Aurelia Butler

Stay informed with free updatesSimply sign up to the More

Asset managers have seen money leave their funds as high interest rates boost the appeal of safe-haven assets like cash. Some investors are also waiting for more certainty on the trajectory of interest rates before wading back into the market.But assets under management, which determines the fees managers charge, have still grown due to an increase in the value of investments. At the end of the quarter, T Rowe’s AUM was $1.54 trillion, 15% higher than last year, despite $8 billion of net outflows.”While outflows will persist in 2024, we continue to believe that there will be substantial improvement this year driven by higher sales and lower redemptions,” CEO Rob Sharps said.Investment advisory fees, typically a percentage of the AUM, rose nearly 12%, to $1.55 billion.Profit rose 36%, to $573.8 million for the three months ended March 31. Excluding one-time costs, the company earned $2.38 per share versus an expectation of $2.04 per share, according to LSEG data. Active managers like T Rowe buy and sell investments more frequently compared to passive fund managers.Over the last several years, such companies have been ceding market share to low-cost passive funds, which can earn decent returns just by investing in the benchmark indexes or other passive vehicles, eliminating the need for active stock-picking.But higher interest rates and market volatility could usher in a new era for active investing. Analysts believe investors will have to adopt a more hands-on strategy to add value to their portfolios and manage risk, in contrast to the set-and-forget approach that has defined investing over the past decade. More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.The yen tumbled to a fresh 34-year low on Friday after the Bank of Japan kept interest rates on hold and offered no indication it was in a hurry to arrest the currency’s slide with higher borrowing costs.The Japanese currency traded as low as ¥156.82 to the dollar after BoJ governor Kazuo Ueda said the weakness of the yen was so far having “no major impact” on Japanese inflationary pressures, fuelling speculation that the government might directly intervene in markets to support the currency.Earlier, BoJ policymakers had voted unanimously to keep benchmark interest rates within a range of about zero to 0.1 per cent.Investors had not anticipated a rate rise this week after the central bank last month ended its negative interest rate policy by raising borrowing costs for the first time since 2007, given Ueda had previously indicated that any further tightening would be gradual.But the BoJ’s position had been complicated by the yen’s depreciation and signals that the US Federal Reserve will have to keep interest rates high to tame inflation, leading to speculation in markets that the central bank might hint at further rate increases later in the year.“Currency rates are not a target of monetary policy to directly control,” said Ueda in a press conference following the BoJ’s rate announcement. “But currency volatility could be an important factor in impacting the economy and prices. If the impact on underlying inflation becomes too big to ignore, it may be a reason to adjust monetary policy.” The central bank’s apparent lack of concern over the weak yen has prompted speculation that Japan’s finance ministry — which can sell currency reserves to prop up the currency — might intervene directly in markets.Later in the day, the yen rose to ¥154.99 before falling sharply back to ¥156.55 within a space of 30 minutes. One Tokyo-based trader said the yen’s sudden rise in the late afternoon had initially appeared to be an intervention by the finance ministry, but it could have been the result of an error since the yen’s depreciation did not last long enough to scare speculative money out of bearish yen positions. Another trader said the sharp movement was sparked by rumours that officials had asked currency traders about market conditions in a so-called rate check. Such questioning occurred before authorities intervened directly to prop up the yen in September and October of 2022.The finance ministry declined to comment. “There is no intention by the BoJ to stop the yen’s decline, at least looking at its statement and its outlook report,” said Masamichi Adachi, economist at UBS. “The finance ministry will have to act [to stem the yen weakness].”He added: “It would have been more effective if both the government and the BoJ faced the same direction.” The Nikkei 225 stock index briefly rose more than 1 per cent after the announcement. It closed 0.8 per cent higher on Friday.The BoJ forecast that “core-core” inflation, a closely watched measure that strips out volatile food and energy prices, would remain near its 2 per cent target for the next three years. Ueda said the central bank would raise rates or adjust the degree of its easing measures if prices rose in line with its outlook.In a single-page statement, the BoJ also noted that it would continue to purchase Japanese government bonds to guard against sharp rises in borrowing costs but dropped a previous footnote on how much it would buy each month.The BoJ has long struggled to maintain price rises at sustainable levels to keep the economy out of deflation. While domestic consumption remains weak, the falling yen is expected to fuel inflation in the months ahead by increasing the cost of imported goods.Investors expect the BoJ to raise rates in July at the earliest if the bank confirms increases in service inflation and real wages, which would help boost consumption. Following the dovish tone on Friday, however, Adachi said he did not expect the next rate rise until October. “Markets remain on high alert for any indication of whether the yen’s current weakness will be interpreted as a lasting inflationary signal,” said Naomi Fink, global strategist at Nikko Asset Management. “The BoJ however is likelier to find any knock-on impact from yen weakness upon inflation as more concerning than short-term currency moves.” More

LONDON (Reuters) – Global stocks were teetering on Friday towards their worst month since September, although futures markets predicted strong tech earnings would spark a Wall Street relief rally later in the day and help traders recoup some losses. Japan’s yen was volatile, hitting a fresh 34-year low after the Bank of Japan (BOJ) kept monetary policy loose at its latest policy meeting, spiking briefly as traders speculated that Japanese authorities may intervene, then sliding again. MSCI’s broad index of global stocks was down 3.4% for the month, although 0.2% higher on the day. World equities have faltered this month as hopes of rapid Federal Reserve rate cuts this year drained from the market following a series of hotter than expected U.S. inflation readings. Still, contracts that wager on Wall Street’s tech-heavy Nasdaq 100 were almost 1% higher on Friday, while those on the benchmark S&P 500 index rose 0.8%, after earnings from Alphabet (NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT) beat estimates.These moves came ahead of a fresh reading on Friday of U.S. core personal consumption expenditures, the Fed’s preferred inflation measure, which could further douse rate cut hopes and strengthen the dollar. In a wild session for the yen on Friday, the Japanese currency weakened as far as 156.82 per dollar, spiked suddenly to 154.97, then retreated again. The Bank of Japan kept interest rates around zero at its policy meeting that concluded Friday, despite forecasting inflation of around 2% for three years.Markets are on high alert for Tokyo authorities to intervene to prop up the currency, in what would be an unconventional and politically tough decision. BOJ Governor Kazuo Ueda said on Friday that exchange-rate volatility could significantly impact the economy. But this came after U.S. Treasury Secretary Janet Yellen told Reuters on Thursday that currency intervention was acceptable only in “rare” circumstances and that market forces should determine exchange rates.The yen was trading about 40% below its fair value, Pictet Asset Management chief strategist Luca Paolini said. “We underestimate the potential for something to go very wrong when you have a currency that is totally misaligned with (economic) fundamentals,” he said. “The sooner they hike rates, the better.” FED HOPES FADE Ahead of the U.S. inflation data the two-year Treasury yield, which reflects short term interest rate expectations, hovered near 5% on Friday. The benchmark 10-year yield was down 2 basis points to 4.706%, still sharply up from its level of below 4.1% in early March. Bond yields rise as prices fall. Traders now expect the Fed to lower its main funds rate, currently at a 23-year high of 5.25% to 5.5%, by just 36 basis points this year, with some fearing a further hike. With the U.S. housing market, labour market and consumer spending strong, inflation could spike again instead of falling in a straight line towards the Fed’s average 2% target, said Frederic Leroux, head of cross asset at fund manager Carmignac. The central bank is “not willing to trigger a deep recession, so we will have more inflation but potentially also more growth,” he said. In Europe on Friday, the benchmark Stoxx 600 share index rose 0.7%, still heading for a 1.4% monthly drop. European government debt investors have also had a disappointing month, despite euro zone inflation having dropped close to the European Central Bank’s 2% target.Euro zone bond yields touched five month highs on Thursday before steadying on Friday. The two-year German bond yield, slipped 1 basis point to just above 3%. The ten-year bund yield fell 3 basis points to 2.62% The ECB is expected to cut its deposit rate from a record 4% in June but analysts have queried how far it can diverge from U.S. monetary policy without weakening the euro significantly. The euro last traded at $1.072, 0.6% lower against the dollar this monthElsewhere, Asian stocks outside Japan added 0.8%, Tokyo’s Topix rose 0.9%, and Brent crude oil gained 0.6% to $89.53 a barrel. More

(Reuters) – A handful of mega-rich donors have emerged as key backers of Republican presidential candidate Donald Trump, collectively donating more than $50 million to support his candidacy against Democratic incumbent Joe Biden. With Trump’s small dollar donations slowing and some major Republican benefactors snubbing him, a clutch of prominent wealthy Americans have become crucial to bankrolling his candidacy. Here are five of the top donors, including one couple, that are backing Trump, based on a Reuters analysis of campaign finance disclosures to the Federal Election Commission: TIMOTHY MELLONTimothy Mellon, an 81-year-old heir of the Pittsburgh-based Mellon banking family, has given the pro-Trump super PAC known as MAGA Inc at least $16.5 million since 2022. He also gave at least $20 million to a pro-Trump super PAC called America First Action Inc during the 2020 presidential election. The hyper-private Mellon, who lives in Wyoming and is rarely photographed, is an amateur pilot who has invested in and led transport-related companies. Forbes estimates that the Mellon family is worth some $14.1 billion. Mellon is also the biggest donor supporting independent presidential candidate Robert F. Kennedy Jr., giving the pro-Kennedy super PAC American Values at least $20 million. Polls have shown Kennedy’s presence on the ticket could siphon votes from both Biden and Trump in their Nov. 5 match-up.Mellon has also donated to a raft of anti-immigration measures, and was a major contributor to a Texas-led fund to build a wall on the southern border with Mexico. Efforts by Reuters to contact Mellon through a publisher and a family foundation he was previously affiliated with were unsuccessful.ISAAC AND LAURA PERLMUTTERIsaac “Ike” Perlmutter, the former chairman of Marvel Entertainment, and his wife Laura Perlmutter have donated more than $10 million in this election cycle to a new pro-Trump fundraising super PAC called Right for America. Perlmutter has been a regular at Trump’s Mar-a-Lago residence in Florida and has been a longtime contributor to Trump’s campaigns. The Perlmutters gave at least $21 million to America First Action Inc in 2020.Last year, Walt Disney (NYSE:DIS) Co laid off Perlmutter as chairman of Marvel Entertainment, a small division within the company responsible for comic book publishing and some consumer products, as part of a cost-cutting campaign.Israeli-born Perlmutter, who Forbes says is 81 years old and worth around $4.4 billion, is known for being very private and is rarely photographed. His wife Laura, who also has a low profile, is a director at the Laura and Isaac Perlmutter Foundation, which says it focuses on health care and community initiatives. Reached by phone, Isaac Perlmutter’s lawyer John Turitzin said he did not want to speak to the media and hung up. LINDA MCMAHON Former professional wrestling entrepreneur, Linda McMahon, a longtime Trump donor who headed the Small Business Administration during the Trump administration, has donated more than $10 million to MAGA Inc in this cycle. McMahon gave more than $15 million in 2019 and 2020 to America First Action Inc, which she chaired ahead of the 2020 election.Until 2009, she ran World Wrestling (NYSE:TKO) Entertainment with her husband Vince McMahon, who bought the company from his father in the 1980s. Earlier this year, Vince McMahon resigned from wrestling giant TKO Group and the subsidiary WWE that he founded following a lawsuit accusing him of sexual assault and trafficking, which he denies. Forbes puts his net worth at around $2.7 billion. Linda McMahon, 75, ran unsuccessfully for a U.S. Senate seat in Connecticut twice. She is now the chair of the pro-Trump America First Policy Institute think tank in Washington D.C., which says it advocates for “free enterprise, national greatness, American military superiority … and the primacy of American workers, families, and communities.”AFPI did not respond to requests for comment from McMahon. ROBERT BIGELOWNevada budget hotel tycoon Robert Bigelow, 79, has given MAGA Inc over $9 million in this cycle. Bigelow told Reuters in January he had pledged to give the pro-Trump group a total of $20 million. Bigelow, who has a fascination with UFOs and space and funds various research efforts, has dined with Trump at Mar-a-Lago. Bigelow says he donated $1 million for Trump’s legal funds.In 2011, Forbes estimated Bigelow’s real estate holdings were worth around $700 million. PATRICIA DUGGAN Patricia Duggan, a major donor to the Church of Scientology, has given MAGA Inc more than $5 million this election cycle.Her ex-husband Robert Duggan is an investor and entrepreneur whose fortunes were boosted by the 2015 sale of cancer drug maker Pharmacyclics to AbbVie (NYSE:ABBV) for $21 billion. Forbes puts his net worth at about $3.3 billion. The Duggans, who met at the University of California at Santa Barbara and have eight children, divorced in 2017. They each gave America First Action Inc at least $4 million in 2020.Patricia Duggan’s personal website describes her as an artist passionate about glass art. She lives in Clearwater, Florida. Duggan did not respond to a request for information.  More