Investment Strategy Forum 2018

Investment Strategy Forum 2018

 

Do squirrels ever forget where they put their nuts?

Legend has it that squirrels simply absent-mindedly bury nuts in the hope of sniffing some out in the future – whether they are the ones they buried or otherwise.

But in 1990, Princeton University’s biology department dispelled this myth of squirrel behaviour. They discovered that squirrels are far from being random or absent-minded. See here.

Indeed, squirrels are masterminds of planning for the future. Potentially, are there nuggets of wisdom for the investment community?

 

Constructing portfolios for the long term

The ongoing market exuberance, buoyed by excess liquidity created by loose monetary policy, has boosted short term performance of most portfolios. Whether investors should be concerned about ‘CAPE fear’ or an impending ‘melt-up’, the consensus is the expectation of lower future returns.

How should asset allocation strategies be revised or tilted in the medium to long term, in order to achieve member objectives? How do you balance the lure of riding short term momentum gains while building defensiveness for the long term?

 

Ideas for growth

Beyond the shrinking public markets, unlisted assets may provide diversification as well as a good source of future ideas. That is, if investors have the appetite for illiquidity risk and can extract sufficient alpha after fees. It also begs the question: How do you price illiquidity premia?

The advent of big data, machine learning and artificial intelligence has provided investors with an additional tool in the toolkit. Do we sceptically dismiss this as a mere extension of the quantitative or data-mining process, or is this an information advantage that can be seriously translated into better portfolio performance?

 

At this annual forum for Chief Investment Officers, Strategists and Investment Committee Chairs, we will examine the governance and construction of portfolios, decision-making challenges as well as innovative approaches for idea generation.