Insights

Index strategies can target well-defined decarbonisation pathways that may help to avoid climate risks

It was a turbulent first half of the year for markets. Has it merely been a challenging period? Or are we seeing a full-scale change of market regime?

Looking back, private markets have experienced robust returns, with 2021 making a high point. Fast forward to this year and the six months to June 2022, and the wider economic and markets environment is barely recognisable.

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

Even though 2022 has begun with an abrupt change in the macro narrative, stoked by the Fed, we hold the line on our bullish outlook for risk assets.

We’ve put together a four-step checklist with useful tips and guidelines around the new reporting requirements and obligations around pension consolidation.

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.

To spur net-zero carbon emissions, we are making our targeted engagement programme even more ambitious

As we look ahead to the next three months, and consider how to invest on behalf of our clients, we are confronted by seemingly conficting 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?

We look at whether TIPS (Treasury Inflation Protected Securities) deserve a greater role within UK defined benefit (DB) schemes’ portfolios.

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.

Unfortunately for markets, our bearish outlook for 2018 came to pass. For 2019, the key question is how tightening fnancial conditions will impact heavily indebted borrowers – and whether this raises the risk of recession.

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?

We turn cautious on global equities on a tactical and medium-term view, as US stocks flirt with record highs even though risks to the world economy are mounting.

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?