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AI remains one of the strongest investment cycles in the global economy. That strength is precisely why the macro consequences are becoming more important. AI is becoming a macro cycle because it is large enough to influence growth, inflation, labour, energy and the price of capital simultaneously.
When making decisions, we all look at past outcomes as one input. This paper questions the appropriateness of the common methods of measuring investment manager performance and suggests we should focus on measures that are of more relevance to actual investor outcomes.
The AI revolution may ultimately create abundance. The current investment regime is being defined by the scarcity encountered while building it. The next phase of the cycle will be determined by which assets own productive capacity and which assets can finance it.
Your CIMA Society Member benefits include complimentary registration to attend five programs via Live Stream (value A$740+GST) so you can engage with your peers and earn up to 30 CE hours over the year.
This session first considered how delegates can use AI to apply multi-lens analysis to deciding the key takeouts from Strategies Summit 2026. Then, our practitioner panel each discussed which high conviction thesis they heard at Strategies Summit they would investigate further - and how.
The investment regime is becoming less about forecasting one central-bank decision and more about understanding who is competing for capital, what return they are offering and whether the resulting cost is sustainable. That changes portfolio construction.
The purpose of investing is not simply to accumulate wealth. The real "prize" is financial wellbeing. As Yogi Berra famously observed: "If you don't know where you are going, you'll end up someplace else." Eyes on the prize! Strategies Summit 2026 (Wed 19 Aug) will challenge and refresh your portfolio construction thinking through robust debate of contemporary and emerging strategies to help you build better quality portfolios.
Over the past three decades, geopolitical fragmentation, technological disruption, fiscal expansion, energy security concerns and changing market structures – and now, the infusion of AI into every aspect of society – have altered the very foundations on which portfolios have been built. In short, the macro environment that shaped portfolio construction no longer exists.
The world is always uncertain. Many events – wars, pandemics, terror attacks – have felt historic at the time but have had little lasting impact on either economies or markets. More recently, despite the US’s “Liberation Day” tariffs, globalisation is alive and well. Real oil prices remain near the long-run average despite the closure of the Straits of Hormuz causing the biggest hit to global oil supply in history. Recessions are caused by a bust in business investment but there has never been a bust without a boom – and we are not there yet. Bond yields have “normalised” after 15 years of historic lows while equity markets have mean reverted since the GFC, possibly suggesting near-term downside, but we are yet to see an end-of-cycle melt-up. Every era convinces itself it’s living through something unprecedented. Noise and cognitive bias can distort our reading of the world – but a fresh lens reveals just how resilient the global economy really is.
Volatility is no longer a temporary disruption. It is increasingly a defining feature of the investment landscape. Geopolitical fragmentation, tighter liquidity, technological change and faster capital cycles are reshaping markets, while volatility is reinforcing secular themes such as AI, electrification, energy infrastructure and national security, creating generational thematic investment opportunities. As short-term market outcomes remain uncertain, the direction of these long-term forces is becoming clearer. Investors should look beyond traditional diversification and keep their eyes on the prize – building exposure to the capital-intensive themes driving economic change, using private markets to access broader opportunity sets, enhance resilience and capture long-term returns.
Even the best fund managers tend to pick stocks that outperform less than 50% of the time. That’s not a flaw in the system. That is the system. Yet some active managers consistently win more from the decisions they get right, than they lose on the decisions they get wrong – enabling them to generate alpha regardless of market conditions. By understanding the investment behaviours of these stock market “maestros”, practitioners can not only identify highly skilled fund managers but also improve their own portfolio construction decisions, better equipping them to deliver the ultimate “prize” for clients - financial wellbeing.
Portfolio construction must evolve to reflect a structurally different world. Traditional diversification assumptions and portfolio frameworks which may not fully capture the risks to which portfolios are actually exposed - or take advantage of emerging asset class opportunities that the structurally different world is exposing.
How can practitioners construct multi-asset, multi-manager investment (MAMMI) portfolios which are greater than the sum of their parts and improve the financial wellbeing of individuals?
Sports teams, clubs and leagues may command the spotlight but they represent only one part of a nearly US$3 trillion sports, media and entertainment investment universe. The opportunity – “the full prize” – encompasses approximately US$500 billion in teams and leagues and a further US$2.5 trillion across the broader ecosystem, from media rights, content and live events to venues, technology and the businesses that power the sector1 2. Together, these segments form a deep and diverse investable market that remains relatively underpenetrated and increasingly in need of flexible capital. This creates significant scope for alternative capital providers to deliver innovative financing solutions across the full value chain. Supported by durable long-term growth trends and a history of low correlation to traditional markets, the full sports, media and entertainment opportunity is too compelling for investors to ignore. (1. Forbes as of December 2024. 2. Goldman Sachs “Investing in sports: the next trillion dollar market?” transcript.)
Powerful structural forces like AI, deglobalisation, climate change, and ageing demographics are reshaping the world as we know it. These forces impact investments across asset classes, regions, and sectors, challenging traditional portfolio construction processes. Furthermore, capital market assumptions, that typically rely on the continuation of recognised relationships and reversion from extreme conditions back to more reasonable ‘norms’ can struggle with structural trends that, by their very nature, deliver new norms, and divergent outcomes. Capturing the opportunities resulting from structural trends, and managing the risks emerging from them can only be achieved through TPA.
A static fixed income allocation was built for a world that no longer exists. The price-insensitive central-bank buyer that suppressed volatility and kept bonds negatively correlated to equities has disappeared at a time when inflation and fiscal sustainability risks are at the forefront of investors’ minds. This new regime demands an unconstrained, absolute-return approach – absolute return fixed income is the diversification prize. However, absolute return strategies can differ substantially in flexibility and exposures. A factor-based framework can help investors understand which characteristics to look for when assessing these strategies.
Markets have narrowed sharply around a single theme: AI hardware bottlenecks, amplified by the launch of AI agents and scaled-up capex plans. Concentration and single-theme exuberance typically precede a durable broadening, with value dispersion narrowing and the style outperforming even as industry outcomes widen through disruption. Markets are at a turning point where the valuation extremes are set to unwind, and the next cycle’s winners will look very different from previous decades. Allocators seeking diversification and protection should rebalance toward fundamental value in global equity portfolios.
Today, more than 90% of global investable assets exhibit a meaningful correlation with the S&P 500, compared with just 26% in 1995. Where the S&P 500 goes, increasingly, so does the rest of the portfolio. The portfolio construction challenge is no longer simply owning different assets. Many of the traditional sources of diversification – including bonds, private markets and hedge funds – have become increasingly caught up in the same market forces. This makes alternative risk premia crucial. Unlike traditional market beta, they arise from structural and behavioural inefficiencies, providing a differentiated source of return that can improve portfolio resilience, increase returns per unit of risk - and keep investors’ eyes on the prize.
