Briefings

  • Chris Bikos_Redington
    Features

    High yield bonds: do your homework

    February 2023 (magazine)

    Last year, European bond markets were struck by a toxic a combination of geopolitical, economic and market tensions. The picture has improved with the dawning of 2023, although the markets will continue to experience bouts of volatility and uncertainty will persist. High yield is back on the agenda, but selectivity and careful analysis will be key in identifying the right opportunities. 

  • Research Affiliates, LLC, based on data from CRSP:Compustat and Worldscope: Datastream
    Features

    Did smart beta go ‘horribly wrong’?

    February 2023 (magazine)

    In 2016, we published a paper titled ‘How can ‘smart beta’ go horribly wrong?’, the first in a series on the future of factor investing and other forms of so-called smart beta. Did smart beta go horribly wrong? Yes and no. 

  • Dr Apostolos Thomadakis
    Features

    European Commission announcement brings some clarity to derivatives clearing

    January 2023 (Magazine)

    Many unanswered questions linger after the departure of the United Kingdom from the European Union. However, a recent announcement by the European Commission (EC) promises to bring some much-needed clarity to the derivatives market. 

  • 1-GIST Impact
    Features

    ESG: Germany’s energy options

    January 2023 (Magazine)

    The country’s reliance on Russian gas means its change of energy sources will carry a larger environmental cost

  • Luca Paolini
    Features

    US dollar strength and the issues facing institutional investors

    December 2022 (Magazine)

    Most central banks across the world are raising interest rates – some more aggressively than others – but it is proving hard for any of them to out-hike the US Federal Reserve. The resulting widening interest rate differentials have been an important factor in the appreciation of the US currency.

  • Sophia Harrison 2022
    Features

    UK fiduciary managers wrangle with LDI fallout

    December 2022 (Magazine)

    UK Gilt yields rose throughout 2022, even before September’s well-publicised spike caused by the unfunded mini budget. Fears of global inflation, exacerbated by the energy crisis and geopolitical uncertainty following Russia’s invasion of Ukraine, took UK 10-year yields from around 1% in January to 3% in mid-September.

  • Equities performance graph
    Features

    The rising influence of target-date funds on capital markets

    November 2022 (Magazine)

    One of the fastest growing markets in recent years is the US retirement market. Since 1995, the investment volume has increased six-fold, so that by the end of 2021, the market stood for almost $40trn (€40.1trn) AUM. 

  • Kopf_Christian_Querformat_1
    Features

    UK sovereign debt in turbulent waters as challenges remain

    November 2022 (Magazine)

    The buttoned-up Gilts market has never seen or done anything like it. Trusty stalwart of liability matching for defined benefit (DB) pension schemes, the blue-chip security has already poleaxed a British chancellor of the exchequer just a month in office, and has effectively done the same to prime minister Liz Truss.

  • südwind-matzkeFoto-016
    Features

    Pension funds continue their focus on ESG social issues

    October 2022 (Magazine)

    Before the year is over, European policymakers are expected to announce their decision to shelve plans for a social taxonomy. 

  • Katja Müller
    Features

    Market overview: German institutional investors manage uncertainty

    October 2022 (Magazine)

    At mid-year 2022, the volume of Spezialfonds – the German vehicle for professional investors –  administered on Universal Investment’s platform was €498bn, a rise of around 5% year on year. On a six-month basis, however, and compared with the end of the booming stock year 2021, asset volumes were down around 3%. 

  • Bloomberg commodity index 2022 weight targets
    Features

    Commodities show their value

    September 2022 (Magazine)

    The few pension schemes with an investment in commodities benefitted from this allocation in recent months. Prices in this asset class rose as the pandemic and war in Ukraine pushed up the cost of fossil fuels and re-ignited inflation while both equity and bond markets faltered.

  • Hendrik Tuch
    Features

    Euro peripheral spreads

    September 2022 (Magazine)

    Just over a decade ago, Mario Draghi, then President of the ECB, gave a speech in which he uttered the famous words: “.…the European Central Bank [ECB] is ready to do whatever it takes to preserve the euro”, a phrase often credited with hauling Europe out of the depths of its sovereign debt crisis.

  • Rick Di Mascio
    Features

    Asset owners need to find the best stock pickers

    July/August 2022 (Magazine)

    For pension funds, an asset manager search is a high-stakes exercise. Get it wrong and the scheme could be saddled with an underperforming manager for an extended period of time, dragging down returns and potentially impacting member outcomes.

  • Custodians graph
    Features

    Custodians will be key as investors move into digital assets

    July/August 2022 (Magazine)

    Digital assets may seem to be the latest investment trend, but institutions are taking their time in embracing them.  Moving interest to the next level will require not only greater regulation but also a solid network of custodians to provide the required security and protection.

  • Karel Lannoo
    Features

    A flawed EU crypto regulatory framework

    July/August 2022 (Magazine)

    The EU will soon have a specific regulatory framework for crypto currencies and markets. Under proposals soon to be adopted, only crypto coins authorised in the EU will be allowed to be offered to investors. But crypto assets and exchanges will have a very light supervisory regime, much less than what is in place for financial instruments and exchanges. This raises the question about the rationale for distinct rules. This question is even more acute in the context of the big decline in the crypto markets over the past weeks.

  • Benjie Fraser
    Features

    Important role for securities services firms in ESG metrics

    July/August 2022 (Magazine)

    The focus on environment, social and governance (ESG) or sustainability investing is almost always on the front office. Fund flows, strategies and research have been centre stage. Often forgotten are the asset-servicing firms working in the wings developing solutions to help their clients evaluate, validate and comply with rules and regulations, particularly in Europe. 

  • Andrew Brown
    Features

    ‘Painful’ private equity fees are hard to avoid

    July/August 2022 (Magazine)

    The Netherlands’ €551bn ($576bn) civil service scheme ABP paid a record €2.8bn in performance fees to private equity managers in 2021, prompting the fund’s president Harmen van Wijnen to announce an external investigation to assess ABP’s rising asset management costs. The €277.5bn healthcare scheme PFZW paid €1.26bn in performance fees to private equity last year, accounting for two thirds of total asset management costs.

  • Alberto Carrillo Pineda headshot
    Features

    Emissions reporting: taking stock of indirect emissions in Scope 3

    June 2022 (Magazine)

    Disclosure proposals by the US Securities and Exchange Commission (SEC) in March could guide the regulatory searchlight beyond companies’ direct and indirect C02 emissions (Scope 1 and 2) and towards upstream and downstream (Scope 3) emissions. 

  • Dan Aylott
    Features

    UK venture: new kids on the block

    June 2022 (Magazine)

    Google the venture firm 2150 and you won’t find an investment strategy but a manifesto. 

  • Kaspar Hense
    Features

    Yen’s swift dive surprises market

    June 2022 (Magazine)

    For several decades, the Japanese yen has not been in the limelight too often. However, earlier this year it became headline news as the currency began to depreciate rapidly against the US dollar. Although investors were not overly surprised that the yen would weaken, the speed of its decline was certainly startling. Over the course of about 15 months, between the start of 2021 to early April 2022, the yen has lost about 25% of its value against the dollar, with nearly half the move occurring in that final month.