Over the last decade, asset owners have implemented factor investment programs with a focus on domestic markets. Increasingly, they are also funding equity factor programs in international markets. Two catalysts are driving this trend. First, there has been a steady erosion in asset owners’ home biases,...Read More »
Oct 25, 2017| ESG Research
As the world moves toward a low-carbon future, companies of many stripes are adopting renewable and clean-energy technologies. That, of course, has implications for stocks and the portfolios that hold them. How can asset owners understand the carbon-transition risks in their portfolios?Read More »
Oct 5, 2017| ESG Research
Last year, we asked whether pay awards to U.S. chief executive officers reflected long-term shareholder returns, and found they did not. The bottom fifth of companies by equity incentive award outperformed the top fifth by nearly 39% on average on a 10-year cumulative basis.Read More »
Institutional investors increasingly are moving toward integrating ESG criteria into their portfolios and their factor allocations, in particular. This shift is driven by their recognition of the financial relevance of ESG issues to their risk management and their focus on long-term sustainable investing.Read More »
Sep 26, 2017| Real Estate Investing
When developing investment strategies, institutional investors in private real estate tend to rely on market-level performance data. But many real estate investors know that every asset is different and even two seemingly identical assets in the same area can produce very different returns. How can they...Read More »
Convertible contingent securities — known as “CoCo bonds”-- are a popular form of hybrid debt, but they can be hard to value when issuers head into troubled waters. These securities are a form of risky debt (typically issued by European financial institutions) that convert to equity when a predetermined...Read More »
A lot has been written about the persistence of the global small-cap premium. But what, apart from size, distinguishes small-cap stocks from their large- and mid-cap counterparts, and how can these distinctions help institutional investors?Read More »
How are institutional investors tackling climate-change risk in their portfolios? Thanks partly to global initiatives such as the Montreal Pledge and the Portfolio Decarbonization Coalition, both launched in 2014, many institutional investors have moved quickly to understand the long-term portfolio...Read More »
Mar. 23, 2015
The classic 60:40 mix of stocks and bonds has shifted to a 40:40:20 mix of stocks, bonds and alternatives, according to the 2014 MSCI Asset Owner survey.
Mar. 17, 2015
When RiskMetrics, now a part of MSCI, announced Value-at-Risk (VaR) as its stated measure of risk in 1996, it initiated an industry standard for institutional risk management that was quickly adopted by the Basel Committee on Banking Supervision for its internal capital adequacy models.
Feb. 11, 2015
China A-Shares are too big to be ignored but remain difficult for many institutional investors to access. How can global investors avoid a stock market that is now the world’s third-largest, with a total market value of nearly USD 4 trillion, putting it just behind the United States and Japan?
January saw the return of volatility to the U.S. equity market. A confluence of factors led to this uncertainty: Investors were faced with the influence of a stronger dollar and the effect of lower oil prices on corporate earnings growth.
Jan. 12, 2015
Commercial real estate’s risk /return profile may be attractive to a variety of institutional investors. Investors may be seeking a diversification effect to their total portfolio; a stable income stream from rent, or inflation protection and expected capital appreciation over the long term.
Dec. 09, 2014
Many institutional investors have struggled to determine the appropriateness of factors for their own plan, what role these allocations might play, which factors should be adopted and how factor indexes can be used.
Dec. 09, 2014
Many institutional investors recognize that their reference universe should include large-, mid- and small-cap equities and that smaller companies should earn a risk premium over larger ones. In practice, however, many of these investors - particularly in Europe and Asia - underweight the small-cap segment.
Dec. 02, 2014
While a growing body of research shows that exposure to factors, such as Value, Momentum, Low Size and Low Volatility, has produced positive excess returns, factor investing for large-scale portfolios has not been well studied.
Investors have long debated the benefits of active versus passive investing. There are institutional investors with strong convictions in each camp, but many have become increasingly pragmatic, combining active and passive mandates in pursuit of the best risk-adjusted return.
Nov. 03, 2014
Equity factor investing aims to capture exposures to different equity risk premia. Factor modeling and factor investing are rooted in the Capital Asset Pricing Model (CAPM) dating from the mid-1960s, Arbitrage Pricing Theory from the 1970s and Fama and French’s three-factor model from the 1990s.
Insights, data and commentary from MSCI Research about global investing, the movement of asset prices, investing for the long term, and risk and return to help investors make better-informed decisions.