Investment Topic: Investment Risk

Research Note May 2021
Portfolio Protection: Challenges with Equity Put Options

We advise extreme caution in using derivatives to protect portfolios from sharp equity drawdowns. We recommend that investors look to asset allocation to defend against equity risk before buying puts. For those investors who must pursue a tail-risk hedge, we provide a list of potential pitfalls and solutions, in the form of a case study.
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VantagePoint April 2021
VantagePoint: Reflation, Inflation, or More of the Same?

In this edition of VantagePoint, we review the drivers of inflation globally and conclude that widespread inflation concerns are likely overdone. For investors concerned about the risks of inflation, we refresh our analysis on the complex relationship between asset classes and inflation and dig deeper into the implications of higher inflation on equities.
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CA Answers March 2020
The Fed Eases as Virus Concerns Grow

March 3, 2020—The US Federal Reserve cut its policy rate by 50 basis points today, highlighting the serious challenges facing the global economy. Still, we don’t believe investors should cut risk. Very few have an informational edge regarding COVID-19’s market impact, and investors could be left underexposed when and if markets rebound.
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CA Answers February 2020
Pandemic Risks and Reactions

February 28, 2020—Global equities sold off sharply this week as cases of COVID-19 spread rapidly outside of China (particularly in Korea, Italy, and the Middle East). While the spike in volatility has been abrupt, the current market sell-off is arguably a needed correction.
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CA Answers January 2020
Coronavirus Outbreak: Initial Thoughts and Implications

Investors should stay calm. While the Wuhan coronavirus is still spreading, the virus remains less deadly and more contained than the SARS outbreak of 2002–03. Looking at other epidemics, history suggests that after an initial sharp hit, economies and markets typically recover quickly.
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CA Answers December 2019
What Risks and Opportunities Are You Focused on as We Enter 2020?

We see opportunities to deploy capital in some niche areas of the investment landscape and reshape (or at least re-evaluate) some areas of the portfolio. Simultaneously, we are closely monitoring the lurch toward protectionist trade policies and their impact on global economic activity.
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Pension Series November 2019
Pension Schemes in Pursuit of Income, Growth, and Diversification

A universal approach to portfolio construction can help schemes achieve required return targets whilst adding additional upside from alpha generation; reduce risk through true diversification; and generate sufficient income to comfortably meet both planned and unplanned cashflow needs.
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