, the diversity of these markets gives the investor a number of ways to take advantage of the region’s continuing strong growth.” He continues: “Investors are also benefiting from the many new companies coming to market throughout the region. While this robust IPO pipeline has added considerable depth to the existing major sectors, we are also starting to see previously under-represented industries beginning to make their presence felt.” Most significantly, Bourrier adds: “The region’s biggest economy, Russia, will start to grow less dependent on commodity-related revenue streams. We expect to see it becoming less reliant on oil and gas earnings as burgeoning consumer demand for goods and services, business investment and state spending inject new life into broad swathes of the economy, including the consumer, retailing, financial and construction sectors.” Staying on the subject of emerging and developing markets, HSBC Investments has re-opened its GIF BRIC Freestyle fund to investors. It has a minimum investment of $5,000 (€3,660) and is part of HSBC’s Luxembourg-based Global Investment Funds range. The fund, which as its name suggests specialises in investment in Brazil, Russia, India and China, closed to new investment in June 2006 to protect performance for existing shareholders. Christian Deseglise, head of global emerging markets, explains: “Over the past eight months, the markets in which this fund invests have grown in size and liquidity and depth has improved. This has increased capacity to a level whereby it is now appropriate to reopen the fund.” Finally, Fortis Investments has strengthened its senior management with the appointment of Peter Branner as chief investment officer for the group’s multi-management arm. |