Alternative Thinking

Was That Intentional? Ways to Improve Your Active Risk

Investors try to outperform their strategic asset allocation benchmarks by taking active risks. Some of these are intentional, but others are low-conviction or even unintentional, which can be a large part of a portfolio’s total active risk. When it comes to beating a strategic asset allocation benchmark, reducing these unintentional active risks may among the clearest sources of “low hanging fruit”.

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ESG Investing

(Car)Bon Voyage: The Road to Low Carbon Investment Portfolios

We discuss how an investment portfolio could dramatically reduce its carbon footprint, potentially even achieving a ‘net zero’ carbon footprint. We discuss the pros and cons of techniques to achieve carbon reduction goals, including security selection, shorting high carbon footprint companies, and trading instruments such as carbon offsets and carbon permits.

Macroeconomics

'20 Questions

2020 is almost over, but it has left many questions unanswered. This week, I’ll answer eleven of them in a not-so-fond farewell to the year. It will be forecast-free. If you want forecasts you can go to any news site or turn on any TV channel. Or wait in line anywhere. Happy New Year!

Macroeconomics

Not Your Average Economic Cycle

Market analysis is often based on comparisons with past economic cycles. This week, we look at why we should be cautious in drawing analogies to previous recessions and recoveries.

Macroeconomics

It’s Not a Bound; It’s an Opinion

In the second paper of our “Bonds Today” series, we review the popular belief that bond yields are too close to zero to fall much further and then explain why we disagree.

Asset Allocation

Don’t Hate the Asset; Hate the Constraint

What role do bonds play in a portfolio today? We explain why it all depends on investors’ ability to own them in a capital efficient way.

Macroeconomics

Election Effects

This week we look at why the market’s reaction to the election results didn’t go according to the consensus script.

Macroeconomics

Portfolio Politics

It’s good to vote, just not with your portfolio. This week’s Wrap-Up looks at why elections are so difficult to trade.

ESG Investing

Climate Finance

The paper reviews the literature studying interactions between climate change and financial markets, including various approaches to incorporating climate risk in macro-finance models as well as the empirical literature that explores the pricing of climate risks across several asset classes.

Macroeconomics

Global Micro

What do investors want in an equity index? This week we look at what a couple of countries in Asia tell about what’s been driving relative returns.

Macroeconomics

Inflation Q&A

This week we answer all of the questions you asked about inflation and some you didn’t ask.