Dangers, and opportunities, lie ahead
Against a backdrop of geopolitical tumult, Mercer’s Phil Edwards outlines four developments investors will need to consider when building and adjusting their portfolios for the year ahead.
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Measuring long-horizon investing
Asset owners should insist “long-horizon” managers have a portfolio monitoring process at the outset of the mandate leading to better relationships and ultimately portfolio performance.
Is diversification really a free lunch?
Diversification can be a powerful tool in managing downside risk, but it has been argued that “too much” diversification can destroy a business if it diverts too widely from its original purpose.
The benefits of alignment
Funds managers should always be open to ways to improve mechanisms for stronger investor alignment, writes Mercer principal, David Scobie. But there are several factors to consider.
Don’t ignore the bigger picture
Given the strong returns of yield-rich asset classes in recent years, caution should be exercised in allowing income-themes to dominate investment allocations. David Scobie of Mercer writes.
Ignorance isn’t bliss
In an increasingly complex and inter-connected world, a broader perspective on risk is essential in helping investors navigate an uncertain future, writes Phil Edwards.
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