Feb 16, 2018| Factors
The recent surge in volatility took some investors by surprise: The level of the VIX doubled in a day, and put an end to some strategies that involved short selling of the VIX. But larger exposures to rising volatility may be hiding elsewhere, including in volatility targeting and risk-parity strategies...Read More »
Feb 15, 2018| Fixed Income
Many investors may have only a qualitative understanding of the ability of passive fund managers to track the returns of a fixed-income index. Our analysis uses tracking error to provide a quantitative measure of the ease – or difficulty – of consistently tracking an index.Read More »
How did different equity factors fare during the past week’s market turmoil? When markets are gyrating, it can be difficult to figure out just what is happening. Real-time data provides greater insight into market events as they unfold.Read More »
Feb 7, 2018| Real Estate Investing
Retailer bankruptcies, department store struggles and empty malls have dominated recent headlines. The apparent culprit? A massive movement toward online shopping, driven by retail giants such as Amazon and Walmart.Read More »
Feb 6, 2018| Factors
Growing fears about rising inflation and interest rates sparked a decline across equity markets in the last few days. The MSCI USA Index fell 2% on Friday and a further 4% on Monday. Has the sell-off been indiscriminate? Or has it affected certain sectors and factors more than others?Read More »
Jan 18, 2018| Factor Investing
Investors need a clear and consistent way to talk about factors. For more than 40 years, MSCI has defined how investors use factors to analyze risk and return, from individual stocks to entire portfolios. Factors are important drivers of portfolio performance and are well documented in academic research....Read More »
The emerging markets rally, the U.S. dollar’s depreciation and the resurgence of global growth were the top three drivers behind a double-digit rally in global equities last year. Stocks were led by the MSCI Emerging Markets Index’s 38% return. Developed markets, as represented by the MSCI World Index,...Read More »
Jan 11, 2018| Fixed Income
As central banks continue to keep interest rates at historic lows, many institutional investors have turned to leveraged loans for their attractive yields.Read More »
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Has ESG affected stock performance?
Are ESG characteristics tied to stock performance? Many researchers have studied the relationship between companies with strong environmental, social and governance (ESG) characteristics and corporate financial performance. A major challenge has been to show that positive correlations — when produced — explain the behavior. As the classic phrase used by statisticians says, “correlation does not imply causation.”
Are Market Valuations in Nosebleed Territory?
Markets have enjoyed a relatively long period of positive returns and low volatility, making some investors wonder if a correction is imminent. One possible trigger for a correction would be investors concluding that market valuations have become extreme, which could lower future returns.
Have Big-Ticket Properties Performed Better Than Lower-Value Properties?
It is sometimes assumed that larger real estate assets perform differently to smaller assets thanks to reduced accessibility and competition at the top end of the market. Using MSCI’s global private real estate dataset, we find evidence to support the assertion that the size of an asset does have an impact on its performance.
Why global small-cap stocks are becoming an important part of institutional portfolios
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 segment as part of their global equity portfolios i.e., via an “all-cap” approach.
What do rising interest rates mean for minimum volatility strategies?
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.
Time to Rethink Emerging-Markets Allocations?
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.
Is your real estate portfolio resilient enough?
Amid recent worldwide political, economic and market uncertainty, how can you increase resilience of your real estate portfolio? The answer to this question boils down to prudent use of three simple portfolio construction strategies: Asset selection, sector allocation and global diversification.
How to integrate ESG without sacrificing diversification
As institutional equity investors increasingly think about the long term, they may adjust their portfolios to accommodate environmental, social and governance (ESG) concerns in their investment decision-making processes. That can be particularly challenging for the largest investors, such as pension funds and endowments, whose portfolios span the entire equity market.
The Search for Yield: Leveraged Loans vs. High-Yield Bonds as Interest Rates Rise
The low interest rate environment continues to send institutional investors on a search for yield. But with the Federal Reserve signaling an increased pace of tightening in 2017, many are reducing interest rate exposure and seeking higher yields in credit instruments.
The tipping point: Women on boards and financial performance
msci women on boards 2016 A growing body of research shows that having three women on a corporate board represents a “tipping point” in terms of influence, which is reflected in financial performance. Our analysis from last year looked at a snapshot of global companies in 2015 with strong female leadership, finding that they enjoyed a Return on Equity of 10.1% per year versus 7.4% for those without such leadership.