Dawit Johannes

Active management was never meant to be easy. We can’t all outperform and behavioural traps lie around every corner. Tactical asset allocation, in particular, is often set up to fail, with a small number of big decisions, made infrequently by a committee of senior people with limited individual accountability. I wrote a short piece on how - and how not - to design a top down investment process. Credits to C. Northcote Parkinson and Daniel Kahneman. Who votes we break for lunch? https://lnkd.in/eRMRq-PU

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“An IPO could value Shawbrook at as much as 2 billion pounds ($2.69 billion” “The bank's private equity owners had previously explored a number of deals with rival lenders over the past two years, including Metro Bank and Co-op Bank” Good news for London, but the truth is that many UK companies are still choosing to list on foreign exchanges to achieve higher valuations. https://lnkd.in/epZFrS_H #Shawbrook #exitstrategy #IPO #exitlaunchpad

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𝐒𝐮𝐫𝐯𝐢𝐯𝐚𝐥 𝐨𝐟 𝐭𝐡𝐞 𝐬𝐢𝐦𝐩𝐥𝐞𝐬𝐭 Over the past 14 years we've had: 🇬🇧 Brexit 😷 COVID-19 📉 The 2022 rate shock …and plenty more global political, economic and market storms. Across that period (Nov-11 to Aug-25), UK investors had access to 𝟏,𝟏𝟎𝟑 𝐦𝐮𝐥𝐭𝐢-𝐚𝐬𝐬𝐞𝐭 𝐟𝐮𝐧𝐝𝐬 – a sensible peer group of professional managers able to choose any path: ➡️ Set-and-forget allocation ➡️ Tactical market timing ➡️ Stock picking ➡️ Systematic risk factor tilts …and more. Over half didn’t survive (𝟓𝟖𝟕 𝐟𝐮𝐧𝐝𝐬, 𝟓𝟑%) – closed, merged or liquidated. The 516 that did are shown as the dots below in volatility/return space. The orange line? That’s just 𝐠𝐥𝐨𝐛𝐚𝐥 𝐞𝐪𝐮𝐢𝐭𝐢𝐞𝐬 𝐚𝐧𝐝 𝐠𝐥𝐨𝐛𝐚𝐥 𝐛𝐨𝐧𝐝𝐬 (𝐆𝐁𝐏-𝐡𝐞𝐝𝐠𝐞𝐝), 𝐫𝐞𝐛𝐚𝐥𝐚𝐧𝐜𝐞𝐝 𝐚𝐧𝐧𝐮𝐚𝐥𝐥𝐲, 𝐥𝐨𝐰 𝐜𝐨𝐬𝐭, 𝐢𝐧𝐝𝐞𝐱-𝐛𝐚𝐬𝐞𝐝. The result: despite the noise, this simple portfolio held up far better than almost all professional alternatives across the risk spectrum. The narratives are familiar: “Dynamically reacting to market conditions” “Positioning for obvious events like rate rises” “Selecting the right manager for the cycle” The beauty of a market-led approach? These narratives are already priced in. You benefit from others reacting to the daily market noise as global stocks and bonds are repriced. ✅ Thoughtful long-term asset allocation ✅ Broad diversification ✅ Low cost ✅ And then… do nothing. That continues to make the most sense for the vast majority of investors. #InvestmentIntel

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If “uncertainty” was the word of the month for financial markets in April, then “divergence” would probably come a close second. I don’t think I’ve ever seen such a stark divergence between Asian and US government bonds over such a short time horizon, and during such an uncertain time. It’s extremely rare for bonds from India to Indonesia to rally this much while Treasuries sell off. While most market participants have been quick to attribute this divergence to tariff policy and a possible shift by investors away from US assets, there is another, more fundamental reason that also helps explain the price action: the Japanification of Asia ex-Japan. Simply put, there is too much manufacturing capacity in Asia to be absorbed by the Asian domestic market, barring a new source of demand (large-scale fiscal stimulus could be one such source, but it does not seem imminent). Japan went through a similar event in the late 1980s, when Japanese goods became more expensive for US consumers – in that case because the Japanese Yen appreciated massively following the Plaza Accord. Over the ensuing 30 years, Japanese bond yields declined as deflation set in. Today, a different policy (in this case, tariff policy) is expected to be inflationary for the US but deflationary for Asia, commensurate with the divergence in the respective bond markets. Indeed, we have seen a number of central banks in Asia lowering their inflation forecasts for the year, even as US inflation forecasts have risen. One thing we can be more certain of, even during this uncertain time – if the desynchronization of Asian economies relative to the US continues, it is likely to bring bond market divergence with it. At a time when US stocks and US bonds are seemingly trading in lockstep, an uncorrelated asset like Asian bonds could be highly complementary for global multi-asset portfolios. #FixedIncome  

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The #1 Growth Driver for MFDs (And It’s Not What Most People Think) Last week, I asked: Which skill impacts an MFD’s AUM growth the most? Most of you voted for Communication Skills or Client Relationship Management. Makes sense, right? But here’s the surprising truth from working with hundreds of MFDs: 👉 The real growth multiplier is Visibility — consistently showing up where your prospects are. Why? Because people don’t buy from the best advisor… they buy from the advisor they see and trust. If no one knows what you do, your knowledge and service can’t create impact. How to strengthen your visibility starting today: >Share valuable content 2–3 times a week (client stories, insights, common mistakes) >Host short webinars to showcase expertise >Use LinkedIn, WhatsApp status, and email to stay top of mind Growth isn’t about doing more work; it’s about being more visible to the right audience. What’s your next step to increase visibility this month? Comment below!

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