When seeking exposure to the energy transition, investors typically think of wind and solar farms, and hydrogen and battery production. But the best risk/reward energy transition opportunities can be found elsewhere.
The fact that structural changes do exist and that historical data are often of limited relevance presents a major opportunity for investors seeking to outperform others.
AI has been described as important a lever for detaching economic growth from population growth as the steam engine. Companies that don't use AI to remake their business simply don't have a place in today's portfolios.
We are living in the middle of a major societal shift towards not just the use of, but the reliance, dependence and advancement of our lives being built on technology that seeks to emulate us, mimic us and envelope us.
Three gigantic, global, interconnected risks have the potential to upend the world as we know it. Investors who understand these will be better positioned to successfully navigate the uncertainty plaguing our world.
In the same way that Moneyball has swept every professional sport, data science is bringing greater transparency to portfolio managers' decision-making skill. To select managers capable of outperforming, behavioural analysis is crucial.
At a time when "you can do anything", there are meaningful implications and opportunities for portfolio rebalancing and investors still structurally underweight bonds need to put aside recency bias and "do something" - now.
Yield premium over comparable liquid markets, control, upfront economics and low historical volatility and default rates make private credit an asset class to consider for a core allocation in investors' portfolios.
As markets become narrow and expensive, core, growth and quality portfolios are converging. This presents risks for many portfolios but a great opportunity for valuation-focused investors.
Every day, every one of us is touched by infrastructure and, the longer we live, the more billions of us there are, and the more we need infrastructure. Demand for essential infrastructure offers opportunities for investors.
Opinions about private markets are often not rooted in facts, due in part to the fact that data on private markets has been scarce. But data is available and it debunks some of the common misconceptions about private markets.
The unique characteristics of private debt make it ideal for any portfolio, fitting in either the defensive or growth component of a portfolio – or even both at the same time.
Brokers hire a great many analysts to write and publish detailed analysis on corporate earnings forecasts. It's right to focus on earnings, but the level of delivered growth is less important than the surprise in growth (positive or negative).
The transition a net zero emission economy offers risks and opportunities for investors. Infrastructure is a simple way to benefit from the transition to a net zero emission economy and represents a multi-decade growth opportunity.
Today, many of the leading companies servicing emerging market economies have superior earnings growth to developed market peers, with many trading even cheaper than at the height of the Covid market turmoil.
Investment-grade corporate bonds can improve portfolio risk-adjusted returns. A focus on the highest quality global corporate bonds will provide opportunities for investors to capture future income, as well as add a defensive anchor within portfolios.
Private Equity pooled returns have been attractive while also less volatile than investing in a single fund or fund-of-funds. Enabling investors to "buy the private market" would complement portfolios just like in public markets.
Small Caps have underperformed large cap peers in recent times however cyclical factors today and a rebound in domestic risk sets up for the reemergence in Australian Smalls.
As professionals we need to stand with our clients and share our voice to ensure risk-aware approaches part of our investment landscape.
The Investing Roundtable explored key challenges and opportunities that practitioners should be thinking about when building quality multi-asset, multi-manager portfolios.
The young are better able to navigate VUCA owing to their natural growth and learning mindset. In an environment where investors can do anything, just not everything, we can all benefit from adopting a youth mindset.
Markets have undergone a regime shift - to prosper, we need to understand the factors that will be crucial to building multi-asset portfolios capable of delivering financial wellbeing in the years ahead.
Achieving equity like returns with much lower risk and equivalent liquidity is the holy grail that is now on offer from high yield.
Beyond a near-term sluggish outlook for global growth, practitioners should think about three key forces which will drive long-term market risks and opportunities.
Since central banks abandoned their ultra-loose monetary policies, currencies once again offer a source of investment returns, as well as portfolio diversification.
While the US dollar's share of global foreign exchange reserves is in long-term decline, the currency's dominance will continue despite the rising risk of embedded inflation.
As economies slow, fixed income will once again provide portfolio diversification, allowing practitioners to focus on capturing long-term trends such as climate change and artificial intelligence.
As we move into an era which is both more inflationary and more volatile, asset allocators will need to adapt in order to deliver returns. A dynamic and unconstrained approach to asset allocation will become essential.
Protecting capital in down markets is the foundation for superior returns – and quality investing, with a long-term investment horizon, protects shareholder wealth on the downside, while capturing steady capital growth.
Active management has consistently delivered outperformance in small companies as the opportunity set allows managers to demonstrate both stock selection and portfolio construction skill.
Decision attribution analysis provides a crucial lens on equity manager skill, benefiting asset owners and fund buyers as they select and monitor managers.
Investors today have more knowledge than any prior generation, however there remains a chasm between knowing and doing. Acknowledging we are all biased, because we are all human, is the first step to better decisions.
CRE Debt provides dependable returns, backed by real property first mortgages. On a risk-adjusted return basis, every balanced portfolio should include an allocation to CRE debt.
The energy transition represents the greatest economic opportunity since the industrial revolution. Reliably capturing the potential and delivering tangible environmental impact requires three core beliefs.
Unlisted assets provide access to a bigger opportunity set that reflects active management in its truest form, giving opportunity for investment managers to further diversify multi asset portfolios with rich investments across diverse industries.
A partial allocation of retirement savings to a contemporary lifetime income stream can help increase the certainty of delivering what the income that retiree clients want. And such an allocation can help clients preserve assets.
To better develop the skills required to analyse corporates, we can start with individuals as case studies and scale from there. If analysts can't do that, it's unlikely they can address more complex situations.
...though not unconditionally. The nascent field of Neurofinance suggests that investors attuned to their emotions can make better decisions during critical market events.
We can help retirees build and retain their sense of control by keeping on building trust and educating them, modelling possible outcomes and showing a planned approach – including providing a Plan B.
A critical part of any retirement plan is a spending plan (which is not the same as a budget). Ultimately, a good spending plan helps keep clients' investments on track.
This Research Roundtable focused on the Ruffer Total Return International (Australia) strategy, with senior practitioners deciding, after briefings, Q&A and debate, their individual rating for the strategy and whether to include it on a hypothetical APL and/or multi-manager portfolios. Afterwards, the meeting is truncated and published for on-demand viewing by all Forum members.
As the clouds of Volatility, Uncertainty, Complexity and Ambiguity continue to swirl, the silver lining is that we are on the road back to normal monetary policy settings, from abnormal, and a return to more rational asset prices. But we must be patient.
Those constructing portfolios must understand the nuances of bond risk/return drivers and how bond market performance can be impacted by different macro scenarios. Opportunities abound.
Inclusion of private equity as an alternative asset in portfolios is an out-of-date approach that does not consider secular trends in companies staying private and the unfolding democratisation of PE.
As economies continue to recover from the catastrophe of Covid-19 lockdowns, we must re-embrace the pursuit of progress, an idea that is central to science, freedom, and a thriving society.
After a chaotic period, across most asset classes, silver linings are emerging. Global equity investors can capture these by identifying companies best placed to benefit from shifts in energy and technology.
Once the decision has been made to invest in global small caps, fundamentals return to the fore. Limited research coverage and inefficiencies in the market are the opportunity.
Investors will have to work harder to make money than just owning US beta. The silver lining is that there are large equity markets and sectors that are cheap with significant growth drivers.
After a lost decade, cyclical and structural headwinds are abating for emerging market equities, while profound secular changes are becoming tailwinds. But the path ahead will look very different to the past.
ESG analysis advances and drives sustainable investing by helping investment practitioners develop a clearer view of a company's true market value, consistent with their fiduciary duty.
Our diverse panel of experts debated which of the high conviction propositions they heard during Markets Summit 2023 they most strongly agreed with and why, including identifying "silver linings" (investment opportunities not yet fully priced into the market) and which they disagreed with most and why - and the portfolio construction implications of both.
This lecture explores the concept of ethics, contemporary issues in financial services as they relate to ethics, and the relevancy and application of ethics in our everyday lives.
Value investing has proven successful over time but it requires discipline and a long-run horizon - and disagreement remains over whether the value premium will persist. What's your philosophy?