Analysis

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.

The Your Future, Your Super performance test will have a tough time weeding out underperforming trustee-directed products when they’re already closed, according to Chant West, while many of those housed on platforms could fail because of their unique fee structures.

Active management might be back in a big way but asset managers need to make sure they’re getting what they pay for: skill, not luck. Figuring out manager style and factor biases is key.

Growth is not a dirty word, but it didn’t cover itself in glory through the market upheaval of 2022. Managers now find themselves in a paradigm where what they pay is important again.

Institutional investors have come crawling back to equities, according to bfinance, while high growth managers have led the rebound in an “abrupt style reversal”. But hopes for a meaningful market rebound could be misplaced.

The market is betting that the Fed will tame inflation without blowing up the global economy. The Fed itself isn’t so sure, but Brandywine Global believes it’s approaching the problem from the wrong end.

Emerging markets are no longer the backwaters of the global economy, but their corporate debt is a multi-trillion-dollar market that’s gone almost untapped by institutional investors.

60/40 isn’t dead, but that doesn’t mean that investors shouldn’t be searching high and low for diversification. Despite what Harry Markowitz once said, it won’t necessarily come cheap.

Private markets were the main driver of superannuation fund performance for 2022, according to Frontier, but only a few of this year’s top 10 funds feature in the league tables over the last decade. And the YFYS test is still creating anomalous outcomes.

A BlackRock survey of institutional investors has found the growing appetite for private markets is dampened only by liquidity concerns. Meanwhile, its strategists warn that the efficacy of the classic 60/40 portfolio is waning.

The meltdown of Silicon Valley Bank is “an early step” towards a more rational market environment, according to Howard Marks, but new problems might arise from bank exposure to commercial real estate.