Institutional investors worldwide traditionally have tended to focus on the stocks of larger companies, finding them less risky, more liquid and offering greater investment capacity than small-cap stocks. But asset owners and managers increasingly are allocating strategically to the small-cap equity...Read More »
Mar 15, 2017| Risk Management
The United Kingdom is about to begin negotiations over its exit from the European Union. Though the process could take up to two years, the triggering of talks leaves institutional investors to assess how Brexit, at least at the outset of negotiations, may affect their portfolios.Read More »
Mar 13, 2017| Factors
Minimum volatility strategies have historically delivered above-average returns with below-average risk, especially in volatile market environments as have occurred in recent years. During this period, the world also has experienced low interest rates.Read More »
Mar 8, 2017| Emerging Markets
When institutional investors think about Asia’s emerging markets, they tend to pay more attention to the larger and more industrialized economies such as China, Korea and Taiwan. Proportionally less attention is paid to the smaller Southeast Asia nations such as Singapore, Indonesia and Malaysia. Yet these...Read More »
Mar 2, 2017| ESG Research
Buoyed by populist sentiment, regulators around the world are considering ways to close corporate tax loopholes and narrow the gap between the statutory tax rate and what companies actually pay. The effort could have significant consequences, both for corporations and for institutional investors who engage...Read More »
Mar 2, 2017| Fixed Income
Convertible bonds have “bonds” in their name but in reality they are complicated corporate securities with risk characteristics that often have little to do with straight bonds. Are they more like stocks or bonds? And how can investors evaluate and model them?Read More »
Feb 23, 2017| Emerging Markets
Over the last five years, the risk and return profile of emerging markets has started to resemble that of developed markets. That leaves many large asset owners to ask how to structure mandates to take advantage of the variation in the behavior of emerging markets.Read More »
Feb 22, 2017| Real Estate Investing
Among the unknowns hanging on negotiations over the U.K.’s leaving the European Union is whether Brexit will trigger an exodus of banking jobs to Continental Europe and what impact that could have on Britain’s economy. A number of financial institutions have discussed relocating some of their operations,...Read More »
Feb 16, 2017| Models/Client Cases
Many natural-gas traders, including operators of storage facilities, depend on seasonal price spreads to earn reliable returns. Traditionally, they buy natural gas in the summer, when prices fall, and then sell during the winter, when prices go up.Read More »
Emerging market equities underperformed U.S. stocks by 7.2 percentage points (as of Nov. 30) following Donald Trump’s election as president, based partly on the expectation that the president-elect is likely to pursue a series of protectionist policies that could hurt many export-dependent emerging nations. Stocks in developed economies (ex-U.S.) also underperformed those in the U.S., albeit by a smaller margin (3.8 percentage points).
Nov. 30, 2016
Over the past decade, many long-term institutional investors have incorporated Environmental, Social and Governance (ESG) considerations into their portfolios, by creating segregated ESG mandates or by incorporating ESG criteria across the entire portfolio.
Markets fear that a defeat of constitutional reforms proposed in Italy’s Dec. 4 referendum would end the government of Prime Minister Matteo Renzi, who has promised to resign if they fail. The reforms aim to make it easier for governments to implement their programs. A failed referendum could produce political instability, which could complicate efforts to recapitalize the country’s struggling banks, impede the government’s ability to reform the economy for the long term and increase risk across Europe, already engulfed by a banking crisis.
The U.S. Securities and Exchange Commission’s new liquidity rules mark the most ambitious ever initiative against investor dilution — the unfair costs an investor may suffer when assets are not liquid enough to meet redemption requests.
Oct. 25, 2016
Among the reasons that value firms sell at a discount to their intrinsic worth is that they tend to be more sensitive to shocks in gross domestic product compared with their growth counterparts. That may occur because of leverage, deployments of capital, risk-taking or something else that constrains value firms' abiliity to adapt to macroeconomic stresses.
During our consultations on whether to add China A-shares to MSCI’s Emerging Markets Index, some institutional investors asked what full inclusion might mean for the index and the asset class. Given China’s already-significant weight in the index, would the addition of shares of local Chinese companies, even if years away, reduce diversification of the index and render the asset class irrelevant?
Oct. 10, 2016
Oct. 06, 2016
Slow growth and a shortage of safe assets have led major central banks to maintain monetary policies that include short-term interest rates near or below zero. The policies, which aim to encourage businesses and consumers to borrow and spend, have lowered bond yields, distorted yield curves, shifted the composition of central banks’ balance sheets toward riskier assets and sent savers in search of yield. The persistence of low growth and a lack of inflation also have led investors to wonder whether such policies still pack any punch.
Oct. 06, 2016
Institutional investors have several paths to reduce exposure to carbon risk in their portfolios — the risk of being exposed to assets that may lose their value prematurely because of efforts to limit climate change.
Sep. 28, 2016
Hedge funds and other investors who manage portfolios that rebalance frequently face a challenge when it comes to the use of factors for trading, hedging and risk monitoring: Which factors tend to break down over time?
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.