Analysis

By David Chaplin Investors should lead with the head not the heart when it comes to assessing ‘impact’ assets, a new paper from Russell Investments says. The report, authored by Noah Schiltknecht, says while impact investors may be happy to give up some monetary gain in exchange for the targeted social ‘good’, careful financial analysis…

Although the major index providers have recognised the growing need for information about the carbon exposures of companies represented and despite the increasing popularity of factor indices for smart beta strategies, the carbon footprint of factor indices has tended to be overlooked. Recent work by S&P Dow Jones Indices has ranked the major factors by…

A recent paper by Willis Towers Watson, which looked at all the major options facing big super funds in designing pension-phase strategies for their members, including different tax positions, says retired members should have less in total equities, but 5-10 per cent more in Australian equities than members in the accumulation phase. The paper, ‘Investing…

The NZ industry has flipped its views on responsible investing in record quick-time, according to a just-released survey. In a follow-up to the inaugural 2016 report, the second BNP Paribas Securities Services/Investment News NZ industry survey found almost 70 per cent of respondents would increase their focus on ESG factors this year compared to just…

A unique series of studies by Credit Suisse Research has shown that the performance of family-controlled listed companies around the world is so superior to other companies that they should be considered a separate asset class. Don’t laugh. Even if it’s not called an asset class, the investment case is compelling. Credit Suisse Research, which…

Big super funds have completed another good year, despite the “lower-for-longer” general predictions, with the average balanced fund returning 10.3 per cent. Frontier Advisors has analysed what the top performers did and didn’t do. Using the SuperRatings ‘SR 50 Balanced Index’ as its universe, Frontier’s David Carruthers and Ian Yun made the following observations from…

APRA believes that there is “a lot of scope for money to be lost” through the operational due diligence process, or lack of it. But ODD, as it is known, has taken on a new importance for asset owners and funds managers, with or without APRA’s view. Craig Roodt, head of investment risk at APRA,…

The standard procedure of firing losing managers and hiring winning managers based on their past three-year performance leads to losses, according to Rob Arnott at factor specialist manager Research Affiliates. This is not a new insight. What follows, though, is. “Even though it may sound counterintuitive, a comfort zone is a dangerous place to be.” -Mary…

One of the biggest concerns facing both policy makers and super fund trustees – a concern they at least share – is what to do about the adequacy problem for the bulk of retirees over the next 20 or more years. Australia’s retirement incomes policies and products are inadequate. The OCED had some tips for…

The good work big super funds are doing is not getting through to stakeholders, be they members, regulators, the Government or other commentators, because of the perception that they are too accepting of the status quo. A new paper by specialist implementation manager Parametric suggests the common stakeholder perception is that super funds are too…

The big geopolitical issues facing the world will take a prominent place for discussion at this year’s annual conference of the Investment Management Consultants Association (IMCA Australia), taking place in Sydney and Melbourne on September 19 and 20. Michael Thawley, a former Australian ambassador to the US and head of the department of Prime Minister and Cabinet,…

There are various studies – one a regular one by Ray Dalio when he used to write many of the Bridgewater Associates newsletters, focusing on US elections – that show political decisions, even wars, are not as influential on market directions as normal cycles and animal spirits. Well, maybe this time it really is different….