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Including Microcaps in Benchmark Indexes: Japan vs. US 

Equity Themes , Global Investing , Factor Investing

Selecting an equity benchmark may mean balancing market coverage and investability. For example, exhaustive coverage may include microcap stocks, with lower liquidity and investment capacity. But excluding them may reduce low-size-premium exposure.

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Reopening Economies and the Resurgence in Value 

Factor Indexes , Global Investing , Factor Investing

After 15 years of challenging performance, many have asked if value is still a valid investment strategy. But the reopening of the global economy following vaccination rollouts has reignited interest across stocks, sectors, countries and regions.

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Value-Performance Anxiety 

Global Investing , Factor Investing

Despite a recent performance lift, many still ask whether the value factor is broken. We analyze the reasons behind its underperformance and start exploring the potential of updates to value definitions and approaches to value-portfolio construction.

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Considerations for Dedicated China Equity Allocations 

Emerging Markets , Global Investing

China provides global equity investors a unique set of opportunities and challenges as they evaluate a potential dedicated investment program and how to approach asset allocation from policy configuration to portfolio implementation.

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Managing the Risks of LIBOR Replacement 

Fixed Income , Risk Management , Global Investing

Investors now have clarity on the process of transitioning away from LIBOR and falling back on replacement benchmark rates. We used stress tests to show that fallback modeling may be necessary to measure and manage the risks of LIBOR instruments.

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The Pace of Fast Change: Growth vs. Thematic Investing 

Factor Indexes , Factors , Global Investing , Factor Investing

Investors considering thematic investments to gain exposure to firms whose fortunes may not be captured by fundamental growth measures, may ask: What are the key opportunities – and challenges – that distinguish thematic from growth investing?

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Are Growth and Value Indexes Still in Style? 

Factor Investing , Risk Management , Global Investing

Growth and value indexes were created in the 1980s as finer tools than market-cap indexes to measure the performance of growth and value funds. Are style-specific indexes still a relevant choice to use as benchmarks for these funds?

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How Inflation Could Affect Multi-Asset-Class Portfolios 

Real Estate Investing , Fixed Income , Global Investing , Integrated Risk Management

Market participants are hotly debating whether U.S. monetary and fiscal policy may cause inflation. We consider four scenarios — reflation, disinflation, an overheated economy and stagflation — and their potential impact on multi-asset-class portfolios.

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How Have Stocks Responded to Changes in Climate Policy? 

ESG Research , Global Investing

To what extent has climate risk been priced into equity markets? Is there a “brown” discount and a “green” premium? Has this shifted over time? How can we model such risks as the world moves toward net-zero targets? We examine the financial impact of climate transition risk on global equity markets.

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Currency-Risk Hedging in Real Estate Benchmarks 

Real Estate Investing , Risk Management , Global Investing

Global real estate investors can expose themselves to currency risk. Using a hedged index, they may better align their benchmark and investment approach and ensure currency risk is accurately treated in allocation modeling and performance attribution.

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Stress Testing Climate-Change Scenarios 

Global Investing , ESG Research

Regulators around the world are upping the ante on climate-related financial disclosures. How can investors stress test potential exposures to these changes in policy? We take a look within Europe.

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A Thematic Lens for Portfolios 

Global Investing

We show how MSCI Thematic Exposure relevance scores helped position growth funds, as an example, alongside thematic funds, and highlighted key megatrends that drove performance. A thematic lens can help analyze other categories and strategies as well.

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Kuwait’s Move from Frontier to Emerging Market 

Global Investing

Kuwait’s reclassification from frontier to emerging market and inclusion in the MSCI Emerging Markets Index provides investors exposure to yet another Gulf Cooperation Council member, one that has worked to open its doors to foreign investors.

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Accounting for Revenue Sources Tells a Richer Story 

Global Investing , Emerging Markets , Economic Exposure

Despite North America’s outsized weighting in the MSCI ACWI Index, companies in the index generated only 30% of their global revenues there. We explore how examining revenue sources may help uncover opportunities of economic growth around the world.

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China Tech Investing: An Indexed Approach 

Global Investing

China’s emergence as a tech leader holds great potential. But its technology value chain isn’t limited to IT firms. Opportunity lies across sectors, from electric vehicles to medical devices. How does one effectively gain exposure?  

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How Diversified Are US Equity Investors? 

Global Investing

The universe of stocks represented by the MSCI USA Index comprises over 600 securities. U.S. investors might assume there are ample opportunities for diversification and potential risk reduction in the domestic market. Is this assumption correct?

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Chinese Government Bonds: Higher Yield, Less Risk? 

Global Investing , Risk Management

Global investors’ interest in Chinese government bonds has risen, as these bonds offer higher yields than developed-market sovereign debt. For investors thinking about adding Chinese bonds to their portfolios, what could be the impact on portfolio risk?

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China A Shares: What Have We Learned? 

Emerging Markets , Global Investing

In this first of a series of blogs covering specific index-inclusion stories, we explore China A shares’ inclusion in the MSCI Emerging Markets Index by looking back at how it occurred and what’s happened since with market and investor reaction.

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Aligning with the Paris Agreement: An Index Approach 

ESG Research , Global Investing

Institutional investors are under pressure to align their strategies with a maximum global temperature increase of 1.5oC as targeted by the Paris Agreement. We examine how they can approach this while respecting other investment constraints.

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Factors in Focus: Impact of Inflation on Style Factors 

Factor Investing , Global Investing , Risk Management

Global equities continued to rally in Q3, brushing aside fear of a second wave of COVID-19 and a large economic slump. We review what it meant from an equity and fixed-income factor perspective and look at what our models showed headed into Q4

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Assessing Company Alignment with UN SDGs 

ESG Research , Global Investing

Five years ago, the United Nations adopted 17 UN Sustainable Development Goals (SDGs) in an effort to end extreme poverty, reduce inequity and protect the planet by 2030. Using a new tool, we examine whether companies are walking the walk.

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ESG in Mexico: At a Fork in the Road? 

ESG Research , Emerging Markets , Global Investing

Mexican companies’ ESG risk-mitigation practices have come a long way over the past decade, but there has been some slippage over the past two years. We examine the current status and why investors may want to pay attention.

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Alternative Views of Equity-Market Liquidity During COVID-19 

Emerging Markets , Global Investing , Risk Management

Institutional investors have typically used traded volume as a way to assess market liquidity. Adding alternative measures that gauge market impact and trading costs can provide a more comprehensive view for portfolio managers and traders.

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Hedging Inflation: A Scorecard 

Integrated Risk Management , Fixed Income , Global Investing , Risk Management

Aggressive actions by central banks and soaring government budget deficits have raised concerns among some investors that inflation may significantly rise. We examine whether an inflation hedge was worth the cost over the past 13 years.

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Understanding the Industry-Momentum Factor 

Factor Investing , Risk Management , Global Investing

When COVID-19 first swept through global equity markets, many factors exhibited unprecedented performance swings. How could institutional investors interpret the industry-momentum factor’s moves in the context of the underlying market dynamics?

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Index Futures and the Expansion of Equity Markets in EM and Asia 

Global Investing , Emerging Markets

Given equity market growth in the emerging markets and Asia, and the dispersion of returns across individual subregions and countries, some have looked beyond traditional long-only approaches, to others, such as futures. We explore those options.

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Managing Climate Risk in Equity Portfolios: A Case Study 

ESG Research , Global Investing

Institutional investors are increasingly focused on mitigating their climate-related risks. How could a “typical” active global equity manager have managed these exposures without disturbing the portfolio’s risk and return characteristics?

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Would Integrating ESG in Chinese Equities Have Worked? 

ESG Research , Emerging Markets , Global Investing

ESG ratings have reflected financial risk and returns in developed-market and emerging-market equities. But was this true in China, where ESG considerations are still in their infancy?

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Did Value-Factor Exposure Deliver for Value Funds? 

Factor Investing , Global Investing

Building on previous MSCI research into the nuanced performance of the value factor, including the impact of sectors and other style factors, we look at how exposure to value drove the performance of actively managed value funds.

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ESG Ratings: How the Weighting Scheme Affected Performance 

Global Investing , ESG Research

Our recent research suggests that environmental and social issues were more industry specific and tended to show up in financial measures over a longer time frame compared to governance issues. How can E, S and G issues be combined?

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Which ESG Issues Mattered Most? Defining Event and Erosion Risks 

Global Investing , ESG Research

Very different ESG issues can be material for different industries. Our research suggests that risks can be divided into two main types: “event” risks and “erosion” risks to companies’ long-term competitiveness. Which ones mattered most for E, S and G?

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Is ESG All About the ‘G’? That Depends on Your Time Horizon. 

Global Investing , ESG Research

The conventional wisdom has it that governance is the most dominant of the three E, S and G pillars. But our analysis finds different results when looking at contribution to performance over different time horizons.

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Equity-Market Dislocation and Index-Based Investing 

Emerging Markets , Global Investing

Market turbulence amid COVID-19 presented risks and opportunities. We explore how indexes , combined with the use of fundamental data, provided a wealth of information to help identify potential market dislocations.

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Outcome-Oriented Factor Investing with a ‘Barbell’ Approach 

Factor Indexes , Factor Investing , Global Investing

Though relatively new to wealth investors, index-based factor investing has some similarity to a high-conviction, outcome-oriented approach. We explore combining the two when seeking outcomes such as equity growth, yield enhancement and risk mitigation.

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Building Better ESG Indexes: 30 Years On 

Global Investing , ESG Research

How ESG indexes have evolved over the past 30 years: A Q&A with Stuart Doole, head of new index development at MSCI, about his conversations with investors since the COVID19 crisis started, the growth of ESG investing and how MSCI Research uses AI and machine learning in developing its ESG indexes.

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Robust Selection Paid Dividends 

Global Investing

Dividend cuts following the COVID-19 slowdown led to approximately USD 194 billion of lost dividends between February and April 2020. An approach that looked beyond dividend-yield ranking would have avoided some affected companies, based on our analysis.

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Five lessons for investors from the COVID-19 crisis 

ESG Research , Factors , Global Investing

COVID-19 unleashed a torrent of sharp movements across global financial markets. We highlight five key lessons for investors regarding global investing, managing factors, active management, indexed investing and ESG investing.

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Index Rebalancing During High Volatility: A Balancing Act 

Global Investing , Emerging Markets

Significant volatility during COVID-19 highlights a need for index reconstitution, but some may worry about trading costs and excess turnover. We investigate the balance between appropriate market representation and avoiding high index turnover.

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Consumer ABS Under Coronavirus in the US and China 

Emerging Markets , Fixed Income , Global Investing , Risk Management

Beyond COVID-19’s steep human toll, the pandemic’s disruption of economic life has led to widespread loss of income and impaired some borrowers’ ability to repay loans. What could the impact be for investors in consumer asset-backed securities in the U.S. and China?

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Using Derivatives to Manage Volatile Markets 

Emerging Markets , Global Investing , Risk Management

We’ve previously noted growth in derivatives contracts to manage emerging-markets exposure in normal and stressed times. Now, facing a real-world stress test, how did investors use these tools? How have implied volatilities and option premium changed?

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MSCI ESG Indexes during the coronavirus crisis 

ESG Research , Emerging Markets , Global Investing

The COVID-19 outbreak is the first real-world test since the 2008 global financial crisis of the resilience of companies with high MSCI ESG Ratings. We analyze the performance of four standard MSCI ESG Indexes over Q1 2020 and longer periods.

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Can diversification help weather the coronavirus storm? 

Emerging Markets , Factor Indexes , Factor Investing , Factors , Global Investing

Whether investors include a tactical approach or invest strategically for the long term, diversifying across factors, sectors and geographies has historically played an important role in portfolio construction. 

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Green bonds: Growing bigger and broader 

ESG Research , Fixed Income , Global Investing

As the green-bond market matures, it is developing offshoots. The types of projects financed, as well as the emergence of innovative types of bonds and loans linked to the ESG targets, is growing. These initiatives may broaden the market for green investment options.

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Will coronavirus reduce emissions long term? 

ESG Research , Global Investing

Has COVID-19 affected carbon emissions? Using satellite imagery from NASA and the European Space Agency, we examined the empirical data so far to understand the potential impact, and if there may be a decline in global greenhouse-gas emissions in 2020.

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Asset allocation and index futures during market crises 

Emerging Markets , Global Investing , Risk Management

During market crises, institutional investors have employed derivatives contracts to hedge market risks or express views on certain performance/risk characteristics. We explore prior use of futures for exposure management and tactical asset allocation.

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How coronavirus could hurt Chinese consumer ABS 

Risk Management , Global Investing , Fixed Income , Emerging Markets

The slowing Chinese economy and trade uncertainty had already put strains on the performance of Chinese consumer asset-backed securities. The COVID-19 pandemic could further harm the performance of these securities. Investors may wish to gauge the risks.

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Integrating ESG in emerging markets and Asia 

ESG Research , Emerging Markets , Global Investing

Previously, we have examined the relationship between ESG characteristics and financial performance in developed markets. In this blog post, we explore whether ESG characteristics  have had financially significant effects in emerging markets and Asia.

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Coronavirus and oil hit equities — how low can we go? 

Risk Management , Global Investing

We compare the market turmoil sparked by the coronavirus pandemic with levels of volatility, drawdown and recovery after 9/11 and the global financial crisis (the two other similarly severe economic and market shocks of the last 20 years).

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The coronavirus market impact spreads globally 

Factor Investing , Global Investing

Fear of a coronavirus pandemic and ensuing economic impacts caused sharp drops in global markets after an initially mild response. We look at recent performance from a factor perspective and how quickly factor returns and volatility reverted in past crises.

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A coronavirus stress test for global markets 

Fixed Income , Global Investing , Risk Management

After the coronavirus spread to multiple continents, markets recorded the worst week since the crisis. How much further could markets drop if epidemic turns into pandemic? Our stress test indicates room for further losses.

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ESG and the cost of capital 

ESG Research , Global Investing , Emerging Markets

We know a lot about the relationship between companies’ ESG characteristics and financial performance. But was there a correlation between ESG scores and cost of capital?

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The coronavirus epidemic: Implications for markets 

Economic Exposure , Emerging Markets , Factor Investing , Fixed Income , Global Investing , Risk Management

The toll from the coronavirus has been felt throughout societies, leading to repercussions on the global economy and financial markets. We examine investor impact through markets’ economic exposures to China and factors and by stress testing portfolios.

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Aramco IPO shows importance of timely index inclusion 

Emerging Markets , Global Investing

Saudi Aramco’s IPO showed why single-country index providers may sometimes need to include companies (especially larger ones) outside of scheduled reviews, as they work to bridge gaps between a country’s equity index exposure and economic drivers.

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Did private capital deliver? 

Global Investing

Private-capital funds enjoyed record inflows from 2014 to 2018, as asset owners sought high-returning assets that had low correlations to traditional public asset classes. Did private capital deliver?

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Trade deal broadened access to China’s nonperforming loans 

Risk Management , Fixed Income , Global Investing , Emerging Markets

The phase-one U.S.-China trade deal lets U.S. asset managers acquire nonperforming loans directly from Chinese banks. We assess the market’s characteristics, as investors face challenges estimating recovery rates and liquidation timing of these loans.

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Looking to the futures of emerging markets 

Global Investing , Risk Management , Economic Exposure , Emerging Markets

Emerging-market (EM) equities have delivered unique risk and return characteristics over the last 30 years. Are futures on EM stocks a liquid enough means to gain exposure during normal and stressed conditions?

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Emerging markets since China A shares’ inclusion 

Global Investing

The emerging-market (EM) equity segment has evolved substantially during the two and a half years since MSCI announced the inclusion of China A shares in the MSCI Emerging Markets Index.

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The value of standards in the investment process 

Global Investing

Standards can establish a common language and provide clarity among market participants. We examine three to see how they can help evaluate returns, quantify factor exposures and measure the impact of changes in sector and industry trends.

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A default wave for Chinese consumer ABS? 

Economic Exposure , Emerging Markets , Fixed Income , Global Investing , Risk Management

The default rate for auto loans in Chinese consumer asset-backed securities increased rapidly in recent months, and China may be moving toward a more borrower-friendly bankruptcy regime. Could this   lead to even higher default rates?

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Have regional equity-market correlations risen? 

Global Investing

Global equity investors use regions as building blocks in asset allocation, typically segregating markets by how developed they are and by geography. Has globalization reduced the potential for geographical portfolio diversification?

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The state of global investing 

Economic Exposure , Emerging Markets , Global Investing

Financial markets are inherently unpredictable, while structural forces such as shifts in monetary policy, trade conflicts and climate change compound the challenges facing investors. Read our analysis commissioned by Norway’s Ministry of Finance.

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Emerging market country allocation matters 

Emerging Markets , Global Investing , Economic Exposure

Investors with strong convictions on emerging markets might consider an approach allowing tilts toward or away from specific themes, such as active allocation to single-country index-based funds. We explore considerations linked with this approach.

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Cyclicals vs. defensives: Did tariffs tip the scales? 

Economic Exposure , Emerging Markets , Global Investing

Did tariffs imposed by the U.S. and China in May trigger a shift to defensive from cyclical stocks? How did they affect different U.S. sectors and industry groups?

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Value investing is down. But is it out? 

Factor Indexes , Factor Investing , Factors , Global Investing

Value stocks generally underperformed the broad U.S. equity market over the past decade — just as they did in the late 1990s. What drove that underperformance? Was it consistent globally? Within U.S. sectors?

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Stress testing US-China trade wars 

Emerging Markets , Fixed Income , Global Investing , Risk Management

Amid ongoing U.S.-China trade tension, we have updated our stress test to consider three scenarios for how the situation could unfold — and their impact on currency, bond and equity markets around the world.

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Chinese convertibles: Equities in fancy dress? 

Emerging Markets , Fixed Income , Global Investing , Models/Client Cases , Risk Management

Chinese corporate bonds that convert to A shares display equity-like characteristics. But investors who view these securities as equities in disguise are overlooking the complexities of the asset class.

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Stress testing Brexit: Deal or no deal? 

Global Investing , Models/Client Cases , Risk Management

Brexit has roiled markets since U.K. voters chose “leave” in the June 2016 referendum. We used our stress-testing model to examine how markets could react to deal and no-deal scenarios.

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What’s the downside in real estate? 

Real Estate Investing , Global Investing

Real estate has always been marked by periods of expansion and sometimes painful corrections. But all cycles are not alike.

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Is climate-change risk all about fossil fuels? Think again. 

ESG Research , Global Investing

When it comes to reducing greenhouse gases, investors tend to focus on fossil fuels and power generation. But other companies also need to adapt to a lower-carbon world. We look at the implications for five types of companies.

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Real estate may be yielding less than you thought 

Global Investing , Real Estate Investing

Income has long been an important part of real estate returns meaning yields are often heavily scrutinized by investors. However, headline yields do not factor in capital expenditure requirements which can vary significantly. Investors looking to better understand potential “free cash flow” positions of portfolios post-capex may want to adjust the yields they use to account for it.

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Using multi-country multi-currency futures in portfolio management 

Global Investing , Risk Management

Investors seeking to more tightly manage their exposures to regional or global benchmarks are turning to multi-country multi-currency futures.

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The changing face of real estate portfolios 

Global Investing , Real Estate Investing

Office and retail investments’ historic dominance of commercial real estate portfolios is decreasing, with other property types — including logistics centers, student housing, and data centers — increasing. This evolution highlights how technology and the search for yield have led investors to diversify and seek exposure to other property types.

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Home bias in fixed income: Has it helped or hurt? 

Fixed Income , Global Investing , Integrated Risk Management

Has global diversification historically helped reduce risk in the fixed-income portfolios of U.S. defined-benefit (DB) pension plans? Our backtests show that globalizing bond allocations would have increased risk measured relative to a liability benchmark. For such plans, home bias in bond portfolios would have reduced active risk over the period of our study.

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Is there another Woodford waiting to happen? 

Global Investing , Risk Management

When the Woodford Equity Income Fund suspended redemptions on June 3, 2019, it showed how, when a fund’s liquidity profile is misaligned with its shareholder profile and redemption constraints, a single large redemption request can trigger gating. 

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Under the hood: Rating ESG funds 

ESG Research , Global Investing

Nearly $31 trillion in assets under management were invested in funds that consider ESG issues in their investing process as of January 2018, a 34% increase from two years previously. Transparency is key to understanding what this expansion means.

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Asian retail resilience: Have store hours affected performance? 

Real Estate Investing , Global Investing

Industrial real estate has outperformed retail assets in recent years, but the trend has been less pronounced in Asia, where store hours, among other reasons, might have led to more resilient retail performance.

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The rise of fundamental factors in China A shares 

Emerging Markets , Factor Investing , Global Investing

Commonly held perceptions about China A shares have influenced investors to think factor strategies may not work in the Chinese equity markets. Our research suggests this may be changing.

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What could stress emerging markets? 

Global Investing , Risk Management , Economic Exposure , Emerging Markets

Emerging-market equities and USD-denominated EM sovereign bonds started 2019 with a bang, but recent market turbulence caused by the U.S.-China trade standoff raises a pressing question: What could trigger the next EM downturn?

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Beyond headlines: How markets responded to US-China trade talks 

Economic Exposure , Emerging Markets , Global Investing

Our analysis suggests that changes in equity-market valuations, analysts’ consensus earnings estimates and data on companies’ revenue exposure are metrics that provided insight into recent market and sector performances.

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Game of Homes: Is winter coming for the domestic-equity bias? 

Equity Themes , Models/Client Cases , Global Investing

Can we quantify home-bias risk in an allocation? And, what has happened when U.S. stocks ended previous multiyear runs of outperformance?

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The Right Tool: How Suitable is Your Real Estate Benchmark? 

Real Estate Investing , Global Investing

You don’t have to be a master craftsman to appreciate the benefits of using the right tool for the job. Even the most casual do-it-yourselfer has experienced the frustration of using the wrong screwdriver for a particular job — one that doesn’t quite fit the screw properly and shreds the head, leaving it uselessly stuck in the wood without fixing anything.

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Evaluating the impact of LIBOR fallback 

Fixed Income , Global Investing , Integrated Risk Management

The planned discontinuation of LIBOR and other interbank offer rates sometime in 2022 will affect a large number of existing financial contracts based on these benchmarks.

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Factors in Focus: Risky start. Quality finish. 

Factors , Global Investing , Factor Investing

We highlight the fast-moving rotation among factors that continued during Q1 2019. As we move into Q2 2019, this framework showed allocation changes in different factors.

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Saudi Arabia inclusion and emerging markets 

Equity Themes , Emerging Markets , Global Investing

Saudi Arabian stocks will be included in the MSCI Emerging Markets Index and the MSCI ACWI Index in a two-step process starting in June this year. With the first step of inclusion of the MSCI Saudi Arabian Index coming shortly, we ask how inclusion of this Middle Eastern market would have affected the MSCI EM Indexes.

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A new day for monetary policy? 

Emerging Markets , Fixed Income , Global Investing

Listen as MSCI’s Andy Sparks discusses potential implications of the US Federal Reserve’s sharply softening monetary policy, and whether the role of central banks has changed.

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Don’t confuse capital growth and asset-value growth 

Economic Exposure , Real Estate Investing , Global Investing

Measuring real estate growth is not a simple exercise; we run through it highlighting some common confusions

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Watching beta in volatile equity markets 

Equity Themes , Global Investing

The U.S. equity market ended last year with a historic drawdown, and beta stood out as a driver of the market decline. But what happened when those losses starting reversing in early 2019?

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What innovative companies and women on boards have in common 

ESG Research , Global Investing

We examined constituents of the MSCI ACWI Index that had been recognized as innovators on one or more annual lists produced by Forbes, Fast Company, MIT Sloan and the Boston Consulting Group between 2015 and 2018.

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Brexit, Black Wednesday and Real Estate's Currency Risk 

Real Estate Investing , Global Investing

When investors buy overseas real estate, they inevitably take on foreign-exchange exposure. The resulting currency-market dislocations resulted in near-term losses for some investors, but also created attractive opportunities for investors to buy real estate exposure in the U.K.

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Evaluating Emerging-Market Stocks through a Governance Lens 

Equity Themes , Emerging Markets , Global Investing

Emerging-market stocks generally are perceived to have lower governance standards than their developed-market counterparts. Less transparency is one factor behind this view. Some emerging-market companies may also disadvantage minority shareholders. How can active and index-based investors address these issues?

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Venezuela and the Specter of Recovery Risk 

Fixed Income , Global Investing , Factor Investing

Venezuela unfortunately finds itself on the verge of political and economic collapse. From the perspective of investors in the country’s sovereign and corporate bonds, recovery risk is now likely a bigger consideration than default risk.

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2019 emerging real estate trends 

ESG Research , Real Estate Investing , Global Investing

For real estate investors, 2019 may be a year of adjusting to rapid changes arising from a variety of sources, including environmental, social and governance-related (ESG) risks; geopolitical uncertainty; and disruptive technology.

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What would a “No deal” Brexit mean for markets? 

Global Investing , Integrated Risk Management

Financial markets are increasingly edgy about prospects for the U.K. Parliament’s expected Dec. 11 vote on a Brexit deal with the European Union.

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Brexit and the risks of home bias 

Economic Exposure , Global Investing

Every so often, a country can be hit by a negative event — a tidal wave, a terrorist attack, a political uproar.

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What it may mean for Japanese stocks if easy money ends 

Models/Client Cases , Global Investing , Factor Investing

Some observers are concerned that when the Bank of Japan (BOJ) eventually ends its ultra-easy monetary policy, it could hurt the Japanese stock market. Part of this concern stems from the fact that the BOJ’s unconventional monetary policy involves purchasing Japanese exchange-traded funds (ETFs).

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Small cap allocations may not be that straightforward 

Global Investing , Factor Investing

The low size factor, or the premium that has been historically realized by investing in smaller sized companies over longer time periods, forms an integral component of many institutional portfolios. However, investors can choose different ways to making a low size allocation.

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Sector investing in China 

Emerging Markets , Global Investing , Factor Investing

As the China A shares market has evolved, investors have faced new choices. They can continue with broad allocations to the emerging markets (EM), choose slightly narrower allocations to China and other specific EM countries or consider targeted investments within China through a variety of means.

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Which factors mattered in China? 

Models/Client Cases , Global Investing , Factor Investing

Chinese equity prices have hardly been music to investors’ ears so far in 2018. The MSCI China A Onshore IMI Index — the broadest MSCI A shares index designed to represent the performance of the overall A shares market — has declined more than 25% in local currency terms through Oct. 31, 2018. Were there factors in this market that outperformed?

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Apples vs. Oranges? Core vs. Opportunistic Real Estate Funds 

Real Estate Investing , Risk Management , Global Investing

Real estate investors sometimes treat core and opportunistic funds as if they were different asset classes. They are measured against different benchmarks and comparisons are limited by a lack of consistent data. But a comparison of the two shows that both core and opportunistic funds have similar return profiles — it’s the magnitude of their returns that has varied over time.

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How the low volatility factor has performed in China A shares 

Global Investing , Factor Investing

Which factors have performed best in the China A market, especially given its relatively high annualized market volatility? Is there too much risk to bear? We investigate the role that the minimum volatility factor has played.