Structural changes in equities markets and the global economy – rather than a collapse in manager skill – have contributed widespread underperformance and increasing correlations amongst traditional active equities strategies. This is likely to persist and provide further support for allocation decisions towards passive, enhanced index and, more recently, systematic equities strategies. Meanwhile, less diversification of inherent factor exposures in traditional fundamental strategies and increasing correlations in performance have introduced additional risk. There is a still a case for fundamental active strategies in portfolios, but it favours a more tactical (and inherently risky) approach – or complementarity within the context of total portfolios. Fundamental active equity allocations should be shorter term, tactical, alpha seeking allocations and/or focused on alpha generating strategies that help to reduce overall portfolio risk.

Tom King

ESG investment is coming under increasing criticism, some valid - but the real problem is the ill-defined use of the acronym itself and we will all be better off if we stop using it.

Tom King | 0.50 CE

In achieving longer term objectives, climate change demands both a defensive strategy to mitigate longer term risks and an offensive, tactical, approach to capitalising on opportunities.

Tom King | 0.50 CE