Crises can be useful - highlighting our investing strengths and weaknesses. What we do with this information determines whether portfolios survive or thrive during the dislocation and in the post-crisis environment. A live and on-demand zoominar series, All Things Considered will challenge your portfolio construction beliefs, helping you identify which remain valid and which require new thinking, to inform your investing knowledge, beliefs and behaviours and help you build better quality investor portfolios.
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...
Classical economists often incorporated human behaviour into their thinking. But in the 1960s and 1970s, homo economicus - the great rational agent of economic theory - was born. It was not until the 1990s that the link between human behaviour and economics began to be re-established.
This lecture instructs IMAC candidates on the fundamentals of investment portfolio performance measurement and attribution.
The world today is an acceleration and escalation of the world that existed before Covid-19, rather than a whole new world. Broad, multidisciplinary thinking is essential.
For investors needing more from their fixed income allocation, global convertible bonds offer a whole new world of opportunity.
Decarbonisation and data growth will dominate every aspect of our lives for decades to come. If your infrastructure manager isn’t leveraging off these themes then you need to find a new one.
We are at the threshold of an epic bull market buoyed by the emerging Buenos Aires Consensus and desensitisation to Covid-19. But beware, inflation will eventually re-emerge.
Incumbent investment frameworks such as Value, Shorting, Passive and Index Aware strategies are failing. Going forward, successful investors will need to be extremely selective when allocating capital.
The tech-wreck of the early 2000s was ground zero for the birth of a succession of Australian technology companies that have disrupted markets and established themselves as global leaders.
Traditional business models will increasingly be challenged. To win, companies will need to spend for the future and investors will need to take a longer term view to define ‘value’.
Post GFC, inflation risk skewed to the downside with central banks fighting against disinflation and deflation – and the market is potentially under-pricing inflation risks going forward.
While it may not be a new approach, ESG investing creates risk-aware portfolios that are more likely to outperform over the long term.
Understanding what has really changed in people's values as a result of Covid-19 and the influence of emotions will prepare us for the increasingly polarised economic, geopolitical, social and environmental new world order.
Since the early 1980s, developed market government bond yields have broadly been falling, with investors voicing concerns that the asset class offered little or no value. Continually, they have been proven wrong.
Investors should not attempt to time, but rather allocate to well-diversified and balanced multi-factor portfolios and provide consistent exposure to targeted factors.
This lecture instructs IMAC candidates on the characteristics and analysis of options, futures and other derivative investments.
It turns out that 'retiring’ and withdrawing from productive life actually conflicts with our own natural drivers of well-being. The concept of ‘retirement’ is an obsolescent by-product of the industrial era that needs to be retired.
This lecture instructs IMAC candidates on the history of global capital markets and the key principals of capital market valuation.
Market pricing goes to the heart of everything we do in constructing portfolios. But the risk-free rate is artificial as central bank manipulate interest rates to stimulate economies. The implications for asset allocation are significant.
This lecture instructs IMAC candidates on the statistics used to describe and analyse the risk and return characteristics of securities and portfolios.
The first All Things Considered webinar was foundational. Our panel of expert portfolio construction practitioners and academics made the case for questioning our investing activities, and identified some “sacred cows” that are most consequential to investment outcomes AND in greatest need of revision.
This Research Roundtable focused on the UBS CBRE Global Real Assets strategy, with 10 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.
A year ago, I showed it's possible to measure prediction accuracy for active managers, and that it influences optimal portfolio construction. Is this still a valid approach to portfolio construction, given today's markets?
Jonathan Pain, Author of The Pain Report, is a regular key note presenter at PortfolioConstruction 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...
Joe Biden had a fantastic night on Super Tuesday and he could be the Democratic Nominee - but a lot can change over the next month. Meanwhile, trade relations between the US and China may falter if China struggles to honor its commitments due to a weak economy.
Most of us want to act on our values, but we also need to feel that we have a reasonable chance of doing so effectively and successfully. Rather than focus on ethical analysis, focus on ethical implementation.
Refocusing sustainable investing efforts onto client values and beliefs starts a chain reaction that delivers sustainable outcomes for clients and long-lasting relationships.
New research shows that media sources generate emotions that transmit to individuals and so influence their investment decisions, resulting in a departure from so-called efficient markets.
By identifying their own systematic patterns of departure from "rational" behaviour, practitioners can compensate for their effects, and improve the quality of their day-to-day investment decision-making.
Over shorter periods of time, there are market inefficiencies due to well researched behavioural biases. Knowledge of these can help improve our own investment decision making and that of our clients.
Several of our Faculty discuss their key takeouts from Finology Summit 2020, to help delegates think through how people's different investing biases, beliefs and behaviours impact investment outcomes.
Using the language of client values and behaviour will help build a foundation of trust, and assist investment advisers architect a portfolio that is in sync with clients' lives and values.
A fixed point of reference, in the context of investment risks and uncertainties, can induce biases in approaches to meet client objectives. These biases will be costly to investors in the long term.
As we scramble to make sense of occurrences such as coronavirus and climate change, the application of prior cultivated imagination can preserve the integrity of investment decision making.
Markets Summit 2020 facilitated debate on the key drivers of and outlook for the markets (on a three- to five-year view) - with particular emphasis on being alert to the high VUCA risks and opportunities ahead - to aid your search for return, and to help you build better quality investor portfolios.
In the decade ahead, ageing demographics, income inequality, market share concentration and climate change will reshape the economy, elevating the VUCA facing investors, requiring deep fundamental research to determine where best to invest.
Market capitalism has survived many rotations of the political cycle over generations. But there is nothing certain or given about capitalism – and today, its future is being called into question, with growing calls to fundamentally change the system.
US/China trade tensions and the coronavirus outbreak highlight that a VUCA world abounds. But this does not change long-term trends that make emerging markets ripe for investment.
VUCA issues are going to increasingly drive market outcomes. Mapping out different scenarios is a must to check your biases as well as challenge your own, others' and consensus views, and generate investment ideas that help manage VUCA and target the right opportunities.
As growth becomes more scarce in developed markets, the valuation gap between emerging market equities and developed market equities will close. Within EM, Asia is the place to be investing.
The current VUCA environment creates opportunities for investors to increase diversification and income in their diversified portfolios, using carefully selected, higher yielding parts of the credit market.
As the old certainties break down, the response from policy makers has been to stimulate economies. The liquidity provided is particularly evident in longer dated growth assets. In the context of the Australian market, Australian mid caps is the sweet spot.
The world has checked into Hotel California – interest rates are failing to stimulate demand and monetary policy is less effective. Successful adaptation will require a re-think of traditional strategic asset allocation approaches.
Trade Wars, the US Election, Brexit 3.0, natural disasters and pandemic risks are causing fear and uncertainty in Australian equity investors. The key to capturing opportunities is to focus on what matters to long-term returns.
High household debt places Australia in a fragile position for further disinflation, implying that bond yields will remain lower for longer. Investors should look to accumulate bonds and ensure portfolios have an appropriate defensive allocation in anticipation of the next downturn.
Markets require constant accommodation to deliver status quo economic (not market) outcomes. Watch for changes in liquidity provision as forward markers of performance.
Corporate bond spreads are now tighter than they were before the GFC, yet corporate leverage is higher. Buy financials, sell corporates.
Emerging market assets and the Australian dollar present as having the greatest upside risk through the remainder of 2020-21.
To fully appreciate the risks and opportunities in a high VUCA environment, portfolio construction practitioners must adopt a mindful approach in order to adapt to unexpected events.
Venture capital is evolving globally to deliver both financial outcomes and also significant and measurable social impact for investors, entrepreneurs and communities.
The US-China trade deal was supposed to settle global trade uncertainty in 2020. Nothing could be further from the truth. Diversified supply chains are vital to minimising VUCA risks into the 2020s.