James Williams', news editor, Hedgeweek

Wells Fargo launches six new UCITS funds, JP Morgan launches tax calculation reporting service for UK-distributed UCITS, Prosperity Capital Management launches Lux-domiciled fund and EFAMA reports fifth consecutive month of UCITS net inflows

JP Morgan Worldwide Securities Services (WSS) has launched its tax calculation reporting service for UCITS funds distributed into the UK the firm announced this week. The UK service currently calculates tax for over 320 funds and over 2000 share classes across the WSS client base. The service is delivered through the bank’s proprietary tax reporting system, Fund Tax Reporting (FTR). The system provides investor tax information in compliance with HM Revenue and Customs and HM Treasury regulations and guidelines. FTR is fully integrated with J.P. Morgan’s fund administration services, enabling fund promoters to distribute their products to countries that require tax reporting for end investors.  

Francis Jackson, WSS EMEA markets executive at JP Morgan said: “The launch of the UK tax service demonstrates our continued commitment to providing solutions for the more complicated aspects of fund distribution for our clients.The FTR platform covers a range of markets, which we are ready to grow further as tax requirements change and our clients seek new channels for fund sales.”
 
Prosperity Capital Management is launching a Lux-domiciled UCITS-compliant equity fund to invest in Russia. The London-based firm is the world’s largest Russia-focused asset manager, with approximately USD3billion of AUM according to its website. Rather than focus on the macroeconomics of the country, Prosperity looks at the microeconomics of the companies it invests in; something that founding partner Mattias Westman attributes to the success of the firm’s flagship fund – Russia Prosperity A – which, as Investment Europe reported this week, has been the best performing fund in its peer group. The fund has returned 98.46 per cent over the past three years.
 
Its nearest rival, Trigon Russia Top Picks Fund B Unit, has, by comparison, returned 72.9 per cent over the same period. Westman was quoted as saying: “We take an active shareholder approach – we hold large stakes in companies and try to be in close contact with the management team and to improve corporate governance.”      
 
In other news, there were further encouraging signs that investors are favouring the security of UCITS funds with EFAMA reporting in its latest fact sheet for May that UCITS experienced net inflows of EUR22billion for the fifth consecutive month; up slightly on the EUR18.5billion net inflows recorded for April. EFAMA attributed this to increased net inflows into money markets funds (EUR13billion compared to EUR10billion in April). This was their seventh consecutive month of positive inflows.
 
Equity UCITS recorded slightly higher outflows for May: EUR12billion compared to EUR7billion in April, whereas Bond UCITS saw month-on-month net inflows climb from EUR16billion to EUR20billion. Year-to-date, March still represents the high-water mark, having attracted EUR47billion in net new flows. Net assets for UCITS, as of end-May, stand at EUR5.84trillion: down slightly by 0.8 per cent.
 
Commenting on the figures, Bernard Delbecque, Director of Economics and Research at EFAMA, said: “Bond funds continued to benefit in May from investors’ search for yield in an environment of low and declining long-term interest rates. This is the continuation of a trend that has started in December 2011 and has remained sustained despite the re-emergence of strong tensions in the euro area sovereign debt markets.  These tensions and the ensuing flight to “safe-haven” and liquid assets also fed the demand for money market funds, to the detriment of investment into equity funds.”
 
Finally, Citywire Global this week reported that Wells Fargo, the US asset management firm, launched six UCITS-compliant funds on Monday 9 July to take their total cross-border range to 13. The new funds cover a range of different asset classes from US high yield to emerging market fixed income. Five of the six funds will aim to replicate existing investment strategies run by Wells Fargo managers in the US. The precious metals fund, managed by Michael Bradshaw and Oleg Makhorine, is only fund to be newly launched for both the US and European market. All six funds will initially be available in the UK, Germany, Luxembourg and Austria.
Including the precious metals fund, they include: Emerging Markets Equity II Fund, managed by Jerry Zhang and Derrick Irwin; Emerging Markets Income and Growth Fund, managed by Anthony Cragg and Alison Shamada; Global Opportunity Bond Fund, managed by Tony Norris, Peter Wilson, Alex Perrin, Michael Lee, Christopher Wightman; US Premier Growth Fund, managed by Thomas Ognar, Bruce Olson, Joseph Eberhardy; and finally US Short-Term High Yield Bond Fund, managed by Thomas Price, Kevin Maas, Michael Schueller. 'We believe further expansion into the European asset management marketplace, which has an approximate market size of USD2.9trillion and a growth rate markedly faster than that of North America, is the logical step for our growing international fund line-up,” said Andrew Owen, EVP at Wells Fargo Asset Management.

 

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