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Speed kills - the US economy must slow down
The US economy needs to slow down. The key question is what causes it to slow and which markets fishtail as a result. It is time to be very careful with portfolios.
| 08-11-18 | More -
When clients need more risk - adjust portfolios or goals?
Where portfolios are invested to achieve goals, the first step in the process should be to align the investor's goals - not the portfolio - to their risk tolerance. Implementation is then straightforward.
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Impact investing is the way of the future for fixed income
It is a common misconception that profit and impact are mutually exclusive. In fact, managing for mainstream risk-adjusted returns and creating a positive environmental or social impact can be achieved in parallel.
| 23-10-18 | More -
Using Australian Asset Backed Loans in portfolios
Potential returns on traditional assets are falling and the search is on for different sources of attractive returns. The Australian Asset Backed Loans asset class deserves a place in many portfolios.
| 22-10-18 | 1.00 CE | More -
In this tug-of-war market, you need a bet each way
The world is getting very interesting. Two strong forces - the US economy accelerating vs tariffs getting bigger - are creating a tug of war that means you need to have a bet each way.
| 15-10-18 | More -
Find me some uncorrelated assets!
In the 1950s, Markowitz showed that low or negative correlation is the secret sauce that makes diversification work. While his maths stacks up, the way it is often abused, does not.
| 17-09-18 | 7 comments | More -
farrelly's Investment Strategy (NZ)
Welcome to the farrelly's Dynamic Asset Allocation NZ subscriber-only area...
14-09-18 | More -
farrelly's Dynamic Asset Allocation Handbook (NZ Edition)
The quarterly Dynamic Asset Allocation is published electronically, and emailed to subscribers in early March, June, September, and December. It features farrelly's Editorial; long-term outlook for markets; Forecast in Focus; and three different approaches to Implementation...
14-09-18 | More -
farrelly's Investment Strategy (Australia)
Welcome to the farrelly's Dynamic Asset Allocation Australian subscriber only area...
14-09-18 | More -
farrelly's Dynamic Asset Allocation Handbook (Australian Edition)
The farrelly's Dynamic Asset Allocation Handbook features editorial exploring investment strategy "hot topics", farrelly's long-term forecasts for asset classes, a detailed review of the long-term forecasts for an individual asset class (rotating across asset classes each quarter) and three asset allocation models to assist with implementation...
14-09-18 | More -
IMAC-S4CS1: Portfolio Performance Measurement & Attribution
This lecture instructs IMAC candidates on the accurate and meaningful measurement and assessment of investment portfolio performance, specifically performance measurement and attribution.
| 25-08-18 | More -
IMAC-S5DS2: Managing Currency in Portfolios
This lecture instructs IMAC candidates on the drivers of currencies in the short and long term and different approaches to currency risk management for portfolios.
| 25-08-18 | More -
Data analytics offers little insight on complex problems
Machine learning algorithms are no match for the human brain when it comes to deciding how investment portfolios should be constructed.
| 24-08-18 | 0.25 CE | More -
Future-proof is too hard but we can better meet client needs
Investors like to have their cake and eat it - i.e., they like investment returns (the higher the better) but dislike volatility (particularly negative returns). It is possible to engineer investment returns that meet those requirements.
| 24-08-18 | 0.50 CE | More -
Designing portfolios for scenarios is critical to future-proof portfolios
A disciplined, scenarios-based approach to determining your views on the outlook for markets and the asset allocation implications can help future-proof portfolios. This hypothetical Investment Committee meeting considers the asset allocation implications of three scenarios.
| 24-08-18 | 1.00 CE | More -
Diversification is not a free lunch
Harry Markowitz called diversification "the only free lunch in finance". But it can’t be taken for granted as not all diversification is good. The answer will often lie with good rules of thumb.
| 24-08-18 | 0.25 CE | More -
Foreign currency should be treated as a complex asset class
Investors should treat foreign currency as an asset class in its own right, considering both short- and long-term currency risks, as well as where the best return opportunities lie.
| 24-08-18 | 0.50 CE | More -
Unconstrained investing is essential in an uncertain world
Unconstrained strategies can be supportive in both maximising portfolio returns and reducing risk but a clear philosophy and framework for apportioning risk in unconstrained portfolios is key.
| 24-08-18 | 0.25 CE | More -
Past performance is not indicative of future performance
The familiar phrase “Past performance is not indicative of future performance” is so common we almost ignore it, but it goes to the heart of how to view and manage risk and return to future-proof portfolios.
| 24-08-18 | 0.50 CE | More -
Future proofed portfolios need growth equities
Investors should learn the lessons of history. Looking beyond near-term valuation multiples can help identify the next great winners and also help avoid the losers. Without growth investing, a portfolio is only focusing on only one side of the equation.
| 23-08-18 | 0.50 CE | More -
All active? All passive? And/or gives better portfolio outcomes
The decision to use active, passive, or both types of investments in portfolios is too often framed as an either-or debate. Both have the potential to help future-proof portfolios.
| 23-08-18 | 0.50 CE | More -
Valuation mistakes will prove very costly in a post QE world
Future proofing portfolios is a difficult task, due to today’s demanding valuations and because the future is intrinsically unknowable. There are no set-and-forget strategies in a world of ever-changing prices.
| 23-08-18 | 0.25 CE | More -
Factor investing increases your probability of success
Not all factor investing strategies are created equal. Investors embracing factor investing need to understand some core principles to create a future-proof portfolio.
| 23-08-18 | 0.50 CE | More -
ESG integration is mission critical
As disruption transforms global economies, and markets become ever more efficient, effectively integrating material ESG factors will help build robust and resilient portfolios.
| 23-08-18 | 0.50 CE | More -
Bin the crystal ball - focus on value, trend & diversification
A robust approach to asset allocation focusing on factors that do have predictive power – valuations and trend – can create a portfolio that is robust to changing markets.
| 23-08-18 | 0.50 CE | More -
Impact investing is the way of the future for fixed income
The impact investment market is growing. There is growing evidence that investing for return while generating a positive impact is a holistic way to create portfolios that are fit for the future.
| 23-08-18 | 0.50 CE | More -
Investors need style neutral global equities exposure
To improve the accuracy of intended portfolio risk, investors should consider using a style neutral global equities fund to offset the likelihood they’re already invested in heavily style-biased portfolios.
| 23-08-18 | 0.25 CE | More -
Infrastructure is critical to future-proofing portfolios
Infrastructure as an asset class has helped investors meet future needs through four very different recessionary periods, reinforcing the need for allocations to the asset class.
| 23-08-18 | 0.50 CE | More -
Investment risk has nothing to do with benchmarks
To future proof portfolios, investors looking to maximise returns should regard risk simply as the risk of losing money and in turn, best manage this risk by taking a long-term time horizon.
| 23-08-18 | 0.50 CE | More -
Future-proof portfolios? Key takeouts
Investment portfolio construction is, by definition, an exercise in long-term thinking. Given the uncertainties and competing priorities, are future-proof portfolios achievable? Practitioners share their views.
| 22-08-18 | More -
Human + machine in investing is better than either in isolation
To future proof portfolios, you need human skill and judgment to distinguish between the purely random and real investment insights. This is the power of combining machines and humans.
| 22-08-18 | 0.50 CE | More -
Asset managers must innovate to meet retiree drawdown needs
An aging population, maturing superannuation system and government policy are dramatically increasing the need for effective solutions for the retiree population.
| 22-08-18 | 0.50 CE | More -
RoI is everything - abstractions are distractions
We are all forced to invest to get a return, but as an industry we have overcomplicated this and at times not delivered. Work from first principles - let simple, a priori return potential be your guide.
| 22-08-18 | 0.50 CE | More -
In the AI age, active managers making smart human decisions will win
AI-based investment solutions will change the landscape much faster than expected - and the importance of making good human decisions will be amplified.
| 22-08-18 | 0.50 CE | More -
Australian private debt can help future proof portfolios
Given the key defensive attributes of Australian private debt, at this late cycle phase of the market, it should be included in all portfolios that are able to invest in illliquid assets.
| 22-08-18 | 0.25 CE | More -
Integrate ESG considerations to help future proof portfolios
It is vital to think about both the risk and opportunities that sustainable investing provides and define a framework that matches your investment beliefs.
| 22-08-18 | 0.50 CE | More -
2018 Strategies Conference - program & prep
Portfolio Construction Forum Strategies Conference is THE investment strategies conference of the year. The jam-packed two-day program is designed and curated by our specialist, experienced and independent team, and features more than 40 leading investment thinkers from around the world, contributing their best ideas on on contemporary and emerging portfolio construction strategies, in the context of the theme "Future-proof portfolios?
20-08-18 | More -
Designing for scenarios is critical to future-proof portfolios
A disciplined, scenarios-based approach to determining your views on the outlook for markets and then the asset allocation implications can help future-proof portfolios.
18-08-18 | More -
Future-proof portfolios are entirely achievable
Future-proofing isn’t about guaranteeing an outcome. No strategy can do that. It's about implementing strategies today that increase the likelihood that multiple objectives, often with different time horizons, can be all achieved.
| 14-08-18 | More -
Future-proof portfolios
'Future-proof portfolios’ are entirely achievable. Given the complexity of developing retirement investment strategies, a ‘whole-of-portfolio’ approach and framework is warranted to achieve better long-term outcomes for clients.
| 14-08-18 | More -
IMAC-S3AS1: Portfolio Theories & Models
This lecture instructs IMAC candidates on the theoretical and empirical underpinnings of portfolio management, specifically in relation to how portfolios are designed and measured.
| 01-08-18 | More -
Does fixed income still diversify portfolio risk?
Re-evaluate the conventional assumption that owning government bonds is inherently defensive and risk diversifying. At best, it's an expensive choice and at worst, it won't work.
| 01-08-18 | More -
Geopolitics to the fore! Do nothing...
There is quite a bit happening on the geopolitical front right now to concern markets. With all this uncertainty, the best thing to do is nothing. Sit tight and enjoy the show.
| 09-07-18 | More -
Passive investing - reshaping the investment landscape
Game changer or new danger? The rise of passive funds throughout this decade is recalibrating the traditional core-satellite portfolio model.
| 26-06-18 | More -
Forum Fodder 22 June 2018
This week in Forum Fodder: Susan Lund – a corporate debt bubble?; Aaron Minney - most investors need to eat capital; Michael Furey - Investment faux pas; Tom Switzer - Don’t write off America; Douglas Isles - Beware the trifecta of desire
| 22-06-18 | More -
Most retirees need to eat capital
There is often confusion about income in retirement. In most cases, some income measures won't give retirees enough to spend, resulting in a lower standard of living than they could be enjoying.
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Will longevity products now become attractive?
New means test rules for pooled lifetime income products, together with development of CIPRs, have the potential to radically alter Australians' views on retirement income products.
| 30-05-18 | More -
Cash is the alternative asset class
Many asset classes - such as real estate and infrastructure - face the same valuation headwinds as equities and bonds. Practitioners should consider using cash as the diversifier for multi-asset portfolios.
| 29-05-18 | More -
Markets creak as yields creep higher
Calm returned to global stock markets in May. But investors should not be lulled into a false sense of security. Equities and bonds face considerable headwinds as the Fed continues to tighten.
| 28-05-18 | More -
Masterclass NZ 2018 - resources
Masterclass NZ is a post-graduate extension program focused on contemporary issues that are fundamental to building better quality portfolios. Each year, the one-day program features five research-based, active learning sessions.
25-05-18 | More -
Research Review: More on momentum investing
Eugene Fama described momentum investing as the one remaining market anomaly. A recent paper gives an explanation for it. Another shows it still offers high profits after implementation costs.
| 11-05-18 | 1.00 CE | More -
The difference for advice in retirement
Many baby boomers are retiring with decent super balances and need advice on spending their retirement savings appropriately. Consuming capital for a higher standard of living is, after all, what super is for!
| 09-05-18 | More -
The place of bonds in a low yield world
Investors are increasingly questioning the continued relevance of bonds in their portfolios. But bonds offer enhanced diversification qualities during times of low growth, low inflation and market uncertainty.
| 03-05-18 | 0.75 CE | More -
From asset allocation to risk allocation
Asset allocation is often regarded as the most important portfolio decision, with asset classes then populated by investments. But this two-step approach can an asset allocation and investment selection mismatch.
| 01-05-18 | 2 comments | More -
Markets aren't pricing rates to revert to the old normal
That's the view that Guy Debelle, Deputy Governor of the RBA, outlined in a recent speech. It's a timely warning - but what do we do with it? I think it depends on your investment time horizon, as do so many investment decisions.
| 27-04-18 | More -
Policy blunders and currencies
Nearly all recent initiatives of the Trump administration will prove to be macroeconomic blunders. The time has come to upgrade the credit quality of investment portfolios and to focus on the currencies of creditor countries.
| 20-04-18 | 0.50 CE | More -
The misunderstanding of life expectancies
As we consider the life expectancy of many clients, we should not be using any number in the 80s. A figure closer to 95 is both more realistic and provides a little buffer in case the individual lives longer than the average.
| 18-04-18 | More -
Understanding how people spend their money in retirement
A retiree's spending will change over time. However, changes in spending profile over time are often ignored when it comes to retirement income planning.
| 12-04-18 | 2 comments | More -
2018 IMR Workshop
The annual Investment Management Research Workshop showcases early stage research in the area of investments to a practitioner and academic audience. It is an initiative of the Investment Management Research Program which is presented by Portfolio Construction Forum, in collaboration with faculty of the University of Technology Sydney (UTS) Business School. The IMR Program succeeds the UTS Paul Woolley Centre.
26-03-18 | More -
Revisiting the importance of investment returns in retirement
About 30 years ago, Canadian researcher Don Ezra identified the ‘10/30/60’ rule - in retirement, 10% of income comes from contributions, 30% from earnings on investments before retirement, and 60% from investment earnings accrued after retirement. Does this rule still apply in Australia, given our current economic conditions?
| 19-03-18 | 2 comments | More -
Diversification - what it is and is not
The concept of diversification may seem to be second nature. However, some of its fundamentals are often misused and sometimes misrepresented.
| 15-03-18 | 3 comments | More -
10 "fearless" predictions for 2018
It is the time of the year when those in the forecasting business like to lay out our expectations for the coming year. Here are mine...
| 18-01-18 | More -
Income layering: What? Why? When? & How?
Income layering is a goals-based approach to building an investment portfolio that is likely to be beneficial to a wide range of retirees - especially those worried about how to sustain spending in the later stages of retirement.
| 10-01-18 | More