Global Strategy Outlook

Top 16 investment papers in April 2016

Our top 16 white papers in April 2016

Savvy Investor is a major new knowledge network with a focus on curating the best pensions and investment white papers and articles, news and blogs from around the web. These were our most viewed and trending papers from the last month:


1. Is Smart Beta just Monkey Business? (EDHEC-Risk Institute)
The “Monkey portfolio” proposition is that smart beta strategies can be deployed naively, with the assurance that all such strategies will add value. EDHEC's research suggests otherwise, with many smart beta strategies having exposure to other factors. The authors warn that care is needed to avoid over-extrapolating the implications of a particular test specification of a smart beta strategy into a wider setting.

2. ESG - Road Blocks or the Road to Integration? (FTSE Russell, 2016)
Large asset owners are increasingly considering ESG factors within core investment processes. The level of sophistication varies between institutions and markets, but the momentum is clear. This FTSE Russell study examines some of the perceived hindrances to applying an ESG framework to the stock selection process, and sets out practical ways of achieving a successful integration.

3. Momentum Investing and Asset Allocation (Berkeley Square Capital Management)
Using three asset classes to frame the discussion (Hedge Funds, Fixed Income, and Equities), Drew F. Knowles of Berkeley Square Capital Management demonstrates the use of a new approach within a quantitative investment strategy in the context of making careful asset allocation decisions. The sample portfolio was examined over multiple market cycles and achieved higher compound returns with less volatility.

4. Active versus Passive: How You Can Get on Base (Segal Rogerscasey, 2016)
This paper by Segal Rogerscasey examines the ongoing debate between active and passive management, highlighting the pros and cons of both strategies. How can institutional investors calculate the probability that active or passive strategies will outperform, and how do they decide which approach is best for their situation?

5. Best Practices in Formal Meetings with Investment Consultants
Formal meetings with investment consulting firms can be make-or-break moments for asset managers. Strengthening relationships with consultants and ultimately winning a prized spot on their selective shortlists hinges on a manager’s performance in face-to-face formal meetings. This paper helps guide managers through the prep, execution and follow-up of these meetings.

6. Front Office and Asset Management Salaries 2016 - New Surveys
Our most read surveys cover compensation benchmarks for different positions within UK Front Office and Asset Management, US Asset Management, Canadian CFA Charterholders and Asian/Australian roles.

7. Brexit's Implications for Financial Markets and Beyond (Lazard, Apr 2016)
In this paper, the authors explore both sides of the “Brexit” debate and examine the political and economic implications for the United Kingdom and the European Union as a whole.

8. Staying the Course in Value Investing (Dodge & Cox, Apr 2016)
Value stocks have performed better than growth stocks for most periods over the last 90 years. The last decade has however seen value lag growth. The authors state that while this is somewhat inevitable, there are good reasons to believe the current divergence may narrow and even reverse soon. Patience, persistence and a long-term investment outlook are essential to achieving long-term success.

9. 2016 EY Global Private Equity Fund and Investor Survey
This 35 page report by Ernst & Young provides valuable insights into the global private equity fund industry. Over 100 finance execs and over 80 investors gave their opinions and observations for the report, discussing some of the opportunities and challenges ahead.

10. Options for DC Plan Menus: Time to Rethink Fixed Income (BlackRock, 2016)
For a long time now, bonds pegged to the Barclays Aggregate Index have provided DC participants with two things: strong returns and safety. Declining interest rates, the main driver of those strong returns, is now likely to end. What to do about it is the question facing plan sponsors.

11. JP Morgan Guide to the Markets - Q2 2016
A quarterly assessment of major global markets from JP Morgan Asset Management. These are the latest in a regular series of quarterly reports.

12. Profitability Trends in Emerging Markets: Active Management (Lazard, Apr 2016)
Over the last five years, the equity performance of emerging markets has trailed that of developed market equities as overall profitability in EMs has declined. The authors believe that this is an important time to understand the drivers of company profitability. To this end, they have examined the components of return on equity for emerging and developed markets.

13. A Guide to Delegated Investment Management (Willis Towers Watson, 2016)
This detailed document from Willis Towers Watson provides plan sponsors with valuable insights into delegation. As a consequence of delegation, plan sponsors have access to relevant skills that are lacking. They also can devote more time to oversight and strategy issues. The authors emphasise the importance of objectives evolving over time as the objectives of a delegate mandate evolve too.

14. Asset Management (Paolo Vanini, 2016)
This 300 page book could have been entitled, "everything you ever wanted to know about investment", such is the breadth of topics covered. The author, Paolo Vanini gives readers a thorough grounding in the main players in institutional investment, and how the industry operates. A wide variety of the building blocks of the investment process are covered in detail, including asset allocation, portfolio construction and factor models, while the most popular investment theories are discussed. The author considers a wide variety of investment vehicles, investment regulation and current trends.

15. Endgame Portfolios and the Role of Credit (LGIM, Mar 2016)
This paper seeks to provide pension schemes seeking self-sufficiency with a framework for constructing endgame investment portfolios. In recent times, there has been an increasing focus on the endgame. This involves transferring assets and liabilities to a 3rd party (often an insurer), or self-sufficiency (i.e. running them off).  

16. Global Investment Outlook Q2 2016 (BlackRock)
In this paper, strategists from BlackRock's Investment Institute Outlook share their key views on the global economic and financial outlook. They note that fears of a global recession have waned since the start of 2016. They believe this, as well as the slow pace of U.S. interest rate increases, stabilizing growth and the slowdown in the U.S. dollar's rise, bode well for markets in the near term.

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