Ha! Yes, sorry that joke was a bit bottom quartile, fresh from the fund management cracker collection. Ahem. Anyway, it’s clear that not everything in financial services has gone to plan this year, so it’s time to refresh our memories of some of the more underwhelming stories of 2014.
First up, cast your mind back to January and Jim “Mr BRIC” O’Neill gifted us his latest acronym, MINT – that’s Mexico, Indonesia, Nigeria and Turkey, the next emerging market powerhouses. Queue, a deluge of fresh new funds…
No? To be fair, in the long term these markets may very well deliver, as Indonesia and Turkey have done this year, while Mexico and Nigeria have somewhat lagged. Still, asset allocators remained largely disinterested, and O’Neill was last seen heading up a far more worthy international committee looking into global antimicrobial resistance.
Keeping on the emerging markets theme, China last month finally overtook the US to become the world’s largest economic powerhouse.
This in itself actually made for a pretty thought-provoking news piece, though it appears the fund and wealth manager communities still failed to bite – many pointing out that the figures were on a purchasing-power parity basis, and that in terms of GDP-per-head, China still lags at less than a quarter of US levels.
And finally, we turn to the award for the asset allocation call of the year, which unfortunately this year rules out at least 90% of the wealth manager community! Yes, the best performing major asset class of the year has been… gilts, the one area where professional investors have been, and still are, keen to avoid.
It just goes to show how difficult it is to get the asset allocation call right, and for that I bow down to the professionals. Best wishes for a successful 2015!