UK equity funds falter as Brexit deadlock and coronavirus fall-out fuel negative sentiment

The Bank of England has fuelled speculation over whether it will introduce negative interest rates in the UK by asking banks to detail how ready they are to deal with rates going negative.

The asset management industry has reached a critical period for nurturing gender diversity, industry experts have advised, as investment firms choose how they will adapt to new challenges caused by the coronavirus pandemic.

A mentoring programme has been launched to address the “striking absence” of senior Black professionals at all levels in investment management, by bringing together experienced Black managers with chief executives and chief investment officers from across the industry.

The investment industry needs to go beyond measuring impact, says The Thinking Ahead Institute, and instead focus on linking those metrics back to the process of creating value for stakeholders. 

The world’s five largest asset management companies, BlackRock, Vanguard, UBS, State Street, and Fidelity International, hold USD22.5 trillion in assets combined, which is higher than the GDP of the United States.

Companies that have promised publicly to run their business for the benefit of all stakeholders have handled the Covid-19 crisis and social and racial inequality worse than companies with no such commitment, a new report from The Test of Corporate Purpose finds.

Pension assets could support the UK economy in the fight against coronavirus, if they were invested in infrastructure such as social housing and environmental protection, according to Baroness Altmann, who spoke at a pensions conference this month.

Investment products such as social bonds and green energy stocks can act as a “Trojan Horse” to convince the finance industry about the benefits of using capital to make a positive impact, said experts at an impact investing event in September.

The search for alpha is expected to lead to a long-term shift to higher emerging markets allocations, both in equity and fixed income, according to a survey of institutional investors by Vontobel.

Several large European banks including BNP Paribas, Credit Suisse, ING, Natixis, Rabobank, and UBS made the headlines earlier this month when environmental groups alleged that they had financed some USD10 billion of oil trading from the Amazon rainforest over the past decade, despite its deleterious impact on the environment and the livelihoods of the indigenous peoples in the region.