Does the rise in passive investment strategies have consequences for financial stability? The shift to passive from active appears to be amplifying some risks to financial stability and mitigating others, according to a paper co-written by Kenechukwu Anadu, a senior financial markets specialist at the Federal Reserve Bank of Boston, and Mathias Kruttli, Patrick McCabe, […]
Fee compression is putting pressure on providers that are seeking to be more innovative in launching new target-date funds, prompting managers to consider more customization, according to new research by Cerulli Associates. The fee compression challenge is bolstering certain trends among target-date managers, including blending passive and active strategies, as well as the push towards […]
In the age old question of whether passive or active investing is the best course, a new paper from Mercer proposed a simple answer: it depends. Specifically, it depends on what an investors’ goals and priorities actually are, the paper said. The popularity of passive strategies can, in part, be attributed to their continued success. […]
While taking an active approach to investment management is paying off for the Canada Pension Plan Investment Board, the Public Sector Pension Investment Board’s actively managed returns are similar to what they would be if it had taken a passive approach, according to a new report by the parliamentary budget officer. The PBO prepared the […]
While shareholder activism is a hot topic among institutional investors, where hedge funds are concerned, it doesn’t seem to have much impact on investee company profitability, according to a paper by J.B. Heaton, an independent financial economics researcher. Hedge fund activism is a great story, one that investors can wrap their heads around, says Heaton. […]
It should come as no surprise that asset owner sentiment is currently dominated by late-cycle tensions. Among pension plans and other institutional investors, this has translated into an appetite for de-risking and diversification, not just beyond equities but within equities (emerging markets, low volatility, small cap, et al.). The climate has also driven a notable […]
While active managers outperform in some situations and not in others, when using active management, what characteristics can pension plans look for to stay on the outperforming side of the equation? Using an “active investing triad” — be patient, be different and be aligned — can help find managers that outperform, said Douglas Schein, managing […]
The benefits of active management
One plan sponsor's take on the active side of smart beta.
Northern Trust survey finds investors open to new options.