Will the “Phase One” Trade Deal Bring More Stable Relations Between the United States and China?
Yes, in the near term, but longer term we expect trade, tech, and possibly finances to decouple further.
Investment Planning
Friend or Foe: Hedge Funds Versus Alternative Risk Premia (Euro Edition)
It has been a challenging time for hedge funds in recent years. Loose monetary policy has driven equity markets upwards and hurt short books. The growth of quantitatively traded funds has eroded some of the inefficiencies commonly exploited by hedge funds. This fact, coupled with the shift toward low-fee passive and alternative risk premia (ARP) products, has raised questions about the merits of hedge funds in investor portfolios. In this paper, we focus on comparing ARP versus hedge funds and investigate whether hedge funds and ARP funds are complementary or whether ARP funds are actually a viable replacement for hedge funds.
VantagePoint: Disruption, Demographics, and Decoupling
The start of a new year and a new decade is an opportune time to reflect on megatrends that will be consequential over the next ten years. In this edition of VantagePoint, we focus on three such trends and their investment implications: disruption, demographics, and decoupling.
What Risks and Opportunities Are You Focused on as We Enter 2020?
We see opportunities to deploy capital in some niche areas of the investment landscape and reshape (or at least re-evaluate) some areas of the portfolio.
Investment Publications Highlights: Fourth Quarter 2019
Fourth quarter’s edition summarizes articles on FX markets.
With Trend-Following Funds Down Sharply This Fall, Should Investors Fish or Cut Bait?
Fish, but only if investors can accept very lumpy returns. The SG Trend Index of ten large trend followers (e.g., Commodity Trading Advisors or managed futures strategies) fell more than 4% in both September and October and only matched cash’s return over the past five years.
Liability-Hedging Strategies for US Plan Sponsors in the Low Interest Rate Era
As sponsors of US single-employer defined benefit plans know all too well, interest rates have experienced dramatic swings in recent years. While many plan sponsors have adapted to this environment by strategically hedging their liability interest rate risk, many are still questioning the efficacy of doing so—especially when interest rates appear to be low. Yet, failing to hedge long-duration liabilities with long-duration assets is a risky endeavor that exposes the plan sponsor to significant downside risk.
Outlook 2020: Ten Investing Themes for the Coming Year
Our thoughts on key macro questions, emerging opportunities, and risks in 2020.
Will Weak Economic Data in the Euro Area Undercut Its Equities?
No, we don’t think so. While euro area economic activity has weakened meaningfully, with real GDP growth falling to its lowest annual pace (1.1%) since 2013 in third quarter, strong equity returns aren’t dependent on robust economic growth. Ultimately, we continue to like the bloc as part of a risk-controlled overweight to global ex US equities funded from US equities.
Pension Schemes in Pursuit of Income, Growth, and Diversification
A universal approach to portfolio construction can help schemes achieve required return targets whilst adding additional upside from alpha generation; reduce risk through true diversification; and generate sufficient income to comfortably meet both planned and unplanned cashflow needs.