Fight ‘halo effect’ and other biases
The halo effect - a belief that people who are good at one thing excel at everything - is just one example of the behavioural biases humans must manage and overcome to be good investors.
Canada's HOOPP has officially adopted the total portfolio approach since the start of 2026. Unpacking the move, the fund's managing director and head of total portfolio group Jacky Lee writes that while the approach doesn't magically make the return better, the fact that it frees the investment team from outdated processes and gives investment leaders the flexibility to act is what gives it an edge.
The halo effect - a belief that people who are good at one thing excel at everything - is just one example of the behavioural biases humans must manage and overcome to be good investors.
The Alaska Permanent Fund Corporation recognises three kinds of partnerships - with managers, specialised advisers and institutional peers - and has a plan for how to get the most out of each.
Whether to divest from sensitive or controversial investments such as firearms can be a difficult call for fiduciaries, and making it doesn't put an end to the tough choices.
The defined-contribution system needs to switch its focus from accumulation to income. This means breaking away from traditional approaches – something most fiduciaries lack the courage to do.
Choice is considered a good thing. But in the auto-enrolment market, offering options for defined-contribution pension schemes can end up adding no value and increasing the cost to members.
The German Association of Institutional Investors (bii) was established in May to improve sharing of ideas across the sector and help establish proper governance safeguards.
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