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Symposium 2013 -
Resources Kit
Symposium facilitated debate on the three pillars of portfolio
construction – markets, strategies and investing.
The
jam-packed program featured 20+ local and international investment
professionals presenting on contemporary and emerging portfolio
construction issues to challenge and refresh delegates' portfolio construction
thinking, giving tangible and meaningful takeouts to apply in practice
to build better quality investor portfolios.
The Resources Kit is now complete. |
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Tuesday 21 May 2013 |
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Critical Issues Forum 1 |
The big picture
PortfolioConstruction Forum Publisher,
Graham Rich, opened Symposium in his usual
thought-provoking (and entertaining) way. Throughout Symposium,
Graham presented Video Thought Pieces, in which leading global
investment experts share their thoughts on investment
challenges.
- The Legend of Benjamin Graham
- So far, King Kong is winning -
Mohammed El-Erian, PIMCO
- Mind the gap - Nouriel Roubini,
Roubini Global Economics
- Two forces driving markets - Nouriel
Roubini
- The great degeneration - Niall
Ferguson, Harvard University
- Identifying the right
wave, Mohammed El-Erian, PIMCO
- Longevity is opportunity
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Thought piece
Thought piece
Thought piece
Thought piece
Thought piece
Thought piece
Thought piece |
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Critical Issues Forum 2
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Building portfolios in a brave new
world - Huxley Redux
Market and economic
environments continue to change, but in ways no investor has
experienced. The training and understanding that define nearly
all investors are no longer up to the task of dealing with
today’s issues. We need to identify deficiencies of the
pervasive methodologies and spotlight additional disciplines
required to navigate the new world order. Specifically, we must
avail ourselves of geopolitical and game theoretical analysis to
remedy contemporary deficiencies. These disciplines lead us away
from traditional asset allocation, new-fangled risk parity and
downside protection strategies and toward prudent risk capital
allocation.
Brian Singer, Partner, CFA, Head Dynamic
Allocation Strategies Team, William Blair & Co (Chicago)
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Resources |
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Climbing the mother of all walls – stay
positive
The market adage is that bull markets climb a wall of
worry. And, despite having much to worry about - a Eurozone in
recession, a listless US recovery, the unknown effects of
Japan’s unprecedented QE, slowing China growth, Cyprus, North
Korea, etc - both the Dow and the more important ‘mother of all
indices’, S&P 500, reached new, all-time highs recently. Where
to from here?
Jonathan Pain, Editor, The Pain Report
(Sydney)
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Resources |
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Expert panel Q&A
Our two Inquisitors grilled
Brian and Jonathan on their respective views.
Brian Singer, Partner, Head DAA Strategies, William Blair & Co (Chicago)
Jonathan Pain, The Pain Report
(Sydney)
Michael Kitces, Partner/Head of Rsh,
Pinnacle Advisory (Washington DC)
Tim Farrelly, Principal, farrelly’s
Investment Strategy (Sydney)
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Resources to come |
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Critical Issues Forum 3 |
This session sets the scene for the two Workshops later in the
afternoon. Referencing back to the assigned pre-reading for
their Workshops, Tim and Michael will each summarise the
thesis/core premise to get everyone on the page in preparation
for the Workshops.
Diversification – when it works, when
it doesn’t
This presentation was preparation for the interactive workshop
later in the day, looking at the fundamental principles behind
diversification, the critical role of correlation in getting
diversification benefits, and how practically to consider the
benefits of diversification when designing portfolios.
Tim Farrelly, Principal, farrelly’s
Investment Strategy (Sydney)
A risk parity approach to building
portfolios
This presentation was preparation for the
interactive workshop later in the day looking at what risk parity
investing is, the opportunities and risks, the practical challenges of implementing such strategies in
portfolios, and whether risk parity portfolios might actually
represent a better way to protect clients through
diversification.
Michael Kitces, Partner/Head of Rsh,
Pinnacle Advisory (Washington DC) |
Resources
Resources
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Due Diligence
Forum 1 |
Winning by not losing – defensive
equity strategies
Building a better global equity
portfolio requires a new structure that incorporates both
high-growth/higher expected-return elements (emerging markets
and small cap, for example) and a complementary low volatility
component. This paper and presentation explain why
low-volatility equities make sense and provides an overview of
the types of strategies available and what they are trying to
achieve.
Philip Houghton-Brown, Head of
Investments, Mercer NZ (Auckland) |
Resources |
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Boomers, herding, denial and zeitgeist
The current financial advice
model serving retirees is suboptimal for their needs. An
approach that is fundamentally focused on retiree objectives is
imperative, as these objectives will generally differ from those
in the accumulation phase, often compete with each other, and
require well thought out prioritisation. Many of the
conventional approaches to post-retirement portfolio
construction have not been scrutinised adequately in terms of
possible outcomes for retirees adopting these approaches. This
paper and presentation assess the possible outcomes of using
these approaches in meeting income objectives and the impact on
asset values, as well as the likelihood of these outcomes
occurring. Finally, we examine how the advice process can evolve
to better address specific objectives by adopting a more
holistic approach to portfolio construction
Lukasz de Pourbaix, Head of Investment
Consulting, Lonsec (Sydney) |
Resources |
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ETFs – the top 5 portfolio strategy
considerations
ETFs have grown substantially in size, range,
complexity and popularity in recent years. This presentation and
paper provide the key issues and portfolio strategy
considerations relating to ETFs that can form part of the client
conversation. These considerations are not often discussed but
should influence whether and how ETFs may be used by clients
relative to alternative structures.
Gavin Shepherd, Director, Strategy Steps
(Sydney) |
Resources |
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Due Diligence
Forum 2 |
Blurring lines - rethinking bond
investment in an uncertain world
With the dynamics of global growth and risk changing
rapidly, it is time for investors to reorient their thinking
about bond allocations and the investment strategies that drive
them. Anemic global growth and financial repression have driven
interest rates to historic lows and markedly reduced future
expected returns on all financial assets. Meanwhile demographic,
financial and political lines - as well as those traditionally
separating developed and emerging markets- are increasingly
blurred. In this environment, bond investors will need to adapt
if they hope to prosper.
David Fisher, Executive VP & Product
Manager, PIMCO (Newport Beach) |
Resources |
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Perspectives on blending active and
index products
The low yield world has focused
investors on the costs of investing, while changing regulation
is leading to greater alignment between clients’ investment
portfolio choices and their risk-return profiles. Together these
factors are transforming the use of active management, indexing
and the blending of investment styles. This paper and
presentation highlight the results of a survey of wealth and
private bank advisory firms, discretionary and multi-asset
institutional portfolio managers, and research and ratings
houses, describing their various approaches to blending active
and index funds in portfolios.
Oliver Berry, iShares Australia Head of
Institutional, BlackRock (Sydney) |
Resources |
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An all-encompassing approach to
emerging markets
The economic growth and newfound fiscal strength of
many emerging countries have created a dilemma for investors.
Expectations of future growth are alluring, but the financial
markets remain highly volatile. Is it possible to reduce
emerging markets’ volatility without sacrificing return
potential? This paper and presentation show that a portfolio
with emerging stocks, bonds and currencies managed in an active,
unconstrained and integrated strategy can capture a greater set
of opportunities to seek the high returns associated with EM
growth, with better risk management potential.
Ross Kent, CEO, AllianceBernstein
Australia/NZ (Sydney) |
Resources |
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Workshops 1&2 |
Diversification – when it works, when
it doesn’t
This interactive, active-learning workshop revisited
the fundamental principles behind diversification. We review Markovitz’s primary findings (without resorting to equations!)
and look at the critical role of correlation in getting
diversification benefits, before examining how to practically
consider the benefits of diversification when designing
portfolios. You will go away with a deeper understanding of how
to think about diversification in practice and some simple rules
of thumb to help build better quality portfolios for clients.
Tim Farrelly, Principal, farrelly’s
Investment Strategy (Sydney) |
Because of the interactive nature of the Workshops, they were
not recorded. Refer to CIF 3 above to view the introductory
presentations for these two workshops. |
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A risk parity approach to building
portfolios
Notwithstanding its long conceptual roots dating back
to Markowitz and favourable performance since the 1990s, risk
parity investing has only really begun to gain momentum in the
past few years. This workshop looked at what risk parity
investing is (and what it’s not), the opportunities and risks,
the practical challenges of implementing such strategies in
portfolios, and whether risk parity portfolios might actually
represent a better way to protect clients through
diversification.
Michael Kitces, Partner/Head of Rsh,
Pinnacle Advisory (Washington DC) |
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Wednesday
23 May 2013 |
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Critical Issues Forum 4 |
Risks and rewards - global economic
risk
Five pillars of risk neatly encapsulate the main
areas of risk and contagion that all investors should be
watching - the US fiscal cliff (it has only been kicked down the
road), the global economic slowdown, the EU sovereign debt and
banking crisis, Middle East and oil prices, and contagion risk.
In the changing risk environment, the key is to determine which
parts of the world are actually paying you to take risk, and
which areas are definitely not.
Nicholas Bullman, Founder & Managing
Director, CheckRisk (London) |
Resources |
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Expert panel Q&A
Our three Inquisitors grilled
Nick on his views.
Nicholas Bullman, Founder & Managing
Director, CheckRisk (London)
Tim Farrelly, Principal, farrelly’s
Investment Strategy (Sydney)
Stewart Brentnall, CIO, ANZ Global Wealth & Private Banking
(Sydney)
Andrew Bascand, MD & PM, Harbour Asset Management (Auckland)
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Resources to come |
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Critical Issues Forum 5 |
Australasia in the Pacific Century
As the centre of the world economy is shifting towards
the Pacific, New Zealand and Australia are facing great
opportunities. But are we ready to embrace them? Or are we not
even aware of them? Both New Zealand and Australia should
embrace economic reforms to make the most of their favourable
geopolitical situation.
Dr Oliver Marc Hartwich, Exec Dir, The New
Zealand Initiative (Wellington)
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Resources |
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Expert panel Q&A
Our three Inquisitors grilled
Nick on his views.
Nicholas Bullman, Founder & Managing
Director, CheckRisk (London)
Tim Farrelly, Principal, farrelly’s
Investment Strategy (Sydney)
Stewart Brentnall, CIO, ANZ Global Wealth & Private Banking
(Sydney)
Andrew Bascand, MD & PM, Harbour Asset Management (Auckland)
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Resources to come |
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Due Diligence
Forum 3 |
Capital preservation in a rising
interest rate environment
For nearly 30 years bond yields globally have fallen,
generating significantly positive returns to investors - but
with yields near record lows and global growth improving, this
is unlikely to continue. In addition, while fixed income
investments are considered to be lower risk than shares, there
are still important risks that need to be understood and
evaluated. This presentation and paper explore the development
of the New Zealand fixed income market and consider ways for
investors to better protect themselves against the growing
risks.
Grant Hassell, Head of New Zealand Fixed
Income, AMP Capital (Wellington) |
Resources |
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What does an elevated Equity Risk
Premium mean for investing?
A changing Equity Risk Premium has implications
beyond considering allocations to equities and bonds. The
presentation and paper consider the factors that might drive a
change in the Equity Risk Premium and ask - If elevated Equity
Risk Premium fall, which sectors and stocks might benefit the
most? What implications might that have for investing in
Australasian equities in the months and years ahead? How should
investors think about the mix of yield and growth? Are we really
in a different cycle now, what can we learn from recent market
behaviour and what should we watch for a retracement in the
recent pattern of returns?
Andrew Bascand, MD & PM, Harbour Asset
Management (Wellington) |
Resources |
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Onwards and upwards – the way forward
for NZ listed property
Property’s attractive characteristic as an asset
class is that it is able to deliver relatively stable revenue
streams, with a growth profile in line with inflation. This
presentation and paper discuss listed property in the context of
the New Zealand market and give some perspective on the sector’s
track record over the last cycle. It also deals with what
investors need to think about when investing in the sector and
what property vehicles need to do better in order to improve
returns for shareholders.
Craig Tyson, Equity Investment Manager,
OnePath (Auckland) |
Resources |
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Critical Issues Forum 6 |
Meeting the longevity challenge
Time frame is a key factor in designing a quality
portfolio. Averages such as the Life Tables do not reflect wide
individual variations in longevity and fail to take account of
ongoing improvements in mortality. Underestimating life
expectancy means a client may outlive their retirement income
and fail to consider timely and realistic lifestyle and
financial responses. This session quantifies the extent of the
problem and identifies five key areas that help to determine
personal longevity, before discussing the three very different
three stages in longevity and their financial implications. A
strategic approach to better manage longevity implications for
portfolios is proposed.
David Williams, CEO, My Longevity (Sydney) |
Resources |
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Understanding retirement sequencing
risk
What really does, and does not, cause a retirement
plan to run out of money? While many retirees are fixated on the
risk of a precipitous market decline, it turns out that the
potential for retirement failure is dictated not simply by the
magnitude of the market decline, but the speed at which it
recovers as well. As a result, the true danger for many is not
actually a market crash or a “black swan” event, but an extended
period of “merely mediocre” results that are uncommon but not
rare.
Michael Kitces, Partner/Head of Rsh,
Pinnacle Advisory (Washington DC) |
Resources |
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Delegate Q&A
Delegates asked David and
Michael questions on their views
David Williams, CEO, My Longevity (Sydney)
Michael Kitces, Partner/Head of Rsh,
Pinnacle Advisory (Washington DC)
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Resources to come |
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Portfolio Construction
Implications |
Portfolio construction key takeouts
panel
All of the Critical Issues Forum sessions are
building blocks for this final session which ensures delegates
determine their key takeouts and actions to take when building
investor portfolios. This session is very interactive! Our
Expert Panel members will discuss and debate the delegates views
collected throughout the program using the Gizmos and answer
more of the delegates’ questions that we’ve collected throughout
the program.
Michael Kitces, Partner/Head of Rsh,
Pinnacle Advisory (Washington DC)
Tim Farrelly, Principal, farrelly’s Investment Strategy (Sydney)
Stewart Brentnall, CIO, ANZ Global Wealth & Private Banking
(Sydney)
Andrew Couch, Investment Mgr, Advanced Investment Solutions
(Auckland) |
Resources |
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