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20 Top Whitepapers from August 2020

Popular and Trending Papers from August 2020

Crisis? What crisis? With U.S. markets reaching new all-time highs, one might be forgiven for thinking that all was well in the world. But in many countries, the ‘R’ number continues to rise, while additional lockdown measures are being reintroduced. Even in territories where lockdowns haven’t yet been reinstated, the rebound in economic data from the depths of 'peak lockdown' appears relatively anaemic.

The list of the 20 top papers for August includes papers examining endowment fund performance, private markets, and fiscal and monetary policy responses to the COVID crisis. Of interest to some may be the papers on China, given recent rumblings about delisting Chinese companies from U.S. exchanges. As always, the Savvy Team has collated a wide range of views and opinions, but kindly note that due to content-specific geographical restrictions, not all 20 papers may be available in every region.

euro and pills

 

How Illiquidity in Private Markets Affects Asset Allocation (State Street, 2020)

In this paper, State Street argues that investors should reconsider how they approach liquidity within portfolios, treating it as a shadow allocation and subject to the same return and risk metrics common to other assets. They suggest that this novel approach offers several benefits for investors.

COVID-19 and the Private Debt Markets (Franklin Templeton, Aug 2020)

For compliance reasons, this paper is only accessible in certain geographies

Franklin Templeton’s article discusses the impact of COVID-19 upon private credit markets in a historical context and offers insights into what the future might hold for the asset class.

Alternatives in 2020 (Preqin)

This report from Preqin reviews 2019 from an alternative asset class perspective, observing that it was a bumper year for alts markets as assets invested exceeded $10tn for the first time. They then discuss the prospects for a number of the more important alts sectors.

The Future of Governance: Corporate ESG priorities (Calvert, 2020)

For compliance reasons, this paper is only accessible in the United States

Calvert’s report outlines the changing role of management, focusing on corporate boards in particular, as they meet the evolutionary challenges posed by rapid technological advancement, increasing scrutiny, and added focus on ESG issues.

Impact Investing: Dual-purpose investing (Candriam, Aug 2020)

For compliance reasons, this paper is only accessible in certain geographies

In this report, Candriam outlines the considerable scope that remains for impact investing. The United Nations recently suggested that an initial $2.5tn is required to help alleviate existing threats to humanity from famine, pandemics, climate risk, etc. Their paper also provides a framework for impact investing, complete with case studies. 

Europe's Fiscal Policy: Reforms still needed (PGIM Fixed Income blog, Aug 2020)

PGIM Fixed Income examines how Europe has tackled the COVID-19 crisis, noting that the initial steps are praiseworthy, but that there are still significant needs for structural reforms.  

Podcast: Why low rates are here to stay (Janus Henderson, Aug 2020)

For compliance reasons, this paper is only accessible in the United States and Canada

Janus Henderson’s first ‘Global Perspectives’ podcast features a lively roundtable debate in which they discuss key market issues and influences.

Global Fixed Income Strategy (Invesco, Aug 2020)

For compliance reasons, this paper is only accessible in certain geographies

The U.S. Federal Reserve is due to announce the results of its review of monetary policy framework shortly. Invesco opines on the likely changes, how these changes might affect inflation targets, and their impact on fixed income markets over both the short and longer-term. 

Central Banks Obscure Looming Bond Market Risks (Manulife IM blog, Jul 2020)

For compliance reasons, this paper is only accessible in certain geographies

Manulife IM investigates the central bank policy responses to the COVID-19 outbreak, noting that there may be unintended consequences of such robust and concerted actions. Their argument favours an active approach to fixed income investing, as a passive approach may be inferior in such unusual times.

The Case for Inflation (MFS blog, Aug 2020) 

MFS outlines the case for an eventual comeback in inflation after several years of a disinflationary demand shock, courtesy of the COVID-19 pandemic. Aggressive fiscal policy and unconventional monetary measures suggest that a shift in asset allocation might be needed to cope with a more inflationary environment.

How the Pandemic May Change Things (Baillie Gifford, 2020)

Dave Bujnowski, Investment Manager at Baillie Gifford, investigates the acceleration in existing secular trends and changing behaviour patterns that have occurred since the COVID-19 outbreak began.

The Next Normal: The recovery will be digital (McKinsey & Company, Aug 2020)

McKinsey & Co. focuses their attention on the digital revolution and its impacts across various businesses, where an acceleration in existing trends has been seen because of COVID-19. Some companies adapted out of necessity or survival, while others took their first tentative steps onto the digital highway.

Investing In Innovation (Franklin Templeton, Aug 2020)

For compliance reasons, this paper is only accessible in the EMEA region

Franklin Templeton revisits the smartphone, looking back at the tumultuous decade since its adoption became mainstream, and examining how it now encompasses many parts of our lives. They contest that the evolutionary cycle of the smartphone and its many uses can be applied to other industries, arguing that innovation drives growth – be this in genetics, fintech, or the management of the explosion in data.

Europe’s Fiscal Hamiltonian Echoes (PineBridge Investments blog, Aug 2020)

PineBridge Investments notes the corollary between the EU’s recent financial responses to the COVID-19 crisis and the financial solutions that Alexander Hamilton manufactured for the nascent United States in what might be seen as similar circumstances.

Endowments — Performance and Asset Allocation Study (BNY Mellon, 2020)

In this paper from BNY Mellon, they investigate the investment performance, asset allocation, and investment strategies across a range of endowments, universities, and non-profit organisations. 

Decoding the Performance Gap in Ivy League Endowments in 2019 (MPI)

MPI notes a wide dispersion in performance between Ivy League endowments in fiscal 2019, observing that a strong year in private market assets (in which many endowments are overweight) was not always reflected in overall portfolio returns.

Fleeting Alpha: Transient Outperformance (S&P Dow Jones Indices, 2020

S&P presents their semi-annual Fleeting Alpha Scorecard report, which investigates active manager outperformance persistence across markets and over longer time frames. 

Video: Japanese Equities - Structural trend growth (Matthews Asia, Jul 2020)

For compliance reasons, this paper is only accessible in the UK & Europe

In this video, Shuntaro Takeuchi, Portfolio Manager, and David Dali, Head of Portfolio Strategy at Matthews Asia, discuss the structural trends and changes underway in the Japanese market that may offer opportunities for investors.

Sizing up Chinese equities – A market too big to ignore (Robeco, Aug 2020)

Robeco highlights the potential of the Chinese mainland stock market, which for many investors, is unfamiliar investment territory.

Chinese Government Bonds – A Low yield world anomaly? (FTSE Russell blog, 2020)

In this paper from FTSE Russell, they highlight the potential attractions of the Chinese bond market, with significant yield pickup and low correlation to Western bond markets as two of the aspects worthy of further consideration.  

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