Texas Teachers has made extensive changes to its equities portfolio, increasing risk premia, reducing active management and applying new strategies developed by the fund’s research arm.
The Canada Pension Plan Investment Board has increased its focus on emerging economies, using active management to access local expertise and maximise its advantages of scale.
Australia’s sovereign wealth fund has revamped its equities portfolio to take on deliberate factor risk and target idiosyncratic risk. The fund’s head of equities, Björn Kvarnskog, explains.
MSCI research has shown that, among top-performing funds, more than half of active returns come from factors, rather than manager skill, and style factors have the biggest impact.
The UK Financial Conduct Authority’s upcoming report is expected to call for consolidation in pension funds, tighter controls on active management fees and greater transparency.
High management margins and low returns will continue to push owners towards passive investments. But active managers can add value in asset classes that require special expertise or access.
A disillusionment with active has led Minnesota to double its passive allocation in public equities, a strategy that sits alongside a commitment to long-term investing in private markets.
Long-term investment in real estate, infrastructure and asset based lending, including financing ships and aircraft where traditional bank backers have fled, make up the German fund’s strategy.
A highlight of the Fiduciary Investors Symposium at Chicago Booth School of Business was an intimate Q&A session with the “Father of Modern Finance” and Nobel Laureate, Eugene F. Fama.
Funds management is often discussed in the context of it being part art and part science, however most of the literature centres around the science, the finance, of funds management. The premise of active management is that skills and knowledge are paramount to capturing excess returns above the benchmark. But despite this premise, little is... Read more »
What would Keynes’ do? Delegates at a London investment think-tank discussed this question with Cambridge University’s David Chambers. Keynes started managing the Kings College, Cambridge endowment after World War I and analysis of his investing style reveals some interesting annotations for investors today. John Maynard Keynes was not just an economist – he was a... Read more »
Investors still rely, to a great extent, on past performance to assess managers’ future performance. Rather than rely on past performance outcomes to predict future results, a new paper, The predictive power of portfolio characteristics, argues that it is possible to improve the ability to predict future long-term success by identifying and measuring selected portfolio characteristics... Read more »