Tag Archives: risk/return

A New ESG Index for Mexico Sets the Stage for Investment

Where can environmental, social, and governance (ESG) benchmarks help investors and markets most? The answer may be in emerging markets, where it is crucially important to identify and navigate ESG concerns. The transparency that ESG benchmarks provide can help investors distinguish companies that prioritize the needs of not just their shareholders, but also their many Read more […]

Are Active Funds Better at Managing Risks? Not Really.

In investing, risk and return are two sides of the same coin; the expected returns of an asset must be accompanied by variation or uncertainty around the outcome of those returns. All else equal, higher-risk assets should be compensated, on average, by higher returns. The same philosophy applies to performance evaluation. The performance of both Read more […]

Carbon-Efficient Portfolio Construction Part 2: Sector-Relative Improves Efficiency

In a prior blog, we demonstrated that unconstrained carbon-efficient portfolios have significant unintended (and unfavorable) sector and risk factor tilts that can drag down performance. In this follow-up blog, we explore potential ways sector-relative, carbon-efficient portfolios can address the drawbacks of sector-unconstrained, carbon-efficient portfolios. To form sector-relative, carbon-efficient quintile portfolios, we ranked and grouped securities Read more […]

Carbon-Efficient Portfolio Construction Part 1: Unconstrained Versus Sector Relative

As more institutions start to adopt low-carbon investing into their investment processes, it’s important to understand portfolio implications of incorporating carbon risk. We recently published a research paper in which we demonstrated how carbon efficiency can be integrated into factor portfolios. In a series of blog posts, we will be discussing our findings. We evaluated Read more […]

Carbon Risk Integration: Interaction Between Carbon Risk and Traditional Risk Factors

The discussions on the merits of carbon awareness investing are evolving, and in a previous blog, we discussed how investors are interested in progressing from the current data-driven carbon emission framework to a risk-analysis-driven, two-degree pathway paradigm. The shift has been largely spurred by the Financial Stability Board (FSB) and recommendations from its Task Force Read more […]

Asian Fixed Income: An Update on the Indian Bond Market

As of June 5, 2017, the yield of Indian sovereign bonds, as tracked by the S&P BSE India Sovereign Bond Index, stood at 7.03%—the second-highest sovereign bond yield among the Pan Asian countries, following that of Indonesia, at 7.09%. The yield of the S&P BSE India Sovereign Bond Index climbed 19 bps YTD as of Read more […]