Analysis

An under-researched element in the professional investment process is portfolio construction. Yet, according to a joint research effort by implementation specialist manager Parametric and the Sydney-based Australian Catholic Superannuation and Retirement Fund, the rewards can be very significant. The research report, ‘Optimality Is in the Eye of the Beholder: The Science and Art of Equity…

By Greg Bright APRA has picked a sore which has troubled the industry for years: ‘who is making what out of cash?’. And it’s a good thing to raise the question, but APRA perhaps should look a little deeper with its investigations. Perhaps bigger issues are not what the definition of cash should be, but…

DWS, formerly known as Deutsche Asset Management, has extended marketing of its Multi Asset Solutions unit’s range of strategies in Australia and New Zealand, following rapid success in Asia over the past couple of years. One of the unique tools used is called ‘group risk in portfolios’ (GRIP). On his first visit to Australia, Nicolas…

Asset class performance, like fund manager performance, can fluctuate wildly from year to year. The annual Russell Investments/ASX study of markets and accompanying analysis provides a reflective view on the lack of persistence in market segment returns on a year-by-year basis. The 20th edition of the report was published late last week and will probably provide…

Two big global managers – Franklin Templeton Investments and Wellington Management – have produced papers espousing the virtues right now of emerging market debt strategies. Emerging market debt is “fixed income’s most dynamic asset class”, one of them says. According to Franklin Templeton: “Over the last three decades emerging market debt has evolved into fixed-income’s…

Cybersecurity breeches may well represent the biggest threat to both corporate and national interests, but investors can also capitalise on the problem. It’s the age-old adage: where there’s muck there’s money. According to a paper by Robeco, ‘Cybersecurity – Turning Threats into Investment Opportunities’, the spending on cybersecurity by companies, governments and individuals has been…

Fund managers love their acronyms. We currently have the FANGs and more lately we have the BATs. We used to have the BRICS too, but they fell out of favour. But both the latest tech-orientated acronyms – FANGs and BATs – have their drawbacks, according to Hexavest. Value is being tested. Value managers have, over…

by James Lindgren* With the latest APRA fund data showing that average operating expenditure per member for all categories of superannuation fund (except corporate funds) has steadily increased since 2004, it is increasingly important that super funds ensure that increasing operational expenditure is helping to improve member outcomes. The Royal Commission into Banking and Financial…

Cliff Asness, the renowned founder of AQR Capital, has published a new white paper critiquing common ways used to compare the overall performance of hedge funds and suggesting better comparisons for investors to make. But he has a sting in the tail for some hedge fund managers. The paper, ‘The Hedgie in Winter’, says that hedge…

MySuper options delivered strong returns in the past one, three and five years, as did ‘non-MySuper’ super options, according to the latest Rainmaker research. But not-for-profit funds continue to dominate MySuper returns compared with commercial funds. And the gap between the competing sectors is even wider for other balanced strategies. Rainmaker announced last week its…

MSCI has included 226 China A shares in its global emerging markets index, after a protracted process urged on by potential investors and competition from fellow index provider FTSE. MSCI expects at least US$600 billion of foreign capital flow into China as a result. New ETPs are bound to spring up. Jonathan Howie, the former…

The draft report of the Productivity Commission into superannuation, as critical as it is about the system, at least has a silver lining with respect to fees. Unlike APRA’s public statements in the past, the Commission has made 38 references to “net returns” and only three references to “low cost”. Maybe we have turned the…