Risk management

Showing of Insights Posts
The shifting equity/bond correlation: Implications for portfolio construction
Multi-Asset Strategist Nick Samouilhan looks at what's driving the change in the all-important equity/bond relationship and what can be done about it.
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Quick Take
2022-12-31
Empirical duration: reason for optimism on risk assets?
While rising rates often produce negative bond returns, combining the concept of empirical duration with a positive outlook on the credit cycle may bode well for some fixed income sectors' return prospects going forward. Investment Analyst Will Prenits and Investment Director Tobias Ripka explain.
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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
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
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
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
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
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
Has climate transition risk been priced into equities?
The recent runup of some “green” equities has investors questioning whether climate transition risks have been priced in. But the lack of Scope 3 emissions data and wide variation in the quality of companies’ climate transition plans leave gaping inefficiencies that active investors can still exploit.
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Article
2022-05-31
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
A new inflationary regime: Why the next decade could look different from the last
We explore why the risk of structurally higher inflation may be the highest it has been in decades and profile the key investment implications this presents.
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Article
2022-01-31
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
Fear of rebalancing? Put a disciplined policy in place
Many investors wrestle with portfolio-rebalancing decisions, particularly in extreme market environments. In this paper, members of our Investment Strategy Team argue for a well-structured rebalancing policy and share research on calendar-based and range-based strategies.
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Whitepaper
2022-05-31