Treasury Inflation Protected Securities, or TIPS, offer additional portfolio diversification, provide a hedge against inflation and help preserve capital, according to this paper from State Street Global Advisors. The authors explain the benefits of TIPS indexing, looking at manager returns over a three-year period.
Inside every long-term investor is a short- and medium-term investor who recognizes the need for short-term liquidity and whose total portfolio consists of varied sub-portfolios. BNY Mellon explores the concept of multi-horizon investing in detail, focusing on the concept of sub-portfolios with different objectives, expected returns and liquidity constraints.
This paper defines a relatively new measure of active management; discusses how it might be used alone and in combination with tracking error to better characterize and compare active managers; discusses how it might help to identify managers most likely to outperform their benchmarks; and promotes further discussion and research of active share as another measure of manager analytics.
Active managers and alternative investment strategies offer the opportunity to add value over passive investments and can offer capital protection. However, as recent cases of financial wrongdoing have shown, it is critically important for investors to adhere to best practices in evaluating a manager's claims and demanding both transparency and an alignment of interests.
While it is critical to reward good performance by general partners, risks and returns should be equitably shared. Non-marketable alternative asset investors should hold frank discussions with general partners about fee arrangements, fund sizes and other activities that may dilute a proper alignment of incentives.
Emerging country returns have high volatility and low correlation. A cap-weighted indexed portfolio is concentrated; its risks are high; and long-term growth expectations are compromised. However, a mathematical model shows that investors can expect to do better with an alternative portfolio structure, one that is rebalanced to relatively equal-weighted countries.
This handbook attempts to strip away some of the mystery around farmland and outline the key aspects of it as an asset class, its management, the key considerations for investors and, perhaps most important of all, the vital questions any good farmland investment advisor must be able to answer satisfactorily.
New research shows flexible managers, or those who can invest in any equity category, delivered higher returns than their benchmark and higher returns than the aggregated performance of style box managers, or those who invest only in a particular equity category. The median flexible manager outperformed the benchmark by 3.2% annualized and the median style box manager by 1.4% annualized.
Companies that are responsive to the changing economic, social and environmental landscape, brought about by trends related to climate change, will create opportunities (that will not come without challenges) to grow their businesses and, in turn, create wealth for their stakeholders.
Direct investment in private companies can deliver returns far exceeding those of private equity and other asset classes while also providing attractive diversification and increased control. The potential for outsize returns, however, comes with increased risk, meaning investors must carefully assess the various financial, organizational and managerial risks involved in this type of investment.