May's Must Read Content

Where to Invest in a World in Flux

The enemy of investing: uncertainty. May has continued this year’s theme – less ‘post-Covid bounce’, more ‘dust off the econ textbooks’ to deal with challenges not seen for a generation. Our selection of papers reflects what our members have been reading over the last month as they seek to know where best to invest right now, and what might come next.

Geopolitical Risk in Europe: Long-term investment implications (LGIM, May 2022)

For compliance reasons, this paper is NOT accessible in the United States and Canada

This paper considers some of the potential ripple effects from the war in Ukraine on the world economy in the long term. The authors consider the U.S. dollar's reserve currency status, responsible investing vs geopolitics, and the spectre of de-globalisation.

Updated 2022 Outlook: The risk of a policy mistake (SSGA | SPDR, May 2022)

For compliance reasons, this paper is only accessible in the United States and Canada

Acknowledging the seismic events in geopolitics, policy, and the markets since SSGA's annual outlook, they summarise their updated thinking. They cover a macroeconomic view and the latest outlook for equities, fixed income, and commodities, as well as a take on emerging markets and China.

Dealing with Hidden Equity Risk in M&A Deals (Man Group, May 2022)

How best to assess the risk to a portfolio as a result of M&A deals? Man Group shows that while it may not be a straightforward process, it is becoming an increasingly important part of risk management, with more capital being allocated to risk arbitrage strategies.

Asian Credit: A structurally growing asset class (Lombard Odier IM, May 2022)

For compliance reasons, this paper is only accessible in certain geographies

Lombard Odier IM posit that the higher yields and shorter average duration of Asian investment grade credit compared with its global counterpart, combined with an increasing demand from local investors, adds up to a favourable demand outlook for the asset class.

Investing in Natural Capital (Nuveen, May 2022)

In this paper, Nuveen defines natural capital and its importance to the planet’s biodiversity, before exploring reasons why investors should consider investing in the sector. They suggest there are benefits from both sustainable investing and financial return standpoints.

Renewable Energy Market Outlook for 2022 and 2023 (IEA)

Records were being broken in the growth of renewable energy, but then came Russia’s invasion of Ukraine. This outlook paper looking ahead to 2023 considers whether the sector’s growth will continue in an uncertain macroeconomic and political environment.

Demystifying Decumulation: A practical guide (Wellington Management, May 2022)

Beyond the accumulation of assets there is a multitude of considerations for investors when it comes to an effective decumulation strategy. The authors look at the impact of withdrawals, portfolio construction, risk mitigation, and strategy implementation.

What Plan Sponsors Should Know About Digital Assets (Cambridge Associates, 2022)

Perhaps understandably, pension managers have generally been lagging behind other institutional investors when it comes to investing in digital assets. However, plan sponsors would benefit from understanding the landscape, as it is likely to impact their portfolios directly or indirectly.