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Contributions by Wei Xu
Foundations of Dedicated China Allocations: Part 2Mar 12, 2021
Asset Allocation and Asset Liability Management , Factor and Risk Modeling , Investing (Investment Management) , Performance Analysis , Portfolio Construction and Optimization , Risk Management , Asset Pricing and ValuationDownload Document
Foundations of Dedicated China Allocations: Part 1Feb 19, 2021 Download Document
China’s rise in global economic influence, increased market size, improved market accessibility and entrance into global equities and fixed-income indexes has led more investors to consider a dedicated China allocation. Due to the complexity of China’s market landscape and investment opportunity set, however, it is no simple task. In this inaugural paper of our “Foundations of Dedicated China Allocations” series, we discuss investment policy and asset allocation as investors think through the various dimensions of setting up such a program.
Specifically, we provide qualitative assessment and quantitative criteria to help answer:
- Why (and why not) consider a dedicated China allocation program?
- Where might a dedicated China program sit in the overall investment process?
- What may be the financial outcomes of incorporating a dedicated China element?
- What are some approaches to setting up a dedicated China allocation?
Hypothetical Investment Policy with Dedicated China Program(s)
(1) Shows where a dedicated China program could fall directly under existing equity or fixed-income investment programs as an additional sub-program. (2) Shows where a dedicated China allocation could fall under a newly created high-level program in parallel with other major sub-asset classes. (3) Shows where a dedicated China allocation is configured under a newly created program one level below other main programs.
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?
Asset allocation and index futures during market crisesMar 25, 2020 Learn More
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.