More has been written about diversification than any other topic in finance and investments. Diversification is the process of allocating capital in a way that reduces the exposure to any one particular asset or risk by investing in a variety of assets or across many risk factors.
For a given level of risk, a diversified portfolio should outperform an undiversified portfolio over the long-term.
When researching this topic, one cannot help but also ask related questions, such as: how much you should invest offshore, where and with whom?
The rise of populism on the back of the Global Financial Crisis (GFC) and the plight of the proletariat dealing with high unemployment and stagnant real wages (while the rich get richer), has led to some significant and surprising elections around the world.
I have always loved magic. Initially as a child because I truly believed that the magician possessed powers beyond the physical world. Then as an adult because I knew this wasn’t the case and loved the challenge of solving the problem of how “it was done. Joao Frasco
In order to understand risk management from a manager research perspective, we first need to describe what we define as risk.
The topic of risk management is very broad, and a myriad of discussion points come to mind when one ponders on it.
The right questions to ask managers about their operational risks.
In this brief article, I’ll take the middle ground in the battle raging between active and passive managers and commentators around which strategy is “best”.
My advice to the trustee couldn’t be more simple: Invest in a low cost index fund. I believe the long-term results will be superior to those attained by most investors – whether pension funds, institutions or individuals – who employ high fee managers.” – Warren Buffett
There are various decisions an investor needs to make when investing in passives. Determining the best or most appropriate passive index for a particular investor looking into the future is extremely difficult.
As portfolio managers within a multi-management business, it is our duty to consider the full opportunity set when constructing portfolios to meet client requirements or fulfill our mandates.