2016 Investment Symposium Opening Keynote
2016 Investment Symposium opening keynote by James A. Bianco
This presentation covers the 2016 election, negative interest rates, and post-crisis challenges for investment managers with James A. Bianco, president, Bianco Research.
Watch the video above for a briefing on the opening session, keynotes and flash talks of the 2016 Investment Symposium. The symposium covered the current market environment, emerging investment themes and investment stewardship challenges in the year ahead. Our flash talk session format is designed to brief clients on more popular topics in less time and encourage timely conversations with investment consultants.
Keynotes and flash talks discussed:
November 2016
To the surprise of pollsters, analysts, and much of the American public, Republican presidential candidate Donald Trump trampled predictions by winning the presidential election in stunning fashion.
The long-term impact of Trump’s presidency on financial markets is impossible to predict at this point, given the amount of uncertainty around his expected policies. However, the short-term dynamics surrounding his election win are starting to emerge, and we share with you what we are seeing and hearing in the market in this newsletter.
October 2016
Direct lending is an established asset class that provides a total return to investors typically between that of high yield bonds and mezzanine debt. It is considered private credit because the assets in a direct lending portfolio are loans originated privately between the direct lending fund manager (acting as lender) and the borrowing company. Due to the private nature of direct lending, the asset class produces attractive risk-adjusted returns supported by reduced competition, lower volatility, and favorable negotiation leverage for the direct lender. Since the financial crisis of 2008, direct lending as an asset class has featured unprecedented growth in deal volume as well as assets under management. This growth is attributed largely to post-crisis regulations that effectively forced banks, the traditional direct lenders of the past, to shed their direct lending operations. Non-bank direct lending asset managers have in turn benefitted from the significant rise in direct lending opportunities.
September 2016
While 529 plans have existed for over two decades, recent developments such as the Achieving a Better Life Experience (“ABLE”) Act have provided a new avenue for families with eligible disabled dependents to build a pool of assets that cover qualified disability expenses such as education, housing, and transportation. Like 529 plans, 529 ABLE (“529A”) plans provide a tax advantaged investment vehicle for eligible participants.
September 2016
S&P Dow Jones Indices and MSCI Inc. have announced the creation of a new real estate sector within the Global Industry Classification (GICS) system. Effective market close August 31, 2016, real estate officially became its own GICS sector, whereas it was formerly included within the financial sector. MSCI implemented this new classification change as of this date, but S&P Dow Jones indices will not see this change made until their quarterly index rebalance date of September 16th. Russell indices will not be affected since they utilize a separate classification system from GICS.
August 2016
Given the heightened volatility in financial markets over the past year from the shale crisis to Brexit, investors are rightly concerned about emerging markets debt (“EMD”) allocations. This strategy update examines key fundamentals of emerging markets debt and identifies reasons to retain this asset class in portfolios.
Live webinar on secure choice stewardship, the second in our defined contribution guidance webinar series.
One of the newer developments in the defined contribution world, several states have established retirement savings plans for workers lacking access to employer-sponsored plans — and another 20 are exploring their adoption. With secure choice programs, fiduciaries have unprecedented opportunities to place segments of the U.S. workforce on a steadier path towards retirement readiness.
Please join us for the second webinar in our defined contribution guidance series, a discussion on secure choice stewardship. This session will cover key topics from our recently published paper, Secure Choice: The Next Chapter in the U.S. Defined Contribution Story.
Attendees will be briefed on:
Live Webinar – Thursday, September 15, 2016 – 2:00-2:45 PM CT
Please contact us for access to this video.
June 2016
On June 23rd, the United Kingdom (UK) shocked markets with its vote to leave the European Union (EU). The Remain vote lost to the Leave vote, 48.1% to 51.9%, with a strong turnout throughout the UK. Younger voters sided with the Remain camp by a wide margin, while older voters supported the Leave camp (Exhibit 2). In the weeks leading up to the referendum, global equity/credit markets and the British pound experienced positive price movement in anticipation of a Remain verdict. Using polling information and odds makers as indicators, investors were caught off guard at the Brexit result, leading to dramatic losses for risk assets on June 24th.
May 2016
Given the depressed oil prices earlier in the year coupled with the recent credit rally, we have gotten many questions from clients about the future direction of default rates, particularly for high yield bonds. In early February, the question was about how high default rates would rise as a result of low oil prices and their subsequent impact on high yield issuers, particularly those in the energy sector. Now, as credit has rallied, investors are wondering if expected default rates are too pessimistic in light of the rally and rise in oil prices. This newsletter contemplates the current implied default rate for high yield bonds and how successfully it has predicted actual default rates, all in an effort to further examine the state of the high yield market. Ultimately, the goal is to provide our clients with guidance on how current conditions in the market could impact their portfolios over both short and long term investment horizons.
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