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:
- Resources Kits - videos and podcasts of the sessions and accompanying papers from our live programs;
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   subscription services from local and international investment professionals and subject matter experts; and,
- CPD Campus - our online portfolio construction learning and accreditation resource.


 Friday 03 July 2015

The independent professional development service for investment portfolio construction practitioners


Dom McCormick kicks off this week's Fodder, commenting on the IOOF media frenzy, which in his words, "increasingly looks like a witch-hunt"... perhaps all senior participants in the investment industry are just one disgruntled colleague and one rabid journalist away from disgrace, he warns.

Next is a panel session from our Academy Winter Seminar just a few weeks ago, in which Hamish Douglass and Chris Joye faced off against PIMCO's Rob Mead and Tim Farrelly, debating whether it's "lower rates for longer" (yes, say Rob and Tim) or "higher rates ahead" (definitely, according to Hamish and Chris) - and what that means for portfolios. This was an extremely popular session which would normally only be available to the 60 Academy Members - so we're very pleased to be able to share it with all Members.

With so much commentary available about the Greek crisis, we've deliberately kept it to a minimum here - however, we couldn't let Anatole Kaletsky's view on Greferendum pass unnoticed. He sees the Greek crisis as a positive for risk assets globally.

Then, we feature two broader geopolitics pieces. In the first, Mohamed El-Erian looks at the three "storms" brewing in European geopolitics (Greece being one, of course, along with Russia's incursion in Ukraine, and the rise of populist political parties) and the likelihood they'll converge into the perfect storm.

In the second,  US-based William (Bill) O'Grady, who writes a regular six-monthly geopolitical outlook and is a much sought after commentator for the likes of The Wall Street Journal,  offers four geopolitical conditions that will most affect policy and markets . The South China Sea tops the list, followed by Russia, the Middle East and unwinding of the EU (the problems in Greece being just a manifestation).

All the best for another great weekend's learning! - Graham

P.S. PortfolioConstruction Forum Conference (19-20 August 2015) is nearly sold out. We have just 43 seats left unallocated - so please don't delay. Register now


Whistleblowers, witch-hunts and wisdom
Recent reports covering IOOF have, in my view, widely missed the mark. The media, politicians and industry participants who have helped propel what to me looks like a witch-hunt need to stop and think.
Dominic McCormick, Select Asset Management

Crossroads: Is it lower rates for longer? Or back to higher rates?
Will low interest rates be with us for decades? Or are higher rates ahead? Our Academy panel argues the case for "lower for longer" versus "back to higher" - and the implications for portfolios.
Hamish Douglas, Rob Mead, Chris Joye, Tim Farrelly
1.50 CPD Opinion

Greferendum and the markets
Contrary to most of headlines, the astonishing weekend events in Greece will almost certainly prove bullish for risk assets around the world and especially in Europe.
Anatole Kaletsky, GaveKal

Shelter from the storm in Europe
The current focus on the downpour in Greece is understandable. But we should not be so distracted that we fail to prepare for two other possible storms – and the possibility that they converge into a perfect storm.
Mohamed El-Erian, Allianz

Four geopolitical issues to watch
Four "big picture" geopolitical conditions will affect policy and markets going forward - in order of importance, the South China Sea, Russia returns, the end of Sykes-Picot in the Middle East, and the unwinding of the EU.
Bill O’Grady, Confluence Investment Management

Member comments
Rising bond yields
It is very hard to discern between Jonathan's reflation thesis and bond market sell down/collapse due to extreme overvaluation as a result of QE...
James Rees


A primer on geopolitics and investing
Does geopolitics have investment implications? In short - yes - and this paper provides a clear understanding of both geopolitics and its clear link to investment markets.
Angela Ashton, PortfolioConstruction Forum 
| 1.25 CE Research

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 
| 0.50 CE Resources
* Winner of the Delegate's Pick Award at Markets Summit 2015

The US stands out in a low growth world
De-leveraging, widening inequality and structural reforms limit growth in developed markets. The US is the most advanced in addressing these challenges.
Ronald Temple, Lazard Asset Management 
| 0.50 CE Resources
* Rated in the top 3 presentations by Markets Summit 2015 delegates

Bond markets lock up and lock out returns
Bond markets were once the world’s most liquid. Today, trading even $5 million in bonds can be difficult. Funds may limit withdrawals and hold larger cash balances.
Scott Weiner, Payden & Rygel 
| 0.50 CE Resources
* Rated in the top 3 presentations by Markets Summit 2015 delegates

Greece - a case study for increasing Eurozone strain
2015 will be a year of huge uncertainty about the future of the Euro. These uncertainties are likely to pose a fundamental challenge to investing in the Eurozone.
Charles Dallara, Partners Group 
| 0.50 CE Resources
* Rated in the top 5 presentations by Markets Summit 2015 delegates

The importance of asset allocation
In this seminal paper, Ibbotson confirms that after the decision to actually invest is made, asset allocation and manager selection are equally important.
Angela Ashton, PortfolioConstruction Forum 
| 0.50 CE Research

Managing sequencing risk - buckets v rebalancing
In managing sequence of returns risk, we may not be giving simple rebalancing nearly the credit it deserves to accomplish similar or better than more complex approaches.
Michael Kitces, Pinnacle Advisory Group 
| 0.75 CE | Research paper

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

A matter of time
Have you ever wondered about why some people plan for retirement and other people don’t? Whether people focus on the past, the present or the future - their Time Perspective - influences their retirement planning behaviour.
Dr Joanne Earl, UNSW | 1.00 CE Research

Big raises and lifestyle creep
The surprising result of a recent study is that the "conventional" view that earnings rise steadily (above inflation) throughout our careers is not accurate. Good spending habits established early on can make an astounding difference to wealth over a lifetime.
Michael Kitces, Pinnacle Advisory Group 
| 0.50 CE | Research

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.
Aberdeen Asset Management 
| 0.50 CE Research

The role of investment philosophy in evaluating investment managers
Investment managers have a better chance of adding alpha if they have a clear philosophy of how they generate it, according to this research.
John Minahan, Kees Koedijk & Alfred Slager 
| 1.50 CE Research

Assessing manager risk & risk-adjusted performance
Fund research is something of a dark art - there is little available on how to go about it. But here are two great papers covering qual and quant analysis of funds and managers.
Deborah Kidd, CFA 
| 0.75 CE Research

Financial ratio analysis
Even if it's not your intention to recommend stocks, understanding financial analysis in general and ratios in particular, can enhance your ability to analyse equity funds.
Pamela Peterson Drake, James Madison University 
| 1.25 CE Research

Undiscovered Fund: Active Au equities with a growth bias
An actively managed fund, positioned towards companies with earnings growth potential greater than the market's expectations.
Zenith Investment Partners 
| 1.00 CE Research


Register now: PortfolioConstruction Forum Conference (19-20 Aug)
Portfolio construction is approaching a crossroads – and critical questions must be answered. For starters, is the developed world’s 35-year (some say, 100-year) investment supercycle exhausted, heralding in an investment regime the likes of which most of us have never experienced in our careers? Or, is reinflation underway, signalling a return to higher rates and strong asset price growth and returns instead? Will active or passive strategies therefore be more appropriate? Complicating things further, what were only emerging megatrends early last decade have now become entrenched, causing massive structural change and further portfolio construction dilemmas. Critical decisions must now be made.

Since 2002, Conference has gained a reputation as THE investment conference of the year. This year's jam-packed, marathon two-day, 15-hour program features 30+ intensive, objective, interactive sessions and a carefully selected faculty of more than 35 international and local portfolio construction experts.

Conference 2015 will facilitate debate on the markets, strategies and investing with particular focus on portfolio “crossroads” - contemporary investment dilemmas and the resulting portfolio construction decisions. We'd welcome you joining us!
Register now

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