[vc_empty_space height=”10px”]
How are investors tackling the issues of de-globalisation and the impact on their portfolios?[vc_quotes layout=”accordion” quotes=”%5B%7B%22name%22%3A%22Kate%20Barker%22%2C%22job_role%22%3A%22Chair%2C%20British%20Coal%20Staff%20Superannuation%20Scheme%20(United%20Kingdom)%22%2C%22content%22%3A%22Kate%20Barker%20is%20chair%20of%20trustees%20for%20the%20British%20Coal%20Staff%20Superannuation%20Scheme%2C%20and%20chair%20elect%20of%20the%20Universities%20Superannuation%20Scheme.%20She%20is%20also%20a%20non-executive%20director%20at%20Taylor%20Wimpey%20and%20Man%20Group.%20Previously%2C%20she%20was%20a%20member%20of%20the%20monetary%20policy%20committee%20at%20the%20Bank%20of%20England%20and%20she%20has%20also%20carried%20out%20much%20public%20policy%20work.%20Barker%20was%20an%20external%20member%20of%20the%20Bank%20of%20England%E2%80%99s%20monetary%20policy%20committee%20for%20three%20terms%20between%202001-2010.%20During%20that%20time%2C%20she%20was%20commissioned%20by%20the%20government%20to%20conduct%20a%20major%20independent%20policy%20review%20of%20UK%20housing%20supply%2C%20and%20subsequently%20a%20review%20of%20land%20use%20planning.%5CnBarker%20was%20chief%20economic%20adviser%20at%20the%20CBI%20between%201994-2001.%20From%202010%20to%202017%20she%20was%20an%20non-executive%20director%20of%20the%20Yorkshire%20Building%20Society%2C%20and%20she%20was%20also%20a%20commissioner%20of%20the%20National%20Infrastructure%20Commission%20between%202017-2020.%5CnIn%202014%20she%20was%20made%20a%20Dame%20for%20services%20to%20the%20economy.%5Cn%22%2C%22image%22%3A%2231915%22%2C%22linkedin%22%3A%22%22%7D%2C%7B%22name%22%3A%22James%20Davis%22%2C%22job_role%22%3A%22Chief%20investment%20officer%2C%20OPTrust%20(Canada)%22%2C%22content%22%3A%22James%20Davis%20is%20chief%20investment%20officer%20of%20OPTrust%2C%20one%20of%20Canada%E2%80%99s%20largest%20pension%20funds%20with%20net%20assets%20at%20almost%20%2420%20billion%20and%20investment%20professionals%20in%20Toronto%2C%20London%20and%20Sydney.%20He%20joined%20OPTrust%20in%202015%20and%20leads%20the%20organisation%E2%80%99s%20investment%20strategy%20and%20oversees%20its%20diversified%20portfolio%20spanning%20the%20globe%20with%20public%20market%2C%20private%20market%2C%20infrastructure%2C%20and%20real%20estate%20assets%20in%20North%20America%2C%20Europe%2C%20developed%20Asia%20and%20emerging%20markets.%20Davis%20has%20over%2025%20years%20of%20strategic%20investment%20planning%20and%20leadership%20experience%2C%20including%20proven%20results%20in%20liability%20driven%20investing%20and%20portfolio%20design.%20Most%20recently%2C%20he%20held%20the%20role%20of%20vice%20president%2C%20strategy%20and%20asset%20mix%20and%20chief%20economist%20at%20Ontario%20Teachers%E2%80%99%20Pension%20Plan%20(Teachers%E2%80%99).%20Before%20joining%20Teachers%E2%80%99%2C%20he%20was%20president%20of%20FuturesTrend%20Capital%20Corporation%20in%20Prince%20Edward%20Island%20and%20vice%20president%20and%20head%2C%20global%20fixed%20income%20and%20currencies%20at%20RBC%20Global%20Investment%20Management%20in%20Toronto.%20He%20is%20widely%20recognised%20as%20an%20engaging%20speaker%20in%20a%20broad%20range%20of%20forums%20within%20the%20pension%20industry%2C%20and%20is%20known%20for%20his%20insights%20on%20global%20economics%2C%20portfolio%20construction%20and%20investment%20strategy.%20In%20addition%20to%20degrees%20in%20mathematics%20and%20meteorology%2C%20James%20holds%20an%20MBA%20in%20Finance%20from%20Dalhousie%20University%20and%20is%20a%20CFA%20charterholder.%22%2C%22image%22%3A%2231916%22%2C%22linkedin%22%3A%22https%3A%2F%2Fwww.linkedin.com%2Fin%2Fjames-davis-0bab4610%2F%3ForiginalSubdomain%3Dca%22%7D%2C%7B%22name%22%3A%22Olivier%20Rousseau%22%2C%22job_role%22%3A%22Executive%20director%2C%20Fonds%20de%20Reserve%20pour%20les%20Retraites%20(France)%22%2C%22content%22%3A%22Olivier%20Rousseau%20was%20appointed%20to%20his%20current%20role%20in%20November%202011.%20He%20also%20chairs%20the%20asset%20manager%20selection%20committee.%20In%201986%2C%20he%20joined%20the%20French%20Treasury%20in%20Paris%2C%20where%20he%20held%20various%20positions%2C%20including%20deputy%20head%20of%20division%20and%20head%20of%20division.%20He%20worked%2011%20years%20for%20BNP%20Paribas%20in%20international%20banking%20and%20finance%20in%20Paris%2C%20Tokyo%2C%20London%2C%20Singapore%2C%20Hong%20Kong%20and%20Sydney.%20He%20also%20served%20on%20the%20resident%20board%20of%20directors%20of%20the%20European%20Bank%20for%20Reconstruction%20and%20Development%20in%20London%20and%20as%20regional%20economic%20counsellor%20at%20the%20French%20embassy%20in%20Stockholm.%20Rousseau%20graduated%20from%20the%20French%20National%20School%20of%20Administration%20in%201986.%20He%20has%20earned%20master’s%20degrees%20in%20law%20and%20economics%2C%20and%20a%20bachelor’s%20degree%20in%20political%20sciences%2C%20from%20the%20University%20of%20Aix-en-Provence.%22%2C%22image%22%3A%2231917%22%2C%22linkedin%22%3A%22https%3A%2F%2Fwww.linkedin.com%2Fin%2Folivier-rousseau-52aa1918%2F%22%7D%5D” title=”Speakers” el_class=””][vc_quotes layout=”accordion” quotes=”%5B%7B%22name%22%3A%22Amanda%20White%22%2C%22job_role%22%3A%22Director%20of%20institutional%20content%2C%20Conexus%20Financial%20(Australia)%22%2C%22content%22%3A%22Amanda%20White%20is%20responsible%20for%20the%20content%20across%20all%20Conexus%20Financial%E2%80%99s%20institutional%20media%20and%20events.%20In%20addition%20to%20being%20the%20editor%20of%20Top1000funds.com%2C%20she%20is%20responsible%20for%20directing%20the%20global%20bi-annual%20Fiduciary%20Investors%20Symposium%20which%20challenges%20global%20investors%20on%20investment%20best%20practice%20and%20aims%20to%20place%20the%20responsibilities%20of%20investors%20in%20wider%20societal%2C%20and%20political%20contexts.%20She%20holds%20a%20Bachelor%20of%20Economics%20and%20a%20Masters%20of%20Art%20in%20Journalism%20and%20has%20been%20an%20investment%20journalist%20for%20more%20than%2025%20years.%20She%20is%20currently%20a%20fellow%20in%20the%20Finance%20Leaders%20Fellowship%20at%20the%20Aspen%20Institute.%20The%20two-year%20program%20seeks%20to%20develop%20the%20next%20generation%20of%20responsible%2C%20community-spirited%20leaders%20in%20the%20global%20finance%20industry.%22%2C%22image%22%3A%2231872%22%2C%22linkedin%22%3A%22https%3A%2F%2Fwww.linkedin.com%2Fin%2Famanda-white-101a7515%2F%22%7D%5D” title=”Moderator” el_class=””][vc_empty_space height=”10px”]
Key takeaways
Kate
One of the mistakes we made at the Bank of England was that we thought the GFC would be over more quickly and we thought we could fix it on our own.
The GFC wasn’t really a global crisis. This time the crisis truly is global, and it’s more important that we get it right.
Central banks are less relevant in the pandemic because this is not a banking crisis. Thus far, policy response has broadly been viewed in a favourable light. Going forward policy may be less popular which will provide a significant challenge. Central banks will be concerned about the potential for stagflation
Do we really need the government to play a bigger role? The private sector has been remarkable throughout the crisis and they should not be taxed out of existence or prosperity to pay for the stimulus measures.
James
This is the most difficult investing period of my 30-year career because there is so much uncertainty. Monetary policy is a blunt instrument and has probably reached its peak effectiveness. This contributes to significant policy risk.
We shouldn’t be debating MMT, we should be debating the governance around it.
It is easy to talk about building a portfolio that is resilient enough to withstand any environment but this is getting harder and harder.
Given that many defensive assets don’t earn a sufficient return, balancing portfolio resilience and return can be problematic.
Olivier
There is much cause for pessimism:
Asset classes are exhausted and expensive in part because our frame of thinking is outdated.
Trust between nations is one of the most problematic issues.
We have realised that we have been short-changed by China.
We will have to choose between the US (who are letting us down) and China (who will not be a better master than the US).
Civil unrest continues and populism remains to be about me, me and I.
The EU suffered through the GFC (even though it started in the US) and also through COVID-19 (even though it started in Asia).
The Florida State Board of Administration has made some strategic moves to take advantage of opportunities in the dislocation, including in private equity, distressed debt and active listed equities.. But CIO, Ash Williams, is concerned about the underlying real economy.
The Responsible Asset Allocator Initiative finds that 25 leading public pension and sovereign wealth funds, with assets of $6 trillion, are investing tens of billions of dollars in COVID-19 solutions and in funds to support stricken companies. Here they look at what the leading asset allocators around the world are doing to respond to the pandemic.
Global economic activities will not be back to pre-COVID levels until 2022 according to CPP Investments’ outlook, with the giant Canadian investor expecting the situation to get worse before it gets better.
The coronavirus pandemic sparked a surge of volatility across global financial markets. In this paper, MSCI looks at five key lessons for investors from the crisis, including that managing factors was more critical than picking stocks.
New research looking at the impact of COVID-19 under different scenarios – from opening of economies to no vaccine – suggests the economic consequences of COVID-19 under all scenarios is substantial and the ongoing economic adjustment is far from over.
Meticulous planning for the next market crash, and an eye on liquidity, meant IMCO was well positioned to invest, particularly in credit, when the opportunity arose. The fund continues to use its agility to its advantage and is now looking for opportunities in private markets.
It is critical to analyse how much COVID-19 could impact the US economy and stock markets but most of the traditional factors or economic indicators will lag the market movement. Therefore, alternative datasets other than the financial data show their explanation power to provide insights into the pandemic. This article, by academics at Tsinghua University, University of Illinois and Carnegie Mellon University, looks at the pattern of the market fluctuation from the perspective of alternative data.
Leave a Comment
You must be logged in to post a comment.
Login