Following the Fed’s announcement of QE2 and the recent auction of 5-year TIPS that resulted in the first-ever negative yield issuance (-0.55%), AQR has updated its recent research series on inflation. This paper addresses the events which resulted in the first-ever negative yield TIPS issuance, discusses the future impact of government actions, and comments on the implication for institutional investors.
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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Emerging market funds need to diversify
Pension funds in many emerging economies need to diversify offshore, says the World Bank, in order to achieve higher returns with potentially lower volatility.
Performance fees hardly worth it
An analysis of 218 Dutch pension funds has shown that paying performance fees has little impact on performance. Size of fund and specialisation were deemed more important for net returns.
OECD presents ESG stocktake
An OECD stocktake compares how different country's regulatory frameworks affect institutional investors’ approaches to integrating ESG factors into their decision-making.
Longer horizons lead to more investment
Dutch research has found that pension funds with longer horizons do hold more illiquid assets, but the correlation wanes after about 17 years and other factors also affect illiquidity tolerance.
McKinsey: Long game is best play
Calls for a long-term investment focus have lacked a sophisticated metric to back them up – until now. The McKinsey Global Institute has found tangible benefits from shunning short-termism.
MSCI shines light in tax gap
MSCI ESG Research has seen growing demand from institutional investors for data on tax-related risk. In response, it has added data such as geographic revenue transparency to its ratings.
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