Forum Fodder

PortfolioConstruction Forum


Our regular Forum Fodder email alerts Members to what's new on this site and with our live professional development progams. A sample of the Forum Fodder email is below.  Become a Member (with our compliments) to receive Forum Fodder and access our multi-media learning centre, (this site) featuring:
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 Friday 13 March 2015

The independent professional development service for investment portfolio construction practitioners


I guess all industries love TLAs (three letter abbreviations, in case I've lost you). Here's a new one - EQMF (ok, it's a four letter abbreviation, maybe we've exhausted all possible TLAs). This week's Fodder kicks off with a review by Dom McCormick of the TLA-ridden ASX-listed and quoted managed fund universe, prompted by the recent listing of the Magellan Global Fund (an EQMF). Dom notes that while there's now enough of a listed fund universe to build a properly diversified portfolio, that increased choice brings a lot of complexity for investors, advisers, researchers and platforms.

Moving from the local to the global, in a short blog, Harvard University prof and ex chief economist of the IMF, Ken Rogoff argues that the idea that hyper-low interest rates are merely symptoms of deficient demand or financial repression is dangerously simplistic.

On CPD Campus, Angela reviews a seminal paper by Don Ezra looking at how retirees can manage investment and longevity risk in a defined contribution world. Read Don's paper and sit the CE quiz to earn 0.75 CE points.

Rounding out this week's Fodder, we feature two high conviction market insights. Firstly, Ron Temple's excellent 20-minute presentation from Markets Summit. Ron argues that despite all its challenges, the US stands out in a low growth world. This was voted one of the top 3 presentations by Markets Summit delegates - "attend" it online and you'll see why. And then, SSgA's Kevin Anderson argues his high conviction idea that this year, the macro will not equal the market (i.e. return).

All the best for some great weekend learning! - Graham

P.S.  Calling all analysts, consultants and portfolio managers from financial planning firms, family offices, retail fund research houses, platforms, and manage-the-manager fund managers!  Apply for the BlackRock/PortfolioConstruction Forum CIMA Scholarship. CIMA has become the mark of an investment research professional.


ASX fund choices
The recent listing of the Magellan Global Fund has essentially introduced a new structure into the ASX-listed and quoted fund universe. With more choice comes more complexity.
Dominic McCormick, Select Asset Management

The stock-bond disconnect
How should one understand the disconnect between the new highs reached by global equity indices and the new depths plumbed by real interest rates worldwide?
Kenneth Rogoff, Harvard University

How should retirees manage risk in a DC world?
This paper offers a surprising amount of information and interesting ways of framing investment issues in retirement, along with analysis of longevity vs investment risk.
Angela Ashton, PortfolioConstruction Forum
| 0.75 CE | 

The US stands out in a low growth world
Challenges of de-leveraging, widening inequality and structural reforms limit growth in developed markets. The US is the most advanced in addressing these.
Ronald Temple, Lazard Asset Management
* Rated in the top 3 presentations by Markets Summit 2015

Macro will not be the market
Macroeconomic outlooks may differ from where you can receive market returns. The outlook can be summarised in three words - improvement, divergence, decoupling.
Kevin Anderson, State Street Global Advisors

Member comments
Not a bear

I saw a comment to the effect that bears were more numerous at this year's Markets Summit... I am in Europe now talking to institutional investors and the mood definitely leans toward a 'melt-up' in asset prices and, in my judgment, higher volatility as well.
Robert Gay, Fenwick Advisers


The oil bubble implosion
Since the 1980s, oil prices have fallen 50% or more over six months just twice - including last year. Was oil a bubble which has now imploded? Or will it bounce back?
Louis-Vincent Gave, GaveKal

Cyclical and structural implications of the oil price fall
The collapse in oil prices in the second half of 2014 is very large in a historical context. This paper explores the implications for portfolio construction.
Dr Jonathan Mirrlees-Black
White Paper

Currency management - to hedge or not to hedge?
Currency risk is a significant issue for Australian investors. This paper summarises the research on optimal hedge ratios for international equities exposures.
Angela Ashton, PortfolioConstruction Forum
| 0.50 CE | 

Break-up of the eurozone is inevitable
A currency union absent of full political union is inherently unstable. After the first country exits the eurozone, markets will attack the next most vulnerable.
Bruce Campbell, Pyrford International
* Winner of the Delegate's Pick Award at Markets Summit 2015

The world is a confusing place
With 20 speakers at Markets Summit 2015, there were inevitably conflicting views. This year, the bears outnumbered the bulls and the mood was noticeably downbeat.
Greg Bright, Investor Strategy News

The great unwinding
The world economy today is defined by the unwinding, the reversal of several very long-term economic trends - and they have economic and investment implications.
Robert Baur, Principal Global Advisors

Member comments
Academy Summer Seminar - Key takeout

I need to do more work on emerging markets. At the height of the BRICs days, every second word appeared to be "decoupling", yet in Lazard's commentary it states it believes emerging market equities "require steady global growth free of exogenous shocks in order to significantly outperform developed market equities". Are there real diversification benefits from emerging markets or is this simply a high beta play?
Sally Campbell, JBWere
More about Academy


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