Debating principles to inform defensible investing

Crises can be useful – highlighting our investing strengths and weaknesses. What we do with this information determines whether portfolios survive or thrive during the dislocation and in the post-crisis environment.

The Covid-19 pandemic has created a global health and economic crisis that is unprecedented in speed, breadth, scope and reaction. There is a growing realisation that it’s a whole new world. The live and on-demand All Things Considered zoominar series explores and challenges the paradigms and assumptions underpinning our investing activities, focusing on those most consequential to investment outcomes.

All Things Considered will challenge your portfolio construction beliefs, helping you identify which remain valid and which require new thinking, to inform your investing knowledge, beliefs and behaviours and help you build better quality investor portfolios.

Complimentary for all Portfolio Construction Forum members, we’d welcome you joining us!  Register now

Graham Rich
Dean, Portfolio Construction Forum

Overview  Zoominar calendar, Cost, CE/CPD Accreditation; Most suited to

About the program  Introduction; Zoominar calendar; Zoominar details

Have your say  Have your say - which assumptions underpinning our investing activites are in greatest need of revision?

Overview

Zoominar calendar

All Things Considered is scheduled for AEST 9.00am to 10.00am, every Friday from Friday 31 July to Friday 28 August 2020. While intended as a series, you can attend any or all of the All Things Considered zoominars. Each is available on-demand the following week - so if you miss one, you can catch up.

By registering, you agree you have read, understood and agree to be bound by the Portfolio Construction Forum Program Terms and Conditions.

1.  AEST 9am-10am, Fri 31 Jul 2020 | All Things Considered… we don’t know what we don’t know
Watch on-demand

2.  AEST 9am-10am, Fri 07 Aug 2020 | All Things Considered… market pricing
More info & to register

3.  AEST 9am-10am, Fri 14 Aug 2020 | All Things Considered… the next big shock
More info & to register

4.  AEST 9am-10am, Fri 21 Aug 2020 | All Things Considered… benchmarks and our objectives
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5.  AEST 9am-10am, Fri 28 Aug 2020 | All Things Considered… a defensible philosophy
More info & to register

Cost: $0

All Things Considered is complimentary ($0) for all Portfolio Construction Forum members.

CE/CPD Accreditation: 1 CE hour per zoominar

By attending an All Things Considered zoominar in full, you earn 1 CE hour that can be used to help meet the CE/CPD requirements of 16 governing bodies (regulators, associations and institutes - including ASIC, APRA, FASEA, AFA, SMSFA, FPA and CIMA® CE/CPD requirements, to name a few.

Aim

All Things Considered will help you identify which of your portfolio construction beliefs remain valid after being challenged by yet another crisis and which require new thinking, to inform your investing knowledge, beliefs and behaviours and help you build better quality investor portfolios.

Most suited to

All Things Considered is suited to all Portfolio Construction Forum members.

It is especially suited to those whose primary day-to-day role is focused within the spectrum of issues involved in designing and building investment portfolios using (but not necessarily limited to) managed funds from a range of firms - so that includes:

  • investment advisers, researchers/analysts and portfolio managers from private wealth management companies;
  • fund analysts and asset consultants from fund research and fund investment consulting firms;
  • fund researchers/analysts and portfolio managers from multi-manager funds management, superannuation, and investment platform companies; and,
  • funds management professionals who work with the above individuals.

ABOUT THE PROGRAM

Introduction

The Forum’s subject matter focus is on five Knowledge Domains – Philosophy, Markets, Strategies, Investing and Finology. All Things Considered is focused primarily on our “Philosophy” knowledge domain:

Philosophy - understanding principles to inform defensible investing knowledge, beliefs and behaviours
A defensible investment portfolio construction philosophy is grounded in a thorough understanding of core investment principles (theories), gained through an evidence-based and critical way of thinking to develop and continuously evolve investing knowledge which, influenced by biases, informs investing beliefs and enables consistent, defensible investing behaviours.

All Things Considered is designed and curated by our specialist, experienced and independent team. It features a Faculty of leading investment thinkers - experienced and expert multi-manager portfolio construction practitioners, investment managers and strategists, academics, and independent consultants - each offering his/her best, high conviction ideas on an accepted investment paradigm or assumption that they believe requires new thinking.

All Things Considered… we do not know what we do not know

Friday 31 July 2020  |  1 CE/CPD hour  |  Watch on-demand

We make automatic assumptions on a daily basis. A critical assumption is that our pre-Covid-19 pandemic investment management toolkit will remain relevant in the future.

Questioning our assumptions is fundamental to ensuring long-term, sustainable investing success - but it is challenging. People living in a system often cannot conceive of a different world. Yet the Covid-19 pandemic has created a global health and economic crisis that is unprecedented in speed, breadth, scope and reaction - and there is a growing realisation that this IS a whole new world.

The first All Things Considered webinar is foundational. Our panel of expert portfolio construction practitioners and academics make the case for questioning our investing activities, and identify some of the “sacred cows” that are most consequential to investment outcomes AND in greatest need of revision.

Featuring:

  • Joe Fernandes, PhD, Principal and Founder of GQF Group (Sydney)
  • Maroš Servátka, PhD, Professor of Economics, Macquarie Graduate School of Management (Sydney)
  • Robert Prugue, Principal Consultant, Callidum Investment Research (Sydney)

All Things Considered… market pricing

AEST 9.00am to 10.00am Friday 07 August 2020 (by Zoom)  |  1 CE/CPD hour  | Register now!

Market pricing goes to the heart of everything we do in constructing portfolios. But the risk-free rate is artificial due to central bank manipulation of interest rates to stimulate economies, which has a flow on effect on the pricing models we all use. If we look at absolute levels, equities look amazingly cheap relative to the risk free rate. If we look at relative levels i.e. history, then the norm is about 5% for the equity premium and so equities now look super expensive. That’s the real dilemma that investors have today - are we to look at asset classes relative to their history, or are we to look at them relative to cash which has been manipulated by central banks? The implication for asset allocation is significant. As a starting point, the case for cash and bonds in portfolios is significantly diminished.

Introducing the Faculty

John Coombe

John Coombe is Executive Director and Principal Consultant at JANA Investment Advisers (Sydney).

Joe Fernandes

Joe Fernandes, PhD, is Principal and Founder of GQF Group (Sydney), and former Managing Director of First State Investments Asia.

Tim Farrrelly

Tim Farrelly is Principal of specialist asset allocation research house, farrelly’s Investment Strategy (Sydney).

All Things Considered… the next big shock

AEST 9.00am to 10.00am Friday 14 August 2020 (by Zoom)  |  1 CE/CPD hour  | Register now!

Who would have thought that a health crisis would create such a significant financial and economic crisis? To properly manage systemic risk in our portfolios, we need to ask ourselves, where is the next big shock coming from? Responsibility and sustainability have been subsumed by the current crisis. But the impact of not addressing them will be the cause of the next.

Hi, everyone. I wanted to talk a little bit about systemic risks. And I’m looking at the World Economic Forum global risks report from 2020. That was released in January this year, based on a survey of really the World Economic Forum, stakeholder community across business, government, civil society and thought leaders and these, this survey was conducted, I think, in through September and October last year, so probably just before the pandemic. And when I look at that global Risk Report, it’s a it’s a perceptions report, and it looks to identify the biggest systemic risks that we face over the next 10 years. And on there you can see infectious diseases is lighting up as a potential risk. It rates as high in terms of impact, but at that point, low in terms of likelihood. So it’s one example where we’ve seen a risk that’s been identified. It’s really non financial risk, but it has a graduated It has become very much a financial risk and had significant financial implications. But to the extent that it was a low probability event, probably quite fairly. So perhaps we can be excused for not having positioned our portfolios for us. But when I look at some of the higher risks on this report, in terms of impact, but also in terms of likelihood, the five highest risks by likelihood an impact, a climate action, failure, extreme weather, biodiversity loss, where the crises and cyber attacks. So these risks perhaps look nonfinancial again, they’re environmental, they’re technological. But we know about them today. And today, we perceive them to be high impact and high in likelihood, and indeed, rank ahead some of the many other recent we’ve talked about today including inflation, deflation, physical crises and asset bubbles. So my question would be, if there are systemic, and perhaps non financial risks that we know about today that have a high potential impact and a high potential likelihood. Why don’t we spend more time thinking about how we factor them into our investment strategies?

Introducing the Faculty

Kylie Willment

Kylie Willment, CIMA®, is Chief Investment Officer Pacific at Mercer Australia (Sydney).

Joe Fernandes

Joe Fernandes, PhD, is Principal and Founder of GQF Group (Sydney), and former Managing Director of First State Investments Asia.

Martina Linnenluecke

Martina Linnenluecke, PhD, is Professor of Environmental Finance at Macquarie Business School (Sydney).

All Things Considered… benchmarks and our objectives

AEST 9.00am to 10.00am Friday 21 August 2020 (by Zoom)  |  1 CE/CPD hour  | Register now!

We assume benchmarks are relevant to our objectives, ignoring their initial construction and evolution over time. Why should we be comfortable with the duration and counterparty exposures inherent in bond benchmarks? We should structure our fixed income portfolios markedly differently. And the same applies more broadly.

Introducing the Faculty

Graeme Miller

Graeme Miller, CIMA®, is Chief Investment Officer Pacific at Telstra Super (Sydney).

Joe Fernandes

Joe Fernandes, PhD, is Principal and Founder of GQF Group (Sydney), and former Managing Director of First State Investments Asia.

Second Inquisitor to be confirmed.

All Things Considered… a defensible philosophy

AEST 9.00am to 10.00am Friday 28 August 2020 (by Zoom)  |  1 CE/CPD hour  | Register now!

Introducing the Faculty

Veronica Klaus

Veronica Klaus is General Manager - Investment Consulting at Lonsec (Sydney).

Joe Fernandes

Joe Fernandes, PhD, is Principal and Founder of GQF Group (Sydney), and former Managing Director of First State Investments Asia.

Second Inquisitor to be confirmed.

Join the debate

What’s your view? Which assumptions underpinning our investing activites are in greatest need of revision? Answer the question and see how your view compares to others. A full list of suggestions underlying each of these topics is below.