Has the Attractiveness of Gilts Improved for UK Investors?
Yes. We believe the attractiveness of UK government bonds has improved relative to just a month ago.
Authored by: Himanshu Chaturvedi
Trade Finance: An Expanding Opportunity for Institutional Investors
Providing high liquidity, good return premiums over cash, and a predictable risk profile, trade finance can play a valuable role in portfolio strategy.
Strategic Currency Hedging Policy: A New Framework
Currency risk is a fact of life for investors, yet few investors have given appropriate thought to setting a strategic hedging policy. The typical approaches have material drawbacks, being either too simplistic or too complex. The new framework we introduce in this paper achieves an attractive balance by seamlessly integrating qualitative portfolio considerations driven by relevant asset class characteristics with a highly simplified yet robust method of incorporating individual currency characteristics. The framework is applicable to a broad set of investors, accommodates lack of precision in measuring currency exposures, separates the question of implementation from policy setting, and helps clearly distinguish between strategic exposures and tactical overlays.
Navigating the Diversified Growth Fund Maze
Diversified growth funds (DGFs) have garnered significant attention and assets—particularly amongst UK defined benefit pension schemes—as a less volatile source of long-term growth. DGFs can be valuable tools for pension portfolio management, but only if trustees understand what they are buying and how it fits into the context of the total portfolio. The simple bifurcation of the available products into traditional and absolute return strategies can be a starting point for trustees to help make sense of the market and set appropriate risk/return expectations across different market environments.