Faced with the risk of persistently high inflation, both the European Central Bank (ECB) and the Bank of England increased their main policy rates substantially in 2022. Policymakers have signalled that more increases are coming. To calibrate the scale and
Asset class returns in the long term We have certainly had plenty of surprises this year. As far as the economy is concerned, few of them have been positive so far. The war in Ukraine and the bottlenecks created by
Global retirement security challenges come home to roost in 2022. The warning signals are blaring and the gauges are flashing bright red in 2022 as key risk concerns for retirement security are coming to a head in today’s rapidly changing
Why it’s time to look at liquid alternatives in a new light: The current market environment has not been kind to traditional multi-asset portfolios, with bonds providing little offset in an equity market brought down by rising interest rates. Central
Quality investing is an approach well suited to small cap equity. As an asset class, small cap has become notably cheap this year. GMO recently launched a Small Cap Quality Strategy to take advantage of the alignment of attractive long-term
As our endowment and foundation survey illustrates, CIOs have done an excellent job of leveraging high quality managers to deliver stellar returns across a variety of asset classes. The question now is: What’s next? Both our objective findings and our
Montana capital partners (“mcp”) is pleased to present the results of its 10th Annual Investor Survey, which gathers the views of institutional investors, such as banks, asset managers, pension funds, insurance companies, and sovereign wealth funds (classified throughout the report
Companies invest billions of dollars in political influence through lobbying, campaign contributions, and other means. However, as with other intangible assets, political capital tends to be overlooked by the market. We show how investors can earn excess returns buying undervalued
Transitioning to a fossil fuel free world requires pragmatic decisions in the short term – and investing where our money can have the most impact.
Continued high yield selloffs throughout September and October have put increasing pressure on credit investors. Spreads have blown out to around to 650 bps, which gives an implied default rate 8.6% at the time of writing (Figure 1), approaching the
An object in motion, Isaac Newton postulated, continues in motion unless acted on by another force. That law of classical physics has its analog in the realm of financial markets. Crowd psychology and pricing dynamics create observable momentum in returns,
In January 2020, the world was hit with some jarring news: The first human-to-human transmission of COVID-19 was reported in Europe. According to news reports at the time, a German man acquired the infection from a colleague who had recently
Private markets have provided farmers, entrepreneurs, corporate tycoons and property developers with access to capital for centuries. The first recorded private loan was almost four thousand years ago in Mesopotamia. But the modern era of private equity – focused on
The fundamental purpose of finance is to contribute to society through enabling wealth creation and increasing societal well-being.1 The investment industry lies at the heart of this purpose, and it is dynamic and complex. With these characteristics come many opportunities
The use of artificial intelligence (AI) in investment management is rapidly increasing, posing both opportunities and challenges—including ethical challenges—for firms and professionals working to adopt these technologies in investment processes. This paper addresses the ethical considerations of using AI in
AFM Onderzoek naar de naleving van de SFDR en Taxonomieverordening door beheerders van Nederlandse beleggingsinstellingen en icbe’s
Sustainable infrastructure Infrastructure is at an inflection point. In response to the rising urgency of climate action, demographic shifts and pandemic-induced fiscal boosts, we are witnessing a momentous shift in the nature of infrastructure investment. Gone is the historical focus
Do you know what the US 10-year yield will be in six months’ time? No, seriously. Tell us. We’d love to know. Ever since the Global Financial Crisis, low growth, low inflation and easy monetary policy have allowed investors to
Trendzicht gaat in op belangrijke trends en risico’s in de financiële sector. Trendzicht biedt achtergrond, verdieping en samenhang bij relevante toezichtonderwerpen. Het vroegtijdig signaleren en begrijpen van veranderingen in de sector draagt bij aan een risicogestuurde, vooruitblikkende en preventieve toezichtaanpak.
Everything you need to know about crypto adoption around the globe: Our data shows that global adoption has leveled off in the last year after growing consistently since mid-2019. We look at this trend in the chart below, where we
Long-term holders are trading at a loss proportional to that of previous market cycles, suggesting that, finally, the highest-conviction participants are experiencing …
An Examination of Underwriting Metrics and Losses Through 60 Years of Economic Cycles. Commercial mortgage loans (CMLs) have become an important component of private investment portfolios over the past 30 years. Interest in commercial mortgages began growing as the sector
The ’Voices’ in this report cover many facets of financial services and beyond — from incumbents to challengers, BigTech to fintechs, policy makers to legal experts. Taken together, they create a valuable chorus of insight and expertise. Many of the
In 2012 Colorado and Washington State pioneered the legalization of adult-use cannabis at a time when federal cannabis legalization was still a farfetched concept. Fast forward — as of October 2022, a total of 37 states, the District of Columbia,
Mitigating and adapting to climate change is both a matter of survival and of economic rationality. Investing in mitigation and adaptation will reduce the economic costs of climate change. In that sense, it saves money. But compared to an alternate
Private markets have provided farmers, entrepreneurs, corporate tycoons and property developers with access to capital for centuries. The first recorded private loan was almost four thousand years ago in Mesopotamia. But the modern era of private equity – focused on
While investors have typically looked to commodities as an inflation hedge, a lack of income, coupled with volatile prices, has resulted in low risk-adjusted returns. Can direct energy investments help investors guard against rising prices? Clean energy: protecting investors against
Steel is a crucial input for multiple key sectors such as construction, renewable energy production and transport and is a fundamental element of a successful economic transition to net zero. The 2015 United Nations Framework Convention on Climate Change (UNFCCC)
There was no shortage of fear in the global bond markets in the third quarter. Central banks aggressively pushed short rates higher in response to the worst inflation of the last half …
Bitcoin’s on-chain activity suggests that holding behavior and network fundamentals are much stronger than its current price would suggest. Ethereum’s successful transition to proof-of-stake marks a monumental accomplishment for its ecosystem. An uncertain macro environment continues to weigh heavily on
The economy was mixed over the summer with GDP contracting for a second consecutive quarter while labor markets continued to exhibit strong growth. The risks that we outlined in our Spring 2022 Outlook have become more acute, in our view,
Managers of private market mandates seem generally unprepared to support clients looking to assess climate related risks and report in line with the requirements of the Task Force on Climate-related Financial Disclosures (TCFD). Data availability is particularly poor within private
Driving energy transition A global pandemic, multi-billion-dollar infrastructure investment plans, rising inflation, green stimulus, and a focus on decarbonisation have seen the demand for infrastructure investments rise exponentially. While most investors immediately look to unlisted offerings, we believe they should
Het nabestaandenpensioen (NP) verandert ingrijpend als de voorstellen in de Wet toekomst pensioenen (Wtp), zoals in maart 2022 bij het parlement ingediend, worden overgenomen. Dit paper beschrijft de effecten van de voorgestelde standaardisering, waaronder de conditie dat het nabestaandenpensioen bij
Silver lining: Following on the heels of August, September 2022 trended negatively for …
In this paper, we showcase how a portfolio manager can replicate fixed income indices using the Axioma Portfolio OptimizerTM and the latest version of the Axioma Credit Spread Factor Model (CSFM) (see [2] for more details and the latest on
The investable asset universe for global insurers has evolved and proliferated rapidly and continues to do so. From new asset classes and security types to numerous implementation vehicles, keeping track of it all could easily be a full-time job. Within
Managers’ beliefs about the merits of RI analysis in their investment process are wide-ranging. Tom Stoppard’s play, Rosencrantz and Guildenstern Are Dead, explores minor characters from a much larger story. Managers of hedge funds focused on responsible investment (RI) may
Riddles in the Dark Time, the answer to Gollum’s riddle, is to us a vaunted teacher. The first half of 2022 has been a turbulent one. In analysing ‘The Road Ahead’ from this point, our first port is the precedent
At the end of last year, we described a liquidity hole that we expected would grow and envelop most assets. Last year, the fundamental conditions for assets (particularly bonds) deteriorated quickly, but asset purchases by the Fed combined with huge
Using Bitcoin mining to combust leaking methane sources can eliminate 5.32% of all global emissions by 2045. This represents 23% of all global methane emissions: more than half the UNEP’s targeted reduction of methane of 45% by 2045. That means
How can concepts like diversification, risk targeting and risk management help build robust multi-strategy portfolios? And how can they be applied in practice? Constructing a robust portfolio is not easy. Even if you expect a relatively benign economic and market
Earlier this month, Cliff Asness at AQR wrote a really interesting piece about interest rates and how they may not be as related to the valuation or performance of growth or value stocks as we all think. This piece followed
Underpinned by waning inflation and strong job numbers in the US, equity markets started the month trending higher. Investors believed peak inflation would lead to a potential pivot in Federal Reserve (Fed) policy hawkishness. However, in his Jackson Hole speech,
China’s ascension over the past twenty years to the second largest economy in the world has changed the global landscape in a variety of ways. As China’s economic size and market capitalization grows, many investors have reasonably been pondering how
How to Prep Your Portfolio for a Different Kind of Recession Risk. During the first half of 2022, global equity markets tumbled around 20% from their January peak, with losses on typical stock/ bond portfolios almost as large, as bonds
At $639.0 billion in H1 2022, fund commitments continue to be robust, roughly on pace to match 2021 totals. While the steady growth in fundraising has flattened out since the advent of COVID-19, maintaining levels similar to the record 2019
Europe’s energy supply shock is creating a painful stagflation, and policy makers face a difficult set of choices. Looking forward, structurally higher energy prices will be a long-term competitiveness challenge for Europe.
What to Expect from the Biggest Protocol Change to the World’s Second-Largest Digital Asset One of the most anticipated events in the history of the digital asset industry is set to take place in September – The Ethereum Merge. This
As we have discussed in past research, true diversification benefits primarily result from the thoughtful combination of differentiated return streams (i.e., betas). By contrast, many investors assemble portfolios that reflect diversification-in-nameonly (DINO), by adding an ever-growing number of portfolio segments
