Analysis

Institutional investors using private equity for diversification are just “doubling up on their main bet”, according to Capital Fund Management, and true diversification will only come through strategies that have fallen out of favour in the last decade.

There’s fairly wide disagreement about what private market outperformance will look like in the future, and investors are sweating the amount of money pouring into the asset class. At least the question of valuation is less frenzied than six months ago.

There’s “ammunition for both sides” of the active/passive debate in research that shows just 2.39 per cent of stocks outperform Treasury Bills. But active managers will be buoyed by findings that fundamentals probably do matter.

Investors say they want to build resilient portfolios but all they’re doing is making them robust. And that’s not enough to come back better from a downturn.

The Coalition wants to take the upper hand in the often emotional superannuation wars. Nation building and the new objective of super give it the perfect opportunity.

ASFA’s 2023 conference began with a pessimistic but realistic view of what investors can expect. They either need to build more resilient portfolios, trade more or “nail their colours to the mast and sail”.

If the Albanese Government gets its way, superannuation will finally have a true objective. But actually legislating it will mean navigating a semantic minefield.

It’s too soon to call the death of traditional portfolio construction even as an apparent new investment paradigm makes it more challenged. Investors should instead stay ‘humble students of the market’.

Global pension assets fell sharply in 2022, but the “global polycrisis” that caused the chaos is unlikely to be a one-off, according to the Thinking Ahead Institute.

Most asset allocators and institutional investors have a chief risk officer to manage investment volatility – but liquidity poses the greater risk, according to PGIM, and few institutions have a role for managing it.

The big headwind to the emerging markets is fading. But buying big stories about growth and shuffling money from one hot sector to another is no way to play them.

Making predictions is hard, especially about the future. That hasn’t stopped TCorp from calling an RBA pivot, falling US inflation and corporate earnings, and further deterioration in US-China relations.