Actionable ETF Investment Ideas for Institutional Investors
Exchange-traded funds have been growing at a rapid pace since the launch of the first ETF nearly 20 years ago. Today, the global ETF market boasts assets worth more than $1.7 trillion and the pace does not seem to be slowing down. According to last year’s Greenwich study, 40% of institutional investors plan to increase their ETF allocation in the next 12 months. But how are the most sophisticated investors utilising these seemingly retail investment tools?
Join experts from SPDR® ETFs, the exchange traded funds (ETF) platform of State Street Global Advisors (SSgA) to hear how institutional investors are currently using ETFs, which asset classes they are accessing with ETFs, and why ETFs are an attractive option for index exposure over other vehicles. The discussion will also address common misconceptions of ETFs.
• Using ETFs for strategic/tactical asset allocation, transition management, cash equitisation, rebalancing portfolios and liquidity management.
• Asset classes to consider accessing with ETFs.
• Comparing ETFs, futures and swaps.
• Addressing common misconceptions of ETFs.
RecordedJun 20 201261 mins
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Nicholas Hardingham, Franklin Templeton Investments; Brendan Maton, IPE (moderator)
Investors increasingly are looking outside traditional government bonds in order to generate acceptable yield in what is a historical low-yielding environment.
Emerging Market Debt (EMD) has been a significant beneficiary of this reallocation. In spite of this, yields for EMD remain significantly elevated in comparison to their developed market peers, and in line with their longer term historical averages.
Much of this capital has been placed into more traditional EM issuers which in itself concentrates investors’ risks. Looking at benchmarks, the most consistent and superior long-term risk/reward outcomes in euro terms have tended to be generated by a blended allocation to hard currency, local currency and corporate EMD.
Given the significant differences in correlation of hard, local and corporate EMD versus traditional fixed income, this active and blended approach could provide investors with diversification from core fixed income holdings whilst capturing the higher yields on offer.
James Webb, Global Head of Business Development of Currency Administration; Marvin Loh, Senior Global Market Strategist
Heightened volatility in the foreign exchange ("FX") markets has increased the level of risk that companies face. Managing currency exposures inherent in the globally diversified portfolios is now front and center for many firms, including alternative fund managers as a topic of interest, particularly among oversight boards with fiduciary responsibility.
BNY Mellon’s Currency Administration group provides an outsourced passive currency hedging service that helps companies manage the currency risk of their international portfolios. In this seminar we will discuss how hedge programs may help reduce the operational and financial risk of foreign currency exposures.
Michael Strating, Managing Director, Head of Quantitative Equities; Wilma de Groot, CFA, Director, Portfolio Manager; Robeco
Institutional investors are increasingly searching for new ways to add value to equity portfolios, without taking on unnecessary risk.
Curious how we create a balanced combination of factors aimed at consistently outperforming a benchmark with controlled tracking error?
You are invited to join Michael Strating (Head of the Quantitative Equities team) and Wilma de Groot (Portfolio Manager Quantitative Equities) who will discuss how low tracking error multi-factor approach can add value, without affecting your risk budget.
Eric Shirbini, Global Product Specialist with ERI Scientific Beta; Moderator, Brendan Maton
EDHEC Risk Institute has been conducting research for several years on the possibility of reconciling financial and environmental performance. The launch of a new series of low carbon indices by ERI Scientific Beta, the smart beta index provider set up by EDHEC Risk Institute in 2012, marks the practical realisation of these research efforts and represents an important moment for responsible finance, because the results of the research undertaken will provide institutional investors with smart beta indices that can reduce the carbon footprint of their equity investments by more than 80%, while at the same time outperforming traditional market indices and being able to create more than 50% additional value in the medium term.
EDHEC Risk Institute's approach can be distinguished from numerous approaches that, over the long term, hope to outperform the stock markets through the higher returns of shares in firms that have a better carbon footprint, because these firms are supposedly less affected by the increasing cost of fossil fuels and the tons of carbon emitted, but that, in the short and medium term, aim to produce performance that is fairly similar to that of traditional stock market indices.
•Topics covered include:
•The limits of green stock picking
•How to perform financially whilst reducing the carbon footprint
•Presentation of Scientific Beta Low Carbon Multi-Beta Multi-Strategy Indices
Eric Shirbini, Global Product Specialist with ERI Scientific Beta; Brendan Maton, moderator
Smart beta product offerings have proliferated over the past decade, offering investors an ample choice of different factors and different weighting schemes to select from for a relevant smart beta index. However, in addition to the question of selecting a suitable index as a standalone investment, the question of combining different smart beta strategies naturally arises in the context of an extensive range of smart beta offerings.
The webinar will address the issue of combining several smart beta strategies, and clarifies the conceptual underpinnings and relevant questions arising when considering smart beta index combinations.
Topics covered include:
•How to include investors’ goals in the construction of smart beta solutions
•Smart beta as a solution for the replacement of the active benchmarked manager: How to manage the relative risk to cap-weighted benchmarks with smart beta risk allocation
•Smart beta as a strategic benchmark
•How to manage the absolute risk of smart beta
Mark Austin (Northern Trust), Tom Seecharan (KPMG), Brendan Maton
As a means of helping ease the burden of pension liabilities, de-risking transactions remain high on the agendas of corporate sponsors and trustees.
When considering de-risking, principal focus is often justifiably spent on identifying the correct solution for the best price. However, other factors also deserve similar focus – transactions such as pension buy-ins or the use of longevity swaps often involve considerable complexity, with the resulting collateral structures persisting long after deal completion.
We invite you to join this webinar, in which we will explore these issues further. After assessing current trends in de-risking, we will focus on how three specific types of transaction – the collateralised buy-in, the use of longevity reinsurance or swaps, and the trapped surplus vehicle – can be supported.
Though this session, we aim to equip pension managers, trustees and corporate sponsors with a further understanding of the timeframes involved in these transactions – and share experiences of how deals have been successfully executed.
Patrick Houweling, PhD, Executive Director and Jeroen van Zundert, Researcher at Robeco
There is extensive academic research that confirms the existence of factor premiums. Much of the conversation to date has been about factor investing in equity markets. Many of the explanations that apply to equities are also relevant to corporate bonds.
We invite you to join our webcast with Patrick Houweling and Jeroen van Zundert from Robeco who will share their research findings and insights into this approach to investing in credits.
Constructing your portfolio in a disciplined way to gain exposure to Low Risk, Value, Momentum and Size factors can help to achieve better risk-adjusted returns for your portfolio, with volatility similar to the index.
Pension funds seeking higher risk-adjusted returns at lower costs, wealth managers responding to regulation and asset managers increasingly have been asking – “how can we harvest alpha using factor indexes?”
In 2014, Brett Hammond, Managing Director and Head of Multi-Asset Class Applied Research, and fellow researchers from MSCI, co-authored an insightful paper demonstrating how up to 80% of alpha comes from exposure to factors. This paper won the index research industry’s prestigious William F Sharpe and Bernstein Fabozzi awards, and made a significant contribution to advancing the understanding of factors.
You are invited to join this webcast where Brett Hammond will discuss how multi-factor indexes can be used to harvest alpha. A range of approaches will be covered with a special focus on the MSCI Diversified Multi-Factor Index – a truly innovative, “all-weather” index that has demonstrated an ability (back tested) to deliver market-cap-index-beating, risk-adjusted returns.
The market is awash with factor-based investing methodologies and solutions - but are you really getting the factor exposure you desire in your portfolio?
While recent market volatility has brought attention to this issue investors should take a long-term view and develop a framework that is not overly influenced by short-term market noise.
From understanding individual factors and their performance cycles through selecting specific strategies, strategically implementing a factor based approach can be a daunting task. Furthermore given the disparity of returns from seemingly similar 'Smart Beta' strategies, the complexity increases dramatically.
Let us guide you through the white noise of factor investing and provide you with insights on a number factor based topics that we’ve recently investigated.
Brendan Maton, Dr. Ricardo Adrogué, Cem Karacadag, Natalia Krol
Join Babson's emerging markets fixed income portfolio managers to discuss how the macroeconomic environment is impacting the short-term and long-term trends driving emerging markets debt.
Dr. Ricardo Adrogué, Babson’s Head of Emerging Markets Debt, Cem Karacadag, Emerging Markets Sovereign Debt portfolio manager, and Natalia Krol, a credit analyst with the Emerging Markets Corporate team, will provide insights into their respective asset classes and discuss how Babson is seeking value in today’s markets.
Dr. Ricardo Adrogué is Head of Babson's Emerging Markets Debt Group. He is also lead portfolio manager for the firm's Emerging Markets Local Debt strategy, and co-portfolio manager for the firm's Emerging Markets Sovereign Hard Currency Debt, Blended Total Return Debt Strategy and Short Duration Bond Strategies. Ricardo holds a B.A. in Economics from the Universidad Católica Argentina, an M.A. in Economics and a Ph.D. from the University of California, Los Angeles.
Cem Karacadag is co-manager of Babson’s Emerging Markets Sovereign Debt strategy and backup manager for the firm’s Local Debt strategy. Cem has 20 years of industry experience that has encompassed sovereign credit analysis, macroeconomic policy research and advice, and emerging markets fixed income strategy. Cem holds a B.A. in Economics from Tufts University and an M.A. in International Economics and European Studies from Johns Hopkins University.
Natalia Krol is a credit analyst with Babson’s Emerging Markets Corporate team in London, focusing on CEEMEA and Asia corporates. Prior to joining the firm in 2014, Natalia spent 3 years at Schroders in London, covering resources and capital goods sectors across EM, high yield and investment grade. Between 2002-2010, Natalia was a European high yield analyst at Barclays Capital in London. Natalia holds a MSc in Accounting and Finance from London School of Economics and a BSs in International Economics from Plekhanov Russian Economic Academy.
Brendan Maton (IPE), Mike Hunstad, Meggan Friedman
Investors interested in reaping the benefits of factor-based investing in their portfolios have long believed the ultimate question to be, “Which factor should I choose?” Our most recent research shows, however, that investors would be better served to ask, “When should I favour each factor?” Our research also suggests that your investment horizon, rather than the timing of incorporating factor based strategies, is key to meeting your objectives.
As the global economy copes with the unpredictable challenges of climate change, institutional investors are exploring the potential impact of these changes on financial assets. With recent announcements by the Financial Stability Board in Basel and the Bank of England to examine the risks posed by ‘Stranded Assets’, more investors are calculating their exposure to high carbon assets and looking for ways to diversify into low or no carbon alternatives.
There are a growing number of options available to institutional investors. Some Asset Owners have announced plans to divest from high carbon assets, while others have looked to low carbon indexes which either exclude or reweight exposure to carbon-intensive companies while limiting short-term risk against the benchmark. We invite you to join a discussion with leading experts to examine the extent to which asset owners feel they are exposed to climate risk; the role of asset managers to encourage good practice when addressing climate change and carbon risk and how asset managers can effectively implement a low carbon strategy through index funds.
More and more investors are realising the advantages of factor investing and starting to implement its lessons not just as an afterthought, but as a top-down element of the overall investment strategy. A large percentage of pension funds still have a cover ratio that barely exceeds the minimum requirement and face funding issues due to the ageing demographics. To meet liabilities, pension funds are looking for higher returns while at the same time have less appetite for risk. Is factor investing the solution for the seemingly opposing challenges of risk and return?
The Power of Rebalancing: Fact, Fiction and Why it Matters
It is well-understood that rebalancing is a necessary step in restoring a portfolio of volatile assets back to its target weights. Whether it is performed periodically or triggered when actual weightings move too far from target, rebalancing a portfolio will naturally lead to selling assets that have outperformed the portfolio, and buying assets that have underperformed the portfolio.
It is much less widely understood that rebalancing can actually be a source of return for the portfolio. Despite the fact that this observation dates back to 1982 [Fernholz and Shay] and has been successfully used to manage portfolios for nearly as long, it has come under considerable attack in the recent past by some academics and practitioners. The main arguments used by these detractors are:
1. There is no return benefit, because the portfolio’s expected wealth does not increase.
2. The return benefit exists, but is due to diversification, not rebalancing.
3. The return benefit relies on mean-reversion.
These arguments may appear compelling at first glance, but all three are fundamentally flawed. This webcast will tell you why.
INTECH Investment Management LLC will act as sub-adviser to Janus Capital International Limited. Janus Capital International Limited (JCIL) is authorised and regulated in the UK by the Financial Conduct Authority.
Learn about investing globally in private credit
Insights into private credit fundamentals worldwide
Learn how private credit is originated
Key thoughts and considerations around portfolio construction and diversification in North America, Europe, Australia/New Zealand and developed Asia
Investors make portfolio allocation decisions for a wide array of reasons. For example, a pension plan may choose to implement a strategic asset allocation change as a result of an asset-liability study. Whatever the reason for the change in investment allocation, delay in implementation will invariably impact returns. Empirical evidence from State Street’s transition team shows that the delay between client investment decision and selection of a transition manager can run into several months and in extreme cases over a year. Current calculations of investment risk will tend to consider investment exposure relative to a benchmark once the portfolio restructuring is complete. Event Shortfall considers that investment risk starts at the point of decision. Measuring risk in this way implies that asset owners are running unrewarded and un-mandated risks for considerable periods of time and are often paying explicit fund management fees for the delivery.
Our webinar explains the background to Event Shortfall, considers some of the practical implications of measuring and managing these risks, and reflects on the viewpoint of industry figures.
- Weltweiter Trendmarkt Gesundheit: Die Nachfrage steigt überproportional
- Bis 2030 steigen Gesundheitsausgaben voraussichtlich rund +6% pro Jahr im Durchschnitt
- Relativ unabhängig von Konjunkturzyklen und unsicheren Börsenphasen
- Gesundheitsmarkt ist vielfältig: Nicht nur Pharma, sondern z.B. auch Generika, Biotechnologie, Betreuung/Pflege, Logistik/Vertrieb, Medizintechnik und IT.
- Zweistelliges Gewinnwachstum im Biotech-Sektor
· Fundamental and quantitative investment approaches are different, but complimentary.
· Blending fundamental and quantitative requires scale, research, and integration.
· A blended approach can lead to consistent performance in different market environments.
· Risk-aware portfolio construction can lead to high active-share while managing benchmark relative volatility.
As a Bank Loans investment expert, Mark Boyadjian, CFA, Senior Vice President and Director of Floating Rate Debt Group at Franklin Templeton Investments will discuss the Bank Loans asset class and the current U.S. bank loans market situation.
Mr. Boyadjian will provide insights on the following themes, and answer your questions during the live Q&A session.
Bank loans, a meaningful player in the broader fixed income space
Credit risk assessment when investing in Bank Loans
Tom Goodwin, Senior Research Director and Guillermo Cano Senior Product Manager, Russell Indexes
Introduction/description of topic
What? Factor-investing, or factor-based equity allocations, are entering the mainstream of the investment conversation. But investors are faced with ‘noise’ in the smart beta arena, including uncertainty around how smart beta can solve investment problems, and the differences between ‘smart beta’ and ‘factor’ indices that have exploded onto the scene. So where do they begin?
Why? If investors have a desire to tilt portfolios towards strategies that can potentially both tolerate market volatility and generate long-term positive returns, exploring how factor-based equity allocations can help achieve these investment objectives is a good place to start.
How? Practical implementation of exposures to these factors raises a new set of questions such as how to efficiently capture the desired factor exposure(s) while being mindful of turnover and capacity, and how to maintain a well-diversified portfolio.
This Russell Indexes’ webcast seeks to guide investors through these complexities. We will illustrate how we’ve cut through the noise to focus on what our research has shown to be the most important and complementary factors for portfolio construction: low volatility, value, quality and momentum. We will also provide examples of how factor combination portfolios can align with investor beliefs, preferences, and constraints.
This webcast channel is for pension funds and other institutional investment professionals in Europe, the USA and Asia. It is particularly relevant for pension fund executives, trustees, consultants and investment managers. IPE will be bringing its community live interviews with leading figures in the market, hosting roundtable discussions on specific topics such as asset allocation and also sharing latest thought-leadership from investment experts.
10-Year U.S. Treasury yields are currently near the 1.50% level and the majority of investors believe these rates are highly unlikely to move much lower, especially to a record low of 1%. But that's where we think they are headed. Learn more about where we go from here.
As global equity markets hover around historical highs, portfolio manager Nick Peters takes stock and outlines the key risks and opportunities for investors over the rest of the year. He also reveals how this is shaping tactical positioning across asset classes in Fidelity’s Multi Asset fund range.
Corporate behaviour is changing, and with it public companies are increasingly providing green goods, products and services as part of their business mix.
Join FTSE Russell and the London School of Economics as we explore:
• Global economic cycles, climate legislation and what to prepare for
• The risks portfolios are facing in a developing green economy
• How to measure and track portfolio exposure to the green economy
• The FTSE Green Revenues Index Series
08:00 - 09:00 San Francisco PDT
11:00 - 12:00 New York EDT
16:00 - 17:00 London BST
• Professor Sam Fankhauser PhD, Co-Director, Grantham Research Institute, London School of Economics
• Gordon Morrison FIA, Managing Director, ESG, FTSE Russell
• Kevin Bourne, Managing Director, FTSE Russell (host)
As part of our on - going 'What's Really Happening in Emerging market' series. We are now able to give you access to the hottest Emerging Markets topics in just 10 minutes! In this edition we will be focusing on Brazil, the host of this years Olympics.
Topics that will be explored in this webcast:
• Is the Brazilian economic activity really improving?
• What is the perspective for structural reforms and fiscal accounts?
• When will the Brazilian Central Bank start easing the monetary cycle?
The United States is ahead in the medal count, and it feels to investors like a variation on a longer theme: The U.S. stock market has been leading developed and emerging market indices, causing some to say "Go USA" to their portfolios. Learn why we think this is a mistake.
Executive Pay has dominated the corporate headlines once again with significant shareholder votes against remuneration policies and reports.
We believe that remuneration policies reflect a company’s culture and affect its reputation and licence to operate. We also expect focus on this area to intensify as we approach many binding remuneration policy votes in 2017.
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