Shift to positive stock-bond correlation could increase risk, reduce return

A shift towards positive correlation between stock
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Texas ERS reallocates to managers to help navigate concentrated equity market

Texas ERS reallocates to managers to help navigate concentrated equity market

Texas ERS' CIO David Veal says the fund is re-allocating around a quarter of its public equity portfolio to external managers, away from the internal team. ERS plans to upsize with existing fundamental mandates but also allocate to new incremental relationships with diversifying strategies.

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The importance of governance in a crisis

From December to mid-March of this year New Zealand Super lost 20 per cent of its assets. It’s the second time in less than 18 months the fund has experienced a significant drop in assets but in an example of how good governance and process can allow for counter cyclical behaviour the fund is now buying equities.

A new route to minimising volatility

Defensive equity investment strategies are nothing new, but a key issue with many is that defensive does not necessarily mean low volatility. Scientific Beta looks at a strategy to target both goals, using robust low volatility controls to create a new defensive index for the volatility-averse investor.

France’s FRR prepares to ramp up equity

The French SWF, FRR, is preparing to invest more in equities and illiquid assets as important reforms extend its time horizon. With the coronavirus crisis delaying the asset allocation decisions the fund is operating in an "intermediate context", slowly shifting out of bonds and into equities.

Emerging markets vulnerable

Investors have pulled $83 billion from emerging markets since the beginning of the COVID-19 crisis, the largest capital outflow ever recorded, and the IMF and the World Bank are calling on G20 countries to show relief in dealing with their emerging market counterparts.

Time for a coordinated approach

The US Federal Reserve has fired its last round of ammunition, cutting interest rates to zero, in a move that continues to see it play from the monetary policy songbook. Some market commentators doubt whether it will be enough to prop up markets, raising the question of whether it is finally time for a more coordinated fiscal and monetary policy approach.

Former Trump adviser: recession coming

Kevin Hassett, the former economic adviser to US president Donald Trump, has warned that the chance of the global economy falling into a deep recession from the coronavirus outbreak was “pretty close to 100 per cent.”

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