PHILADELPHIA, PA, January 15, 2016 – FIS Group, a manager of U.S. and global developed, emerging and frontier markets equity portfolio strategies, today issued its Q1 2016 Market Outlook, which suggests caution on U.S. equities, highlights opportunities in Japan, Europe, and India, and assesses possible sources of a tail risk event that could disrupt global equities.
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Duration: 47 minutes
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For the most part, 2015 was a forgettable year as growth anemia and disappointment, enduring characteristics of the post GFC period, continued. At 3.1%, global growth once again underperformed IMF forecasts from October 2014 with most of the disappointment emanating from the Emerging world that is most exposed to the slowdown in China and the end of the commodity super-cycle. With notable exceptions of commodity producers such as Brazil and South Africa, inflation also underperformed the 2014 forecast, underpinned primarily by weak demand and the precipitous decline in commodity prices.
PHILADELPHIA, PA, October 29, 2015 – FIS Group, a manager of U.S. and global developed, emerging and frontier market equity portfolio strategies, today issued its newest Market Insights Alert on the rapidly evolving economic and investment picture in China. Following the summer’s volatility and the ongoing Chinese economic deterioration and sliding profit data which has unnerved global investors, FIS Group looks at the risks and opportunities across asset classes: equities, currency, and fixed income.
PHILADELPHIA, PA, October 26, 2015 – FIS Group, a manager of U.S. and global developed, emerging and frontier market equity portfolio strategies, issued its Q4 2015 Market Outlook, which underlines caution towards global equity markets, but highlights a counter-trend relief rally in Brazil, Japan, Europe, China, and India.
Since mid-June this year, the wild ride in the Chinese A-share stock market along with deteriorating economic and profit data have unnerved many global investors. Against this backdrop, the Chinese government’s remarkably stable GDP growth reports of 7% for Q2 and 6.9% for Q3 have engendered increasing concern over the credibility of official figures. In an attempt to counter this slowdown, the government has rolled out a series of measures designed to stimulate demand. It has cut interest rates and reduced bank reserve requirements seven times this year, released funds for infrastructure investment, cut taxes on automobile sales and lowered the required down-payment for home mortgages. Historical precedent suggest that as China transitions to a “middle income” economy, the path of least resistance is downward. Based in part on observations from our recent visit to China, in this report, we posit that the key to understanding opportunities and risks in China is to:
PHILADELPHIA, PA, July 30, 2015 – FIS Group, a manager of U.S. and global developed, emerging and frontier markets equity portfolio strategies, today issued its newest Market Insights Alert which concludes that smaller managers deliver an additional 200bps of performance than larger managers in frontier market equities.
PHILADELPHIA, PA, July 27, 2015 – FIS Group, a manager of U.S. and global developed, emerging and frontier markets equity portfolio strategies, today issued its newest Market Insights Alert which looks at the transformation of the Chinese economy from export-led to being driven by domestic consumption. In the alert, “Transition to a Chinese-Style ‘New Normal’: Less is More” FIS Group also provides a detailed evaluation of the government’s progress implementing its reform agenda and concludes that while there is still more upside for Chinese A share equities, the next period will be characterized by extreme volatility.
In China, economic results of late have largely been disappointing, with traditional headline indicators highlighting sluggish growth and mounting deflation risk. Our view is that China is experiencing the economic transition to a so-called “New Normal”, and the prevailing growth slowdown, gauged by traditional industrial-focused indicators, is both necessary and essential for the ongoing economic transformation. In this paper, we will discuss the key priorities of the reform agenda, along with the Chinese government’s progress in implementing these reforms to date. In the last section, we will discuss the nascence of this round of the bull stock market and the recent massive correction, along with our short-term and long-term expectations. The bottom line is that we are positive on China’s economic reform and the government’s efforts in supporting capital market reform. We also believe that there will be more upside in Chinese A-shares, but that the next leg will be characterized by extreme volatility.
For 19 years FIS Group has successfully invested with entrepreneurial managers in global equities markets based on the considerable body of research suggesting that talented, high-active share, entrepreneurial managers are best positioned to outperform market benchmarks, net of fees. We believe that there are generally two reasons, both timeless and universal, why this inefficiency will continue. First, entrepreneurs with “skin in the game” are motivated to work harder, as entrepreneurs generally are in every other business across the time and space of human history. Second, in the modern markets of listed equities, size and scale are the enemies of alpha. While we have long known both of these simple (but nonetheless surprisingly ignored) truths to be self-evident in asset management, the significant opportunity of investing with entrepreneurial managers continues unabated. However in our firm’s 19 years of investing and decades more of experience of our principals, we have rarely (if ever) seen so clear a demonstration of both of these sources of alpha in one simple chart.
As Greece’s negotiations with its creditors devolved over the weekend fostering a global rout in risk assets on Monday, through my attendance at a global investor forum in Europe, I solicited the thoughts of institutional investors that live and work closer to the epicenter of the crisis. Not surprisingly, I found a wide divergence of risk appetites and aversion. However, my overwhelming impression is that, while many recognize a high risk of short term volatility, investors here are quite sanguine about the medium and long-term risks of a Greek default or even a so called “Grexit”. This document reflects my observations from the various presentations and conversations over the last few days. This commentary borrows heavily in particular from a presentation and paper by Marko Papic, from BCA Research.
PHILADELPHIA, PA, February 25, 2015 – FIS Group, an innovative leader in sourcing and building long-only manager of managers portfolios, together with Talson Capital Management, launch the Paragon Discovery Fund, a new hedge fund of funds strategy. The Fund is a joint venture between FIS Group and Talson Capital Management, the Darien, Connecticut-based, investment firm that manages and customizes portfolios of hedge fund investments. FIS Group is hosting a webcast today to signify the official launch of the Fund.
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Duration: 38 minutes
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Since late 2012, coinciding with the election of reformist Prime Minister Shinzo Abe, Japanese equity markets have surged nearly 70% (in local currency) in the past two years. Yet ‘Abenomics’, as the set of ambitious and bold fiscal and monetary policies pursued by the Abe Administration have been dubbed, have thus far failed to move the appetites of Japanese household savings. But there is reason to believe that Japan is on the precipice of reordering its domestic savings structure as soon as this year, with potentially significant implications for its equity markets.
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Duration: 42 minutes
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PHILADELPHIA, PA, December 11, 2014 – We are proud to announce that FIS Group’s Senior Vice President, General Counsel and Chief Compliance Officer, Shelley Simms, is among the Philadelphia Business Journal’s 2014 Corporate Counsel Award winners. Ms. Simms received her award today at a well-attended event held at the Union League of Philadelphia.
There is no shortage of prognostication on which assets/ strategies will be most/least impacted as the Fed and the BOE become less accommodative, and how they will be affected. How we answer both questions will be critical to performance over the next year or so. This paper evaluates the likely path and impact of Fed tightening with specific focus on the counterbalancing effects of asynchronous monetary policies globally and the likely impact of Fed tightening on EM risk assets.
Tina Byles Williams, CEO/CIO of FIS Group leads a wide-ranging discussion on FIS Group’s view of geopolitical, demographic and macroeconomic trends shaping risk and investable opportunities for institutional investors.
The panel moderator Sam Austin, III, SVP Director of Marketing and Client Service (FIS Group) and Ms. Byles Williams conducted this discussion as a part of FIS Group’s third annual Investment Symposium. The event was held on September 26, 2014 in Philadelphia.
FIS Group, Inc. is an 20-year old Philadelphia based institutional asset management firm that focuses on investing in long-only global and international equity strategies.
In the first half of 2014, the MSCI Frontier Markets Index substantially outperformed its actively managed peer group. The degree of this outperformance is deeply ahistorical for major equities classes and poses several implications for manager selection and evaluation. This paper examines the unique structure of this market rally in an effort to better understand the frontier markets environment, assess the complicated interplay between index structure and performance measurement, and discusses how allocators should evaluate and respond to these special circumstances.
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Duration: 53 minutes
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Liquid Holdings Group, Inc. LIQD a provider of a single platform that integrates order, execution, and risk management as well as reporting and shadow NAV in the cloud for the financial services community, today announced it will be among the first group of approved service providers included in the FIS Group Ecosystem. FIS Group, an innovative leader in sourcing and building emerging manager portfolios, created the Ecosystem to assist talented entrepreneurial portfolio managers in the formation and strengthening of new asset management firms.
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Duration: 42 minutes
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Duration: 40 minutes
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Facilitating opportunity
• Grow and diversify the pool of talented entrepreneurial managers to the benefit
of the asset management industry
• Support entrepreneurial efforts of talented investment managers
• Increase FIS Group’s first mover track record from 25% to 50%
of all funded firms
• Funded entirely by revenue generated from
FIS Group’s core business
• Services provided at no cost to the managers
During a rather sobering January, several clients wondered whether we were maintaining our generally bullish sentiment on G3 equity markets discussed in our mid-month market outlook presentation. Thus far (January 30, 2014), that conviction has admittedly been severely tested with the Dow down 4.39%; the S&P 500 down 2.39%; the Russell 2000 down 2.09%; MSCI EAFE down 3.57% and Emerging Markets down by a whopping 6.61%. First, let’s recall the highlights of our 2014 strategy report:
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Duration: 51 minutes
Description: This interactive webinar discussion will be led by FIS Group’s Founder and CIO, Tina Byles Williams. The discussion will highlight the actionable implications from our recently published white paper entitled, “Is Active Equity Management Alpha on Permanent or Temporary Disability?” Additionally, the paper’s models have been updated for this discussion, and Tina will reveal whether the updates had a significant effect on the original conclusions. Tina will close this webinar by providing participants with a peek at what FIS Group’s market and risk models are forecasting for 4th Quarter.
The topics to be discussed during the webinar include the following:
• Evidence pointing to the cyclical nature of periods when either active or passive management are in favor rather than a permanent “new normal” where active U.S. large-cap managers struggle to beat their benchmarks;
• Updates on several of the conclusions published in the original paper and their implication for active managers in a time of anticipated Fed tapering and slowing of corporate profit growth;
• The uncertainty of whether the ‘Risk On, Risk Off’ trading environment of the last five years will persist or give way to a renewed premium on stock picking;
• FIS Group’s forecast for the 4Q 2013 market environment and our view on investment opportunities for capital allocators and equity managers for the remainder of the year.
In 2011, FIS Group published a research paper which analyzed the drivers of entrepreneurial (or smaller) manager outperformance in US equity strategies from 2006-2010.1 While the study illustrated out-performance for five out of seven long-only equity investment styles offered through smaller managers/strategies (based on assets under management (AUM)) relative to their larger manager peers, it also detected the apparent beginnings of diminishing excess returns to fundamental active equity management strategies in the post-financial crash period. The most marked erosion of return has been observed among active Large Growth and Large Core products. By the end of 2012, the S&P 500 Index had risen over 100% since the market bottom in March 2009; but as a class, U.S. Large Cap active managers have been underperforming the market benchmark with a tenacity that is troubling. The paper analyzes several key questions including:
The three to five years ending December 31, 2010 have challenged many active long only (and long-short) equity managers’ ability to produce alpha, particularly if their investment decisions are based on the intrinsic fundamental characteristics of individual stocks. As a manager of Entrepreneurial managers1 , the majority of whom employ this type of investment approach, FIS Group conducted research on the major factors driving the impairment of excess return observed over the last five years. Additionally, we examined whether the performance advantage of Entrepreneurial managers over their Established manager peers (by investment style and market capitalization) observed in our and others’ prior research had altered as a result of the changing macroeconomic and market environments. Our conclusions are as follows:
The purpose of this study is to determine whether there are significant relationships between asset levels that traditionally determine a manager’s status as emerging and various measurements of risk-adjusted return. Those measurements include the Information Ratio, Sharpe Ratio and Sortino Ratio. Additionally, the study attempts to evaluate the impact of certain salient characteristics of the firm universe, such as portfolio concentration (as measured by average number of portfolio securities), degree of trading activity (as measured by portfolio turnover) and number of research analysts and portfolio managers.
