A global pandemic. Economic disruption. Climate change. Asset allocations and investment strategies that worked previously may not work tomorrow. In our annual Institutional Investor conference co-hosted by CalPERS and CalSTRS, we explored the issues asset owners face in building resilient portfolios.

Highlights Included: 

• MSCI CEO Henry Fernandez interviewed Jagdeep Bachher, CIO at UC Investments, discussed the nature of risk and how UC Regents approaches sustainable investing.
• Roger Urwin, Global Head of Investment Content at Willis Towers Watson, explored how leadership makes a difference in asset management. View the videos below.

Research: How the COVID-19 Crisis Affected Financial Markets

Peter Zangari, Global Head of Research and Development at MSCI, explored lessons learned from the COVID-19 crisis. The findings are explained in our recent research paper, “Five Lessons for Investors From the COVID-19 Crisis.” Highlights include:

• Diversification. A hypothetical portfolio of diversified companies outperformed one with less diversified companies.
• Volatility. Volatility spiked higher during the COVID-19 crisis than during the global financial crisis, but it came down relatively quickly.
• Factors. A lot of volatility in the recent crisis came from factor risk as opposed to stock-specific risk.
• ESG. Portfolios that had greater exposure to ESG considerations tended to outperform ones that had less ESG exposure.
• Bond-market Liquidity. COVID-19 was relatively muted in terms of its impact on corporate-bond markets and bid-ask spreads compared to the global financial crisis of 2008 but the probability of defaults in the bond market rose sharply during the crisis. The energy and consumer discretionary sectors were most impacted.

Further market insights can be gleaned from our Insights Gallery, which features interactive charts and data visualizations, and from our analyses of how the coronavirus crisis has affected financial markets