Bringing our most compelling thoughts to help you make more informed investment decisions.
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.
With global interest rates remaining near all-time lows, and $15 trillion of debt providing investors a negative yield, bond-market bears are in danger of becoming extinct. But could today’s ageing society finally provide the trigger for a sustained bond-market selloff?
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?
Good governance is crucial to all boards, whether they oversee a FTSE 100 multinational, a multi-billion pound pension scheme or a national charity. There is no one-size-fits-all approach to how boards should be run but we have learned that there are plenty of ways to evolve and enhance effectiveness.
A future in which there is less work to be done will radically reshape the economy, with important consequences for investors – including some contrarian implications for the consumer and real-estate sectors.
Four practical steps DB pension schemes can take to help them navigate volatile markets.
We stay bullish on risk assets as we believe the medium term outlook for markets has actually improved
Can environmental, social and governance concerns (ESG) fit within a factor-based portfolio? In this article, we tackle two issues: the inconsistency in methodologies for ESG scoring, and ways to integrate ESG considerations into factor portfolios.
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.
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.
The economic expansion of the last decade has been a consistent tailwind for financial assets. We see next year as the start of the twilight zone between expansion and an eventual downturn that will likely mark the end of the cycle.
What determines a city’s future success and how is this linked to property investment?
In the next economic downturn, central banks will likely have to reach further into their unconventional playbook. But which policymakers have the most freedom to act and what does that mean for asset prices?
The American midterm elections are approaching and the crystal ball gazing has begun. Here’s what investors should consider regardless of whether the US votes for a ‘distilled Donald’, the ‘Democratic double’ or a ‘divided democracy’.
Whether you’re looking at equities, bond yields, currencies or economic strength, it’s the US that’s been leading the charge. Is this likely to continue?
Will it become more common for DB schemes to run off without sponsor support?
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?
Developments in trade tensions, emerging markets and European politics may determine the trajectory of markets over the coming months.
Raising the retirement age can help with the fiscal costs of living longer. But our unhealthy lives could force us to look at other options.
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?
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?
A brief discussion of some of the behavioural biases that can explain factor premia.
Today’s China no longer matches the view of the country that most people have. Could this gap between perception and reality offer a wealth of investment opportunities?
What should investors make of rising yields, higher volatility and wider credit spreads?
A lack of policy space means that central banks may have to turn to more unconventional responses when the next recession occurs.
Can cyclical tailwinds paper over the structural cracks? And what’s the outlook for global trade, China and equity investors?
While trade tensions have escalated in recent months, we believe the case for emerging markets remains compelling - if investors know where to look.
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?
The disruptive change of the ‘shale revolution’ has forced existing producers to adapt while reducing OPEC’s pricing power. We expect further far-reaching changes to take effect in the coming years
Get ready for a shift in UK market leadership, says Stephen Message, manager of the L&G UK Equity Income Fund.
Are market expectations too good to be true?
Managing transfers out of DB pension schemes.
Looking into 2018, US policies will remain one of the biggest focal points for EM assets, even if it has felt like ‘waiting for Godot’.
The consequences of monetary tightening will define the 2018 investment landscape.
We expect another strong year for growth with the global economy firing on almost all cylinders. But the market has priced in this optimism, implying greater vulnerability for disappointment. We expect the low interest rate environment to continue into 2018. While interest rates can drift up, we do not think this is the beginning of the end for the bond markets.
A renewable revolution is taking place in the way we produce and consume energy and it presents an enormous opportunity for investors.
Increasing life expectancy is one of the most profound success stories of the post-war era. The pace and scale of this human success story has been remarkable, but it is creating its own challenges for corporates.
In this quarterly outlook we outline our asset allocation views and address three key questions on equities, US monetarypolicy and emerging markets.
Effective cashflow management for DB pension schemes.
Slower population growth has probably depressed OECD inflation by around ½% over the past decade. Going forward, the outlook could change.
The logistics industry is seeing increased investment, driven by technology trends including automation and smart manufacturing.
Just as the popularity of two-wheeled pedal power has been surging across London, a different type of cycle, the economic kind, has vanished from sight.
After more than a century of incremental change, technological trends and consumer demands around road vehicles are converging.