Investment Publications Highlights: Third Quarter 2019
Third quarter’s edition summarizes five articles on machine learning.
Investment Planning
With Peak Brexit Stress Seemingly Passed, Should UK Investors Boost Sterling Allocations?
No, sterling-based investors should not change their currency hedge ratios or their allocations to sterling-denominated assets based on potential Brexit outcomes.
Alternative Risk Premia: A Diversifying Option for Investors (Euro Edition)
Elevated equity market valuations and potentially rising bond yields suggest the return environment for traditional risk assets could be difficult. Faced with this challenge, institutional investors are seeking alternative sources of return. Alternative risk premia strategies—which harvest well-established risk premia and market anomalies across asset classes—may fit the bill.
Market History
Equity market downturns are chaotic environments that are rarely short-lived—the best advice is to be prepared.
Portfolio Liquidity
Investors that have inflexible spending needs and large allocations to illiquid assets should plan how they will tackle the next downturn’s liquidity challenges.
Diversification Challenges
As investors prepare for the next equity market downturn, they should take a closer look at the benefits and limits of diversification.
Behavioral Roadblocks
Bear markets often trigger emotional responses that can sometimes lead investors to act contrary to their long-term objectives; as such they need simple strategies to help overcome their worst instincts.
Playing Offense
Investors should review existing policies regarding portfolio rebalancing and tactical asset allocation and ensure they have a strategy to play offense during the next downturn.
Revving UK Pension Schemes’ Funding Engines
A number of UK defined benefit pension schemes have experienced significant funding level gains in recent years, driven by sponsor contributions, liability management exercises, and strong equity market returns. However, due to increased volatility in global equity markets, relatively high valuations in many market segments, and the late stages of the economic and credit cycles, optimising the scheme’s growth engine is more challenging than ever. This paper provides a framework for how to achieve that goal.
VantagePoint: Third Quarter 2019
In this edition of VantagePoint, we uncover four of the most common inaccuracies we hear about US equities.