Threadneedle Italy sees value in commodities

Alessandro Aspesi has worked for Threadneedle Investments since 2007 and has spearheaded the opening of the Italian office in 2008. Six years on, he looks at the broad picture to give an outlook of the Italian market and of Threadneedle business in the country.

As of 31 March 2014, the London-based fund manufacturer had £89.7bn AUM globally distributed across retail and institutional clients.

In Italy, the business is almost equally divided between retail clients (40%) and institutional clients and discretionary portfolio management (60%).

Retail clients are served by Threadneedle through a series of distribution agreements with most of the major players in the country, such as Fineco, Deutsche Bank, Finanza & Futuro, Banca Generali, Gruppo UBI Banca and Monte dei Paschi Promozione Finanziaria.

New recovery

Aspesi (pictured) highlights that the Italian asset management industry is currently experiencing an accelerating phase after going through a difficult period between 2009 and 2012

“Financial institutions have absorbed their liquidity problems and are retuning their attention on services such as the asset management and private banking and on credit activities,” Aspesi says.

In particular, Italian investors are increasingly paying attention to financial planning for retirement, favouring foreign asset management companies, according to Aspesi.

“We opened our office in 2008 and we have certainly seen an interesting increase in the retail business over the last three years,” he says.

Asked whether he believes the average Italian investor is rather conservative and tends to favour fixed income against equities, Aspesi confirms that Italian investors are generally risk-adverse and prefer a moderate growth of capital with strong focus on capital preservation.

Tailored strategies

The increase of the retail business has pushed Threadneedle to promote multi-asset strategies as well as strategies focused on income.

“Our strategies are specifically tailored to each client segment. Retail clients demand strategies that can compensate the low yields currently offered by domestic government bonds and at the same time have a long-time horizon for growth.

“At the same time, strategies offering consistency of track record are more popular among clients linked to discretionary portfolio management. However, absolute returns strategies are requested by all types of clients in Italy,” Aspesi explains.

In a global market which is subject to volatility and especially in a risk-adverse market like the Italian one, strategies that seek positive returns with low correlations also prove to be particularly sought-after.

Among Threadneedle’s flagship strategies for Italy in the absolute return space, Aspesi singles out Credit Opportunities – a long short credit strategy; Global Opportunities -a global macro fixed income strategy; UK/American Absolute Alpha – long short equities strategy.

Focus on commodities

Over the past four years Threadneedle has focussed on commodities strategies, which allow its clients diversification and a low correlation to the main equity and bond global markets.

“We offer an actively managed strategy with 24 subcategories of the UBS Dow Jones Commodity index through Threadneedle (Lux) Enhanced Commodity Fund.

“We are able to choose how to position ourselves in relative terms on each commodity in order to take full advantage of the expiry structure. By doing so we can take advantage of commodities’ seasonality while keeping the basic characteristic of low correlation with the main financial global indeces,” Aspesi concludes.

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