The Norwegian government is trying to balance financial returns with sustainable development in regulating the GPFG, and the possibility of applying this model to other sovereign wealth funds (SWFs) and institutional investors in general. In this paper for the University of Oslo, Adjunct Professor Anita Halvorssen argues that sustainable development needs to be included in the newly adopted Generally Accepted Principles and Practices (GAPP/ Santiago Principles) for SWFs.Click through to research paper here
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Norway aims for ‘green’ returns
Anita Halvorssen, balance returns with sustainability, Norway GPFG
Research
GIC, Temasek eye trillions of growth in climate adaptation market
Singapore’s two largest asset owners, GIC and Temasek, see attractive opportunities in climate adaptation solutions – a relatively underfunded area compared to decarbonisation. The former has already made selective adaptation investments and said the opportunity set across public and private debt and equity could increase to $9 trillion by 2050.
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Momentum in Japan works well: Asness
By studying value and momentum in Japan as a system, because they are strongly negatively correlated, this paper by AQR’s Cliff Asness argues that despite popular belief, momentum “works quite well” in Japan.mrec4inarticleinline Sponsored Content scnative1 scnative2 scnative3
Making sense of China’s excessive foreign reserves
This analysis suggests that without a well-developed domestic financial market, the value of the Chinese currency (renminbi) may significantly depreciate, instead of appreciate, once the Chinese government abandons the linked exchange rate and the massive amount of precautionary savings of Chinese households are unleashed toward international financial markets to search for better returns.mrec4inarticleinline Sponsored Content
The economics of hedge funds
This collaborative research examines the relationship between hedge fund managers’ fee structures and the amount of risk taken and among other things finds a “high-powered incentive fee” encourages excessive risk-taking, while management fees have the opposite effect.mrec4inarticleinline Sponsored Content scnative1 scnative2 scnative3
Yale warns on ‘nanny’ reforms
Subjecting money market funds to a bank-like regulatory structure would disrupt the short-term money market and increase systematic risk according to this Yale Law School paper. While risk-limiting reforms are important to ensure the continued safety and security of MMFs, this paper argues major revisions such as the floating NAV requirement or bank-like regulation would
Some like it hot
Empirical literature and MSCI analysis show that high implementation costs indicate there is little evidence the average managers in either emerging market or small caps have produced either higher or more persistent risk-adjusted returns relative to their developed market and mid-cap peers. mrec4inarticleinline Sponsored Content scnative1 scnative2 scnative3
Inflation-linked bonds and their relative value as an inflation hedge
Treasury inflation-protected securities (TIPS) have a relatively unique profile within fixed income portfolios, which has important implications for investors’ setting of objectives and portfolio construction. This Towers Watson article explores the different motivations for using TIPS and other inflation hedges.mrec4inarticleinline Sponsored Content scnative1 scnative2 scnative3
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