South America Shows the Highest Growth Rate in Foreign Investments in Pension Funds with a 20% CAGR from 2008 to 2014

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Pension funds around the world are increasingly looking beyond their borders to address their investment needs, according to the Association of the Luxembourg Fund Industry (ALFI) which recently released its global pension fund report, “Beyond their borders: evolution of foreign investment by pension funds,” produced by PwC Luxembourg.

The report – which looks at the growth of pension funds globally, the asset allocation of pension funds on a regional basis and the foreign investment of pension funds – found that South America’s pension funds showed the highest growth rate globally, with assets soaring from US$ 184 billion in 2008 to US$ 528 billion in 2014, a 19.2% compound annual growth rate.

In terms of investing overseas, foreign investment for the pension funds of the majority of OECD countries (excluding the US) accounted for about 25% on average of their total pension investments in 2008, but jumped to almost 31% in 2014.

Denise Voss, chairman of ALFI, comments: “As the baby boomer generation approaches retirement and life expectancy continues to improve, public sector pension liabilities will grow. At the same time the need for greater personal savings for retirement income is growing. This study provides more clarity on the global investments of pension funds, demonstrating the opportunities offered by global investing and how some markets are approaching this, but also highlighting how pension fund regulations differ from one country to the other. In particular it highlights the regulatory constraints on some pension funds in the amount they can allocate to investment funds or in foreign investments and suggests the impact this could have on their growth.”

Dariush Yazdani, partner of PwC Luxembourg Market Research Centre, adds: “The new millennium has changed the playing field for pension funds. There are significantly more people retiring today than there were even a decade ago and this is putting pressure on pension funds’ investment strategies. But even in the midst of new challenges, pension fund managers are facing a future brimming with opportunities. The unique ability of pension funds to focus on long-term investments allows them to absorb short-term volatility while bearing market and liquidity risk through diversification – one of the most effective means of achieving diversification is through foreign exposure.”

Growth of pension funds globally

On a regional basis, North America’s pension funds represented the largest assets at a global level, having reached US$ 27.21 trillion in 2014, up from US$ 15.8 trillion in 2008.

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Asset allocation of pension funds on a regional basis

Taken globally pension funds allocated 44% of their total portfolio to equities, 28% to bonds, 26% to alternatives and 2% to money market products in 2014. Allocation varies considerably from region to region, with North America allocating 48% of total assets to equities, Asia Pacific 40%, Europe 37%, and South America 34%.

The US, Canada, Japan and the Netherlands are the countries that pursued the largest equity investments in 2014, allocating US$ 12 trillion, US$ 986 billion, US$ 662 billion and US$ 582 billion respectively to this asset class.

Japanese pension fundsexperienced the largest increase in the share of equities within their total portfolio, which increased by 21% from 2008 to 2014. In contrast, South Korea’s pension funds showed the largest decline in their equity share, decreasing by 22% from 2008 to 2014.

The alternative asset class has shown a strong increase from 2008 to 2014 with the total amount allocated to alternatives jumping from US$ 4.4 trillion in 2008 to US$ 9.7 trillion in 2014, a 117% increase.

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International investments by pension funds

Foreign investment by the pension funds of the majority of OECD countries(excluding the US) accounted for about 31% of their total pension investments on average, however with regional differences described below.

In North America (excluding the US), pension funds’ overseas investments stood at 16% of the region’s total portfolio in 2008, reaching 21% in 2014.

In Europe, the average percentage of pension fund portfolios allocated to foreign markets increased from 32% in 2008 to 34% in 2014, with the Netherlands, Finland and Portugal investing the highest percentage of their pension fund portfolios overseas in the last six years – in the Netherlands foreign investment reached 76% of the country’s total portfolio in 2014.

Asia Pacific’s pension fundsinvested, on average, 19% of the region’s total portfolio in foreign markets in 2008, and expanded that to 31% in 2014. Hong Kong and Japan are the most aggressive investors in foreign investments within Asia, with Japan’s pension fund allocation to foreign markets rising from 16% in 2008 to 32% in 2014.

In South America, this is the case for Chile and Peru, with Chile allocating 44% of total assets to foreign markets in 2014 and Peru investing 41% for the same period. Brazil, in contrast, invested less than 1% in foreign markets in 2014 due to stringent regulatory barriers which are beginning to soften.

When investing abroad, pension funds favor equity investments but adopt different strategies:

Some pension funds develop asset management teams based abroad. For example in 2011 Norges Bank Investment Management, which manages the Government Pension Fund Global for Norway, established a subsidiary in Luxembourg to oversee direct and indirect real estate investments in Continental Europe. The South Korean National Pension Service opened an office in London in 2012, followed by another in Singapore three years later.

Another strategy includes acquisitions or partnerships with asset managers that have expertise in foreign markets. In 2012 Fidante Partners, which manages the Australian government’s pension funds bought a significant stake in MIR Investment Management, a specialist in Asia-Pacific equities.

Investing in foreign funds is another efficient way to invest abroad. Nearly all mature pension markets tend to use investment funds when investing a large percentage of their assets abroad as they are one of the most effective and convenient vehicles for gaining exposure to international assets, giving liquidity and exposure to a wide variety of global assets that are not always available in a domestic market. For less developed pension markets, a higher usage of investment funds is expected over the coming years. Developing countries are likely to follow the move of the Chilean pension funds, which have been achieving higher diversification through the use of UCITS funds.

Ms Voss concludes: “A key finding of this report is the importance of investment funds in the diversification of the portfolios of pension funds around the world. Investment funds, and UCITS investment funds in particular, provide pension funds with a substantial degree of liquidity, diversification and a very high level of investor protection.”

Worldwide Investment Funds Decrease in Q2

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The European Fund and Asset Management Association (EFAMA), in its latest international statistical release containing the worldwide investment fund industry results for the second quarter of 2015 concludes that:

  • Investment fund assets worldwide decreased 1.6 percent to EUR 37.1 trillion at end June 2015, from EUR 37.7 trillion at end March 2015.  In U.S. dollar terms, worldwide investment fund assets increased 2.3 percent to stand at USD 41.5 trillion at June 2015, reflecting the depreciation of the US dollar vis-à-vis the euro during the second quarter of 2015.
  • Worldwide net cash inflows increased in the second quarter to EUR 596 billion, up from EUR 564 billion in the first quarter of 2015, thanks to increased net inflows to balanced/mixed funds.
  • Long-term funds (all funds excluding money market funds) recorded net inflows of EUR 616 billion during the second quarter, compared to EUR 573 billion in the first quarter.
  1. Equity funds attracted net inflows of EUR 121 billion, down from EUR 145 billion in the first quarter.
  2. Bond funds posted net inflows of EUR 100 billion, down from EUR 176 billion in the previous quarter.
  3. Balanced/mixed funds registered a large net inflow of EUR 342 billion, up from EUR 213 billion in the previous quarter.
  • Money market funds registered net outflows of EUR 20 billion during the second quarter of 2015, compared to net outflows of EUR 9 billion in the first quarter of 2015.
  • At the end of the second quarter, assets of equity funds represented 41 percent and bond funds represented 21 percent of all investment fund assets worldwide.  Of the remaining assets, money market funds represented 11 percent and the asset share of balanced/mixed funds was 19 percent.
  • The market share of the ten largest countries/regions in the world market were the United States (48.3%), Europe (33.2%), Australia (3.8%), Brazil (3.4%), Japan (3.0%), Canada (3.1%), China (2.7%), Rep. of Korea (0.9%), South Africa (0.4%) and India (0.4%).

Has the Post-Crisis Slump Lured Investors Into Premature Pessimism?

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In its second white paper on the world’s four largest economies, BNY Mellon cautions against «premature pessimism», arguing that it is too soon to conclude that global growth will disappoint over the rest of this decade.

The Federal Reserve’s hesitation ahead of its closely-watched rate decision illustrates a sobering economic truth: the post-crisis recovery in the developed world has been underwhelming, even as the slowdown in emerging economies has been unsettling. Against this backdrop, it is tempting to accept mediocre growth as the «new normal».

«But just as the pre-crisis boom tempted people into overconfidence, the post-crisis slump may have lured people into premature pessimism,» notes Simon Cox, BNY Mellon Investment Strategist. «It is too early to say that the underwhelming growth of recent years constitutes a new trend.  There is still a lot to play for.»

Cox looks at Japan, America, China and India, the world’s four biggest economies, by purchasing-power parity. Despite recent setbacks, this quartet is benefiting from some promising macroeconomic trends. Deflation is receding in Japan; inflation has eased in India; unemployment is declining in America; and despite China’s stock market turmoil, its property market shows signs of stabilizing.  BNY Mellon calls them the G4.

In its first white paper, the company argued that the G4 had substantial «room to recover» as demand revives. The second white paper turns from demand to supply, looking at how the G4’s productive capacity will evolve until 2020. It pays close attention to workforce trends, capital accumulation and productivity gains – the ultimate «sources of growth». 

Labor.- Many people believe that labor shortages will bedevil China and doom Japan. Contrary to popular belief, however, demographics is not destiny.  China’s working-age population grew by only 0.5 percent from 2010 to 2014. Yet that did not stop its GDP growing by over 35 percent over the same period. While China’s working-age population is now falling, the decline will be fairly gentle over the next five years and may even pause in 2019-2020, because the cohort retiring at that time is unusually small. Economic recovery has also trumped demographic decline in Japan, where employment has actually increased over the past five years.

Capital accumulation.- In Japan, America and India, investment in new capital has been lackluster in recent years. That has left a backlog of necessary capital expenditures that should yield decent returns as economies revive. In the U.S. private fixed assets are now the oldest they’ve been since the 1950s.[3] Even in China, notorious for its «overcapacity», there is considerable scope for further capital spending. China’s stock of capital per person is still small, leaving many areas of «undercapacity».

Technology.- Some technophiles believe we are in the midst of a third industrial revolution which will yield driverless cars, artificial minds and refurbishable bodies. But brisk technological progress has yet to translate into rapid economic gains. To boost output per worker, improved technologies have to be widely deployed by firms.  That requires investment.  The technological revolution may, therefore, become an economic revolution only when capital formation finally booms. China and India, for their part, still have great scope to enjoy «catch-up growth», benefiting from technologies that are not new to the world, but are new to them. This progress will not be interrupted by the «middle-income trap», Cox argues, because such a trap is largely a myth.

BNY Mellon’s G4 scenario envisages growth over the rest of this decade averaging 2 percent in Japan, 3 percent in America, 7 percent in China and 8 percent in India.  By questioning the glum consensus, the firm aims to create a robust discussion that helps investors think through all potential growth scenarios. 

Lombard Odier IM cierra varios fichajes para crear un equipo macro global

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Lombard Odier IM Hires New Global Macro Team
CC-BY-SA-2.0, FlickrPhoto: Salvatore Gerace . Lombard Odier IM cierra varios fichajes para crear un equipo macro global

Lombard Odier Investment Managers (LOIM) ha fichado a Vilas Gadkari, Giuseppe Sette y Jan Szilagyi para crear un nuevo equipo macro global, ampliando así sus capacidades en el mundo de las inversiones alternativas. El nuevo equipo forma parte de la base de inversiones de retorno absoluto, combina una amplia experiencia y cuenta con una innovadora plataforma de análisis.

Vilas Gadkari,
 cofundador de Rubicon Fund en 1999, cuenta con más de 25 años de experiencia en la gestión de activos. Trabajó como senior portfolio manager en Brevan Howard Asset Management y en Salomon Brothers Asset Management.

Por su parte, Giuseppe Sette, quien fundó Endowment Advisors en 2012, fue portfolio manager en Brevan Howard y en Davidson Kempner y cuenta con más de 15 años de experiencia.

Por lo que respecta a Jan Szilagyi, fue portfolio manager macro global en Fortress Investment Group y en Duquesne Capital y cuenta con más de 15 años de experiencia en estrategias macro globales.

El día 1 de octubre, la firma lanzó un UCITS de estrategia global macro de 150 millones de dólares en Luxemburgo. La estrategia busca aprovechar los aspectos macroeconómicos en todo tipo de activos y regiones. El fondo estará registrado para su venta en Europa en las próximas semanas y ampliará la oferta de UCITS alternativas de Lombard Odier IM.

Jean-Pascal Porcherot, responsable de estrategias de hedge funds comenta: “Estamos muy ilusionados con el equipo que se ha unido a Lombard Odier IM y con el nuevo fondo lanzado. El calibre del equipo ofrece a los inversores una visión fresca a los desafíos a los que deben hacer frente en el actual entorno macro global”.

Columbia Threadneedle Investments in Strategic Tie Up with Rio Bravo Investimentos in Brazil

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Columbia Threadneedle Investments has entered into an exclusive partnership with Rio Bravo Investimentos, the Brazilian independent money-management firm founded by former central bank head Gustavo Franco, to launch a Brazilian-domiciled fund available to Brazilian pension fund clients.

The fund, wholly managed by Rio Bravo and designed as a feeder, is fully invested in Columbia Threadneedle’s European Select strategy, a successful high alpha European equities portfolio. Due to current regulatory restrictions that prevent Brazilian corporate pension funds from holding more than 25% of total AUM of a fund, the Rio Bravo fund is launching with seed capital of BRL 34 million (approx. USD 8.5 million).

Joseph Sweigart, Senior Institutional Sales Director, Latin America Institutional Distribution at Columbia Threadneedle Investments said: “We are very pleased to partner with Rio Bravo Investimentos, a highly regarded, independent asset manager with long-standing institutional client relationships. We believe that Brazilian pension fund clients will be interested in funds that can generate both high alpha and geographic diversification. Columbia Threadneedle’s European equities team has the proven track record and quality focus to deliver long-term outperformance. Despite the low growth in European economies, the continent counts some of the world’s leading stocks, making it the perfect hunting ground for investors.”

Sweigart will be in Brazil to present at the 36th ABRAPP – Brazilian National Pension Fund – Congress on 8th October, talking about the benefits of global diversification for investors.

Si quieres hacer carrera en asset management, estudia en una de estas universidades

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If You Want a Career in Asset Management You Should Choose One of These Schools
Foto: Kevin Dooley . Si quieres hacer carrera en asset management, estudia en una de estas universidades

Para aquellos estudiantes que busquen hacer carrera en la industria de la gestión de fondos, el recien publicado 2015 eVestment Education Report es una lectura tan obligada como para los responsables de buscar y atraer talento hacia las diferentes firmas de la industria.

El informe ahora presentado ha sido elaborado a partir de la información que gestores de fondos institucionales de todo el mundo han facilitado -incluyendo la formación académica de sus profesionales clave- y pone de manifiesto que las universidades estadounidenses son el principal proveedor de profesionales de las compañías de todo el mundo.

Entre otros datos que muestra el trabajo, señalaremos que el 13,9% de los profesionales clave de las firmas de gestión de activos no ha trabajado en el sector el tiempo suficiente como para haber vivido un incremento de tipos por parte de la Fed; que el profesional medio tiene una experiencia de 19,3 años desarrollando trabajo “relevante”; y que el nivel más elevado de formación del 40% de los profesionales clave es una licenciatura, del 39% un máster y del 22% un doctorado.

Las 20 universidades de las que proviene un mayor número de gestores clave son:

  1. University of Pennsylvania
  2. Harvard University
  3. Columbia University
  4. University of Chicago
  5. New York University
  6. Stanford University
  7. Northwestern University
  8. Cornell University
  9. University of California – Los Angeles
  10. Boston College
  11. University of California – Berkeley
  12. University of Virginia
  13. Massachusetts Institute of Technology
  14. University of Michigan – Ann Arbor
  15. Yale University
  16. Boston University
  17. Duke University
  18. Dartmouth College
  19. Princeton University
  20. University of Southern California

Para obtener el informe completo puede utiizar este link

 

Flexibilidad, riesgo y diversificación: claves para optimizar la generación de rentas

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¿Final de ciclo crediticio en Estados Unidos?
CC-BY-SA-2.0, FlickrFoto: Rob Brewer. ¿Final de ciclo crediticio en Estados Unidos?

Según miramos atrás, vemos como los últimos años han traído cambios significativos a la industria de la gestión de activos. Un cambio que está afectando a la mayor parte de los inversionistas es el nivel rendimiento que ofrecen los activos. En un mundo en el que, en muchos casos, las tasas de interés se encuentran por debajo de la inflación, la búsqueda de fuentes sostenibles de rentas se presenta cada vez como un reto mayor. En la actualidad, menos del 20% de la deuda viva en el mercado supera un rendimiento del 4%. Este escenario hubiera sido impensable hace unos años.

En este entorno, los inversionistas deberían tener un enfoque más holístico al perseguir la obtención de rentas, diversificando sus fuentes de rendimiento y buscando la consecución de sus objetivos en clases de activos no tradicionales. Por ejemplo, hablando de renta fija, los inversionistas pueden diversificar su cartera incluyendo activos como la deuda corporativa high yield y la deuda de mercados emergentes, que todavía ofrecen rendimientos atractivos.

Para aquellos que tangan acceso a activos reales, existen algunos activos alternativos que pueden ofrecer rentas atractivas dada su baja correlación con el mercado, como los fondos que invierten en real estate o en infraestructuras.

Sin embargo, para construir con éxito una cartera generadora de rentas, uno no debe guiarse en exclusiva por su nivel de rendimiento o yield. La capacidad de crecimiento de estas rentas es crucial para asegurar que se podrán alcanzar los objetivos y que los ingresos generados podrán crecer por encima de la inflación. Para cumplir con este papel, las compañías que pagan un buen dividendo pueden ser una opción acertada.

“Al invertir en compañías estables con un historial de reparto de dividendos crecientes, se incrementa la probabilidad de que una cartera generadora de rentas pueda crecer al mismo ritmo que el coste de la vida […]. En este tipo de activos preferimos Europa sobre otros mercados desarrollados”, puntualiza BlackRock.

En un entorno de tasas de interés cerca de sus mínimos históricos, los inversionistas buscan oportunidades en estos nuevos activos, pero navegar este mercado es cada vez más difícil. Para tomar decisiones fundamentadas sobre cómo invertir en estrategias orientadas a la generación de rentas es crucial entender bien cuáles son las principales características de estas clases de activos, y también sus riesgos.

Muchos inversionistas a la búsqueda de elevar el rendimiento de sus carteras han incrementado su perfil de riesgo sin darse cuenta. Es aquí donde la diversificación juega un papel crucial para asegurar que la cartera no esta sobre-expuesta a ningún tipo de riesgo. También es importante ser conscientes de la exposición a riesgos nuevos, como el riesgo-emisor, en el caso del crédito, o el riesgo de tipo de cambio, el de liquidez o el de la volatilidad de los mercados de renta variable.

“Obtener un equilibrio entre el objetivo de inversión que se desea obtener y el nivel de riesgo que estamos dispuestos a tolerar, es posiblemente el pilar más importante a la hora de construir una cartera orientada a la generación de rentas”, afirma BlackRock.

Este material es para fines educativos únicamente y no constituye asesoría de inversión, ni oferta ni invitación para comprar o vender valores en jurisdicción alguna (o a persona) donde dicha oferta, invitación, compra o venta sea ilegal conforme a las leyes de valores de dicha jurisdicción. Si algunos valores o fondos están referenciados o inferidos en este material, dichos valores o fondos puede ser no registrados ante los reguladores del mercado de valores de cualquier país en Latinoamérica y Ibérico, y por tanto, dichos valores no puedan ser objeto de oferta pública dentro del territorio de dichos países. La veracidad de la información contenida en este material no ha sido confirmada por el regulador del mercado de valores de ningún país dentro de Latinoamérica y Iberia.

 

 

 

GRI Colombia, Chile, Peru: Connecting Senior Real Estate Executives Globally

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GRI Colombia, Chile, Peru: Connecting Senior Real Estate Executives Globally
CC-BY-SA-2.0, FlickrFoto: Diego F. Garcia P. . GRI Colombia, Chile, Perú: conectando a los altos cargos del sector inmobiliario

On the 11th and November 12th, the first edition of GRI Colombia – Chile – Peru will gather at the Bogotá Plaza Summit Hotel, Colombian, Chilean and Peruvian leaders of the real estate sector.

The event connects leading investors, developers and lenders to exchange ideas and deepen their business relationships during the closed-door discussions and networking sessions. It offers an effective way to identify potential partners who share common interests and enjoy doing business in a relaxed and intimate atmosphere.

At the GRI forums there’s no stage, no presentations or panels. Instead there are closed-door discussions between leaders where everyone participates.

This forum will go over the relevant issues in the market such as: Residential, joint ventures, investment vehicles, offices, hotels, next markets or Andean region big picture.

Keynote speakers include Álvaro Uribe Vélez, Former President, Colombia who will speak about “Latin America in the emerging economies century”; Sam Zell, Chairman, Equity International and Equity Investment Group to share his view on “The impact of the monetary policy on developed and emerging markets-What difference might the Pacific Alliance, MILA and TPP make?”

Other participants include: Paladin Realty Partners, USA; Terranum Corporate Properties, Colombia; TC Latin America Partners, USA; Grupo Exito, Colombia; Grupo Pegasus, Argentina; Inquietudes Inmobiliarias, Colombia; Pontificia Universidad Javeriana, Colombia; Grupo Lar, Colombia; Parque Arauco, Colombia; The Blackstone Group, USA; Union Investment Real Estate, Germany; Socovesa, Chile; PSP Investments, Canada; Jamestown Latin America, Colombia; Ospinas & Cia, Colombia; Lennar International, USA; Gávea Investimentos, Brazil; Equity International, USA; and Jaguar Capital, Colombia.

Early bird offer untill October 9th.

For more information about the program and participants please download the brochure or visit our website

Standard Life Investments Creates New Tool to Manage Global Real Estate Risk

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Standard Life Investments has designed a new tool to help institutional investors manage risk and inform their decisions when investing in global real estate.

The Global Real Estate Implementation Risk tool (GREIR) can help investors find the right markets for their level of risk appetite and understand the expected returns in their global real estate portfolios. It provides an easy method for investors to assess and compare the individual risk ratings of 60 different countries.

GREIR produces a risk score for each country that can be converted into a risk adjustment factor, to achieve a more accurate comparison of the ‘at risk’ portion of expected returns from a global real estate portfolio. 

The GREIR tool aggregates three categories of global surveys, representing more than 300 data points, to evaluate and assess economic, political and real estate specific risks.

Indices from all three categories are weighted to produce a risk score of between 1 and 10 for each of the 60 countries included in the rankings.  The country with the lowest score is the least risky for real estate investment.  The seven components of the score are market size, ease of doing business, competitiveness, innovation, public sector corruption, creditdefault swap spreads, and transparency. The rankings will be updated on a quarterly basis.

Anne Breen, Standard Life Investments, Head of Real Estate Research and Strategy, said: “The level of risk in real estate investment varies enormously from country to country, and the historic measures used for these can mean investors miss changes in risk.

“Cross border investment requires a three dimensional assessment of how the mix of risks affects expected returns. The aim of the GREIR tool is to address the need for a robust framework on which to base decisions about global and regional real estate investment strategies.  It provides a more coherent measurement of the domestic risks involved, and helps investors find the right markets for their level of risk appetite.”

Over time the GREIR tool will be expanded to include leading cities within each of the countries listed.

 

Market Environment is the Determining Factor: We Must Seek New Sources of Return Beyond Traditional Assets

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Modest expected returns across a variety of asset classes, sub-par growth and a compressed outlook environment has left investors a challenge of how to maintain income when so many traditional sources of income are drying up.

The fact is that we are undergoing a drought of returns in the traditional «income» products. In order to discuss these, as well as other issues, Pioneer Investments will hold an exclusive due diligence meeting entitled «Embrace New Sources of Return» at the JW Marriott Marquis, Miami, on the 8th of October.

The event will provide attendees with the opportunity to listen to the outlook from several members of the investment team at Pioneer Investments, who will explore beyond the traditional asset classes, conventional asset allocation and risk management, identifying new and attractive solutions for investors who are looking for more flexibility, more sophistication and more active management.

According to the investment team at Pioneer Investments, trends which are changing the market revolve around three very important issues: ageing demographic, public debt and increased regulation.

All of these  factors  could jeopardize investors’ retirement and savings plans.“There is a need to consider a different way of investing that targets new sources of return, downside mitigation, and volatility management,” highlights the asset management firm.

In 1980, there were 9.8 workers at a global level for every retired person – by 2050, it is expected to drop to four workers per pensioner; and this, along with public deficits, means that in 10 to 20 years, public pension systems will encounter serious difficulties to meet the needs of its citizens.

In the past, such a scenario has led investors to run more risk yet the increase in regulation has made it harder for long-term investors to make riskier choices; and that is why the investment team at Pioneer Investments recommends the use of tools which achieve lower correlation with traditional asset classes. According to the company’s experts, this will help to maintain volatility under control and achieve higher levels of wealth accumulation over time.

To access these alternative sources of return, the industry is recording significant inflows into two types of assets: multi-asset strategies, and liquid alternative strategies.

Liquid alternative mutual funds aim to provide diversification, improve risk-adjusted returns, and may act as shock absorbers during times of market stress. They offer additional flexibility to long-only allocations as managers seek to realise opportunities from non-traditional strategies. Such flexibility allows liquid alternative strategies to seek to capture alternative sources of return while remaining relatively uncorrelated with the global equity and bond markets.

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Multi-asset investments can provide different potential sources of return and a more diverse means of allocating risk than through a simple global macro strategy.

According to Pioneer, investors are increasingly inclined to invest in terms of risk-return objectives.“We believe that investors are thinking more about the risk they are willing to run and are increasingly willing to sacrifice some upside in return for better downside protection,” company sources added. Moreover, investors are adding the reliability and stability of the portfolio’s income sources to that equation , a factor that adds to the already known risk-return binomial, and the portfolio’s time horizon. 

Amongst other Pioneer Investments Portfolio Managers and Market Specialists who will be attending the “Embrace New Sources of Return” event in Miami this Thursday October 8th Adam MacNulty, will be speaking about Pioneer Funds – Global Multi-Asset Target Income, and about liquid alt strategies as well, such as Pioneer Funds – Absolute Return Multi-Strategy, and Pioneer Funds – Absolute Return Multi-Strategy Growth. Thomas Swaney will also speak on Alternative Solutions – specifically, Pioneer Funds – Long / Short Opportunistic Credit.

“If you can free up some of your assets to work harder for you, if you can accurately measure your risk tolerance and if you have trust in your asset manager to be more active in your investments, then it is our opinion that you really could have the potential to generate greater returns in this environment,” concludes the firm.

For further information on this event or Pioneer Investments’ solutions please contact: US.Offshore@pioneerinvestments.com