Insights

The plates under the global economy are shifting. Advances in technology, population change, decarbonisation and geopolitical pressures are both catalysing new industries and rendering some assets obsolete.

Since the start of the year, investors have well and truly adopted the US soft-landing narrative.

In our CIO autumn update, teams from across LGIM assess the key implications of AI for our clients.

In their latest investment outlook, our Asset Allocation team delve into the ‘time warp’ around an expected recession, arguing we’re not out of the woods just yet.

In a new whitepaper, we explore the fundamentals of the battery value-chain, with a focus on lithium

In their latest investment outlook, our Asset Allocation team weigh up the macro and market impact of stress in the banking sector – and how it’s affecting their positioning.

Our research suggests the window to achieve a 1.5°C outcome, consistent with ‘net zero’ emissions by 2050, is closing fast.

As the macroeconomic environment shifts from one of low to higher interest rates, Marija Simpraga assesses how this may affect returns for investors in renewable energy projects.

LGIM is committed to achieving net-zero greenhouse gas emissions by 2050 across all assets under management.

As delegates gather at COP27, they confront the same long-term challenge posed by climate change as they did last year. But the context has changed dramatically: in light of the war in Ukraine, governments need to balance net-zero goals with a new imperative for energy security.

In their latest investment outlook, our Asset Allocation team discuss their positioning and investment views for the coming months, in light of rising recession risks, flaring geopolitical tensions and ebbing market liquidity.

In their latest investment outlook, our Asset Allocation team explain why in light of the evolving macroeconomic environment, they now favour selling into strength

A common goal of limiting global warming to well-below 2°C – and ideally 1.5°C by the end of the century as set out in the Paris Agreement – does not mean there is a common or accepted path for how to get there.

While consensus forecasts suggest further economic recovery in 2022, we remain prepared for bumps in the road.

Greater political certainty in the US, combined with positive news on both the efficacy and deployment of COVID-19 vaccines, have given investors the green light to add risk.

Despite the ongoing challenges, we see next year as a time for healing – for the economy, environment and society.

In 2019, LGIM ran a targeted engagement campaign focused on social, governance and transparency issues at large companies with poor ESG scores.

A once-fringe economic theory has been embraced by liberal politicians at the same time as traditional budget hawks have been in retreat. Its rise has potentially radical implications for inflation and investors.

As we look ahead to the next three months, and consider how to invest on behalf of our clients, we are confronted by seemingly conflicting signals from depressed bond yields and exuberant equities.

Nervy investors are eyeing top-heavy market-cap indices with suspicion. But how can they use factors to navigate the trade-off between diversification and concentration risk?

Running RPI-linked assets versus CPI-linked liabilities can pose material risks. But as pension schemes become better hedged – and market pricing becomes more appealing – they may seek to explore CPI-linked assets in greater detail.

Managing transfers out of DB pension schemes.

Cashflow matching strategies are customised investment solutions, designed to enable clients such as pension schemes or insurance companies to meet their liabilities. We believe that emerging market fixed income has an important role to play in designing cashflow matching strategies.

The global risk asset rally continued in early 2017, with emerging market investments the star performers.

There are so many elements to consider when building factor-based solutions it can be overwhelming. We’ve highlighted two case studies of investors tackling these challenges.

The falls over the past two years in high yield and emerging market debt (‘alternative credit’) credit spreads,1 along with indications of late-cycle behaviour in the US, has led some investors to be nervous about allocating to these areas. But should pension schemes reconsider?

Investors have been buffeted by a large number of negative headlines in 2018. We remain of the view that tightening global liquidity conditions are likely to exacerbate market volatility.

Investors need to factor in how immigration concerns in the European Union could fuel the rise of populist parties, potentially increasing the political risk premium.

Traditional models suggest there is a very high chance equities outperform over the long term. But are they overconfident, and should long-term investors adjust their asset allocation accordingly?

Many investors combine concerns over overcrowding in factors with capacity fears. We want to help separate these terms and provide some clarity over the current state of factors.

Is artificial intelligence overhyped, or are we at the vanguard of a new wave of corporate productivity improvements ushered in by next-generation technology?

While the financial reforms pose risks to trading, we can take heart from the benefits of greater transparency, says Ed Wicks, Head of Trading at LGIM.

A lack of policy space means that central banks may have to turn to more unconventional responses when the next recession occurs.

A renewable revolution is taking place in the way we produce and consume energy and it presents an enormous opportunity for investors.

Predictions about the demise of the TV industry have persisted for over a decade, even as UK TV advertising and subscription revenues have continued to grow. However, we believe the industry has reached a tipping point, driven by rapid developments in technology and changing demographics.

The enthusiasm and excitement of a new technology has on many occasions captured the imagination of the supposedly hard-nosed investment community, and encouraged them to overstate its profit potential.

The world is changing and how it looks in five years’ time will be very different to today. A long-term perspective is the key to success.

Technology change presents risks as well as opportunities. Identifying and valuing these risks is crucial to preserving investor value in both the short and the long term.

In a surprising result, the general election has ended in a hung parliament. At the time of writing, the Conservative party has won approximately 318 seats.

Global credit markets have shown remarkable resilience over the past year.

In a largely anticipated result, Emmanuel Macron has won the French presidential election.

The DC pensions industry has moved forward since auto-enrolment was introduced, with many more saving into a pension. This is great news, but challenges remain. How do we help individuals see the value in saving more for a future that seems a long way off?