What are your plans for the rest of the year?
JS: It is going to be really important, not only for us but for our clients, to ensure we have the right products and strategies in place to help navigate some of the challenges we see in the marketplace.
One challenge is the search for yield in the low-return environment. Another exists around equity market volatility and ensuring we have solutions that can help clients.
We are in a fortunate position in that we have been on this road for a few years. In terms of managing the volatility in the markets, we have a number of funds in our stable – whether it is our range of managed volatility equity funds or our fixed income funds – that are really unconstrained and can make money in falling as well as rising markets.
In the alternative space, with the acquisition of Martin Currie we brought in a couple of what we would call equity hedge strategies, which we think are very appealing in this marketplace, whether that is long/short Europe or long/short Japan.
We have been gearing ourselves up for markets such as this, where clients are looking for something less correlated to the way equity markets are behaving. For example, we launched an alternative Ucits fund that has an alternative credit type approach, using underlying hedge fund managers to navigate some of these markets. The fund has had very healthy inflows recently.
These are all strategies we think appeal to this market and, from a client market perspective, we will continue to focus on this area for the rest of the year.
JE: Primarily, we need to reassure our existing clients they are in good hands, whether they’re in equity, fixed income or alternatives strategies. These are uncertain times and the communication needs to be better than ever.
We also need to take into consideration the macro environment, now that the interest rate hiking agenda has been pushed back in many markets. We must think about what that means in terms of investor preferences and how we provide investors access to our intellectual capital.
Finally, we need to find solutions, through product launches, that allow people to navigate the equity market volatility.