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...

Welcome to the farrelly's Dynamic Asset Allocation Australian subscriber only area...

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...

Welcome to the farrelly's Dynamic Asset Allocation New Zealand subscriber only area...

farrelly's Investment Strategy provides subscription and consulting tools and services to enable a dynamic, forward-looking approach to asset allocation, a key driver of quality portfolio construction and quality results for investors...

Portfolio construction is only “successful” when it helps clients achieve their financial goals. Yet delivering on those goals - be it financial independence or, at the very least, a reasonable standard of living in retirement - is more challenging than ever. The vast fiscal and monetary responses to Covid-19 helped stabilise economies and boost asset prices, but did little to aid long-term investors - arguably, they have undermined the prospects for long-term investment portfolios. We find ourselves in an environment of historically high asset prices and heightened uncertainty about the path of inflation and the pandemic itself - while also grappling with complexities that pre-date the crisis, including ultra-low interest rates, technological disruption, and geopolitical tension which increase market risk further. We need to be open-minded to contemporary, emerging and non-traditional portfolio construction theories, techniques and tools, to maximise the likelihood of meeting client goals in the years ahead. The end justifies the means!

In the 1990s and 2000s, investors were largely able to ignore the macro picture. But macro forces have reawakened and matter more than ever for portfolios to succeed in meeting client goals in the years ahead.

All markets are embedded in a web of human relations, values and norms. We must rethink the relationship between market and civil society to return to a more secure and stable economic plane.

Raghuram Rajan | 1.00 CE

For decades, investors used the 60/40 portfolio as the default market proxy. The expectation was the 60% allocated to global equities would provide the growth, the 40% allocated to fixed income would generate sufficient income, and the relatively low correlation between the two provide diversification. Unfortunately, capital market assumptions are projecting a substantial reduction in global equity returns over the next 10 to 20 years, fixed income yields are near generationally low levels, and correlations among most traditional investments have been rising. In other words, the maths just doesn’t add up. Practitioners need to continuously upgrade their toolbox to achieve portfolio goals. We need to identify alternative sources of returns and income to help investors achieve their goals and objectives, and investments that can help buffer the inherent volatility of the global markets. Asset allocation and portfolio construction needs to consider an expanded set of solutions including hedge funds and private markets (private equity, private credit & real assets) so that portfolios are truly the ends to the means.

Many retirees are focused on the income return from their investment portfolios as the foundation for what they have available to spend in retirement. The flaws of income-oriented strategies have always been present, though the implications are now becoming more apparent, and the consequences could be about to bite. As the yields for most investments are historically low, and likely to remain low for several years, retirees may be tempted to reallocate to higher yielding investments, such as high yield bonds or equity-income strategies. This has led to some commentators to call the death of the traditional 60:40 portfolio. A total return approach presents a compelling alternative as it can support retiree spending strategies while removing the temptation to increase risk. So, in the end, total-return portfolios could mean better outcomes for retirees.

We all agree that, sadly, there is no such thing as the perfect company. This presents a great challenge for responsible investors. The companies that are solving the world’s greatest challenges - be they environmental or humanitarian – often have near term imperfections that see them starved of capital. A pragmatic approach is what’s required, one that embraces company imperfections and focusses on the big picture – the potential for positive societal impact. Thoughtful and constructive company engagement can help bridge the gap from good to great. But the term engagement has been caught up in the jargon and acronyms that increasingly pervade responsible investing. Ultimately, engagement is as much about support as it is challenge – a collaborative partnership where the end really can justify the means.

With more than A$3 trillion in assets under management, Australia’s superannuation system is one of the best-resourced retirement systems in the world. But for individual Australians, a reasonable standard of living in retirement can only be achieved with appropriate accumulation and decumulation solutions. As the Baby Boomer generation continues its transition into retirement and life expectancies rise, portfolio construction practitioners must be open-minded to ensure they have the retirement solutions needed to meet client goals right to the end of their days.

Markets and economies have benefitted from more than three decades of declining interest rates, as central bank inflation-targeting regimes, globalisation and new technologies helped keep goods and services prices in check. It is unlikely that this “great moderation” can continue throughout the 2020s. Stimulatory fiscal and monetary policies remain in place, despite rising inflationary pressures - in the US, at least. Meanwhile, a potential combination of Chinese deleveraging and tighter Federal Reserve policy raises the risk of deflation. Uncertainty around the inflation outlook is at an extreme – yet a view on inflation is a critical input to building portfolios capable of achieving client goals out into the future.

A disciplined, scenarios-based approach to determining your views on the outlook for markets is a vital means to the end – building portfolios capable of achieving client goals out into the future. Three economists describe and debate three plausible, forward-looking economic and market scenarios that have a reasonable probability of occurring during the next two to three years. These are then inputs to the Asset Allocation Roundtable later in the day.

Private debt essential to modern investment portfolios. If the end objective is an attractive risk-adjusted return, then private debt is the means to get there.

Andrew Lockhart | 0.50 CE

Infrastructure has a key role to play in the world’s move towards decarbonisation and goal to reach net-zero emission targets by 2050. Government policy support and the unprecedented amount of capital required to achieve these targets should change how you think about investing in infrastructure assets. Global listed infrastructure is a means for investors to access this accelerating investment trend, through high-quality and geographically diverse liquid assets, but an active approach is critical to building out infrastructure investment opportunities. This multi-decade initiative is happening today. Now is the time to ensure portfolios are exposed to the net-zero investment opportunity infrastructure offers.

Style matters when constructing portfolios, but there are other characteristics in a manager that are as - if not more - important in generating consistent returns over the long term.

Myooran Mahalingam | 0.50 CE

Everyone is going crazy about inflation. But will current elevated levels be sustained? Not likely. Post Covid-19, secular factors such as debt levels and demographics provide even stronger headwinds against inflation than the preceding decade ever did. In developed economies such as the United States and Australia, Consumer Prices averaged circa 2.00-2.25% this century. Current market inflation expectations for the next 10 years suggest CPI of 2.5%. That’s price stability, not inflation. Central Banks have created some room to allow inflation to run a little higher than traditional targets, but their aims are the same. In the end, it is prudent to consider the risks of persistent high inflation, but the means is not to flip portfolio asset allocations in response to the recent euphoria. Rather, asset allocators need to focus on and set their portfolios for the underlying regime of price stability.

Capital markets will be shaped profoundly as the economy transitions from a depletive economic model to a more sustainable one. Such transitions will inevitably create winners and losers. Within Environmental Markets, a host of macroeconomic factors is driving growth for energy efficiency, renewable energy, water, waste/resource recovery, food, and agriculture related markets. For asset allocators, recognizing such opportunities and seeking higher quality companies with strong business models is key to delivering excess risk-adjusted returns. The next economy is sustainable. In the end, a portfolio that is able to capture emerging alpha opportunities will be the means to long term success.

With attractive valuations and global investors underweight the asset class, the case for a dedicated Emerging Market Debt allocation is growing ever stronger.

Arif Joshi | 0.50 CE

Building quality investment portfolios is not simple, yet portfolios are simply a means to an end – achieving client goals. Practitioner education, however, focuses heavily on developing technical investment skills, often to the detriment of time learning the knowledge and skills that enable better engagement and understanding of the most important aspect of any portfolio – the client! Finology is the unique mix of behavioural finance (“fin”) and investor psychology (“ology”) as it relates to understanding the investor mindset and giving investment advice. It focuses on identifying our own and our clients’ investing biases, beliefs and behaviours and the investment implications, as a means to a better end for clients.

A disciplined, scenarios-based approach to determining your views on the outlook for markets and then the asset allocation implications is a vital means to the end – building portfolios capable of achieving client goals out into the future. This hypothetical Investment Committee meeting picks up from the Economists Roundtable earlier in the day. First, an Asset Class Expert Panel debates the three forward-looking economic and market scenarios presented by the Economists Roundtable. The Investment Committee (Strategies Conference 2021 delegates) then vote to determine which of the three scenarios is most likely. Finally, our asset allocation consultants explain the asset allocation implications of each scenario.

In retirement, investors seek to convert their savings into a sustainable salary replacement with access to growing capital. The metric for success must also shift to accommodate these trade-offs.

Paddy McCrudden | 0.50 CE

There is no point in building wealth for the future if that future is one of frequent and catastrophic climate events that undermine our way of life.

Chris Iggo | 0.50 CE

Active long biased, long short equity is optimal for meeting client goals. It combines equity market beta with absolute return thinking, stock picking skill, and flexible exposure. Market neutral investors forgo desirable long-term beta; long only investors forgo flexibility; behavioural biases risk passive investors panicking in bear markets and locking in losses. Investors should view long biased, long short equity as a core solution, dedicating a meaningful slice of portfolios to this strategy, rather than being constrained by traditional equity/debt buckets. The long-term alignment of the strategy (“means”) with client goals (“end”) is demonstrable and paramount.

The UN Sustainable Development Goals (SDGs) are 17 objectives for promoting ecological sustainability, social well-being, and economic development, providing governments, companies, and investors with a global blueprint to sustainable investing. For fund managers, investing will no longer be just about increasing financial value. The fund manager of tomorrow understands that the real-world impact of investments to society and the environment is equally important to generating alpha. Integrating SDGs in the investment process provide a means to understanding the real-world impact of companies. When building sustainable portfolios, investors should consider the real-world impact of their investments and build portfolios aligned with the SDGs as a means to building clients' wealth, as well as improving well-being. Aligning investments with the SDGs justifies the means.

There are now a plethora of funds that aim to account for environmental, social and governance issues based on different philosophies and processes. Passive screening and divestment approaches are inefficient ways of bringing about real change. To achieve the ultimate end - the preservation of our planet - practitioners should instead use active, fundamental strategies, capable of identifying companies that are helping the world adapt to, or mitigate, climate change. The top-line revenues of such portfolios will handsomely outperform GDP in the years ahead.

Australia faces significant challenges ahead - including navigating the health and economic impacts of Covid, responding to emerging issues around the future of work and new technologies, preparing for an increasingly risky geo-political environment, and addressing longstanding challenges such as climate change and reconciliation with Indigenous Australians. Addressing these requires leadership of a quality that enables society to cohere in the face of pressures that would otherwise create divisions. Trust will be at a premium - in turn, this will depend on the quality of ethical decision making by individuals, groups and organisations. A more ethical Australia would achieve an economic improvement about half as big as the nation’s economic reform priority list outlined by the Productivity Commission in 2017 (which would lift the economy by some $80 billion over time). But improving ethics cannot be achieved with a single initiative; it requires improvements in five key areas. With the individual, business and economic benefits on offer from a more ethical Australia, the business case for change is a sound one. In the face of the challenges ahead for Australia, strengthening ethics is simply a must for a better future.

Established in 2002, Strategies Conference has earned a reputation as THE portfolio construction strategies conference of the year. The program is designed and curated by our specialist, experienced and independent team and features an exceptional Faculty of 50+ leading investment thinkers - portfolio managers, CIOs, senior investment analysts, investment strategists, economists, independent consultants and practitioners - from around the world. Each offers his/her best, high conviction ideas around contemporary and emerging portfolio constructions issues and strategies, in the context of the program theme, “The end justifies the means!”.

Established in 2002, Strategies Conference has earned a reputation as THE portfolio construction strategies conference of the year. The program is designed and curated by our specialist, experienced and independent team and features an exceptional Faculty of 50+ leading investment thinkers - portfolio managers, CIOs, senior investment analysts, investment strategists, economists, independent consultants and practitioners - from around the world. Each offers his/her best, high conviction ideas around contemporary and emerging portfolio constructions issues and strategies, in the context of the program theme, “The end justifies the means!”.

Established in 2002, Strategies Conference has earned a reputation as THE portfolio construction strategies conference of the year. The program is designed and curated by our specialist, experienced and independent team and features an exceptional Faculty of 50+ leading investment thinkers - portfolio managers, CIOs, senior investment analysts, investment strategists, economists, independent consultants and practitioners - from around the world. Each offers his/her best, high conviction ideas around contemporary and emerging portfolio constructions issues and strategies, in the context of the program theme, “The end justifies the means!”.

Established in 2002, Strategies Conference has earned a reputation as THE portfolio construction strategies conference of the year. The program is designed and curated by our specialist, experienced and independent team and features an exceptional Faculty of 50+ leading investment thinkers - portfolio managers, CIOs, senior investment analysts, investment strategists, economists, independent consultants and practitioners - from around the world. Each offers his/her best, high conviction ideas around contemporary and emerging portfolio constructions issues and strategies, in the context of the program theme, “The end justifies the means!”.

Established in 2002, Strategies Conference has earned a reputation as THE portfolio construction strategies conference of the year. The program is designed and curated by our specialist, experienced and independent team and features an exceptional Faculty of 50+ leading investment thinkers - portfolio managers, CIOs, senior investment analysts, investment strategists, economists, independent consultants and practitioners - from around the world. Each offers his/her best, high conviction ideas around contemporary and emerging portfolio constructions issues and strategies, in the context of the program theme, “The end justifies the means!”.

Self-awareness has been hailed as one of the most important meta-skills of the 21st century. In an investment advice context, both advisers and clients benefit from engaging in activities that promote its development.

Rob Hamshar | 0.50 CE

With several catalysts impacting on the Australian advice landscape, we are seeing a resurgence back to centrally developed investment portfolio construction solutions - but the approach differs to history.

David Hutchison | 0.75 CE

Many investment professionals are typically quite skilled at manipulation, so those researching their funds need to protect themselves against manipulation as they conduct their due diligence.

Herman Brodie | 1.00 CE

Emotions generated in the media by way of the words used in turn influence investors decisions, providing the foundation for a highly profitable investment process.

Supply chain inflation has become an increasing preoccupation for economists, corporations and governments, as freight costs have accelerated, commodity prices increased and import prices returned to inflation.

Tough conditions in global supply chains in Q1 2021 - congested logistics networks, continued demand growth and cost inflation - will take much of Q2 2021 to unwind.

This lecture contrasts classical and modern economists' views and theories about human behaviour, reflects on more recent challenges from psychologists, and scrutinises the limits to arbitrage - concluding that with the link between human behaviour and economics being re-established, economics has come full circle.

Rich Pickings explores the investment beliefs and philosophies of prominent professional investors. In this Rich Pickings, I sit down with London-based Keith Lloyd, CEO and Deputy CIO of global bond manager, Colchester Global Investors.

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...

Our Markets Summit program kicks off with a video retrospective of the key events of the prior year...

The herculean tug of war between stronger economic growth and higher bond yields will be the defining battleground of 2021 and will be accompanied by violent and rapid-fire recalibrations of relative valuations.

Jonathan Pain | 0.50 CE

Our diverse panel debated which of the high-conviction propositions they heard at Markets Summit 2021 resonated most strongly, which they disagreed with most - and the portfolio construction implications.

Expert Panel | 0.75 CE

The energy transition has the potential to be as transformative for the world economy and geopolitical landscape as the digital revolution has been since the 1980s.

Chris Iggo | 0.50 CE

Often underrepresented in investor portfolios due to concerns around liquidity, private equity investing with a truly hands-on approach allows active investors to maximise their capital growth potential.

David Leslie | 0.50 CE

Rather than accepting lower returns for liquidity, investors should go back to the drawing board and re-assess their need for daily liquidity.

Peter Robinson | 0.50 CE

Those who cling to yesterday’s narrative may forego one of the great trades of recent decades as the world shifts to a "global reopening" narrative and away from one of "secular stagnation".

Julian McCormack | 0.50 CE

Fiscal stimulus and the vaccine have fuelled an extraordinary rally in equities - but, ultimately, stocks are at record highs because of extraordinarily low market interest rates. Investors should be wary of inflation, but also of being underweight equities.

Arvid Streimann | 0.50 CE

Covid-accelerated trends - including digitalisation, geopolitical tension and the impact of ESG on the cost of capital - are structural and divergence within equity markets could increase.

Crispin Murray | 0.50 CE

With the official cash rate near zero, it's time to head back to the drawing board to find a more consistent source of income. Private debt provides a compelling alternative source of income in a portfolio.

Andrew Lockhart | 0.50 CE

De-carbonisation, company management and ESG scrutiny are diminishing the influence of commodity prices on resources alpha generation. If long term sentiment begins to turn, there is significantly more value to be found in the resources sector.

Nick Pashias | 0.50 CE

The 60/40 balanced portfolio needs to be “stretched” or redesigned, to mitigate the impact of low yields on overall portfolio risk and return. Investors need to make their equity allocation work harder and consider new diversifiers.

Thomas Poullaouec | 0.50 CE

Supply chain decision makers must continue to focus on mitigating risk in 2021, not maximising growth. Political risks outbalance opportunities.

Chris Rogers | 0.50 CE

The consensus view that US equities are in a bubble is overblown. Go back to the drawing board when it comes to your views on US valuations - because this time IS different.

Jeff Schulze | 1 comment | 0.50 CE

Pent up consumer demand, fiscal stimulus and accommodative monetary policy set the stage for a sharp global recovery. It is back to the drawing board in a high growth environment.

Ronald Temple | 1 comment | 0.50 CE

Established in 2009, Portfolio Construction Forum Markets Summit is THE investment markets scene setter of the year. The geopolitical, macroeconomic and corporate outlook remains unclear, yet stock markets continue to climb this wall of worry. It is time to pause, reflect and go back to the drawing board! Markets Summit will help you better understand the key drivers of and outlook for the markets (geopolitical, economic and asset class), and the opportunities and risks ahead, on a three- to five-year view, to aid your search for return and to help you build better quality investor portfolios.

Structural factors will ensure that the cash rate cannot rise over the medium term, resulting in negligible cash returns. A core fixed income exposure consisting of Australian government bonds will outperform cash over the long term.

Chris Rands | 0.50 CE

During 2020, G-REITs experienced a once in a generation demand shock. With new building supply and REIT balance sheets in good shape, G-REITs are well positioned as economies reopen and demand returns. Now is the time for G-REITs.

It's time to construct portfolios with investment strategies designed to advance humankind towards a global sustainable economy, a just society, and a better world.

John Quealy | 0.50 CE

The illiquidity premium offers strong value over the cyclical horizon. A combination of interest rate, credit and illiquidity risks provide diversified fixed income exposures with attractive return potential.

Rob Mead | 0.50 CE

The Covid-19 pandemic has accelerated profound shifts in how economies and societies operate and is transforming macroeconomic policy, geopolitics and sustainability.

Ben Powell | 0.50 CE

Believe in sustainable investing or not, investors need to understand its impact on investment returns and portfolio construction as capital markets stand on the cusp of a transformation to an ESG world.

Suni Harford | 0.50 CE

Portfolio construction practitioners must go back to the drawing board and focus systematically on the constraints facing global policymakers, in order to successfully extract the implications for portfolios.

Scale-as-a-service cloud computing platforms allow companies - both large and small - to get their IT infrastructure up and running in minutes. Over the next decade, this will have profound implications for the global economy.

The US, Australia and their allies have long depended on global "rules of the game" for their major companies and sectors to flourish. Australia and the US will have to accept that China will play an ever greater role shaping these rules.

Ngaire Woods | 1 comment | 0.50 CE

Jonathan Pain, Author of The Pain Report, is a regular key note presenter at Portfolio Construction Forum's professional development programs. Over the years, he has debuted new investment theses and challenged delegates about how to build better quality investor portfolios...

As a tumultuous 2020 neared its end, the clouds of uncertainty appeared to be parting. Successful vaccine trials raised hopes that the Covid-19 pandemic would soon be over, the US election result promised a more geopolitical- and market-friendly presidency and government, and rebounding investor confidence fuelled a dramatic rotation into value stocks. Yet that confidence is already being tested in 2021 as new Covid variants take hold, doubts emerge about the efficacy of vaccinations, and the Democrats’ Senate win stirs fears of an aggressive spending, taxation, and regulatory agenda that’s not favourable to business. The geopolitical, macroeconomic and corporate outlook remains unclear, yet stock markets continue to climb this wall of worry. It is time to pause, reflect and go back to the drawing board!

Established in 2009, Portfolio Construction Forum Markets Summit is THE investment markets scene setter of the year. This page takes you to the Markets Summit 2021 Special Interests Forum (elective) room 3 livestream.

Established in 2009, Portfolio Construction Forum Markets Summit is THE investment markets scene setter of the year. This page takes you to the Markets Summit 2021 Special Interests Forum (elective) room 2 livestream.

Established in 2009, Portfolio Construction Forum Markets Summit is THE investment markets scene setter of the year. This page takes you to the Markets Summit 2021 Critical Issues Forum (plenary) livestream.

Established in 2009, Portfolio Construction Forum Markets Summit is THE investment markets scene setter of the year. This page takes you to the Markets Summit 2021 Critical Issues Forum (plenary) livestream.

Established in 2009, Portfolio Construction Forum Markets Summit is THE investment markets scene setter of the year. This page takes you to the Markets Summit 2021 Special Interests Forum (elective) Room 5 livestream.

Established in 2009, Portfolio Construction Forum Markets Summit is THE investment markets scene setter of the year. This page takes you to the Markets Summit 2021 Special Interests Forum (elective) room 1 livestream.

Established in 2009, Portfolio Construction Forum Markets Summit is THE investment markets scene setter of the year. This page takes you to the Markets Summit 2021 Special Interests Forum (elective) Room 4 livestream.

The Investment Management Analyst Certificate (IMAC) advances investment management analyst knowledge, skill and expertise in a definitive set of competencies necessary for building and/or advising on quality multi-manager portfolios. It is both a structured post-graduate certificate course in its own right, and the Australian-based Registered Education Program for the global Certified Investment Management Analyst® (CIMA®) program.

This Research Roundtable focused on the Colchester Global Government Bonds strategy, with senior practitioners deciding, after briefings, Q&A and debate, their individual rating for the strategy and whether to include it on a hypothetical APL and/or multi-manager portfolios. Afterwards, the meeting is truncated and published for on-demand viewing by all members.

1.50 CE

This lecture instructs farrelly's subscribers on on the principles of managing currency in portfolios.

This lecture instructs farrelly's subscribers on the foundations of asset allocation in three parts - key principles of asset allocation, optimisation and how to define an asset class.

The first generation of behavioural finance described people as "irrational", fooled into cognitive and emotional errors that diminish wealth. The second generation of behavioural finance describes people as "normal" - we use shortcuts and sometimes commit errors on the way to satisfying our wants.

Meir Statman | 0.50 CE