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The real factor exposures in “smart beta” indexes
Investors relying on nomenclature of smart beta indexes as an accurate reflection of their factor exposures should take a closer look. New research, using a “factor efficiency ratio”, finds that most smart beta indexes are unable to provide desired factor exposures without taking on substantial unintended exposures. Importantly the paper finds that some smart beta
Compelling reasons to invest in emerging markets
In recent years, investors have viewed emerging markets a bit like marmite, the distinctly flavoured spread made from brewer’s yeast: they either like the allocation or they don’t.
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
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Kosovo’s new wealth fund offers development model for eastern Europe
Kosovo, a small country in south-eastern Europe that emerged as an independent state after the Balkan conflict, plans to create a sovereign development fund, the first of its kind in the region.
Dump cap-weighted indexing for ‘efficient beta’
 The status quo of ‘passive’ equity investment, ranking companies by market capitalisation, is delivering lower returns for higher volatility than a beta strategy which blends a cap-weighted approach with two of its competitors – minimum variance and fundamental indexing. Michael Bailey spoke to Lazard Asset Management’s Asia Pacific chief, Rob Prugue, about a paper co-written
The impact of technology on investments
Harshal Chaudhari recently sidestepped from his role as company-wide CIO at IBM, looking after $150 billion in pension assets, to a new role as the tech giant’s chief analytics officer. He spoke to Top1000Funds about the strategy he ran at the pension fund, his wider thoughts on the global economy and the impact of technology on the investment world.
PRI signatories challenged to act now
Mission 2020 convenor Christiana Figueres challenged PRI signatories to invest 1 per cent of assets in clean technology and renewable energy by 2020, saying the world is nearly out of time.
Denmark’s PKA goes for wind farms
The top-five Danish pension fund, PKA, has made a bigger push into alternatives than its peers, and a good chunk of that allocation comes from direct investment in offshore and onshore wind farms.
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