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Symposium
NZ 2015 - Resources Kit
Symposium facilitates debate on the three pillars of portfolio
construction – markets, strategies and investing. Established in 2011,
it is THE NZ investment markets and strategies conference of the year.
The jam-packed, two day program, featuring 20+ leading investment
professionals, was in effect two programs in one. Day one focused on the
key drivers of and outlook for the markets. Day two focused on
developing robust strategies to meet client objectives.
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Quicklinks |
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This online Resources Kit is a key feature of the Symposium 2015
program (in fact, all our programs feature an online Resources Kit). It
enables all Members (whether or not they were part of the live "studio
audience" on the day) to "attend" Symposium 2015. It's an
invaluable set of continuing education material.
This Resources Kit includes all the videos, podcasts, slides and papers
for each session, along with a link to the delegate Workbook, and the
Backgrounder.
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Session titles |
A list of all the sessions from the jam-packed program;
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Session
resources |
Videos, podcasts, slides and papers for all 20 sessions.
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Workbook |
Download it and print it, use the checkboxes on pg 6-7 to tick off sessions as you
"attend".
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Session titles |
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Symposium 2015 was in effect, two programs in one. is Day one focused on the key drivers of and outlook for the markets. Day two focused on
developing robust strategies to meet client objectives. In order:
Day 1 - Markets
Day 2 - Strategies & Investing
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Session resources |
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Day 1 - Markets |
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About the
program |
Symposium
facilitates debate on the three pillars of portfolio
construction – markets, strategies and investing. Established in
2011, it is THE NZ investment markets and strategies conference
of the year. The jam-packed, two day program, featuring 20+
leading investment professionals, was in effect two programs in
one. Day one focused on the key drivers of and outlook for the
markets. Day two focused on developing robust strategies to meet
client objectives. |
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Critical Issues Forum 1 |
Facilitating debate on the markets,
strategies and investing
PortfolioConstruction Forum Publisher and Symposium NZ 2015 Moderator,
Graham Rich, opened
Symposium NZ 2015 in his usual
thought-provoking (and entertaining) way, highlighting key
issues to consider over the jam-packed, marathon program.
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Resources > |
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Critical Issues Forum 2 |
The global economy is firing on all
cylinders
The outlook for the global economy is unambiguously positive. We
have reformist governments in the world’s most populous nations
and the developed world has finally recovered from the WFC
(Western Financial Crisis). At long last all the regional
economic cylinders are firing in unison and secular stagnation
is yesterday’s story.
Jonathan Pain, Editor, The Pain Report
(Sydney)
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Resources >
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Critical Issues Forum 3 |
Desperate central banks are causing
Pollyanna asset prices
Slow growth is an old story. The new story is that world is
finally beginning to re-balance - a process that unfortunately
will take another 20 years. The first phase is that we think we
are getting out of the woods of stagnation and deflation and
already financial markets are getting way ahead of that story.
Central banks are making that situation much worse with their
belated asset purchases, zero interest rates and, in China's
case, the accelerated opening up of domestic markets in order to
qualify the yuan as a reserve currency. All of these
well-intended policies are causing bubbles and worrisome
distortions to asset prices. Negative bond yields and tight
credit EU spreads are the tip of the iceberg. In that
environment, investors should resist the temptation to chase
yield, especially in structured 'yield' products, and must avoid
lending to debtors that will be most vulnerable to market
backlash when credit quality and equity value deteriorate and
reality sets in.
Dr Robert Gay, former
senior economist with the US Federal Reserve (NY)
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Resources >
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Critical Issues Forum 4 |
China’s property bubble is set to
burst!
A credit-fuelled property bubble enabled China to maintain its
incredible run of growth through the global financial crisis (GFC).
However, now China has to deal with a massive excess supply of
property that is causing construction activity to contract along
with a range of other linked sectors in the Chinese economy, as
millions of homes lie vacant. This is unlikely to be ‘just
another property cycle’ in China. The bursting of China’s
property bubble poses a major risk to both the country’s
stability and the global economy.
Sam Churchill, Head of Macro Research,
Magellan Asset Management (Sydney)
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Resources >
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Critical Issues Forum 5 |
The patient is out, but the doctor is
(all) in
Divergences in global economic and policy outcomes have
important implications for markets around the world. US growth
is recovering, and it is very likely the Fed will increase rates
later this year. Meanwhile, in Europe, weak growth and the
threat of deflation have prompted the ECB to launch
unprecedented monetary policy support. This policy divergence
has directly influenced asset prices across the globe with
implications for stocks, bonds and currency markets.
David Fisher, MD & Product Manager, PIMCO
(Newport Beach)
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Resources >
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Critical Issues Forum 6 |
Get used to low interest rates
World-wide low interest rates are not a temporary phenomenon.
The world has changed and it is highly likely that the current
low rate environment will be with us for decades. Long term low
interest rates means that most equity and property valuations
are not stretched. Getting used to low rates will be a critical
adjustment that all investors will need to make in the coming
years.
Tim Farrelly, Principal, farrelly's
Investment Strategy
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Resources >
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Critical Issues Forum 7 |
House prices are a blunder of our
governments
High and rising house prices in Auckland hog the headlines. The
tax regime and bank lending practices are largely irrelevant.
Instead, increasingly unaffordable house and land prices result
from the collision of two, no doubt individually
well-intentioned, sets of policies. Tight restrictions on land
use crimp the supply of the sort of houses most people want to
live in, and very high target levels on non-citizen inward
migration persistently boost demand for housing. One or other
policy might make sense, but together they represent a very
costly blunder.
Michael Reddell, retired Special Adviser
Economics, RBNZ (Wellington)
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Resources
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Critical Issues Forum 8 |
Don’t ignore the tech sector for growth
investing
Returns in defensive equity yield and income sectors have been
outsized as bond yields have fallen. Growth sectors have
under-performed. And yet earnings and revenue growth for most
growth sectors has continued. Globally, technology shares are
cheap on a relative basis. Until recently NZ investors have had
few investment choices in the local technology industry.
However, a myriad of tech companies have raised capital and
listed on the stock exchange. Tech investing has significant
challenges with rampant competition and rapid obsolescence, at
the same time it remains the fastest growth segment and today it
appears to have attractive valuations.
Andrew Bascand, MD &
PM. Harbour Asset Management (Auckland)
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Resources
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Critical Issues Forum 9 |
Oil price moves are a cyclical risk,
adding volatility to markets
One of the most important events of 2014 for investors was the
dramatic collapse in the oil price. A short-term recovery
appears unlikely and, more importantly, the long term
equilibrium price is now likely to be lower. This will have both
cyclical and structural impacts – for example, lower oil prices
are hitting a number of producing countries budgets hard (Russia
being the most widely reported) while Brazilian equities are
down due to weaker oil prices. Overall, portfolios must be
repositioned for increased volatility.
Nick Langley, Co-CEO &
Co-CIO, RARE Infrastructure (Sydney)
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Resources
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Critical Issues Forum 10 |
Investing in NZ is a big challenge for
an Au-based, Kiwi investor
Despite a genuine desire to invest in NZ on behalf of a
substantial Australian superannuation fund, after several years
of trying, no money has been invested. The capital being sought
is too small scale, fund manager fees are too high, and genuine
diversifying opportunities too few. Once those hurdles are
overcome, NZ will be a more attractive destination for
institutional capital”.
Sean Heneghan, CIO
Multi-Asset, AMP Capital Australia (Sydney)
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Resources > |
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Critical Issues Forum 11 |
Portfolio construction implications
panel 1 - Markets
Our Faculty debated their high conviction ideas on the drivers
of and medium-term (2 to 3 year) outlook for the markets.
Jonathan Pain, Editor, The Pain Report
(Sydney)
Sam Churchill, Head of Macro Research,
Magellan Asset Management (Sydney)
Tony Hildyard, Country
Head NZ, PIMCO (Wellington)
Tim Farrelly, Principal, farrelly's
Investment Strategy
Nick Langley, Co-CEO & Co-CIO, RARE Infrastructure (Sydney)
Andrew Bascand, MD & PM. Harbour Asset Management (Auckland)
Sean Heneghan, CIO Multi-Asset, AMP Capital Australia (Sydney)
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Resources
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Critical Issues Forum 12 |
NZ is not a rock star economy. Will it
ever be?
New Zealand has plummeted down the world income per capita
rankings from third place in the 1950s to 23rd place in 2015.
Successive Governments have done little in the past couple of
decades to reverse that decline. Why have we failed to regain
our earlier position? Three different reasons are proposed and
debated.
Prof Robert MacCullouch, Auckland University Business School
(Auckland)
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Resources
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Critical Issues Forum 13 |
Economic growth is the answer, not the
problem
Economic growth has had a lot of bad press recently. Critics hold it
responsible for environmental degradation, rising unhappiness
and inequality. But on closer inspection, the objections
typically leveled against growth do not stand up to empirical
scrutiny. Economic growth achieves the very opposite of what its
critics believe it does. Economic growth is no silver bullet to
all the world’s problems. But it comes close.
Dr Oliver Hartwich, Exec Director, The New Zealand Initiative
(Wellington)
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Resources
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Critical Issues Forum 14 |
Portfolio construction implications
panel 2 - NZ Economy
Our Faculty debated their high conviction ideas on the
drivers of and outlook for the NZ economy.
Dr Oliver Hartwich, Exec Director, The New Zealand Initiative
(Wellington)
Tim Farrelly, Principal, farrelly's Investment Strategy
Sean Heneghan, CIO
Multi-Asset, AMP Capital Australia (Sydney)
Nathan Smith,
Columnist, National Business Review (Auckland)
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Resources
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Critical Issues Forum 15 |
Asset allocation will dominate
portfolio returns in the years ahead
As we all brace for lift-off in the key US federal funds rate,
going forward, robust, top-down macro perspective will be even
more critical to the success of portfolios than ever. The US
equity market faces a number of headwinds: a tightening in
monetary policy; a stronger dollar; and weaker earnings. Reverse
these three factors and you have the case for Europe. The
argument in favour of China, India, Japan and India is that they
have reformist governments. Then, consider which countries have
the capacity to lower interest rates the most? The answer is
China, India and Indonesia. But it’s not just about where you
invest, it’s also about how you invest. The relentless pursuit
of mediocrity and closet indexation just won’t cut it.
Jonathan Pain, Editor, The Pain Report
(Sydney)
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Resources
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Critical Issues Forum 16 |
Historic accumulation/decumulation
models won’t work in future
Historically, we've spent 40 years accumulating assets and
savings, followed by 10 years maintaining and protecting them,
before passing them on to the next generation. In future,
increased longevity will see a new pattern - 40 years
accumulating, followed by 30 years decumulating – but the latter
is at odds with human nature. We underestimate our lifespan and
we want to buy now and pay later. It's possible, or more likely
probable, for future generations, that our money will run out
before our body does. This means that our historical models of
accumulation and decumulation will not work for future
generations
Diane Maxwell, Retirement Commissioner
(Wellington)
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Resources
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Critical Issues Forum 17 |
Risk and return – not as tight a link
as we’ve been taught
What return premia - if any - are attached to different types of
investment risk? And just how reliable those premia are in
practice? Can the risks be diversified? This
presentation will help you assess different types of risk
and return and, in particular, see through marketing dressed up
as sophisticated analysis.
Tim Farrelly, Principal, farrelly's
Investment Strategy
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Resources
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Insight |
Cash may not be king but it could be a
handsome prince
In this environment, what’s very important is capital
preservation. The problem investors have is that there are very
few places to hide. So, while cash may not be king, I think it
could end up being a very handsome prince.
Simon Doyle, Head of Fixed Income and
Multi Asset, Schroders
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Insight
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Critical Issues
Forum 18 |
Key Takeouts Workshop - The Markets
This highly interactive, Socratic workshop kicked off with
each panelist outlining the high conviction idea they agreed
with most, and which one they agreed with least. Delegates then worked in their tables to determine the same, before
reporting back on a table-by-table basis. Collectively consider
the portfolio construction implications.
Tim Farrelly, Principal, farrelly's
Investment Strategy
Michael Furey, Managing Director, Delta
Research & Advisory (Brisbane)
Janet Natta, Director, Smart Money Advice (Hamilton)
Debra Carlyon, Director, Stuart & Carlyon (Auckland)
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Resources
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Due
Diligence Forum 1 |
All is not lost in preserving yield in
a low-yield environment
New Zealanders are living longer and enjoying healthier, more
productive retirements than ever before. While this is good
news, to enjoy the lifestyle they choose in retirement many
people need regular income to supplement their New Zealand
superannuation. But there is a problem. Yields on traditional
saving vehicles such as term deposits and bonds remain close to
multi-decade lows. Such yields are likely to stay low for some
time because the ‘neutral’ cash rate and ‘equilibrium’ bond
yield is lower than it used to be. Consequently, investors will
need to hunt out alternative sources of yield to meet their
investment objectives. All is not lost. Yield can be preserved
in a low yield world but investors need to be aware of the risks
and trade-offs associated with these alternatives.
Keith Poore, Head of
Investment Strategy, AMP Capital NZ (Wellington)
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Resources
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Small Caps are an essential risk
diversifier
Investors in the Australian equity markets find themselves
investing in a market that is very concentrated and therefore
carries undue portfolio risk. Small cap exposure adds diversity
in terms of a broader number of sectors to invest in - therefore
providing essential diversity in terms of where profits and
dividends are derived from. Diversity is an investor’s essential
risk management tool. Small caps also provides access to
emerging sectors and stocks. Importantly, investing in smaller
cap sectors and stocks does not have to be a high risk strategy
for investors. The diverse range of quality small cap companies
with recurring earnings and growing dividend yields offer
investors essential risk diversification and should be
incorporated in to an investor’s portfolio.
Simon Conn, Senior
Portfolio Manager, Investors Mutual (Sydney)
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Resources
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Engaging NZ companies on governance
will improve outcomes
There are several current New Zealand initiatives on foot
focused on improving listed entity governance. The FMA has
updated its "Corporate Governance-Principles and Guidelines" as
well as "a Director’s guide to IPO's". The NZX recently updated
its rules on continuous disclosure and the use of trading halts.
However, at the coal face, it is the engagement between company
Boards and institutional shareholders that can achieve
meaningful improvements for all investors. NZ institutions lack
the Australian tool kit of the "two strikes" rule, so
perseverance and commitment are essential.
Rebecca Thomas, CEO, Mint Asset Management (Auckland)
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Resources
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Due
Diligence Forum 2 |
NZ fixed interest – picking the highest
yield is not enough
Building NZ fixed interest portfolios is harder than it has ever
been. The yield curve is low and flat, credit spreads are tight,
and there has been a dearth of retail bond issuance for
practitioners to choose from. It is not enough to wait and pick
the highest yielding new retail issues as they come available.
Portfolios need to be constructed for the specific needs of
clients, which will typically be a combination of liquidity,
income, quality, and diversification.
Christian Hawkesby,
Head Fixed Inc, Harbour Asset Management (Auckland)
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Multi-manager global equity portfolios
needn’t be low active share
The level of active share in global equity portfolios has
received increasing attention over the last 10 years. This is
another useful metric for assessing the multitude of different
investment strategies available. When combining managers
together to form a multi-manager global equity portfolio,
investors should still aim to keep active share relatively high.
Alan Clarke, Investment Analyst, ANZ
Investments (Auckland)
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Resources
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Harness India's growth by investing
before the crowd
To harness the full potential of the India growth story,
investors need to consider equity exposure to companies which
have strong links to the growth drivers of the economy. Rather
than large, liquid companies with significant global revenue
bases which dominate benchmark allocations, investors should
seek exposure to India’s surging local demand, driven by the
population demographic, rising wealth and initiatives of the
recently appointed Government. This can be achieved by
participation at an earlier stage of a company's growth, to
capitalise on the growth story.
Mugunthan Siva, MD, India Avenue Investment Management (Sydney)
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Resources
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Critical Issues Forum
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Key Takeouts Workshop - Strategies &
Investing
This second interactive, Socratic
workshop kicked off with each of our DDF presenters outlining
their high conviction portfolio construction strategy idea.
Delegates then worked in tables with others who attended the
same DDF sessions, to determine their key takeouts and portfolio
construction implications.
Keith Poore, Head of
Investment Strategy, AMP Capital NZ (Wellington)
Simon Conn, Senior Portfolio Manager, Investors Mutual (Sydney)
Rebecca Thomas, CEO, Mint Asset Management (Auckland)
Christian Hawkesby,
Head Fixed Inc, Harbour Asset Management (Auckland)
Alan Clarke, Investment Analyst, ANZ
Investments (Auckland)
Mugunthan Siva, MD, India Avenue Investment Management (Sydney)
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Resources
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Due Diligence Forum 3 |
Portfolio construction of the future
will focus on 3 risk buckets
We’ve always been told that asset allocation accounts for around
90% of performance volatility through time – but it doesn’t have
to be that way and it’s definitely not the case for many
investment strategies. In fact, the contribution to overall
performance from exposures across asset class, risk factors, and
pure market timing and security selection varies considerably
across funds. Portfolio construction should therefore focus on
three risk buckets – beta, smart beta, and alpha. If not, you run
the risk of creating a poorly diversified (that is, over
diversified) portfolio – and, worse, a portfolio that costs far
more than it should.
Michael Furey, Managing Director, Delta
Research & Advisory (Brisbane)
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Resources
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Stress testing for DIMS
If you have a DIMS license, you are required to stress
test portfolios. This session examined two practical approaches
to stress testing, and the strengths and weaknesses of
each, to enhance your understanding of
how to build your own approach to portfolio stress testing.
Tim Farrelly, Principal, farrelly's
Investment Strategy
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Resources
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Critical Issues Forum
20 |
Mastering your Key Takeouts and
professional positioning
This engaging, intensive and fun interactive 60-minute workshop
showed delegates how to capture, package and articulate their Key
Takeouts from Symposium NZ 2015, and synthesise them with their core professional value proposition, in a way that ensures clients see the benefit.
Michael Henderson, Corporate
Anthorpologist, Cultures at Work
(Auckland)
Michael has over 25 year's
experience in observing advising and educating organisations
(such as The NZ Rugby Union, Spark Digital, Ogilvy, Microsoft,
and Coca-Cola) on how to enhance their workplace culture for
greater levels of performance, staff fulfilment and customer
delight.
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This was a "you
had to be there" session. |
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