- CIO insights - Four investing paradigms for an era of regime shifts
CIO insights - Four investing paradigms for an era of regime shifts
Wednesday 06 December 2017
Research / Market
In a market environment characterised by disruptive trends and possible regime shifts, asset managers need to evolve and to enhance their capabilities to understand, measure and factor these new trends into investment processes.
Potential lower returns and higher risks expected in the future will require investors to move towards a high conviction approach to find the value left in the markets and potential winners in a changing environment. This will also require the further embracing of factor investing to gain exposure to well rewarded risks while avoiding unrewarding ones.
Portfolio construction will also need to adapt to this new environment and to consider multiple scenarios. In doing this, it will be paramount to embrace a flexible approach that goes beyond the traditional boundaries (active vs passive, liquid vs illiquid, benchmark constrained allocations).
In this regard, an ongoing dialogue with investors will be key in order to understand and address their evolving needs. The ability to provide greater transparency, effective tools and services will also be increasingly relevant in order to pursue the best opportunities while mitigating risk.
Turkey shakes summer thin markets, but contagion risk is contained
“The domestic boom has been financed by private debt (mainly external debt). Well before this week’s crisis, Turkey was the most vulnerable country in our EM ranking”.
Global Investment Views - August 2018
"Concerns about trade continue to take centre stage. While US assets have so far been resilient amid escalating protectionist rhetoric, markets targeted by tariffs are under pressure."
Where will the next financial crisis come from? Are we ready to confront it?
"The world is not yet completely out of the 2007- 2008 financial crisis, but the risk of a new crisis already arises. The theme of “regime shift” (volatility, interest rate, inflation, etc.) has resurfaced, which led to a marked correction in financial markets in January – February."