All Strategies articles
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White papersThe Data Science Revolution
How the new richness and accessibility of data, and advances in data science, are enhancing both quantitative and traditional fundamental investment research—and sparking a revolution in active management.
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White papers
Blog | Factors strategies: avoiding off-target exposure pitfalls
Factor investing is no longer a niche strategy frequently applied by the sophisticated few. These strategies’ potential for improved risk-adjusted returns has led to successful long-term relationships with pension funds, and a growing demand from retail clients.
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White papers
Target Factor Exposure: Investment applications and solutions
Factor strategies differ significantly in terms of portfolio construction. There is much debate regarding the pros and cons of alternative construction approaches. A vigorous debate has unfurled over the best way to combine factors into a single portfolio, with some practitioners preferring the top-down approach and others favoring a bottom-up “integrated” approach.
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White papers
Improving Portfolio Diversification with Single Factor Indices
To improve the robustness of their portfolio, asset owners can either exploit the imperfect correlation between risk factors and try to have a more balanced or deconcentrated allocation to them or try to improve conditional diversification by considering exposures of risk factors to macroeconomic regimes.
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White papers
Risks Rebalanced - Asset Allocation Committee Outlook 1Q 2020
On Tuesday, January 14, Erik Knutzen, CIO of Multi-Asset Class, Gorky Urquieta, Co-Head of Emerging Markets Debt, and Conrad Saldanha, Senior Portfolio Manager, Emerging Markets Equity, discussed the AAC’s latest views on navigating the current market environment.
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White papers
Blog | Are there active bets hidden in your index?
As the bull market has marched on in 2019, rising markets have continued to lift US stocks to new highs. Indexes are generally the metric for these milestones, which can at times raise questions about uneven performance—particularly when an index reaches an all-time high while another comparable index doesn’t. But comparisons such as these lose sight of the very purpose of a passive index, which is to stay true to its stated objectives rather than outperform them.
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White papers
ETFs in the 2020s: four trends to watch
The increased adoption of ETFs was one of the most striking of all the investment revolutions that characterized the 2010s. A decade ago, many retail investors still considered ETFs to be novel, exotic, and somewhat complicated. And institutions weren’t rushing to embrace ETFs either, as many were already reaping low cost benefits from other index vehicles.
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White papers
Capital Market Assumptions - 5 Year Outlook
Every year, Northern Trust’s Capital Market Assumptions Working Group develops forward-looking, historically aware forecasts for global economic activity and financial market returns that drive our five-year asset class return expectations and inform our asset allocation decisions. All of this comes together in the form of our long-term strategic asset allocations, which are used by institutional and individual investors worldwide.
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White papers
Investment Outlook Q1 2020: Slowing but going
On balance, we take a moderately risk-on approach, but a wide range of economic, domestic and geopolitical risks persist. Resumption of nuclear testing by North Korea and US conflict with Iran are on the radar. There’s also the US presidential election to contend with and various flavours of increasingly extreme politics vying to outdo each other. However, late cycle dynamics appear poised to extend for at least one more year.
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White papers
The Solvency Sharpe Ratio: Strategic Asset Allocation for Insurers
New approaches to Strategic Asset Allocation for increasingly complex insurance balance sheets.
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White papers
Time For A Flight To Cyclical Value In European Equity
When we look fundamentally at the risks and rewards in equity markets for 2020, we find that value o ffers better opportunities than growth as implied expectations are lower and therefore more attractive for value at this point. The performance of value vs growth has been on a downward trend for a long time, almost 13 years. In our view, the rotation towards value that started in September 2019 is likely to continue in 2020.
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White papers
Global Investment Views - January 2020
As we approach the year-end, a look back over the past 12 months reminds us how unconventional this year of records has been. On the upside, equities rallied to historical highs in December and fixed income returns were also strong as bond yields fell. The combination of these trends enabled a traditional 50 bond/50 equity balanced portfolio for European to investors generate 15.5%1, the best annual performance in the last two decades.
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White papers
Does Past Performance Matter? The Persistence Scorecard
The S&P Persistence Scorecard attempts to distinguish a manager’s luck from skill. One key measure of successful active management lies in the ability of a manager to outperform his peers consistently.
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White papers
Global Investment Views - December 2019
In recent weeks equities rallied along with bond yields as investors reacted to the prospect of a US-China ‘phase one deal’ and fading global recession fears. The value of negative yielding bonds continued to fall, from US$17 trillion over the summer to the current US$12.5 trillion. While equities were previously overshadowed by the excessive gloominess on the global economy and earnings, markets rebounded after corporate results in the US and Europe met or exceeded low expectations, and as economic data did not show any material worsening. The mantra now seems to be ‘not so bad is the new good’.
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White papers
Equity Portfolio Construction: Filling the Gap Between Alpha and Beta
Separating equity alpha and beta is a good first step—but could investors be doing more in the space left between them?
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White papers
Simply Put(Writing)
PutWrite strategies can improve the risk-return efficiency, liquidity, flexibility and cost-effectiveness of investor portfolios.
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White papers
Quantitative Easing: The End Of The Road For Pension Investors?
Has central banks’ Quantitative Easing (QE) been a blessing or a curse for investors?
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White papers
Research: How could climate change impact sovereign risk?
In this paper, FTSE Russell introduces the concept of climate change risk and its implications for sovereign risk in both advanced and emerging economies, via changes in fiscal policy, social contract and political stability.
