18 June 2024 – Page 2 – The Fund Society

Attention shifts to US, UK after European Union postpones FRTB

The European Union’s move to push back the start date for new bank capital rules on the trading book by one year to January 2026 has turned the spotlight on regulators in the US and the UK, where the requirements are still officially expected to take effect in July 2025.

The European Commission announced earlier today (June 18) that it had decided to delay implementation of the Fundamental Review of the Trading Book (FRTB), planned for January 2025, due to concerns that US regulators would fail

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US judge ends Exxon lawsuit against shareholder over climate activism

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Charted: Stock Buybacks by the Magnificent Seven

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June 18, 2024 Graphics/Design:

See this visualization first on the Voronoi app.

Charted: Stock Buybacks of the Magnificent Seven

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

By 2025, Goldman Sachs predicts that total U.S. stock buybacks will exceed $1 trillion. The bank sees this growth being driven by strong tech earnings growth and lower rates.

But what are buyback amounts like for the largest tech companies today?

This graphic looks at the total value of shares each Magnificent Seven company has repurchased in the last four quarters using data from their latest financial statements.

What is a Stock Buyback?

A stock buyback is when a company buys their own shares to reduce the number of available shares on the market. Companies may choose to buy back stock to return value to shareholders. Having fewer shares available improves earnings per share, and may drive up the stock price.

Buying back stocks can also come with risks, such as using up cash that would otherwise be put toward growing the business.

Stock Buybacks of Tech Titans

We gathered data from company financial statements to see how stock buyback amounts differed among the Magnificent Seven. Each total represents what companies reported from June 1, 2023 to June 1, 2024.

As we can see, the tech companies in the Magnificent Seven have been the ones buying back their stock over the past year.

CompanyTotal Stock BuybacksBuybacks as a % of Market Cap Apple$83B2.8% Alphabet (Google)$63B2.9% Meta$25B2.0% Microsoft$20B0.6% Nvidia$17B0.6% Amazon$0B0.0% Tesla$0B0.0%

Values rounded to the nearest billion. Company market caps are as of June 6, 2024.

Apple had by far the most share repurchases, raising its diluted earnings per share from $1.26 to $1.53. Going forward, Apple authorized an additional $110 billion for share repurchases, a U.S. record. The board says the repurchases are in light of their “confidence in Apple’s future and the value we see in our stock.”

On the flip side, both Amazon and Tesla did not issue stock buybacks in the last four quarters. Amazon’s CFO

Swiss regulator finds HSBC violated money laundering rules

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Investors are the most bullish since November 2021, a widely followed survey shows

Optimism is high on Wall Street at the midpoint of the year. Investors are the most bullish they have been since November 2021, according to the global fund manager survey, or FMS, released Tuesday from Bank of America Securities. Not only are portfolio managers not anticipating a recession, but they are also betting big on equities — especially the ” Magnificent Seven .” Cash levels are at a three-year low. All appears to be well on the markets front. Halfway through 2024, the S & P 500 and the Nasdaq Composite are each at records , on Monday closing once again at all-time highs. The broad market index is now a stone’s throw away from 5,500, a milestone that would have flabbergasted many strategists at the start of the year. .SPX YTD mountain S & P 500 in 2024. “June FMS sentiment is at the most bullish level since Nov’21,” wrote Bank of America investment strategist Michael Hartnett. “Our broadest measure of FMS sentiment, based on cash levels, equity allocation, and economic growth expectations inched higher to 6.03 from 5.99 last month.” Still, that optimism has some investors concerned a reversal is on the way. In November 2021 — the last time Wall Street was this bullish — the S & P 500 capped off a strong year, advancing more than 26%. However, the following year, in 2022, the broader index slumped more than 19%, driven by the Federal Reserve starting to raise interest rates, which sparked a correction in large-cap tech stocks. In fact, investors are concerned about the potential for greater volatility in the second half of 2024. The fund manager survey shows inflation fears have eased in investors’ minds, though it remains the top concern, while concerns over geopolitical risks and the U.S. presidential election have grown. Inflation is the No. 1 risk on investors’ minds, according to 32% of investors, down from 41% in May, followed by geopolitics (22%, up from 18%) and the U.S. presidential election (16%, up from 9%). For the moment, however, the market view appears sanguine, according to the survey. Roughly two-thirds, or 64%, of money managers are in the soft landing camp, where the economy slows but doesn’t tip into a recession, firmly matching the consensus view. Expectations of a hard landing are at new lows, down to just

CNBC

UK investment levels remain lowest in G7 for third year in a row

In its latest report published today (18 June), the Institute for Public Policy Research (IPPR) found the UK has remained underinvested over the past 32 years by £1.9trn in real terms compared to an alternative scenario in which the country would have maintained its median position. According to IPPR, the “foregone investment” could have bolstered productivity, advanced the green transition and brought about better, cheaper products and services. In contrast, other countries such as Slovenia, Latvia and Hungary managed to attract higher levels of private sector investment than the UK …

Ex-Mattioli Woods investment director joins Beckett Investment Management

In a LinkedIn post, Goodchild announced he joined the firm in May 2024 to manage the company’s Blenheim fund range alongside Samantha Owen, Tony Yousefian and Scott Buxton. Goodchild was at Mattioli Woods for over a decade, first joining as an investment manager in 2013, and later becoming a multi-asset fund manager and property securities manager. He was promoted to investment director in 2017, a position he held until January 2024, when the wealth manager decided to axe a “small number” of investment jobs to restructure its proposition. “I am looking forward to contributing to th…

Hargreaves Lansdown receives second bid from PE consortium for £5.4bn

This is an increase from the previous bid of £4.6bn, which the FTSE 100 company rejected last month as the platform said it undervalued the company. In a stock exchange notice today (18 June), Hargreaves Lansdown said the consortium increased its cash offer to 1,140p per share – up from the previous 985p – 30p of which will comprise a final dividend for the financial year 2024. HL shareholders will also be given the option to choose a “rollover equity alternative” in respect of some or all of their shares, the platform explained. Hargreaves Lansdown rejects bid from private equity …

Maven Capital to raise £40m across four VCTs

In a stock exchange notice today (18 June), Maven said four of its venture capital trusts will each raise up to £10m, which will also include an over-allotment facility of up to £5m. The VCTs are: the Maven Income and Growth VCT; Maven Income and Growth VCT 3; Maven Income and Growth VCT 4 and the Maven Income and Growth VCT 5. Shares will be issued in the 2024/25 and 2025/26 tax years. Maven said: “Having considered the current cash reserves of the companies and the amounts intended to be raised under the offers, the boards are confident that [Maven] will continue to be able to id…

CalPERS accelerates recruitment for private credit, PE, compliance

CalPERS, the $499.7bn California Public Employees’ Retirement System based in Sacramento, is looking to strengthen its private credit, private equity, and compliance and risk teams amid increased allocations and staffing challenges, according to a report by Pensions & Investments.

According to Wilshire Advisors, the board’s general investment consultant, CalPERS is currently understaffed in private credit. In a report presented at an investment committee meeting on 12 June, Wilshire highlighted the need for additional resources to sustain the success of the private credit portfolio. Five key positions on its team remained unfilled as of the end of 2023.

Last month, global head of private debt Jean Hsu announced her retirement effective July, after a nearly 25-year tenure. At the investment committee meeting, Marcie Frost, the US pension fund’s CEO, said that she hoped to name Hsu’s successor by the end of 2024, following a compensation review.

In private equity, CalPERS had 43 approved positions as of 1 May, with nine vacancies. The team had grown to 34 members from 35 last year. Wilshire’s report suggested that while current staffing levels suffice, more staff with expanded skills are needed to manage the increasingly complex portfolio.

At CalPERS’s risk and audit committee meeting, also held on 12 June, chief compliance officer Kevin L Fein said that the compliance and risk team had 29 positions, with nine still vacant. Fein added that these roles require specific experience in running or building similar programs, which have posed recruitment challenges.

Frost also noted that recruitment had been paused due to a recent division reorganisation and the upgrading of three management positions: “With the reorganisation complete, we can now proceed with recruitment.”

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