Fees eat diversification’s lunch
The balance between the allocating to the right number of asset classes and over-diversification is a concern for pension fund investment executives and committees. A new paper by professors at the US Air Force Academy examines the relationship between fees of diversifying asset classes and their diversifying benefits. The paper finds that, in many cases, extra fees completely overwhelm the…

How to use smart beta
While smart beta is a much-talked about concept, implementation is slow. Part of the reluctance of investors is the risk of sustained underperformance, but that can be overcome by matching portfolio liquidity requirements with factor cycle duration. Amanda White speaks to Michael Hunstad, head of quantitative equity research, global equity management, at Northern Trust. Sustained underperformance of a group of stocks…

Liquidity premium escapes UK investors
  UK pension funds have not taking advantage of their comparative advantage as long-term investors and have not earned a positive long-run liquidity premium on their investments, according to a paper from the Cass Business School that examines UK pension funds’ monthly allocations to major asset classes over the period 1987-2012. The authors - David Blake, Lucio Sarno and Gabriele Zinna –…

A sustainable financial system on the agenda at Davos
The United Nations Environment Programme’s Inquiry into the Design of a Sustainable Financial System will present its interim report in Davos this week. The report has been initiated to advance policy options to improve the financial system’s effectiveness in mobilising capital towards a green and inclusive economy, and the interim report profiles innovations in five areas including institutional investment. Here it…

Optimal long-term allocation with pension fund liabilities
The literature on how to optimally manage the investments of defined contribution funds is relatively scarce, despite the fact the growth in defined contribution continues to outpace defined benefit funds globally. Now new research from academics at the University of Lausanne demonstrates how to perform an ALM study from a financial prospective for defined contribution plans. The research finds that a liabilities…

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While smart beta is a much-talked about concept, implementation is slow. Part of the reluctance of investors is the risk of [more]
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As the fixed income asset class undergoes rapid change and the opportunity set expands, unconstrained bond funds have become popular. But as this article examines, with that expanded opportunity set [more]

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Fees eat diversification’s lunch

The balance between the allocating to the right number of asset classes and over-diversification is ... [more]

How to use smart beta

While smart beta is a much-talked about concept, implementation is slow. Part of the reluctance ... [more]

Liquidity premium escapes UK investors

  UK pension funds have not taking advantage of their comparative advantage as long-term investors ... [more]

A sustainable financial system on the agenda at Davos

The United Nations Environment Programme’s Inquiry into the Design of a Sustainable Financial System will ... [more]

Optimal long-term allocation with pension fund liabilities

The literature on how to optimally manage the investments of defined contribution funds is relatively ... [more]

Do pension funds add value?

Asset owners, on average, add 15 basis points of value above their asset class benchmarks ... [more]

OECD calls for policy solution to long term investing barriers

Governance of institutional investors and the lengthening investment chain causing  bigger distances between assets’ beneficial ... [more]

2015 could be watershed year for ESG issues

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  • January 07, 2015

2015 is poised to be the turning point as a number of key issues relating ... [more]

Long-termism, the problems with capitalism and other holiday reading

The holiday season is a good time to catch up on the reading you may ... [more]