Einblicke

As we enter the final months of 2020, we outline why we have become more inclined to buy dips in the equity markets.

Q4 2021 - An introduction to Active Strategies

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.

This past year has been one of the worst periods on record for investors. We assess what could signal a turnaround in 2023.

After a challenging year, is it all doom and gloom? The end of 2022 presents a forbidding picture to investors and policymakers alike. How much of what we are seeing is new, and what continuities are there that could create opportunities?

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

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.

In this article, we look at the high Sharpe ratios, improvement in quality and low duration of global high yield corporate bonds and explain why we believe that this asset class could be a valuable addition to a DB pension scheme portfolio.

In fixed income markets, it’s usually when things begin to ‘feel’ better that you run into maximum optimism. But wouldn’t it be ironic if the long-awaited reopening of economies and societies turned out to be a difficult period for markets?

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.

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.

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 financial conditions will impact heavily indebted borrowers – and whether this raises the risk of recession.

Will it become more common for DB schemes to run off without sponsor support?

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.

We remain cautious overall as risks of the US election, trade with China, unpredictable geopolitical events and Brexit continue to smoulder.

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?

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.

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

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.

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.

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.

Some countries are in pole position, while others are in danger of crashing out. The global labour force (the number of 15-70 year olds willing to work) is slowing down.

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

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

Monetary support is being tapered despite significant risks. Pressure is building steadily and we think that recent resilience is going to be tested.