The Chinese mutual fund market is expected to undergo a manager shake-out as large state banks seek to dominate the business by exploiting their wide distribution networks.

Despite understanding of the Markets in Financial Instruments Directive having risen in 2005, over 50 per cent of investment firms still have not started budgeting for MiFID technology projects in 2006, a survey reveals.

Growing numbers of institutional investors in North America are using listed and highly liquid equity derivatives for hedging and investing purposes as an alternative to cash equities and to minimise equity trading costs, new research shows.

The overall pensions deficit among 80 major companies within the Fortune 100 in the US is projected to rise 65 per cent by year-end unless market conditions improve and/or company contributions are increased by a significant margin, new analysis reveal.

The choice of F&C Asset Management by Dutch insurance and pensions provider, Achmea to run €1.5bn of its assets in a responsible engagement overlay programme has been hailed as a further endorsement that implementing socially responsible investment (SRI) and corporate governance policy not only follows on from shareholder responsibility towards society, but can also enhance the durability of the investee companies.

WH Smith’s cash-flow matching strategy to meet benefit and administration costs and minimise unrewarded interest rate and inflation risks, has wide-ranging ramifications, says Tony Osborn-Barker.

The US Federal Reserve is now unconcerned about any detrimental effects of the recent hurricanes and is on a quest for a ‘neutral’ inflation rate, says Neil Mellor.

Pictet & Cie partner, Renaud de Planta, is not worried about building assets but instead focuses on solid performance. The small firm which prides itself on strength, stability and independence also capitalises on clients’ perceptions of it offering something different, writes Yuri Bender.

Renaud de Planta, the partner at Swiss private bank Pictet & Cie responsible for asset management activities, looks out from his vantage point on the banks of Lake Geneva and smiles every time he hears about a new consolidation or acquisition in the investment world.

“Whenever I see a competitor entering into a consolidation exercise, then I am happy that I am not there,” says Mr de Planta, with an almost palpable sigh of relief, following the recent wave of mergers at Julius Baer, Citigroup and Nextra.

Kevin Cronin, Putnam Investments’ CIO, is currently defensive from an interest rate and credit standpoint but his five-pronged Boston-based team is looking to develop new products and strategies for investors across the world, writes Paula Garrido.

After months of speculation, President Bush’s administration finally announced that Ben Bernanke would takeover as chairman of the US Federal Reserve once Alan Greenspan retires in January.

After a disappointing three years, the J Sainsbury pension scheme has introduced a system to get rid of poor performing managers, but is sticking to the same structure, writes Henry Smith.

The recent fears of rising inflation due to high/rising energy prices and perhaps fears of stagflation have resulted in negative returns in equity markets over the last few weeks. However, core inflation has increased only marginally and we expect to see a similar trend going forward.

After a sunny start, October became rather a dreary month — not just for weather-beaten New Englanders, but also for equity investors worldwide. Volatility measures began climbing, and solid September gains made it tempting to lock in profits, especially in areas like energy and utilities that have surged in 2005.

A resurgent oil price has led to a buoyant Latin American economy, but also added weight to unorthodox economic policies and damaging political rhetoric.

Fitch Ratings recently issued a report condemning the region’s failure to take significant advantage of its turn in good fortune.

With oil prices continuing to hover near historic highs there are growing concerns that Asia’s nascent manufacturing-led recovery may be derailed.

The main way Asia is affected by high oil prices is by the impact they have on global demand for Asia’s exports.

Predictions of inflation target policies in the wake of Ben Bernanke’s Federal Reserve appointment may be mis-guided, but increased volatility is expected as well as a rise in interest rates, which would affect performance of many different asset classes, says Paula Garrido.

Equity derivatives have made massive progress in traditionally untapped markets partly due to institutions having to reduce their equity allocations but not wanting to. Gerry O’Kane charts the rise of the asset class and provides an insight into the different types of products on offer.

Hedge funds can be considered the alcoholics of the derivatives world – dependent on them to function in any meaningful way.

They have also been known to collapse when they’ve either over-indulged their passion or misjudged the effects of the product.

Guillaume Picot puts forward the case for hybrid products, which offer diversification and de-correlation to reduce average volatility and optimise potential returns arising from market cycles.

Underlyings

Given the tradition for equities and bonds in the standard investor’s portfolio, it is of no surprise that they are usually taken as primary underlyings for hybrids, their returns hedged, boosted, diversified or otherwise acted upon by the other asset classes.

Strategic investment

A further reason that an investor might wish to consider a hybrid product would be to allow an investor to capture an economic view that involves the behaviour of more than one asset class, in order to enhance or protect a standard return.

Max Nardulli unveils the three pillar relationship that will lead to sub-advisory success – providing value, product delivery and strategic partnerships and how to best deliver this.

Credit investors are lapping up credit default swaps and the industry is showing a new maturity by addressing the problems that have plagued it in the past, says Christine Senior.

Credit default swaps (CDS) are powering ahead as the instrument of choice for a wide variety of credit investors.

Roger Aitken outlines how the latest B2C multi-dealer CDS platform has been developed and built in conjunction with industry leaders to combine efficient electronic STP with electronic execution.

Following the CDS explosion, Christoph Stübbe presents the case for CDS indices, which provide market standards to facilitate investment, trading and hedging, and help to improve market liquidity.

As the credit default swaps industry has expanded, so too has backlog of confirmations. Electronic trading platforms are now fundamental to the industry’s continued growth, writes Richard M. McVey.

FT Mandate talks to Jeff Bakalar, senior vice president and senior portfolio manager for the senior debt group at ING Investment Management on their investment process.

By diversifying currency portfolios and employing dynamic allocation techniques FX managers can create alpha, writes Daniel Szor.

Contrary to the current trend of consolidation, it seems that Europe’s top bourses are clawing for small-cap domination, which is leading to fragmentation. Roger Aitken reports.

Demand for automated STP systems is growing, but managers are looking for tailor-made solutions that are adaptable to different workflows, technology and architecture. Roger Aitken reports.

The technology exists to achieve STP if only the securities industry could agree on their roles and responsibilities – a problem that comes from lack of experience, says Gary Wright.

The Genesis Emerging Markets Investment Company fund follows a bottom-up stock picking style that looks for development through long-term holdings, writes Paula Garrido.

The long-term goal in any fund administration outsourcing venture is to build a strategic framework for the client based on the four pillars of capability, cultural fit, communication and commitment, says Rob Wright.

European hedge fund management used to be almost exclusively the preserve of Swiss and UK fund managers. However, in recent years, their dominance has become less pronounced.