The top 16 white papers in June 2016
Savvy Investor is a major new knowledge network site that focuses on curating the very best pensions and investment content from across the web - from white papers and articles to news and blogs.
These were our most viewed and trending papers from the last month:
1. The Future of Asset Management (Robeco, 2016)
The business of investment management will change significantly in the years ahead. Demographic and regulatory trends have imposed gradual change upon the industry, but technological developments are now injecting more urgency into the pace of change. In this white paper, Robeco examines the forces that are driving change, and how this will transform the industry. The authors examine the growth of index funds, the consequent separation of alpha and beta, and the growth of multi-asset and LDI solutions. The paper argues that the industry is moving to a lower fee, higher cost environment, alongside a digital battle for customer engagement. In this scenario there will be winners and losers, although the asset management pie will continue to grow.
2. Understanding and measuring the illiquidity risk premium (Willis Towers Watson)
Illiquidity risk is a potentially appealing means of generating additional yields in a low-return world. The authors of this 10-page document discuss three different dimensions of illiquidity risk premium that investors should demand for a given asset.
3. BREXIT: Implications for the UK financial services sector (PwC, 2016)
This 48-page paper by PwC analyses the potential impact on the UK financial services sector of a "Brexit" from the EU. The authors provide two alternative "Brexit" scenarios - the FTA scenario and the WTO scenario.
4. Front Office and Asset Management Salaries 2016 - New Surveys
Our most read surveys cover compensation benchmarks for different positions within U.S. Asset Management, UK Front Office and Asset Management, Asian/Australian roles and Canadian CFA Charterholders.
5. Smart Beta - Global Survey of Asset Owners (FTSE Russell, 2016)
FTSE Russell's 2016 smart beta survey documents the findings from interviewing over 250 asset owners around the world. This detailed 40-page paper reveals that factor investing is continuing to gain ground, with over 70% of asset owners surveyed currently implementing or evaluating such strategies. The survey explores investor perceptions of smart beta, including the rationale for using these strategies and the methods of evaluation. The study examines strategic versus tactical implementation of factor strategies, and discusses the evolving roles of external managers and consultants within the process.
6. Factor Investing and Risk Allocation: From Traditional to Alternative Risk Premia Harvesting (EDHEC, 2016)
This detailed paper examines the best possible approach for harvesting alternative long/short risk premia. The authors look beyond the traditional factors of factor investing.
7. Why BREXIT may not happen (The Savvy Investor blog, June 2016)
The UK is facing an unprecedented political crisis. The June 23rd referendum vote ended with the majority of Brits voting to leave the European Union. Article 50 will need to be triggered by the new prime minister, kick-starting negotiations with the EU. But according to these recent articles on Savvy Investor, a Brexit from the EU is not at all guaranteed.
8. The Ins and Outs of Investing in Illiquid Assets (CAIA, 2016)
In recent years, investing in illiquid assets has become more common. There are a number of reasons why these assets have grown in popularity, mainly the belief that they provide greater expected returns and diversification potential. This paper examines both theoretical and empirical foundations on which this viewed is based.
9. De-Risking Journeys of Mid-Sized Pension Schemes (LGIM, 2016)
This 50-page paper examines the long-term de-risking goals and strategies of mid-sized pension schemes in the UK. Over 40 schemes with total assets of between £100 million and £1 billion were surveyed.
10. Global Trends in Institutional ETF Adoption: Drivers for Growth Through 2020 (Greenwich Associates)
Institutional investors are major contributors to the gradual rise in global ETF demand. In 2015, ETFs attracted over $350 billion in new assets worldwide. In this 11-page paper by Greenwich Associates, the authors examine how current ETF trends can be expected to impact demand in 2020. They use a growth model that estimates growth in ETF assets over the next five years. The model examines respondents' strategies for widening usage, boosting holding periods and adopting new products among both ETF non-ETF users.
11. Pensions With Purpose: Meeting the Retirement Challenge (State Street, 2016)
This 37-page document provides important insights into the pension fund industry. 400 senior executives representing private and public pensions systems across 20 different countries were interviewed for the survey. Key themes covered include: investment strategy; managing risks; efficiencies; talent; accountability.
12. European Infrastructure Investors Survey 2016 (Deloitte)
This 28-page paper by Deloitte provides important insights and analysis into the current state and outlook for European infrastructure investment markets. The authors believe that the infrastructure asset class will continue with its strong performance and provide stable and secure returns.
13. What to Expect in a Post-Brexit World (OppenheimerFunds, June 2016)
With the UK on its way out of the European Union, here's what investors need to know.
14. From Brexit to Stagflation? (PIMCO)
What is the likely economic fall-out from the Brexit vote on the rest of the world? Joachim Fels of PIMCO shares his thoughts in this brief article.
15. The New Prominence of Private Assets: Targeting outcomes (BlackRock, 2016)
Once dominated by venture capital and private equity buyouts, private asset strategies are now numerous, diverse, and able to contribute to specific investment outcomes such as income, real return or growth. Monitoring potential over-concentrations and managing risk are key concerns in constructing private asset portfolios. Investors can take deliberate steps to hedge or gain better diversification but there’s no denying that it’s a resource-intensive endeavour.
16. Solvency II - consequences for European Insurers managing fixed income (Natixis)
New prudential regulations for European insurance companies entered into force on 1 January 2016. These regulations will have an impact well beyond the insurance industry, most notably in asset management.