We live in eventful times – the case for event-driven investing
This blog highlights the current dispersion in the corporate sector, and the investment opportunities it is creating for event-driven managers. As such, the strategy can offer investors an attractive and relatively idiosyncratic source of return compared to more traditional equity and fixed income assets.
Minimum volatility – in a sweet spot, but for how long?
This blog highlights the strong performance, in terms of both return and risk, of “minimum volatility” strategies, particularly over the last couple of years, and examines some of the potential reasons for this. It also looks at potential future bumps in the road, such as a changing interest rate environment, elevated valuations, and possible changes in fund flows into this area.
Capital Preservation in DC Plans Deserves a Second Look
Though it may be easy to overlook an asset class generally characterized by safety and stability, it is imperative for plan sponsors to take a second look at the capital preservation options in their programs and evaluate the fiduciary implications associated with the offerings.
Know Your Managers
2015 was characterized by bouts of volatility, narrow stock leadership and some very wide divergences between indices and within the components of indices. In some instances this contributed to material underperformance amongst active managers and their respective benchmarks. During volatile times it is a good idea to reaffirm why a particular manager was hired and in what particular instances they may out or underperform.
Sources of Hedge Fund Alpha
Most investors think alpha or performance comes from a single source: Manager Skill. However, there is more than one way to achieve superior returns and investors would be wise to consider all of the alpha options to maximize returns and minimize volatility within a portfolio.
We review the recent performance trends of “130/30” strategies, which involve a limited amount of shorting, but remain beta one (maintain equity exposure). While a surface look at recent performance in databases seems favorable, a deeper dive serves as a reminder that that there is no panacea in the search for alpha and that one is required to identify truly skilled managers in less efficient asset classes.
Capacity Management: To close, or not to close, that is the question
Capacity management for equity strategies is a crucial element of evaluating not only how an investment manager plans to manage its overall business, but the impact it might have on potential value added for a strategy versus its benchmark and peers. Capacity management practices can differ noticeably across investment managers and the total estimated capacity will heavily depend upon the size and characteristics of the strategy’s investment universe and the type of investment strategy employed.
Market and Portfolio Construction Impacts on Active Management Performance
A discussion of the sources of active equity management’s general underperformance in 2014 and 2015.
Stand By Your Man(ager)
This post addresses the question – how long does one give an underperforming investment manager before firing him or her?
Mutual Fund Fees: Recent Trends & Observations
This post discusses the results of Aon Hewitt Investment Consulting’s annual mutual fund fee study.