Tag Archives: institutional investor

Carbon Exposure of the S&P 500® Low Volatility Index

Understanding the carbon exposure of smart beta strategies is important for market participants who are already implementing factor strategies and wish to incorporate carbon risk into the investment process. In a previous blog, our analysis showed that factors such as low volatility and value may be predisposed to higher carbon emissions because of their sector Read more […]

Carbon Pricing: The Business Case for Low-Carbon Innovation

The belief that economic growth is possible without lowering carbon emissions is becoming harder to sell by the minute. A study by the London School of Economics showed that if business-as-usual emissions continue over this century, the value of risk to global financial assets in today’s terms is 1.8%, or USD 2.5 trillion. Likewise, analysis Read more […]

Can SDGs Shape the Future of Corporate Disclosure?

Businesses are showing increasing interest in using the Sustainable Development Goals (SDGs) to inform and enhance their social and environmental programs and ultimately their business strategies.  The SDGs were adopted by the United Nations in 2015 and include 17 ambitious goals and 169 targets aimed at ending poverty, protecting the planet, and ensuring prosperity for Read more […]

DJSI Push Companies to Achieve the SDGs

On Sept. 7, 2017, RobecoSAM and S&P Dow Jones Indices (S&P DJI) announced the results of the annual rebalancing of the Dow Jones Sustainability Indices (DJSI).  This year, a record of 942 companies (up 9 %) from around the world that had participated in RobecoSAM’s annual Corporate Sustainability Assessment (CSA) eagerly waited to learn whether Read more […]

Carbon Exposure of Smart Beta Indices

Carbon emission awareness has been gaining greater prominence on many market participants’ radar as they continue to seek and demand carbon emission information and related risks for companies associated with climate change.  To address this need, the Financial Stability Board taskforce recently published a series of recommendations on how companies should report climate-related risks and Read more […]

Are Leveraged Loans Losing Their Luster…or Poised to Shine?

Leveraged loans (also called senior loans or bank loans) typically pay a two-part coupon—a market-driven base rate (30-90 day LIBOR) plus a contractual credit spread.  As shown in Exhibit 1, the weighted average credit spread of U.S. leveraged loans, as measured by the S&P/LSTA Leveraged Loan 100 Index, has fallen steadily and now sits at Read more […]

Ingredients in a Multi-Factor Recipe

In our previous blog on multi-factor merits, we discussed the diversification benefits of combining equity factors.  We highlighted how multi-factor indices may generate more stable excess returns, while avoiding the risks inherent in timing factors.  But to achieve this, can market participants just throw lots of factors into a pot and hope for the best? Read more […]

Multi-Factor Merits: Are You Putting All Your Eggs in One Single-Factor Basket?

It is undeniable that an individual investor would need considerable skill (or luck) to navigate optimally between the various single-factor equity strategies.  If the goal is to outperform the benchmark, then simply choosing between a quality, value, momentum, or low volatility strategy may present the biggest risk.  While they all have been shown to hold Read more […]

Rising Rates Arrive

Which of the figures below belong together?   It’s obvious, even if analogies aren’t your strong suit, that A is like C and B is like D.  A and C are not like B and D. The economic relevance of this simple visual exercise is this: At its March 2017 meeting, the Federal Open Market Read more […]

Next Generation Retirement Investing

For many plan participants, the goal of a retirement account is to provide a steady stream of income that will sustain their standard of living in retirement. Therefore, participants need a framework that aligns the management of their savings with their retirement income goal. This framework has three related components: Risk management that addresses the Read more […]