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Apr. 17, 2018
Winners and losers of a U.S.-China trade war »
Zhen Wei | Economic Exposure, Factor Indexes, Global Investing
The question of who wins or loses a U.S.-China trade war has more than two possible answers. While much of the analysis has focused on China’s heavier reliance on exports to the U.S., American companies (and those who invest in them) actually have greater revenue exposure to China than the other way around. In fact, 5.1% of the revenues of companies in the MSCI USA Index come from China and may be at risk as a result of a trade war. In comparison, only 2.8% of the revenues of the companies in the MSCI China Index come from the U.S.
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Apr. 13, 2018
Markets appear to have priced in the recent tariffs, but the risk of a broader trade war still looms. Market scenarios based on economic studies suggest an all-out trade war could drive global equity prices down another 10%, with U.S. investors receiving the worst of it.
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Apr. 03, 2018
Putting the spotlight on Spotify: Why have stocks with unequal voting rights outperformed? »
Nearly 15 years after Google’s initial public offering, the debate about listed companies that offer unequal voting rights to outside investors rages on. A number of high-profile technology companies including Dropbox Inc., Spotify and Snap Inc. have recently listed shares with unequal voting rights, adding fuel to the debate. Meanwhile, investors are trying to determine if they should shun the stock issued by these companies or include them in equity portfolios.
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Facebook’s privacy issues, Apple’s European tax woes and Amazon’s global ambitions are constantly in the news. And over the last few years, large U.S. technology companies, sometimes known as FAANG, have made up larger slices of the global equity market. Should their level of market concentration concern investors?
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Although e-commerce has disrupted industries once considered staples in retail properties, certain retail assets are thriving. Simply put, some goods and services cannot be purchased over the internet: Working out at a fitness center or dining at a restaurant cannot be replicated by online transactions. And while some companies sell groceries online, most food shopping still takes place in stores. Our findings show that experience-oriented tenants, such as movie theaters and restaurants, and internet-resistant retailers, such as supermarkets, dominated the top-performing retail assets in 2017.
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Mar. 07, 2018
Asset managers globally can no longer ignore fund liquidity risk management. Fund liquidity regulation is arriving in all jurisdictions. Despite all challenges to define, observe, model, measure and therefore regulate liquidity risk, it has long been clear this day would come, given the crucial role of liquidity risk in the investment process of open-ended funds.
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Previously, we have asked whether the number of women on boards has a relationship to corporate financial performance. Research suggests that it has. But is that the whole story?
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Feb. 23, 2018
Speed bump or regime shift? Deconstructing the recent spike in equity market volatility »
The week of Feb. 5 witnessed a return of market volatility not seen since the days of the euro crisis in 2011. After hovering near 10% for most of the past year, the level of the VIX briefly topped 50%. What caused the spike?
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Large U.S. technology companies, the so-called FAANG, dominated the U.S. stock market in the last few years and had a significant impact on many investment strategies. These companies have been underrepresented in most factor-based strategies due to their unattractive factor characteristics. Have factor investors suffered from not investing in these stocks?
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Feb. 21, 2018
Since the Global Financial Crisis, real estate investors have turned to Global Gateway Cities as a key way to diversify portfolios and to generate capital growth. The conventional wisdom asserts these large, well connected and economically dynamic cities should provide more liquidity and more stable cash flows than those available from secondary markets. But have these cities, which include London, New York and Tokyo, offered the superior and safer investments to justify their premium pricing?