Portfolio Management

  1. The puzzle in active investing

    trueMost active investors are — despite a flood of modern resources — still unable to outperform their benchmarks by a high enough amount to warrant skill.

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  1. Capital asset pricing mistakes

    trueThe introduction of asymmetric beta to the CAPM framework can allow an investor to construct a portfolio with expectations well above the security market line.

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  2. Smart money, crowded trades?

    trueIn a multimanager portfolio, duplicate positions are not uncommon and are, perhaps, inevitable. The sources of such overlap are far from clear. How does an investor measure and manage this “risk”?

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  3. Moving beyond 'buy-hold-lease' farmland strategies

    trueFalling prices for row crops, like corn and soybeans, which often account for more than 60% of the typical institutional portfolio, suggest farmland investors will need to consider other strategies for generating attractive returns in the future.

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  4. All risks are not created equal

    trueInvestors who have relied on quantitative easing as the basis for many of their investment decisions have been well-rewarded. But the times, and investors' views, are changing.

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  5. Evaluating plan hibernation vs. plan termination

    trueFor the nearly 50% of corporate pension plans that are either closed or frozen, the choice to terminate the plan is essentially a timing decision, because it is unlikely that a sponsor would elect to manage the plan until the last benefit is paid to the last surviving participant.

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  6. Can estimating volatility trump predicting stock returns?

    trueCapturing stocks' volatility is a path to potential outperformance that is often overlooked in favor of the traditional betting on stocks that are likely to rise in value.

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  7. Look beyond macro story to find equity returns in frontier markets

    trueFrontier markets typically are underdeveloped, with strong prospects for growth and capital market expansion.

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  8. Drug royalties in a real asset portfolio

    trueThe pharmaceutical industry has a strong need to access growth capital for the development and production of blockbuster drugs.

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  9. The illusion of liquidity

    truePension fund executives, like many investors, historically have been willing to pay a premium for liquidity. Lately, though, they've started to realize that, for many investments, liquidity can be an illusion. When the 2008 financial crisis hit, only the very highest-quality assets — such as U.S. ...

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  10. As equity drivers shift, allocations will need to change

    trueThe stock market's rise from the depths of the financial crisis has been nothing short of spectacular. Those returns, however, are largely owed to the actions of central banks.

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  11. Risk parity still can offer rewards to careful investors

    trueAfter tremendous growth over more than a decade of strong returns, risk-parity strategies recently have been struggling. Has the market run-up exposed a fatal flaw? We don't think so.

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  12. Alternative strategies for investors to position their portfolios in a rising rates environment

    trueFixed-income markets might be experiencing the calm before the storm. Rather than allowing complacency to creep in, following the normalization of markets after the significant sell-off in the second quarter of 2013, thoughtful investors should at least be thinking of how best to protect themselves ...

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  13. Upping the ante on implementation of derisking process

    trueMany ERISA pension plans are now implementing specific formulas called “glidepaths” to automatically shift funds to fixed income from growth assets as the plan's funded status increases. The goal, of course, is to reduce funded status risk — i.e., to decrease the chance plan sponsors will face ...

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