Focus on the “Mind-blowing” Opportunities of the US Economy
The $60-B Scottish Fund managed owned by Aegon NV is ignoring talk of a rise in protectionism/populism under US President Donald Trump to focus on the “mind-blowing” opportunities of the world’s biggest economy, the US is a “huge market.”
The firm has virtually no assets under management in the US and is only just starting to offer investment products there. Donald Trump’s ascendancy provides a timely boost because it is likely to spur the economy.
“Most people view it as not good for global markets but good for US markets,” an official said in an interview at Kames’s head office in the Scottish capital. “We’ve got to see what measures he manages to pull off around tax and stimulus.”
Kames has been wholly owned by Dutch insurer Aegon since Y 1998 and is one of Scotland’s biggest money managers behind the soon-to-be-merged Aberdeen Asset Management Plc and Standard Life Plc.
Its plans for expansion in the US come as European asset managers suffer outflows and clients flock to better-performing passive funds offered by the likes of Vanguard Group Inc. and BlackRock Inc. At the same time, regulations such as Europe’s Mifid II rules are pushing up costs, encouraging firms to bulk up to stay competitive.
Kames wishes to grow its US business organically rather than through M&A (mergers and acquisitions). The firm’s relatively defensive investment approach, he said, makes it a “specialist in taking out market volatility” and means it will prosper if President Trump’s “America First” strategy sparks market turbulence.
The active manager concentrates on strategies that deliver regular income and mitigate volatility, though that means it can lose out on market rallies when investors want to “ride the wave,” the fund manager said.
Kames’s Diversified Monthly Income Fund has gained about 26% including reinvested income since it started in February 2014, compared with about 23% for the FTSE 100 in the same frame.
“We feel our strategies in the US will be well-suited because of the volatility that we’re likely to see over the next couple of years. “For us, the opportunity isn’t doing a bunch of new stuff, the opportunity is taking what we are really good at and finding new customers,” the firm said.
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