Analysis

Inflation is likely in a transitory phase, yet remains stuck on high settings. Sovereign funds around the world are adjusting accordingly, Invesco says, with 5 major themes charting the course of institutional investors.

Mergers aren’t costless and big super can’t necessarily be counted on to clean up the long tail of unsustainable small funds. Solving the problem might require thinking outside the box.

Sovereign bonds from countries with real environmental credibility and a compelling strategy for decarbonisation make a fine addition to institutional portfolios. The trick is figuring out which bonds belong.

Australian super funds and asset managers shouldn’t ape their international peers when it comes to unlisted investment practice, according to Frontier, and demand for more frequent valuations will ultimately be worn by members.

Big funds can be cheaper and drive hard bargains in the private markets – but it’s easier to see them coming and harder for them to get money where it needs to go.

Australia’s sovereign wealth fund and New Zealand Super have topped this year’s Global SWF governance, sustainability and resilience rankings, while institutions the world over are rethinking their investment strategies amidst market ructions.

The amount of investment required for the energy transition will likely prove to have an inflationary impact. But doing nothing will make the inflation surge of the post-Covid years seem paltry in comparison.

Good news from other emerging market countries has been overshadowed by spotty data and a sluggish recovery in China. But the recovery is gathering pace, and there’s good news on the geopolitical front too.

This downturn will be different, according to Ninety One. But the world is so indebted that there’s either the mother of all paybacks coming, or the mother of all defaults.

After a punishing innings for her flagship ETF, ARK Invest founder Cathie Wood thinks investors need to stop living in the 70s. This time next year the Fed will be “running in the opposite direction” and deflation will dominate the market.

More damage is done by consensus longs than short reports that shake company valuations according to Perpetual’s Anthony Aboud, who argues that investors stuck in underperforming stocks would have preferred a second opinion when they bought it.

Scale is a double-edged sword but fund managers with the right model can make it work. And while other super funds are internalising as fast as they can, Aware Super will never completely abandon outsourced management.