News

The rush to decarbonize the economy and the ASX risks leaving workers and communities behind, and investors exposed to “significant losses” and greater social support costs.

How institutional investors generate returns now needs to change, according to a position paper from the Future Fund, with the very foundations of Modern Portfolio Theory shaken by the events of 2020-22.

Institutional investors are mostly unaware of what’s dragging on their performance, according to analysis by Northern Trust Asset Management. Having too many managers with the same style is part of the problem.

A small handful of new benchmarks would make alternative strategies viable under the YFYS performance test and once again allow funds to take advantage of their diversifying characteristics.

Pension funds are increasingly turning to active management to generate returns in a hostile environment. But as they seek to become true global investors, super funds face a different set of tradeoffs.

Geopolitical tension has pushed aside cyber-worries and pandemic fears to take the top spot in the latest Depository Trust & Clearing Corporation (DTCC) poll of the global financial services industry.

2022 has left investors battered. The start of 2023 will leave them merely bruised. But analysts and economists alike aren’t pricing recession right.

New Zealand’s biggest non-government fund manager, ANZ Investments, has made a pre-Christmas senior staff clean-out with two long-time employees set to leave the $30 billion plus business early next year.

The chaos of 2022 has reset valuations to the point where they’re hard to ignore, according to J.P. Morgan Asset Management. That doesn’t mean the future of markets is any less cloudy.

“We had the courage to stick with our investment strategies,” ACS CIO Michael Block tells ISN. “Often what happens with a strategy that doesn’t work is you cut and run at the wrong time. We were lucky enough or clever enough or brave enough that that didn’t happen, and our members reaped the benefit this year.”

According to RIAA, the YFYS test “runs contrary to sound climate risk management”, and goes against both the government’s own net zero plans and APRA’s guidance on climate change risk.

Chant West’s proposed replacement for the performance test might cut through the complexity and create a fairer system for super funds, which have dramatically altered their investment strategies to avoid failing.