The financial services industry has long embraced the potential of AI-based systems including robo-advice. These two papers review the psychological and relational dynamics that arise from "algorithm aversion".
Manufacturing reshoring by global multinationals is key to economic development in frontier and emerging markets. Understanding the shifting dynamics can be critical to investment decision-making at both the country and sector level.
This Research Spotlight focuses on the Brandywine Global Opportunistic Equity strategy, a benchmark unaware true value global equity strategy that has produced very strong alpha.
Powerful geopolitical, demographic, environmental, technological and sociological trends are reshaping our world, impacting investment risk and uncertainty and how best to design portfolios capable of improving the financial well-being of individuals.
Investors need to challenge conventional wisdom around investment style, process and active share and focus on durable sources of alpha that will improve total portfolio returns.
With a more benign outlook for interest rates conditions, there is an opportunity to capitalise on the innate earnings power of infrastructure assets.
An Alternative Risk Premia (ARP) approach to investing, rooted in academic research, can deliver more stable and resilient performance even in volatile market conditions.
Within emerging market economies, there are many companies that have developed to challenge the world's best businesses. Valuations are attractive and do not reflect the underlying value of the business.
Did you ever wonder why so many pundits got their Australian house price forecasts so wrong? Real estate pricing is not driven by interest rates, population growth, or tax regimes.
The market growth and quality of private market alternatives provides investors an opportunity to meaningfully enhance 60/40 with higher returns and less volatility.
Higher rates and structural changes, such as tighter regulation, are reshaping both public and private debt markets, requiring investors to take a multi-sector and relative value approach across both.
When it comes to investing in public equities, it's easy to get deterred by media headlines but it's vital to remember that stocks are not the economy.
In a higher interest rate regime, with a higher correlation between stocks and bonds, replacing public equities with private market investments makes sense.
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.
It is essential that portfolios are exposed to different, uncorrelated alternative risk factors and capture a variety of available risk premia to maximise risk-adjusted returns.
The widespread adoption of managed account solutions has shown a seismic shift in most investment advisers believing it is too risky to entrust just one active investment manager with building a diversified portfolio for clients.
Traditional asset allocation is insufficient for addressing investors' real-world needs. A more dynamic approach to portfolio construction is needed, incorporating risk factor diversification to account for tail risks, and objectives-based investing.
The things that make people, people, are also the things that bind our portfolio construction methods together. We are impacted not only by our biases in behaviour, but also by the biases we hold that we're not even aware we hold.
To gain deeper insights, critical to long-term investing, we must adapt by integrating finance with other disciplines. Adopting a holistic perspective can greatly improve problem-solving, bringing valuable benefits to our clients' portfolios.
Our diverse panel of asset class experts discussed and clarified the implications of four economic scenarios for the medium-term (three-year) outlook for key asset classes, and then the Investment Committee (Summit delegates) voted to determine probabilities for each of the scenarios as inputs to the Asset Allocation Roundtable.