All Risk Management articles – Page 9
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White papers2021 Outlook: The Uneven Recovery
The recovery in many ways looks real and durable—but it also looks uneven and, in some cases, quite unpredictable. In this discussion, investment professionals from the public and private markets discuss where they expect to see risks and opportunities in the year ahead.
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White papersMarket scenarios and risks - November 2020
This month, we amend the narrative of our central and downside scenario to take into account a larger than expected Covid second wave in Europe and delayed fiscal support in the US. We reduce the probability of our central scenario from 70% to 65% and increase the probability of the downside scenario from 20% to 25%.
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White papersDegrees of Risk
Recognition as a PRI Leader on climate reporting will help us raise awareness of the importance of “Climate Value-at-Risk.”
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White papersLiquidity trends in the wake of Covid-19: implications for portfolio construction
The Covid-19 crisis has triggered the deepest liquidity squeeze since 2008. Unlike the Great Financial Crisis (GFC), an unprecedented real economy shock led to extremely quick deterioration of financial conditions and showed that, under extreme circumstances, liquidity may dry up not only within risk assets, but also within risk free ones.
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White papersHow best to approach climate change risk management?
Chris Wagstaff considers how asset owners might best approach climate change risk management by adopting a number of non-mutually exclusive mitigating actions to address transition and physical risks.
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White papersMarkets scenarios & risks - October 2020
This month, we do not amend the narrative of our central and alternative scenario. Economic data confirm a slower recovery path in line with our central scenario and Central Banks maintain their accommodative stace. We maintain the probability of our central scenario at 70%, 20% for the downside scenario and 10% for the upside.
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White papersGrowth versus Value: Balancing the Risks
Across Europe, measures implemented to contain the Covid-19 pandemic are being gradually lifted. The infection rates on the continent show different dynamics with some exceptions. At the same time, the capital markets are recovering. Therefore, we are currently at the crossroads between crisis and recovery.
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White papersGlobal Convertible Securities: A Strategic Choice For Lower-Volatility Equity Participation
An environment of unprecedented uncertainty has heightened the need for risk-managed investment solutions. Because of their structural features, convertible securities can address a range of strategic investment needs, providing lower-volatility equity market participation or serving as an enhancement to a fixed income portfolio.
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White papersA risk-based approach to harnessing alternative sources of income
The income-generating potential of alternatives seems to be largely underappreciated, despite the trend toward larger allocations to alternative asset classes and the need for yield. Investors can enhance their ability to capitalize on the yield and diversification benefits of alternatives by focusing on the risks that drive returns in each specific segment of the alternatives universe. Executing this, however, is no simple task. If done incorrectly, investors risk negating some of the diversification benefits that make alternatives such valuable contributors to stronger, more resilient portfolios.
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White papersMarkets scenarios & risks - July 2020
We marginally amend the narrative of our central and alternative scenario on the back of recent developments. We also increase
the probability of our central scenario from 50 to 60% while reducing the likelihood of the upside scenario from 30 to 20%. -
White papersSpotlight on Sterling credit - Identifying opportunities
The strong recovery in sterling credit in Q2 can mask some underlying developments within the index, creating both risk and opportunity. Much of the current attractive credit premium at the overall index level may be attributed to a relatively small number of sectors and issuers, while in the current economic climate, even those sectors traditionally considered lower risk, may be more vulnerable than many investors think.
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White papersHow to protect an equity portfolio with an overlay strategy in a market downturn
Dynamic risk management strategies (risk overlays) can be useful for investors. They are a means of reconciling their two main objectives: capturing the risk premia of risky assets to meet their long-term strategic goals, while still meeting short-term objectives such as limits on drawdowns or requirements for regulatory capital.[1]
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White papersMegatrends: After the Great Lockdown – new business realities and the implications for investors
New Business Realities and the Implications for Investors
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White papersManaging Risk Models in the Coronavirus Crisis
The spread of the COVID-19 virus has blindsided conventional risk models. By understanding what went wrong, investors can develop a more forward-looking approach to risk management that considers multiple scenarios for a highly uncertain market environment.
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White papersPortfolio Risk Management: A Multidimensional Perspective
Asset allocation, effective portfolio design and dynamic management have always been powerful tools for battling volatile markets, but risk has come into even sharper focus lately. Economic growth is slowing, yields are low and stocks have taken several tumbles. Investors are looking for new ways to tackle risk.
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White papersRisk Factors, Macroeconomic Context And Forecasts - July 2019
Risk Factors
The table within the article presents risk factors with judgmental probabilities (i.e. not market based). It also develops the possible market impacts. -
White papersIs it time to get off the roller coaster?
The market for pension de-risking is growing at an un- precedented pace. Today, pension funds in the US, UK and Canada are simultaneously at the highest funded status they’ve experienced in ten years. In addition, these markets have attracted new entrants in pension insurance and reinsurance, so there is ample insurer capacity, vibrant price competition, and attractive buy-in and buy-out pricing.
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White papersDefault Probability Measure
In a world of integrated global financial markets, accurately predicting company default risk is important not only in traditional fixed income credit analysis but also more broadly across the financial industry.
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White papersQ1 2019 - Global Asset Class Spotlights: Top Down Quarterly Assessment
The combination of monetary policy stances (more patient and flexible everywhere), encouraging tariff negotiations, Chinese authorities proving successful in their resolution to support the economic cycle are all potential triggers (and risks when mirrored) to risk assets and might help produce a positive short lasting reaction.
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White papersIf you can de-risk now, why wait?!
Pension funds in the US, UK and Canada have transferred nearly $400 billion in pension and longevity risk since 2007. While these countries are the focal point of the market today, the Netherlands has been a vibrant market, and Germany recently opened for pension risk transfer in 2018 with two notable transactions, together worth more than $5 billion. Several other countries will soon follow suit. In 2017, the US and UK set a combined record with nearly $50 billion in total activity3, and 2018 is shaping up to be another outstanding year on both sides of the pond.
