Portfolio strategy
Showing of 50 Insights Posts
Closing the return gap: A new set of “stepping stone” ideas
Multi-Asset Strategist Adam Berger offers incremental, flexible investment ideas that can be combined to help asset owners pursue their goals amid declining capital market return expectations.
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White paper
2023-06-30
Sticky inflation, weaker growth: A volatile mix
As central bank policy, rising prices, and slowing growth roil the markets, Nanette Abuhoff Jacobson and Supriya Menon explore the implications for equities, bonds, and commodities.
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Article
2022-10-31
Climate from the allocator's perspective
How do different asset allocators within Wellington incorporate climate change into their investment process as markets, data and regulation continue to evolve?
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Replay
2023-05-31
Making the money last: Research insights on the decumulation challenge
Our Investment Strategy team considers the unique challenges of decumulation strategies, including sequencing and longevity risk, and offers thoughts on best practices in portfolio construction, process design, and implementation.
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Quick Take
2022-08-31
Demystifying decumulation: A practical guide
Investors seeking a sound decumulation strategy must consider a host of variables, including risks that weren’t on the radar when they were accumulating assets. Members of our Investment Strategy team consider the interaction between portfolio withdrawals and specific characteristics of the portfolio’s realized return. They also offer thoughts on successful decumulation strategies, focusing on portfolio construction, process design, and implementation.
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Article
2023-04-30
Nobody’s perfect: The case for a long-term strategy in active management
While many asset owners recognize the value of a long-term mindset, it can be challenging to resist short-term instincts in volatile environments like the one we’ve seen in recent months. But asset owners who have a strategy to help them stay focused on the long term may avoid a number of potentially costly behaviors, including abandoning a thoughtfully selected allocation to a manager after a relatively short period of underperformance.
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QUICK TAKE
2022-07-31
When will US federal deficits matter?
Now that the Federal Reserve has moved into tightening mode, it’s worth asking when the US deficits and overall debt could become a source of worry. As long as interest rates stay reasonably low without driving persistently high inflation, I believe deficits and the debt won’t matter too much to the economy or markets. The debt won’t be painful to finance and can continue to grow — within reason. In fact, if economic growth is higher than the interest rate on government borrowing, it’s possible for debt to GDP to shrink even amid sizeable deficits.
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Quick Take
2022-07-31
Nearing the finish line: Ideas on end-state investing for corporate DB plans
As corporate plans approach their fully funded “end state,” new goals will need to be set. Members of our LDI team share their research on this transition and the required realignment of asset allocation strategies, including changes in return-seeking and liability-hedging portfolios and key liquidity considerations.
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Whitepaper
2023-04-30
Beware of benchmark concentration
We discuss the outperformance of megacap stocks and offer perspective on how active managers may approach the challenge of being underweight those stocks.
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Quick Take
2022-06-30
A US insurer’s roadmap for navigating the new RBC regs
With the NAIC’s latest revisions to risk-based capital (RBC) charges now on the books, what should US insurers be focused on moving forward? And how have the relative value propositions across fixed income assets and other investments changed as a result? Multi-Asset Insurance Strategist Tim Antonelli and Investment Specialist Geoff Austein-Miller share their views and insights.
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White Paper
2023-03-31
For markets, it’s complicated
As markets grapple with the war in Ukraine, inflation worries, and a host of other issues, Nanette Abuhoff Jacobson and Daniel Cook offer their thoughts on the investment implications for equities, commodities, and fixed income.
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Article
2022-10-31
Regime change likely to challenge modern market structures
Recently, I wrote about the rotation from growth to value and why some of my colleagues and I expect volatility, more than a smooth transition of leadership, to define markets. The thesis is rooted in the fact that seismic macro questions loom over markets and are likely to trigger violent fluctuations in investor conviction. Earlier this month, Macro Strategist John Butler dissected one of these questions: Will the negative correlation between stocks and bonds turn positive?
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Quick take
2022-05-31
Macro survey: Nervous about China
Respondents to our latest internal survey think the markets may be complacent about risks in China and emerging markets more broadly. Every quarter for the past six years, the Wisdom of Wellington team has surveyed around 100 of our Wellington colleagues across different investment disciplines and locations to get their views on what we see as the key macro questions of the day. The results can pinpoint where the firm’s views differ from the consensus and can also reveal significant shifts in our collective thinking.
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Quick Take
2023-02-28
River from above
Better balance in bonds: How a factor framework and a barbell approach could help
For investors seeking diversification in their credit portfolios, members of our Fundamental Factor team propose a portfolio construction and manager selection process designed to source complementary manager alpha-generation styles and help “smooth out” the path of fixed income alpha.
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Article
2023-02-28
Start at the end: How to size and structure private allocations for corporate plans
How should corporate defined benefit plan sponsors think about the private allocation decision? Members of our LDI and Alternatives teams propose a “start where you want to end up” approach that incorporates liquidity and return requirements.
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2023-02-28
Hedging climate risk: The best defense is a good offense
Climate risks have the potential to create a long-term return drag on investment portfolios. We suggest a straightforward approach to hedging the deleterious effects of climate change.
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ARTICLE
2023-02-28
What if…? Contemplating five big questions for 2022
Could there be policy, inflation, or market surprises in 2022? Multi-Asset Strategist Adam Berger weighs the possibilities and the portfolio implications.
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ARTICLE
2023-02-28
Integrating climate change into capital market assumptions: our approach and findings
"Members of our Investment Strategy team explain how they are incorporating climate-related inputs, including physical and transition risks, into their capital market assumptions and outline the impact of these changes at the asset-class level."
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Article
2023-01-31
2022 Alternative Investment Outlook
Our 2022 Alternative Investment Outlook looks at 5 areas of focus for the coming year and explores private equity markets and ESG opportunities.
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ARTICLE
2022-12-31
2022 Fixed Income Outlook
Our fixed income outlook for 2022, examines our views on inflation and interest rates and the role central banks will play in the coming year.
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Article
2022-11-15
2022 Equity Outlook
Our 2022 Equity Outlook explores opportunities in equity income and emerging markets, along with trends in health care and technology for the coming year
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Article
2023-01-27
LDI in 2022: Nine questions corporate plan sponsors are asking
Our LDI Team offers insights for the coming year, addressing some of the most commonly asked questions on funded ratios, securitized assets, intermediate credit, alternatives, and other return-seeking and liability-hedging topics.
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Article
2022-12-31
2022 Climate Change Investing Outlook
As the effects of climate change become more difficult to ignore, we suggest focusing on adaptation, mitigation, & engagement for 2022 climate investing plans.
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Article
2022-12-31
When public and private equity converge: An allocator’s guide
Multi-Asset Strategist Cara Lafond believes the time has come to recalibrate private equity portfolios to keep up with the evolution of the equity ecosystem. She offers a case for a more holistic view of public and private allocations, a fresh look at how allocators access growth, and the use of private and crossover strategies in innovative sectors.
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Article
2022-12-30
Navigating narrow bond markets: how diversified is your fixed income alpha?
Understanding an active manager’s path and style of alpha generation should be a critical part of anyone’s fixed income manager evaluation process, says Brendan Fludder of our Fundamental Factor Team.
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Quick Take
2022-07-28
2022 Multi-Asset Outlook
In our 2022 Asset Allocation Outlook, we expect markets to focus on central bank efforts to tame inflation look at 5 post-pandemic essentials for 2022.
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Article
2022-12-31
A credit strategy designed for all seasons
We make the case for fixed income allocators to have an “all-weather†credit portfolio composed of carefully chosen building blocks.
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2022-11-15
Changing “weather” patterns in alternatives and climate
Multi-Asset Strategist Adam Berger offers a forecast on the future of alternative and climate-related investing, with insights on manager selection, public/private allocations, climate-aware capital market assumptions, and a range of other topics.
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Article
2022-11-30
Strong but slowing growth: A tale of two narratives
Markets appear to be caught between two hard-to-reconcile narratives: The pace of economic growth looks poised to slow, but the level of growth is likely to stay relatively strong. Multi-Asset Insurance Strategist Tim Antonelli and Investment Strategy Analyst Daniel Cook offer insights for global insurers at this point in the cycle.
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Article
2022-01-31
The evolution of derisking: Assessing new and time-tested liability-hedging ideas
As defined benefit plans contemplate the best path to their eventual “end state,” members of our LDI team update their liability-hedging research with a blend of traditional benchmark ideas and new opportunities to capitalize on changing market conditions and a broader investment universe.
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Article
2022-09-30
Investing for the long term (in a short-term world)
With short-term behavior evident across the financial landscape, Multi-Asset Strategist Adam Berger explores the intuitive and quantifiable advantages of being more long term, and he offers seven habits that can help asset owners cultivate a long-term mindset.
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Article
2022-09-30
Chinese government bonds: How do they measure up in a multi-asset framework?
As China’s bond market continues to grow in size and liquidity, we consider the potential role the country’s government bonds can play in diversifying a broader sovereign portfolio, improving yields, and offsetting equity risk.
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Article
2022-08-31
Update on key sustainability initiatives
We highlight progress on key sustainability initiatives: interim targets for our net-zero commitment, inclusion of location data in climate disclosures, and expanding our compliance with SFDR.
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ARTICLE
2021-12-31
Rethinking growth and where long/short directional strategies fit in
With allocators looking for opportunities to recalibrate their growth exposures, Multi-Asset Strategist Cara Lafond shares her “best fit” criteria for long/short directional strategies and explains why the financial sector appears to check all the boxes.
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ARTICLE
2022-07-31
Split decision: Should investors separate China from EM equities?
Many investors are contemplating whether to separate China from the rest of their emerging market equity allocation. Members of our Investment Strategy Group argue that the key decision point is not China’s dominance of the emerging market index, but the extent to which a standalone China allocation can be viewed as similar to an EM ex-China allocation. In this paper, they evaluate the similarity of the two allocations using a variety of metrics, from correlations to factors to sector composition.
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Article
2022-07-31
Building climate resilience with strategic asset allocation framework
Driving volatility and dispersion, climate change could have lasting effects on the risk and return profile of a strategic asset allocation plan. We suggest allocators factor climate change into their structural planning today, and we propose a climate-aware allocation framework to help them do so.
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ARTICLE
2022-07-31
Why global insurers should take a closer look at REITs
Insurance Strategist Max Davies, Investment Director Will Lee, and Investment Specialist Ethan Sales look at the potential benefits of REITs for global insurers, plus why now may be an opportune time to consider this often unsung asset class.
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Article
2022-07-31
Update on key sustainability initiatives
We highlight progress on key sustainability initiatives: interim targets for our net-zero commitment, inclusion of location data in climate disclosures, and expanding our compliance with SFDR.
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Article
2021-12-31
A theme is not an index
We explore the case for active thematic investing and highlight the importance of avoiding theme-washing.
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Article
2022-06-30
A source-based approach to managing inflation risk
Multi-Asset Strategists Nick Samouilhan and Adam Berger present a source-based investment “playbook” that asset allocators can follow as they seek to neutralize the looming threat of higher inflation.
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Article
2022-06-30
ESG playbook for insurers: Tune out the noise
In this video interview, Insurance Multi-Asset Strategist Tim Antonelli provides a playbook for how insurers should approach ESG. Tim offers an actionable to-do list, addresses common misconceptions, and shares forward-thinking ideas to anticipate and manage risk. Tim is interviewed by Account Manager Sarah Marschok who offers color on the investment themes she is observing in the market.
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Video
2022-06-01
Cash-balance liabilities: A new investment framework
A cash-balance plan is very different from a traditional pension plan, and the differences can have a major impact on the interest-rate sensitivity of the plan’s liability. In this paper, we consider the implications of a cash-balance plan’s design and propose an investment framework focused on capital preservation, consistent income, and liquidity.
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Article
2022-06-01
Insurance Multi-Asset Outlook — Rising rates: Threat or opportunity?
Multi-Asset Insurance Strategist Tim Antonelli and Investment Strategy Analyst Daniel Cook argue that now may be an opportune time for insurers to adopt a more pro-risk stance, despite the potential headwind of rising rates.
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2022-03-31
LDI Alert — Adding intermediate credit to the derisking tool kit: What plan sponsors need to know
With a growing number of derisking plans seeking exposure to intermediate credit, members of our LDI team highlight some key investment considerations.
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Article
2022-03-31
Never assume and other tips for 2021
Multi-Asset Strategist Adam Berger stress tests the consensus views on four key issues: rising interest rates, high equity valuations, US market leadership, and the impact of slower globalization on China’s growth.
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2022-02-01
Insurers: A potent plan of attack for 2021
In this video interview, Tim Antonelli offers key advice for insurers as they plan for 2021, including a robust to-do list. Tim’s role as a multi-asset insurance strategist uniquely qualifies him to offer outside-the-box ideas that can help insurers anticipate and manage risk. Tim is interviewed by Sarah Marshock, a leader on Wellington’s Financial Reserves Management Team, who offers color on the investment themes she is observing in the market.
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video
2022-01-31
An insurer’s guide to fixed income: Setting the record straight on rates and credit
Investment Directors Abigail Babson, Amar Reganti, and Anand Dharan lay out their proposed framework for building a more resilient fixed income allocation that is equal to the challenges of today’s environment.
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2021-11-01
Fighting downgrade drag to reduce pension liability lag
Even robustly constructed liability benchmarks can struggle to keep pace with the liabilities they are meant to represent, and credit-rating downgrades of issuers in the benchmark are a primary culprit. In this paper, members of our LDI Team define the problem and offer ideas to help plan sponsors and LDI managers work together to fight back.
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Article
2021-11-30
Studying outsiders: Blending the advantages of public and private equity
Learn why we believe a longer-term public market approach focused on strong capital allocation could combine the benefits of public and private equity.
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Article
2022-05-31
Debunking four common myths about CLOs
Fixed Income Portfolio Manager Alyssa Irving sets the record straight regarding CLO myths, including their potential risks and investment benefits.
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2021-01-31