Michael Recce: The goldilocks approach to neuroscience, AI and investing

Apologies for the sound here, this interview was recorded using Skype and occasionally the quality drops.

I chat with Michael, Chief Data Scientist at Neuberger Berman, on using alternative data sets to improve insights into portfolios, deep diving into specific companies and industries and how these sets allow us to look at the world in a richer and more immediate fashion than ever before.

Nothing on this podcast is to be considered investment advice or a recommendation. No investment decision or activitiy should be undertaken without first seeking qualified and professional advice.

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Aware Super maps AI exposure as it sharpens whole-of-portfolio risk focus

Aware Super maps AI exposure as it sharpens whole-of-portfolio risk focus

Australia’s third-largest pension fund Aware Super is taking stock of its investment exposure to AI and the initial analysis suggests at least 15 per cent of the fund’s assets are exposed to the thematic. In a project deep dive, head of investment strategy Michael Winchester says finding the portfolio's true concentration around AI will require looking beyond simple dollar aggregation.

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AustralianSuper
pivots to Asia

Asia will be a growing part of investors’ portfolios, predicts the chief investment officer of AustralianSuper, Mark Delaney. He is steering the $43-billion fund towards the Asian century with up to 45 per cent of its international equities now in emerging markets. Asia represents about half of this emerging market exposure and, despite the flight

New ways to calculate portfolio weights

This paper presents two simple algorithms to calculate the portfolio weights for a risk parity strategy, where asset class covariance information is appropriately taken into consideration to achieve “true” equal risk contribution. Previous implementations of risk parity either (1) used a naïve 1/vol solution, which ignores asset class correlations, or (2) computed “true” risk parity

ESG here to stay

Anyone who thought ESG was a passing fad can think again. The announcement this week that Mercer, which has led the consulting industry on standalone ESG ratings, will now integrate those factors across its ratings process has cemented ESG as an important investment risk and return consideration. The consultant rates more than 20,000 investment strategies

OECD investigates
market fragility

In this fourth part of an OECD working paper, researchers look at the potential that portfolio rebalancing by financial investors can contribute to spreading financial turmoil in a major market event such as the global financial crisis or ensuing sovereign debt crisis in Europe. In International Capital Mobility and Financial Fragility – Part 4: Which Structural

Mercer integrates ESG

Mercer will integrate its proprietary environmental, social and governance (ESG) ratings across all of its manager-search and performance data, cementing ESG as a key investment consideration. The consultant rates more than 20,000 strategies, oversees more than $5 trillion of assets under advice and has $60 billion in its multi-manager products. Mercer has led the consulting

Modern portfolio theory, risk and fiduciary duty

It was only a few decades ago that trustees in many jurisdictions were restricted from investing in certain assets. Fiduciary duty has evolved as the thinking about investments has changed. This is true, then, of how trustees should be applying fiduciary duty to current day investment challenges, including systemic risk and climate change risk. Ed

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