End and Beginning of an Earnings Cycle In brief: Decelerating inflation should provide a tailwind for high quality bonds but will likely bring the earnings cycle to an end for most companies. Companies with uncompetitive products or services facing elevated
To be successful, companies need to have people at the helm who are wellequipped to create resilient long-term growth. By voting and engaging directly with companies, we encourage management to control risks while seeking to benefit from emerging opportunities. We
In this report, which shares LGIM research on sustainability themes ahead of the climate summit in Sharm El-Sheikh, we argue that these objectives are not mutually exclusive; rather, they are inextricably linked. The document, penned by our Investments and Investment
The first six months of 2022 were particularly challenging for investors, as central banks became increasingly determined to rein in inflation – sparking weakness across almost all asset classes. We believe the next six months will also prove tricky, while
In this CIO spring update, teams from across LGIM share some of our analysis. These include the following key points: To avert the threat of stagflation, central bankers face their biggest dilemma since the 1970s. The US dollar is likely
The benefits of cashflow driven investment (CDI) are slightly controversial. Some believe it is a powerful risk management strategy for DB schemes nearing their endgames, whereas others are more sceptical given that it may compromise …
After another extraordinary year for investors, expectations are mounting that 2022 will form a turning point for the global economy and markets: in the face of rising inflation, central bankers aim to withdraw the stimulus that has provided an extremely
We are marginally more cautious as the Chinese economy becomes unsettled and supply-chain issues persist, but retain our belief that we are in the middle of the cycle, not approaching the end. After cruising along for months, the S&P 500
We are marginally more cautious as the Chinese economy becomes unsettled and supply-chain issues persist, but retain our belief that we are in the middle of the cycle, not approaching the end. After cruising along for months, the S&P 500
We now know that the world risks a grim future even if the global economy is decarbonised rapidly, according to a landmark report on climate change. The assessment makes clear: inaction is simply not an option for policymakers, companies and
Decarbonisation was one of the biggest themes of 2019 and 2020. Rightly so, we would argue. With the 2021 United Nations Climate Change Conference (COP26) taking place in November, this could be another important year for decarbonisation. Global temperatures are
We continue to favour staying long equities, and are prepared to increase our exposure in a dip, as investors bask in the sunshine of a global economy in mid-cycle. From a strategic perspective, the current market environment is increasingly challenging
To be successful, companies need to have people at the helm who are well-equipped to create resilient long-term growth. By voting and engaging directly with companies, we encourage management to control risks while seeking to benefit from emerging opportunities. We
2020 was a difficult year, for society, businesses and markets alike. The pandemic presented new and unforeseen challenges, creating periods of extreme uncertainty, and correspondingly high volatility in financial markets. As a result, governments and central banks around the world
With record amounts of stimulus still gushing through global markets, and the economic cycle at a relatively early stage, we remain positive on risk assets. Risk assets have notched up strong and even spectacular returns from their pandemic lows, prompting
After contending with the terrible human and economic toll of a pandemic, as well as market volatility reminiscent of the financial crisis, investors could well be forgiven for wondering anxiously: what could 2021 possibly have in store for us?
Introduction: Binary outcomes In our recent CIO Autumn Outlook, we highlighted the binary nature of the key event risks heading into the final quarter, all of which still have the scope to move markets significantly. These are the US presidential
DB (defined benefit) pension schemes are progressing along their journey to end-game, with many becoming increasingly cashflow negative and struggling to balance competing requirements for returns and cashflow. In this environment we believe that the cashflows, diversification and return-generating nature
CIO autumn update The more things stay the same… Change may be the only constant over the coming months. We believe investors will need to be dynamic in striking a balance between managing risks and seizing opportunities. Since we published
Change may be the only constant over the coming months. We believe investors will need to be dynamic in striking a balance between managing risks and seizing opportunities. Since we published our last outlook, many of the dynamics we observed
As fixed income professionals, one question we find ourselves increasingly answering is: How do you make the connection between environmental, social and governance (ESG) considerations and credit? For most people, there is an intuitive connection to be made when it
We believe there is a striking disconnect between market pricing and the real economy, especially with regard to expected company earnings. In the past three months, risk assets have pulled back from the brink of collapse, as policy makers hosed
As activity in public credit markets has oscillated across our screens, private credit markets have been largely overlooked. In our view, this is an oversight for investors. We believe the attributes associated with private debt become more valuable during periods
Our research into the ESG views of Boomer, Gen X and Millennial savers f someone had told me, late in 2018, that over the next two years we would see forest fires devastate Australian wildlife; witness sightings in the US
Q2 Outlook In our last quarterly outlook, we flagged our cautious posture on risk assets, taken due to a number of smouldering risks on the horizon. One risk we did not highlight, however, was that a pandemic would break out,
As defined benefit (DB) pension schemes mature and become better funded, they are increasingly considering various different end-game approaches. In previous papers, we have explored new developments in ways of thinking about pension scheme risk in end-game and on the
The long bull market in equities might seem to some like evidence against the benefits of diversification, but we believe now is the time for schemes to consider how diversification, and particularly the inclusion of alternative strategies, could help the
Q1 Outlook Since our last quarterly note, where we focused on the threats to the world economy, political and international events have meant that the global economic backdrop has become somewhat more positive and market positioning is less stretched than
In this outlook, teams from across LGIM examine the opportunities and risks with which investors are presented in this context. Here are some of our conclusions: Global growth may ultimately disappoint investors even as recession fears abate The many ways
We turn cautious on global equities on a tactical and medium-term view, as US stocks flirt with record highs even though risks to the world economy are mounting. In our last quarterly note, we pointed out that investors faced a
Ros Altmann, former UK pensions minister, has spoken of the need to “make pensions digital”. The Department of Work and Pensions’ Pensions Dashboard aims to do just that, by collecting and curating information about members’ multiple defined benefit (DB) and
When contemplating what the final months of 2019 might have in store, we are probably similar to many other investors in feeling somewhat apprehensive, given the challenges we face: trade tensions, slowing growth, policy uncertainty and, of course, Brexit.
A once-fringe economic theory has been embraced by liberal politicians at the same time as traditional budget hawks have been in retreat. Its rise has potentially radical implications for infation and investors Decades into an era of declining infation and
When contemplating what the final months of 2019 might have in store, we are probably similar to many other investors in feeling somewhat apprehensive, given the challenges we face: trade tensions, slowing growth, policy uncertainty and, of course, Brexit. Looking
Can environmental, social and governance concerns (ESG) ft within a factor-based portfolio? In this article, we tackle two issues: the inconsistency in methodologies for ESG scoring, and ways to integrate ESG considerations into factor portfolios. As growing numbers of investors
Retirement anxiety, rate depression, populism… and what to do about it With global interest rates remaining near all-time lows, and $15 trillion of debt providing investors a negative yield, bond-market bears are in danger of becoming extinct. But could today’s
Following the recent rally, we have dialled down our tactical equity exposure to neutral from positive, in light of market expectations for central bank action and the still-simmering trade war
How can pension trustees prepare for new requirements on the fnancial materiality of environmental, social and governance (ESG) factors? ‘ESG considerations’ mean many things to many people – not least regulators, who are now viewing them as core to the
Three months ago, following a brutal period for equities, we noted that investors were likely to be rewarded by “being fearful when others are greedy – and greedy when others are fearful”. Spectacular returns over the first quarter demonstrated the
The second annual results of our Climate Impact Pledge showcase the corporate leaders and laggards on climate action; we are encouraged by improvements across sectors but will continue to press companies to meet this era-defining challenge.
Fundamentals A future in which there is less work to be done will radically reshape the economy, with important consequences for investors – including some contrarian implications for the consumer and real-estate sectors.
How can expected returns be enhanced without increasing risks? We discuss cutting-edge visualisation tools and a first-principles approach to secure the predictable benefits of a diversified portfolio.
Four practical steps DB pension schemes can take to help them navigate volatile markets. 2018 will probably be remembered as the year volatility returned to the market. As highlighted in our CIO’s investment outlook, (Brace for a credit squeeze) there
How can pension trustees prepare for new requirements on the fnancial materiality of environmental, social and governance (ESG) factors? ‘ESG considerations’ mean many things to many people – not least regulators, who are now viewing them as core to the
How can pension trustees prepare for new requirements on the fnancial materiality of environmental, social and governance (ESG) factors? ‘ESG considerations’ mean many things to many people – not least regulators, who are now viewing them as core to the
ESG For the Kempen Dividend team, Environmental, Social and Governance (ESG) criteria are an integral part of the investment process. Their unique methodology makes sure that they take all aspects of a company’s ESG risks and opportunities into account when
Can environmental, social and governance concerns (ESG) ft within a factor-based portfolio? In this article, we tackle two issues: the inconsistency in methodologies for ESG scoring, and ways to integrate ESG considerations into factor portfolios.
CIO Investment Outlook Unfortunately for markets, our bearish outlook for 2018 came to pass. For 2019, the key question is how tightening fnancial conditions will impact heavily indebted borrowers – and whether this raises the risk of recession.
The economic expansion of the last decade has been a consistent tailwind for financial assets. We see next year as the start of the twilight zone between expansion and an eventual downturn that will likely mark the end of the
DB Solutions Will it become more common for DB schemes to run off without sponsor support? We look at how to assess the viability and trade-offs of operating under such arrangements and how investment strategy could be set.
