MAX FACTOR. Rather than simply weighting stocks by SMART BETA INVESTING IN DC

Size: px
Start display at page:

Download "MAX FACTOR. Rather than simply weighting stocks by SMART BETA INVESTING IN DC"

Transcription

1 MAX FACTOR SMART BETA INVESTING IN DC Factor investing, or Smart Beta, is providing a new frontier for DC schemes to address a range of investing needs. Improved diversification and better risk-adjusted returns, together with the cost-efficiency and transparency characteristics of index investing, are key attractions. BY SOPHIE BALLARD, SENIOR DC RELATIONSHIP MANAGER Rather than simply weighting stocks by their market cap, as is done in index investing, Smart Beta is changing the investing landscape. And DC investors are catching on. Compared to market cap-weighted benchmarks, these factor-based strategies give schemes the opportunity to target higher returns over time, lower risk, or a combination of both, using cost-efficient implementation approaches. Targeting factors in this way allows schemes to seek the underlying drivers of investment return that were once the sole preserve of active managers. Smart Beta effectively combines some of the benefits of both active and index management. Predictable exposures and straightforward implementation can also help to reduce the governance burdens on DC scheme management. 12 Contribute Autumn 2017 State Street Global Advisors

2 Integrating Smart Beta into DC Schemes There are a number of ways Smart Beta can be used in DC. Strategic implementations can introduce factors either alone or in combination. Looking at past performance, some factors are more pro-cyclical, i.e. they tend to do better in stronger, positive markets (Value, Small Cap), while others are more defensive (Low Volatility, High uality). Smart Beta is often a complement to traditional index strategies so an analysis of the wider portfolio can help to align the portfolio to the scheme s goals, existing holdings and constraints. CHOOSING FACTORS Smart Beta strategies target a range of factors including: VALUE Value stocks trade at a lower price than their fundamentals (earnings, sales etc.) would imply. Inexpensive stocks have been shown to out-perform more expensive stock over time. Regardless of the intended objective, it s crucial to remember that the best risk-adjusted returns are achieved from long-term exposures and that patience is necessary to get the best from factor investing. Target Improved Risk-adjusted Returns We know from our research that DC members generally value a smoother investment journey. When Smart Beta strategies that target uality or Low Volatility factors are introduced, they can help to lower overall volatility and limit the impact of market falls, at relatively low cost. Multi-factor funds that combine a number of Smart Beta factors can help the scheme to diversify even further and take advantage of low or negative correlations between factors. Combining the uality and Low Volatility factors, for example, can build a defensive allocation that complements value-based strategies. Such an approach might be adopted if the portfolio already has exposure to Value or if a more conservative investment approach is preferred. Combining factors in this way can help dampen the cyclical effects of Smart Beta and offer schemes a potentially smoother risk/return profile compared to single-factor exposures. SMALL CAP LOW VOLATILITY UALITY Smaller-cap companies have tended to outperform larger-cap companies over the long term. Tilting towards lower risk stocks can generate improved risk-adjusted returns. Many Low Volatility indices attain a 20 30% reduction in volatility, compared to their cap-weighted indices. Investing in higher-quality companies (high profitability, earnings stability, low leverage etc.) has been shown to deliver greater downside protection. In falling markets their stock price tends to be less impacted than the overall market. Refining the Glide Path Glide Path Asset Allocation Target Date Funds have the ability to continually evolve and utilise new investment ideas, such as Smart Beta. The growth phase of their glide path can, for example, invest in Value and Small Cap factors, then transition to uality and Low Volatility strategies as the fund matures and looks to derisk. 0% DGF Multi-factor Bonds A larger allocation is made to Value or Small Cap factors early in the investment glide path in order to target improved risk-adjusted returns. 50% As retirement nears and members ability to sustain losses reduces Low Volatility or uality factors are progressively introduced to narrow the volatility profile further. This approach helps optimise allocations throughout the lifetime of the scheme more return-seeking assets earlier in the glide path, less volatility towards retirement. 100% Passive equity Years to retirement Source: SSGA For illustrative purposes only. ssga.com/ukdc 13

3 SMART BETA IN THE INVESTMENT TOOLKIT CASE STUDY 1 DC schemes describe their decision to implement Smart Beta as part of their investment strategy. CONSUMER GOODS 50M 2,500 MEMBERS Scheme size Is type of factors are you targeting with Smart Beta strategies? We are targeting Value, Size, uality and Low Volatility. this replacing or complementing a market cap approach? It is replacing our market cap allocation. attributes of the approach make it attractive for your plan/strategy? Access to fundamentally desirable characteristics such as Value Higher expected risk-adjusted returns compared with market cap passive investing Avoiding biases associated with market cap investing such as placing higher weight to the most expensive companies Adding value through sensible annual rebalancing Similar charges to passive market cap investing In essence, the strategy is passively managed with a set of rules regarding stock weightings. It targets particular stock characteristics like low valuation companies, which outperform over the longer term which is relatively intuitive for members. Communications are similar to those for passive investing the fund is a passive fund, which means that the shares are chosen in such a way as to track a broad index of shares in a mechanistic manner rather than relying on a particular investment manager to individually choose shares. do you see as the potential benefits for members over the long term? Higher net risk-adjusted returns in the growth phase that will contribute to better member outcomes at retirement. Smart Beta Essentials 1 = not important, 4 = essential How are you communicating with members about Smart Beta? We recommended the Global Multi-Factor Strategy within a blended fund, combining an allocation to an Emerging Markets Index Fund. Governance Cost Factor targeting Return potential Diversification 14 Contribute Autumn 2017 State Street Global Advisors

4 CASE STUDY 2 ENGINEERING > 1BN 30,000 MEMBERS Scheme size Is How type of factors are you targeting with Smart Beta strategies? Fundamental indexation and Low Volatility. this replacing or complementing a market cap approach? As a complement to existing market cap index strategies within our default investment option. attributes of the approach make it attractive for your plan/strategy? It introduces an element of diversification away from a pure market cap equity strategy. It s expected to modestly improve the risk/return profile for a member over the long run, without compromising on overall returns. The lower fees and governance requirements (relative to an active equity strategy) also appeal as a DC investor. are you communicating with members about Smart Beta? The Smart Beta funds are wrapped within a white-labelled fund. Members will see they hold units in a single fund which has an objective to deliver long-term growth that is similar to equities but with less variability in returns. do you see as the potential benefits for members over the long term? From an investment perspective, Smart Beta provides diversification from traditional equity exposure with improved long-term risk/return. Plus, it offers reduced fees for members and lower governance needs for trustees. Smart Beta Essentials 1 = not important, 4 = essential Governance Return potential Factor targeting Diversification Cost NEXT STEPS To learn more about the potential of Smart Beta for your scheme, visit the Smart Beta section of our website. ssga.com/ukdc 15

5 CONTRIBUTE For subscriptions, us at or visit ssga.com/ukdc Marketing Communication Belgium: State Street Global Advisors Belgium, Chaussée de La Hulpe 120, 1000 Brussels, Belgium. T: +32 (0) SSGA Belgium is a branch office of State Street Global Advisors Limited. State Street Global Advisors Limited is authorised and regulated by the Financial Conduct Authority in the United Kingdom. Dubai: State Street Bank and Trust Company (Representative Office), Boulevard Plaza 1, 17th Floor, Office 1703 Near Dubai Mall & Burj Khalifa, P.O Box 26838, Dubai, United Arab Emirates. T: +971 (0) France: State Street Global Advisors France, Immeuble Défense Plaza, rue Delarivière-Lefoullon, Paris La Défense Cedex, France. T: +33 (0) Authorised and regulated by the Autorité des Marchés Financiers. Registered with the Register of Commerce and Companies of Nanterre under the number Germany: State Street Global Advisors GmbH, Brienner Strasse 59, D Munich, Germany. T: +49 (0) Authorised and regulated by the Bundesanstalt für Finanzdienstleistungsaufsicht ( BaFin ). Registered with the Register of Commerce Munich HRB Ireland: State Street Global Advisors Ireland Limited, Two Park Place, Upper Hatch Street, Dublin 2. T: +353 (0) Incorporated and registered in Ireland. Registered Number: Regulated by the Central Bank of Ireland. Member of the Irish Association of Investment Managers. Italy: State Street Global Advisors Limited, Milan Branch (Sede Secondaria di Milano), Via dei Bossi, Milano, Italy. T: State Street Global Advisors Limited, Milan Branch (Sede Secondaria di Milano) is registered in Italy with company number R.E.A and VAT number State Street Global Advisors Limited, Milan Branch (Sede Secondaria di Milano) is a branch office of State Street Global Advisors Limited. Street Global Advisors Limited is authorised and regulated by the Financial Conduct Authority in the United Kingdom. Netherlands: State Street Global Advisors Netherlands, Apollo Building, 7th floor, Herikerbergweg 29, 1101 CN Amsterdam, Netherlands. T: +31 (0) SSGA Netherlands is a branch office of State Street Global Advisors Limited. State Street Global Advisors Limited is authorised and regulated by the Financial Conduct Authority in the United Kingdom. Switzerland: State Street Global Advisors AG, Beethovenstr. 19, CH-8027 Zurich. T: +41 (0) Authorised and regulated by the Eidgenössische Finanzmarktaufsicht ( FINMA ). Registered with the Register of Commerce Zurich CHE United Kingdom: State Street Global Advisors Limited, 20 Churchill Place, Canary Wharf, London, E14 5HJ. T: +44 (0) Authorised and regulated by the Financial Conduct Authority. Registered in England. Registered No VAT No Branch office websites: This communication is directed at professional clients (this includes eligible counterparties as defined by the Financial Conduct Authority (FCA)) who are deemed both knowledgeable and experienced in matters relating to investments. The products and services to which this communication relates are only available to such persons and persons of any other description (including retail clients) should not rely on this communication. This document contains certain statements that may be deemed forwardlooking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Risks associated with equity investing include stock values which may fluctuate in response to the activities of individual companies and general market and economic conditions. Bonds generally present less short-term risk and volatility than stocks, but contain interest rate risk (as interest rates raise, bond prices usually fall); issuer default risk; issuer credit risk; liquidity risk; and inflation risk. These effects are usually pronounced for longer-term securities. Any fixed income security sold or redeemed prior to maturity may be subject to a substantial gain or loss. Target Date Funds are designed for investors expecting to retire around the year indicated in each fund s name. When choosing a fund, investors should consider whether they anticipate retiring significantly earlier or later than age 65 even if such investors retire on or near a fund s approximate target date. There may be other considerations relevant to fund selection and investors should select the fund that best meets their individual circumstances and investment goals. The funds asset allocation strategy becomes increasingly conservative as it approaches the target date and beyond. The investment risks of each fund change over time as its asset allocation changes. The information provided does not constitute investment advice as such term is defined under the Markets in Financial Instruments Directive (2004/39/EC) and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell any investment. It does not take into account any investor s or potential investor s particular investment objectives, strategies, tax status, risk appetite or investment horizon. If you require investment advice you should consult your tax and financial or other professional advisor. All material has been obtained from sources believed to be reliable. There is no representation or warranty as to the accuracy of the information and State Street shall have no liability for decisions based on such information. The whole or any part of this work may not be reproduced, copied or transmitted or any of its contents disclosed to third parties without SSGA s express written consent. Investing involves risk including the risk of loss of principal. Past performance is not a guarantee of future results. Diversification does not ensure a profit or guarantee against loss. A Smart Beta strategy does not seek to replicate the performance of a specified cap-weighted index and as such may underperform such an index. The factors to which a Smart Beta strategy seeks to deliver exposure may themselves undergo cyclical performance. As such, a Smart Beta strategy may underperform the market or other Smart Beta strategies exposed to similar or other targeted factors. In fact, we believe that factor premia accrue over the long term (5-10 years), and investors must keep that long time horizon in mind when investing. Low volatility funds can exhibit relative low volatility and excess returns compared to the Index over the long term; both portfolio investments and returns may differ from those of the Index. The fund may not experience lower volatility or provide returns in excess of the Index and may provide lower returns in periods of a rapidly rising market. Active stock selection may lead to added risk in exchange for the potential outperformance relative to the Index. Asset Allocation is a method of diversification which positions assets among major investment categories. Asset Allocation may be used in an effort to manage risk and enhance returns. It does not, however, guarantee a profit or protect against loss. The information contained in this communication is not a research recommendation or investment research and is classified as a Marketing Communication in accordance with the European Communities (Markets in Financial Instruments) Regulations This means that this marketing communication (a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research (b) is not subject to any prohibition on dealing ahead of the dissemination of investment research State Street Corporation All rights reserved. DC-4203 Exp. Date: 30/09/2018

BREAKING DOWN BORDERS. Is now the time for multinational plans to consider cross-border consolidation?

BREAKING DOWN BORDERS. Is now the time for multinational plans to consider cross-border consolidation? BREAKING DOWN BORDERS Is now the time for multinational plans to consider cross-border consolidation? BY GUEST CONTRIBUTOR, PAUL BONSER FIA, SENIOR PARTNER AT AON HEWITT 18 Contribute Autumn 2017 State

More information

ESG AND DC THE GROWING. Investors with long time horizons need to consider FOR ESG IN DC PLANS

ESG AND DC THE GROWING. Investors with long time horizons need to consider FOR ESG IN DC PLANS THE GROWING ESG AND DC FOR ESG IN DC PLANS Funds that consider environmental, social and governance factors can help members mitigate emerging risks and capture new drivers of long-term growth. BY ALISTAIR

More information

Check out Simon Sineck s. LEARN YOUR WHY e-course. (available at startwithwhy.com) for tips on uncovering the purpose underlying your work.

Check out Simon Sineck s. LEARN YOUR WHY e-course. (available at startwithwhy.com) for tips on uncovering the purpose underlying your work. STEWARDSHIP IN ACTION A roadmap for adopting a stewardship approach to retirement benefits management within your organization 1 GATHER With the detours in mind, plan how you re going to get from where

More information

Long-Term Smart Beta Estimated Forecasts

Long-Term Smart Beta Estimated Forecasts tember 3, 217 We advocate using Smart Beta investments as a means to potentially boost returns, increase transparency and manage risk, while keeping costs in check. Although many investors have embraced

More information

Proxy Voting and Engagement Guidelines

Proxy Voting and Engagement Guidelines March 2018 Proxy Voting and Engagement Guidelines Rest of the World State Street Global Advisors ( SSGA ) Rest of the World Proxy Voting and Engagement Guidelines i cover different corporate governance

More information

Why Use Smart Beta in DC?

Why Use Smart Beta in DC? Smart Beta for DC Smart Beta for DC Why Use Smart Beta in DC? Increasing numbers of our DC clients are looking to us to help them use smart beta solutions in their schemes. Offering improved risk-adjusted

More information

Global Rates Forecast

Global Rates Forecast 2019 Global Cash Outlook Innovations in Cash Global Rates Forecast We review our expectations for euro, sterling and dollar performance in 2019. We expect the European Central Bank to wind down its asset

More information

February 23, Dear Board Member:

February 23, Dear Board Member: February 23, 2018 Dear Board Member: As one of the world s largest investment managers, we are pleased to see the strong performance US companies have been delivering to shareholders, as steady capex growth

More information

Proxy Voting and Engagement Guidelines

Proxy Voting and Engagement Guidelines March 2018 Proxy Voting and Engagement Guidelines United Kingdom and Ireland State Street Global Advisors ( SSGA ), United Kingdom and Ireland Proxy Voting and Engagement Guidelines i outline our expectations

More information

Global Retirement Reality Report 2018 UK Snapshot

Global Retirement Reality Report 2018 UK Snapshot Global Retirement Reality Report 2018 UK Snapshot Hopes & Fears The Expectations and Reality of Retirement The concept of retirement remains constant. The reality of retirement continues to change. Since

More information

Better Days for Active Management?

Better Days for Active Management? 2018 Global Market Outlook Step Forward, Look Both Ways Investment Themes Better Days for Active Management? Lori Heinel, CFA Deputy Global Chief Investment Officer Return of the Stock Picker? Normalizing

More information

Money Market Funds Are You EU Reform Ready?

Money Market Funds Are You EU Reform Ready? Money Market Funds Are You EU Reform Ready? EU MMF Reforms The European Union (EU) money market fund (MMF) reforms will become effective from 21 January 2019. The reforms are set to change the landscape

More information

Proxy Voting and Engagement Guidelines

Proxy Voting and Engagement Guidelines March 2018 Proxy Voting and Engagement Guidelines Australia and New Zealand State Street Global Advisors ( SSGA ) Australia & New Zealand Proxy Voting and Engagement Guidelines i outline our expectations

More information

Proxy Voting and Engagement Guidelines

Proxy Voting and Engagement Guidelines March 2017 Proxy Voting and Engagement Guidelines Japan State Street Global Advisors ( SSGA ) Japan Proxy Voting and Engagement Guidelines complement and should be read in conjunction with SSGA s overarching

More information

OFFICIAL INSTITUTIONS GROUP. Trusted Partner for Sovereign Investors

OFFICIAL INSTITUTIONS GROUP. Trusted Partner for Sovereign Investors OFFICIAL INSTITUTIONS GROUP Trusted Partner for Sovereign Investors Official Institutions Group YOUR TRUSTED PARTNER SSGA s Official Institutions Group is dedicated to managing assets on behalf of sovereign

More information

CASH SEPARATELY MANAGED ACCOUNTS. Custom Cash Portfolios from a Global Leader

CASH SEPARATELY MANAGED ACCOUNTS. Custom Cash Portfolios from a Global Leader CASH SEPARATELY MANAGED ACCOUNTS Custom Cash Portfolios from a Global Leader CUSTOM CASH PORTFOLIOS DESIGNED TO MEET YOUR GOALS For today s global institutions, cash reserves help support a broad range

More information

US Stimulus Extends Equities Runway

US Stimulus Extends Equities Runway 2018 Mid-Year Global Market Outlook Weatherproof Your Portfolio Global Equities US Stimulus Extends Equities Runway Even as US large-caps benefit from increased capital expenditure, the time is right to

More information

A Case For Global Managed Volatility Alpha Strategy

A Case For Global Managed Volatility Alpha Strategy A Case For Global Managed Volatility Alpha Strategy Active Equity The True Objectives of Investors It is common to hear investors define their investment objectives as seeking the greatest risk adjusted

More information

Credit Research. Outlook Global Cash. Outlook. Innovations in Cash

Credit Research. Outlook Global Cash. Outlook. Innovations in Cash 2019 Global Cash Outlook Innovations in Cash Credit Research Outlook Instead of trying to predict the timing of the end of the current market cycle, we are considering the biggest risks within the global

More information

UNDERSTANDING & COMPARING ESG TERMINOLOGY

UNDERSTANDING & COMPARING ESG TERMINOLOGY UNDERSTANDING & COMPARING ESG TERMINOLOGY A Practical Framework for Identifying the ESG Strategy That Is Right for You By Rakhi Kumar, Head of ESG Investments and Asset Stewardship Natasha Dayaramani,

More information

Active Quantitative Equity Don t Waste Resources on Forecasting the Oil Price When Choosing Energy Stocks

Active Quantitative Equity Don t Waste Resources on Forecasting the Oil Price When Choosing Energy Stocks Market Commentary June 2018 Active Quantitative Equity Don t Waste Resources on Forecasting the Oil Price When Choosing Energy Stocks In recent decades, oil-price movement has increasingly explained movement

More information

Proxy Voting and Engagement Guidelines

Proxy Voting and Engagement Guidelines March 2018 Proxy Voting and Engagement Guidelines Europe State Street Global Advisors ( SSGA ) European Proxy Voting and Engagement Guidelines i cover different corporate governance frameworks and practices

More information

Global Proxy Voting and Engagement Principles

Global Proxy Voting and Engagement Principles March 2018 Global Proxy Voting and Engagement Principles State Street Global Advisors ( SSGA ), one of the industry s largest institutional asset managers, is the investment management arm of State Street

More information

Effective Climate-Risk Disclosure in the Agricultural and Forestry Sectors through the Lens of the Task Force on Climate-related Financial Disclosures

Effective Climate-Risk Disclosure in the Agricultural and Forestry Sectors through the Lens of the Task Force on Climate-related Financial Disclosures Article March 2019 Effective Climate-Risk Disclosure in the Agricultural and Forestry Sectors through the Lens of the Task Force on Climate-related Financial Disclosures Rakhi Kumar, CA Head of ESG Investments

More information

Proxy Voting and Engagement Guidelines

Proxy Voting and Engagement Guidelines March 2016 Proxy Voting and Engagement Guidelines Australia State Street Global Advisors ( SSGA ) Australia Proxy Voting and Engagement Guidelines outline our expectations of companies listed on stock

More information

TIMEWISE TARGET RETIREMENT FUNDS. Guiding workplace savers to better retirement outcomes

TIMEWISE TARGET RETIREMENT FUNDS. Guiding workplace savers to better retirement outcomes TIMEWISE TARGET RETIREMENT FUNDS Guiding workplace savers to better retirement outcomes T ACTUAL DECISIONS AT RETIREMEN THE NEW RETIREMENT JOURNEY The concept of retirement remains constant. The reality

More information

Making the Most of Reflation

Making the Most of Reflation Making the Most of Reflation A Stock-picker s Guide Michael J. Solecki, CFA Chief Investment Officer, International Equity Esther Baroudy, CFA Portfolio Manager, Global Equities With contributions from

More information

Proxy Voting and Engagement Guidelines

Proxy Voting and Engagement Guidelines March 2016 Proxy Voting and Engagement Guidelines Europe State Street Global Advisors ( SSGA ) European Proxy Voting and Engagement Guidelines cover different corporate governance frameworks and practices

More information

SMART BETA CLIENT EXPERIENCES

SMART BETA CLIENT EXPERIENCES Case Study SMART BETA CLIENT EXPERIENCES Exploring the Multiple Functions of Smart Beta As investors seek to increase returns in today s low-yield environment, some are discovering that Smart Beta may

More information

Canadian Long-Term Asset Class Forecasts

Canadian Long-Term Asset Class Forecasts June 30, 2017 Summary Fixed Income Equities Alternative The Canadian curve has flattened slightly and Canadian provincial and corporate credit spreads have come down across maturities. In Canada, 10-year

More information

Use Short-Term Moves to Hedge Long-Term Currency Exposures

Use Short-Term Moves to Hedge Long-Term Currency Exposures 2019 Global Market Outlook Not Over Until It s Over Currency Outlook Use Short-Term Moves to Hedge Long-Term Currency Exposures While 2019 may initially provide more of the same for international currency

More information

Break-out Year for China?

Break-out Year for China? 2018 Global Market Outlook Step Forward, Look Both Ways Investment Themes Break-out Year for China? George Bicher Chief Investment Officer, Fundamental Emerging Market Equities Laura Ostrander Emerging

More information

HOW MEPS WILL CHANGE RETIREMENT

HOW MEPS WILL CHANGE RETIREMENT HOW MEPS WILL CHANGE RETIREMENT Providing Retirement Plans to Uncovered Workers by Brian Griggs, FRM, Investment Strategist and Catherine Reilly, CFA, Investment Strategist Finding a way to deliver a good

More information

SSGA Long-Term Asset Class Forecasts

SSGA Long-Term Asset Class Forecasts SSGA Long-Term Asset Class Forecasts 30 September 2017 Market Commentary Summary Fixed Income Equities Alternative Given the current expected path of monetary policy, our long-term US cash return reflects

More information

THE NEW ALTERNATIVES PARADIGM

THE NEW ALTERNATIVES PARADIGM THE NEW ALTERNATIVES PARADIGM Balancing Liquidity and Opportunity DON TOREY CIO Alternative Investments DAVID SELBOVITZ, CFA, CAIA Portfolio Strategist for Alternative Investments The new investment reality

More information

Fund Operating Guidelines for the State Street Global Advisors US Bank-Maintained Commingled Funds 1

Fund Operating Guidelines for the State Street Global Advisors US Bank-Maintained Commingled Funds 1 March 2018 Fund Operating Guidelines for the State Street Global Advisors US Bank-Maintained Commingled Funds 1 CTF & DB ERISA Fund Edition Table of Contents 02 Overview & Foreword 02 Section 1. Client

More information

Caution Ahead as Tailwinds Fade

Caution Ahead as Tailwinds Fade 2018 Mid-Year Global Market Outlook Weatherproof Your Portfolio Emerging Markets Caution Ahead as Tailwinds Fade George Bicher Asset Class CIO & Portfolio Manager James Binny Global Head of Currency Simona

More information

Proxy Voting and Engagement Guidelines

Proxy Voting and Engagement Guidelines March 2017 Proxy Voting and Engagement Guidelines United States State Street Global Advisors ( SSGA ) US Proxy Voting and Engagement Guidelines outline our expectations of companies listed on stock exchanges

More information

Client Alpha: The New Strategic Advisory Model

Client Alpha: The New Strategic Advisory Model CLIENT ALPHA THE NEW STRATEGIC ADVISORY 1 INVESTMENT LORI HEINEL, CFA Deputy Global Chief Investment Officer, SSGA ROUNDTABLE How the shift toward solutions is transforming the definition of active and

More information

Harnessing ESG as an Alpha Source in Active Quantitative Equities

Harnessing ESG as an Alpha Source in Active Quantitative Equities Harnessing ESG as an Alpha Source in Active Quantitative Equities By Anna Lester, Chen He and Chris McKnett At State Street Global Advisors (SSGA), we engage in environmental, social and governance investing

More information

Emerging Market Debt. Indexing on the Rise. Niall O Leary. Lyubka Dushanova. Global Head of Fixed Income Portfolio Strategists.

Emerging Market Debt. Indexing on the Rise. Niall O Leary. Lyubka Dushanova. Global Head of Fixed Income Portfolio Strategists. Emerging Market Debt Indexing on the Rise Niall O Leary Global Head of Fixed Income Portfolio Strategists Niall_Oleary@ssga.com Lyubka Dushanova Portfolio Specialist, Fixed Income Lyubka_Dushanova@ssga.com

More information

Marketing Communication. THE SPDR ETFs GUIDE TO SMART BETA

Marketing Communication. THE SPDR ETFs GUIDE TO SMART BETA Marketing Communication THE SPDR ETFs GUIDE TO SMART BETA Complete Guide to Smart Beta Bridging the gap between active and index strategies, smart beta represents an evolution in indexing. Rather than

More information

Increasing Life Expectancy

Increasing Life Expectancy The LONGER LIFE CHALLENGE Children today have a more than 50% chance of living to more than 100. Andrew Scott Professor of Economics, London Business School Behind an unassuming row of yellow-brick houses

More information

THE WHOLE PORTFOLIO. ASSESS CORRELATIONS Recognize that correlations vary over time, even for some presumed safe havens like treasuries.

THE WHOLE PORTFOLIO. ASSESS CORRELATIONS Recognize that correlations vary over time, even for some presumed safe havens like treasuries. 04 THE WHOLE PORTFOLIO Managing the unintended consequences of asset allocation decisions. Investment Ideas MONITOR EXPOSURES IN LOW VOL STRATEGIES Be aware of unintended sector and currency exposures

More information

PERFORMANCE A NEW DIMENSION IN THE PURSUIT OF

PERFORMANCE A NEW DIMENSION IN THE PURSUIT OF A NEW DIMENSION IN THE PURSUIT OF PERFORMANCE By Nigel Aston, Head of European Defined Contribution, State Street Global Advisors For the retirement savings industry, helping clients and plan members to

More information

HOW DO SOVEREIGN INVESTORS APPROACH ESG INVESTING? Official Institutions Group

HOW DO SOVEREIGN INVESTORS APPROACH ESG INVESTING? Official Institutions Group Official Institutions Group Elliot Hentov, Head of Policy and Research, Official Institutions Group Alexander Petrov, Associate, Policy and Research, Official Institutions Group ssga.com/oig HOW DO SOVEREIGN

More information

ETFs in Monetary Policy

ETFs in Monetary Policy Case Study: Bank of Japan Alexander Petrov Associate, Policy Research, Official Institutions Group Alexander_Petrov@ssga.com November 2017 Key Points Bank of Japan (BoJ) has diversified assets in its purchase

More information

As the Cycle Lengthens, Investors Look to Hedge Tail Risk But at What Price?

As the Cycle Lengthens, Investors Look to Hedge Tail Risk But at What Price? 2018 Global Market Outlook Step Forward, Look Both Ways Investment Ideas As the Cycle Lengthens, Investors Look to Hedge Tail Risk But at What Price? Dave Kobuszewski, CFA Senior Portfolio Manager, Investment

More information

Searching for Alpha Consistency in Emerging Market Equities

Searching for Alpha Consistency in Emerging Market Equities Searching for Alpha Consistency in Emerging Market Equities Gaurav Mallik Chief Portfolio Strategist Adhi Mallik, CFA Investment Product Manager In Brief Despite recent headwinds related to country-specific

More information

IQ INSIGHTS. Dynamic De-risking Avoiding the Pitfalls of a Static Investment Policy

IQ INSIGHTS. Dynamic De-risking Avoiding the Pitfalls of a Static Investment Policy IQ INSIGHTS Dynamic De-risking Avoiding the Pitfalls of a Static Investment Policy uary 2015 by Yimin Huang, CFA, CAIA, Senior Portfolio Manager, Investment Solutions Group Most corporate defined benefit

More information

Staying Risk On in a Low Volatility Regime

Staying Risk On in a Low Volatility Regime 2018 Global Market Outlook Step Forward, Look Both Ways Portfolio Positioning Staying Risk On in a Low Volatility Regime Lorne Johnson, Ph.D. Senior Portfolio Manager, Investment Solutions Group Overall

More information

How to Capitalize on a Bright Outlook for Chinese Equities

How to Capitalize on a Bright Outlook for Chinese Equities How to Capitalize on a Bright Outlook for Chinese Equities Andrew Xiao, PhD, CFA Senior Portfolio Manager, China Equity Andrew_Xiao@ssga.com Thomas Kronzer, CFA Portfolio Strategist, Fundamental Equity

More information

The Four Pillars of Post-Crisis Banking Regulations Pillar II: Liquidity and Funding

The Four Pillars of Post-Crisis Banking Regulations Pillar II: Liquidity and Funding The Four Pillars of Post-Crisis Banking Regulations Pillar II: Liquidity and Funding August 2015 Part 3 in the series: Yielding to a New Regulatory Reality-A Shifting Banking System and Its Impact on Cash

More information

State Street Global Advisors Second Quarter Cash Forecast

State Street Global Advisors Second Quarter Cash Forecast State Street Global Advisors Second Quarter Cash Forecast il Following the Fed s 25 basis point rate hike on ch 21, we expect at least two additional rate hikes of 25 basis points (bps) each in, with potential

More information

Don t Bet Against Bonds as Inflation and Growth Stay Moderate

Don t Bet Against Bonds as Inflation and Growth Stay Moderate 2018 Global Market Outlook Step Forward, Look Both Ways Investment Ideas Don t Bet Against Bonds as Inflation and Growth Stay Moderate Matt Nest, CFA Global Head of Macro Strategies Interest Rates With

More information

INVESTMENT PROFESSIONAL USE ONLY THE NEXT FRONTIER OF TARGET DATE INVESTING. Seeking to Provide Lifetime Income in Retirement

INVESTMENT PROFESSIONAL USE ONLY THE NEXT FRONTIER OF TARGET DATE INVESTING. Seeking to Provide Lifetime Income in Retirement INVESTMENT PROFESSIONAL USE ONLY THE NEXT FRONTIER OF TARGET DATE INVESTING Seeking to Provide Lifetime Income in Retirement The Next Frontier of Target Date Investing Defined Contribution (DC) plans have

More information

The Case for Short-Duration Strategies

The Case for Short-Duration Strategies The Case for Short-Duration Strategies Will Goldthwait: Good morning. And welcome to State Street Global Advisors webinar on short-duration strategies. Thank you for joining us today. My name is Will Goldthwait

More information

FINDING YIELD. SEEK YIELD SUSTAINABILITY IN EQUITIES Look beyond traditional defensive sectors to Resources, Telecoms, and IT.

FINDING YIELD. SEEK YIELD SUSTAINABILITY IN EQUITIES Look beyond traditional defensive sectors to Resources, Telecoms, and IT. 1 FINDING YIELD Opportunities remain, but the evolving complexion of bond and equity markets demands a nuanced and cautious approach. Investment Ideas TARGET HIGHER-RATED CREDIT Higher-rated high-yield

More information

Cash Separately Managed Accounts

Cash Separately Managed Accounts Cash Separately Managed Accounts Custom Cash Portfolios from a Global Leader www.ssga.com/cash 1 CASH CUSTOM PORTFOLIOS YOUR PARAMETERS, OUR INSIGHTS: CUSTOM CASH PORTFOLIOS DESIGNED TO MEET YOUR GOALS

More information

WILL: Hello everyone, welcome to State Street Global Advisors third quarter podcast. My name is Will Goldthwait, I m a portfolio strategist here at

WILL: Hello everyone, welcome to State Street Global Advisors third quarter podcast. My name is Will Goldthwait, I m a portfolio strategist here at WILL: Hello everyone, welcome to State Street Global Advisors third quarter podcast. My name is Will Goldthwait, I m a portfolio strategist here at State Street and on today s call I ll be joined by two

More information

Long-Term Value Begins at the Board: The power and potential of active asset stewardship

Long-Term Value Begins at the Board: The power and potential of active asset stewardship Long-Term Value Begins at the Board: The power and potential of active asset stewardship Ronald P. O Hanley President and CEO, State Street Global Advisors Vice Chairman, State Street Corporation John

More information

DISRUPTION DEMOGRAPHIC. Why We Need to Save More and Invest Differently

DISRUPTION DEMOGRAPHIC. Why We Need to Save More and Invest Differently DEMOGRAPHIC DISRUPTION Why We Need to Save More and Invest Differently AMLAN ROY Global Chief Retirement Strategist Unprecedented demographic changes are under way across the world, and their speed and

More information

IQ INSIGHTS. The Value of Time Make Patience an Active Investment Decision

IQ INSIGHTS. The Value of Time Make Patience an Active Investment Decision IQ INSIGHTS The Value of Time Make Patience an Active Investment Decision May 215 In the short run the market is a voting machine, but in the long run it is a weighing machine Benjamin Graham by Conor

More information

ALIGNING FACTOR & ESG VIEWS

ALIGNING FACTOR & ESG VIEWS LIGNING FCTOR & ESG VIEWS JENN ENDER, PhD Director of Research Global Equity eta Solutions XIOLE SUN Vice President Global Equity eta Solutions In the same way that the study of the underlying drivers

More information

Morgan Stanley Liquidity Funds Historic NAV

Morgan Stanley Liquidity Funds Historic NAV Morgan Stanley Liquidity Funds Historic NAV CRC 2201078 Exp. 08/03/2019 Note: The measurement of Mark-to-Market NAV changes from a weekly to a daily basis at the start of 2017, in light of European Money

More information

WORLD DIVERSIFICATION FOR AN UNCERTAIN

WORLD DIVERSIFICATION FOR AN UNCERTAIN DIVERSIFICATION FOR AN UNCERTAIN WORLD A wave of political uncertainty has proven challenging for markets and investors in recent months. For DC members, short-term volatility can be unsettling. We gathered

More information

FUNDAMENTAL VALUE EQUITIES 02 THE BIG PICTURE 04 FINDING VALUE 06 RESEARCH BRIEFING. Taking Stock Q Concentrating on long-term value

FUNDAMENTAL VALUE EQUITIES 02 THE BIG PICTURE 04 FINDING VALUE 06 RESEARCH BRIEFING. Taking Stock Q Concentrating on long-term value Taking Stock Q1 218 2 THE BIG PICTURE Volatility re-emerged in Q1 after a lengthy absence. But does that change how one should value stocks? FUNDAMENTAL VALUE EQUITIES Concentrating on long-term value

More information

IQ INSIGHTS. Can the Black-Litterman Framework Improve Asset Management Outcomes?

IQ INSIGHTS. Can the Black-Litterman Framework Improve Asset Management Outcomes? IQ INSIGHTS Can the Black-Litterman Framework Improve Asset Management Outcomes? by Dr. Marcus Schulmerich, Vice President, Global Portfolio In early 1990, a mathematical model for portfolio allocation

More information

DESIGN SOPHISTICATION FOR THE MASS MARKET

DESIGN SOPHISTICATION FOR THE MASS MARKET DESIGN SOPHISTICATION FOR THE MASS MARKET How target date funds are gaining traction as a better way to deliver good retirement outcomes. By Sahil Sethi, DC Strategist, State Street Global Advisors There

More information

Geopolitics Drives Uncertainty and Downside Risk

Geopolitics Drives Uncertainty and Downside Risk 2019 Global Market Outlook Not Over Until It s Over Geopolitical Outlook Geopolitics Drives Uncertainty and Downside Risk The trend toward monetary tightening should continue and further unilateral sovereign

More information

FM Proxy Voting and Engagement Guidelines US

FM Proxy Voting and Engagement Guidelines US FM Proxy Voting and Engagement Guidelines US MARCH 2014 CAPABILITIES State Street Global Advisors Funds Management, Inc. s ( SSgA FM ) US Proxy Voting and Engagement Guidelines outline our expectations

More information

IQ INSIGHTS. Volatility: Causes, Threats, and How to Protect Against It

IQ INSIGHTS. Volatility: Causes, Threats, and How to Protect Against It IQ INSIGHTS Volatility: Causes, Threats, and How to Protect Against It November by Bill Street, Head of Investments, EMEA Markets have been somewhat tamed by central banks through a combination of forward

More information

SELLING SAUDI-ARAMCO. Necessity or Opportunity? Official Institutions Group

SELLING SAUDI-ARAMCO. Necessity or Opportunity? Official Institutions Group Official Institutions Group Elliot Hentov, PhD Head of Policy and Research, Official Institutions Group ssga.com/oig SELLING SAUDI-ARAMCO Necessity or Opportunity? Selling Saudi-Aramco: Necessity or Opportunity?

More information

Global Credit Research Update

Global Credit Research Update Global Credit Research Update As of Second Quarter 2017 Market Commentary Global Credit Research Summary Perhaps the best way to describe the current global credit cycle is extended. While the exceptionally

More information

RISK PREMIA OF ESG CAPTURING THE

RISK PREMIA OF ESG CAPTURING THE An excerpt from FALL 2014 CAPTURING THE RISK PREMIA OF ESG Christopher McKnett, Head of ESG Investments Simon Roe, Head of Core Portfolio Management, Active Quantitative Equities It s one thing to have

More information

GICS Rebooted: A New Sector for Modern Communication

GICS Rebooted: A New Sector for Modern Communication GICS Rebooted: A New Sector for Modern Communication September 2018 By Rebecca Chesworth, Senior Equity ETF Strategist, SPDR EMEA Technological advancements have revolutionised content creation, access

More information

REDUCE RISK TARGET RETURNS. Diversified Strategies for DC

REDUCE RISK TARGET RETURNS. Diversified Strategies for DC REDUCE RISK TARET RETURNS Diversified Strategies for DC Diversified Strategies for DC WHY DIVERSIFY? any defined contribution (DC) schemes aim to help members target more stable performance and counter

More information

IN THE KNOW. Transaction Costs and What They Mean

IN THE KNOW. Transaction Costs and What They Mean IN THE KNOW Transaction Costs and What They Mean In the Know. Transaction Costs and What They Mean As investment managers, we occupy the privileged position of being trusted with people s money. With trust

More information

Fundamental Value Equities. 04 Finding Value. 08 Value Strategies. Taking Stock Q Concentrating on long-term value

Fundamental Value Equities. 04 Finding Value. 08 Value Strategies. Taking Stock Q Concentrating on long-term value Taking Stock Q2 2017 02 THE BIG PICTURE Valuation anomalies continue to uncover investment opportunities, particularly outside the United States. Fundamental Value Equities Concentrating on long-term value

More information

Global Credit Research Update

Global Credit Research Update Global Credit Research Update As of Third Quarter 2017 Market Commentary Global Credit Research Summary After several years of extraordinarily accommodative monetary policy, global central banks are (finally)

More information

Smart Beta: Unlocking New Investment Opportunities

Smart Beta: Unlocking New Investment Opportunities Smart Beta: Unlocking New Investment Opportunities Ana Paula Harris State Street Global Advisors FOR INVESTMENT PROFESSIONAL USE ONLY. Not for use with the public. All the information contained in this

More information

Morgan Stanley Investment Funds (MS INVF) Global Convertible Bond Fund

Morgan Stanley Investment Funds (MS INVF) Global Convertible Bond Fund Morgan Stanley Investment Funds (MS INVF) Global Convertible Bond Fund FIXED INCOME GLOBAL FIXED INCOME TEAM FUND OVERVIEW 30 JUNE 018 MORG AN S TAN LEY IN VES T MEN T FU N DS (MS IN VF) An Attractive

More information

Morgan Stanley Investment Management s Proxy Voting and Engagement Report: 2017

Morgan Stanley Investment Management s Proxy Voting and Engagement Report: 2017 Morgan Stanley Investment Management s Proxy Voting and Engagement Report: 2017 STEWARDSHIP REPORT The following report provides an overview of Morgan Stanley Investment Management s (MSIM) Proxy Voting

More information

Morgan Stanley Investment Funds (MS INVF) Global Balanced Risk Control Fund

Morgan Stanley Investment Funds (MS INVF) Global Balanced Risk Control Fund Morgan Stanley Investment Funds (MS INVF) Global Balanced Risk Control Fund solutions & multi-asset global Balanced Risk Control Team (GBAR) Fund overview 31 December 2017 Morgan Stanley Investment funds

More information

Morgan Stanley Investment Funds (MS INVF) Euro Strategic Bond Fund

Morgan Stanley Investment Funds (MS INVF) Euro Strategic Bond Fund Morgan Stanley Investment Funds (MS INVF) Euro Strategic Bond Fund fixed income global fixed income team Fund overview 31 March 2018 Morgan Stanley Investment Funds (MS INVF) A Flexible Approach to Investing

More information

Morgan Stanley Investment Funds (MS INVF) Short Maturity Euro Bond Fund

Morgan Stanley Investment Funds (MS INVF) Short Maturity Euro Bond Fund Morgan Stanley Investment Funds (MS INVF) Short Maturity Euro Bond Fund fixed income global fixed income team Fund overview 31 December 2017 Morgan Stanley Investment funds (MS INVF) A Diversified Portfolio

More information

Morgan Stanley Investment Funds (MS INVF) Eurozone Equity Alpha Fund

Morgan Stanley Investment Funds (MS INVF) Eurozone Equity Alpha Fund Morgan Stanley Investment Funds (MS INVF) Eurozone Equity Alpha Fund active fundamental equity european equity team Fund overview 31 March 2018 Morgan Stanley Investment funds (MS INVF) Eurozone Equity

More information

Morgan Stanley Investment Funds (MS INVF) Global Fixed Income Opportunities Fund

Morgan Stanley Investment Funds (MS INVF) Global Fixed Income Opportunities Fund Morgan Stanley Investment Funds (MS INVF) Global Fixed Income Opportunities Fund fixed income global fixed income team Fund overview 31 March 2018 Morgan Stanley Investment funds (MS INVF) An Active, Flexible

More information

Global Fixed Income Opportunities Fund

Global Fixed Income Opportunities Fund APPROVED FOR USE IN GERMANY Morgan Stanley Investment Funds (MS INVF) Global Fixed Income Opportunities Fund FIXED INCOME GLOBAL FIXED INCOME TEAM FUND OVERVIEW 30 JUNE 018 MOR G AN S TAN LEY IN VES T

More information

Achieving Better Investment Performance: Time to Delegate?

Achieving Better Investment Performance: Time to Delegate? Aon Delegated Consulting Services For Professional Clients Only Achieving Better Investment Performance: Time to Delegate? Achieving better investment performance: time to delegate? The predominant focus

More information

Geopolitical. Outlook

Geopolitical. Outlook 2018 Global Market Outlook Step Forward, Look Both Ways The Macro Picture Geopolitical Outlook Will Markets Be More Skittish in 2018? Elliot Hentov, Ph.D. Head of Policy and Research, Official Institutions

More information

Morgan Stanley Investment Funds (MS INVF) Global Credit Fund

Morgan Stanley Investment Funds (MS INVF) Global Credit Fund Morgan Stanley Investment Funds (MS INVF) Global Credit Fund FIXED INCOME GLOBAL FIXED INCOME TEAM FUND OVERVIEW 31 DECEMBER 2017 MORGAN STANLEY INVESTMENT FUNDS (MS INVF) A Globally Diversified Portfolio

More information

INFORMATION FOR SHAREHOLDERS OF THE SICAV. SSgA Technology Index Equity Fund

INFORMATION FOR SHAREHOLDERS OF THE SICAV. SSgA Technology Index Equity Fund INFORMATION FOR SHAREHOLDERS OF THE SICAV «SSgA Technology Index Equity Fund» ISIN Code P USD Share class: FR0000018624 ISIN Code I USD Share class: FR0010588137 ISIN Code I EUR Share class: FR0011129592

More information

PRIME Funds. The next generation of passive funds

PRIME Funds. The next generation of passive funds PRIME Funds The next generation of passive funds Contents Introduction... 2 PRIME Funds At a Glance... 3 PRIME Funds... 4 How PRIME Funds Aim To Achieve Returns... 5 PRIME Funds & Risk Categories... 6

More information

2019 Global Cash Outlook. Innovations in Cash. State Street Global Advisors 2019 Global Cash Outlook 1

2019 Global Cash Outlook. Innovations in Cash. State Street Global Advisors 2019 Global Cash Outlook 1 2019 Global Cash Outlook Innovations in Cash State Street Global Advisors 2019 Global Cash Outlook 1 3 Foreward 5 Global Rates Forecast 9 Is It Time to Move Back to Prime? 12 Challenges and Potentials

More information

Morgan Stanley Investment Funds

Morgan Stanley Investment Funds NOT FOR DISTRIBUTION OR USE WITH HONG KONG GENERAL PUBLIC Morgan Stanley Investment Funds Global Property Fund REAL ASSETS GLOBAL LISTED REAL ASSETS TEAM MONTHLY COMMENTARY 31 JANUARY 2019 Performance

More information

LESSONS FROM A TITAN

LESSONS FROM A TITAN LESSONS FROM A RETIREMENT TITAN SAVINGS PLAN All plan sponsors are working to balance the complexities surrounding the retirement saving equation. Not saving enough can inhibit or unduly extend members

More information

2018 Global Retirement Reality Report. The Happiness Formula. Germany Italy Netherlands Sweden Ireland UK US Australia

2018 Global Retirement Reality Report. The Happiness Formula. Germany Italy Netherlands Sweden Ireland UK US Australia 2018 Global Retirement Reality Report The Happiness Formula :) Germany Italy Netherlands Sweden Ireland Australia Leading with Reality We live in a data-rich age, with no lack of studies on the state of

More information

An Actively Managed Approach to High-Yield Investing with a Focus on Compounding the Benefits of Middle Market Issuers

An Actively Managed Approach to High-Yield Investing with a Focus on Compounding the Benefits of Middle Market Issuers Morgan Stanley Investment Funds (MS INVF) Global High Yield Bond Fund fixed income global fixed income team Fund overview 31 March 2018 Morgan Stanley Investment Funds (MS INVF) An Actively Managed Approach

More information

INDEX INVESTING. Skilfully delivered.

INDEX INVESTING. Skilfully delivered. INDEX INVESTING Skilfully delivered. Index Investing Our record of delivery, our skill and experience, our focus on risk management, our global resources and our trading advantages have made us the index

More information