Research Papers

It’s official. The U.S. economic recovery from the devastating Great Recession (20072009) made history in July 2019, as the 121-month expansion officially became the longest on record. In December the cycle extended to the 126-month mark, and continues to roll along. According to the National Bureau of Economic Research, the previous record spanned 120-months (1991-2001) and many will recall the dotcom implosion that punctuated its calamitous end.

A commonly held, but misplaced, belief that emerging market debt (EMD) is an obscure, risky, outpost of the fixed income universe has resulted in it being under-represented in many portfolios. Within each category (hard or local currency EMD), however, it has qualities that are similar to, or even better than, other core fixed income allocations.

All too often investors tend to look at ESG analysis as something that can be distilled into a simplifi ed score or conclusion. We believe that this can create a false sense of security and an investment approach that can fall short of its aims. ESG analysis will always be subjective and a matter of degree, rather than a conclusive, data-driven absolute truth. Ultimately ESG is an approach to looking at companies. What things are we fundamentally trying to understand about those companies? What questions should we be asking

The trend of mortality statistics in Canada has brought good news – Canadians are living longer. The implication for people considering retiring at age 65 is that they can expect to enjoy a long retirement. In fact, a male Canadian who has just retired, aged 65, will on average spend 19 years in retirement and a female 22 years. Further, 27% of males and 41% of females can expect to spend over 25 years in retirement.1 Any improvement in mortality would obviously increase these fi gures further.

As in many areas, when it comes to saving for retirement the US and UK share a number of things in common. Although both countries have a history of DB plans, these are now predominantly legacy arrangements with most closed to new participants and, in many cases, future accrual also. Read More

The purpose of this paper is to introduce established theories that provide insight on how stress, when left alone, can have a negative impact on employees’ mental and physical health.

It’s been another good year for investors with strong returns across a broad range of asset classes. Heading into 2018, the question is whether the market-friendly economic environment can continue. This report explores the outlook for multi-asset, fixed income, equities, liquidity and alternatives and how they shape key investment conclusions.

It’s hard to read the business news these days without seeing references to private sector companies de-risking their defined benefit (DB) pension plans. This de-risking activity is occurring in the face of historically low interest rates.

What will global trade and commerce look like in the coming years, and how will it influence the investment landscape?

In a world where there are now more indices than stocks on the US market, this paper explores some of the challenges involved in index and factor investing, as well as the fundamental questions a prudent investor should ask.

2017 RBC Global Asset Management Responsible Investing Survey Executive Summary

Experts Vicki Bakhshi and Jamie Jenkins of BMO Global Asset Management (EMEA) discuss how to successfully deploy an ESG focus that’s entirely complementary to long-term performance goals,

Canadian Investors, typically conservative in their approach to wealth management, show an increasing openness to using technology to cut costs and maximize returns.

This point of no return is an interesting concept that has been widely used in many other contexts. In this article I would like apply it to the balance sheets of pension funds. The health of pension funds is often described by the funded ratio, which is the ratio of assets compared to the value of the liabilities.

Many factor investing strategies don’t provide pure exposure to their target factors, resulting in contamination from undesired sources of risk. Factor attribution helps investors get what they desire. It uncovers the true drivers of risk and return in candidate portfolios, allowing investors to identify the optimum investment for them.

These are no ordinary times. Uncertainties have arrived “not single spies, but in battalions.”1 They include global central banks retreating from providing quantitative easing (QE), secular economic stagnation, high debt levels, adverse demographic trends, political dysfunction, heightened geopolitical tensions and the dislocation accompanying the march of technology.

Environmental, Social and Governance (ESG) investing has been demanding ever more attention in Canada – and globally. Vicki Bakhshi, Director in the Governance and Sustainable Investment team at BMO Global Asset Management (EMEA), shares her insights on what’s behind the momentum, the range of ESG strategies available, and the biggest trends and challenges ahead as we move toward building a more sustainable financial system.

Fixed income ETFs have provided investors of many types, from large institutions to retail investors, an alternative tool to access the cash bond market. In this piece, we highlight several key aspects of the fixed income ETF trading dynamics to better assist investors in harnessing the utility of these instruments when implementing investment strategies.

How does a person’s resiliency predict their life fulfillment?

These are no ordinary times. Uncertainties have arrived “not single spies, but in battalions.” They include global central banks retreating from providing quantitative easing (QE), secular economic stagnation, high debt levels, adverse demographic trends, political dysfunction, heightened geopolitical tensions and the dislocation accompanying the march of technology.

How can the government help modernize the Canadian capital accumulation plan (CAP) landscape? What regulatory changes are needed to help protect CAP sponsors from key risks relating to disclosure and decumulation? Eckler’s 2017 CAP Legal Forum brought together some of Canada’s leading pension lawyers and government representatives to discuss these issues.

*Reprinted with permission from Eckler Ltd.

Over the past five years we’ve noted a number of factors influencing sovereigns such as low interest rates, the falling oil price and reduced funding. This year however we note geopolitical shocks in developed markets are shaping decision making. When coupled with uncertainty over the end of quantitative easing, the commencement of quantitative tightening and ongoing volatility in currencies and commodities it’s clear sovereign investors are faced with a challenging macroeconomic and therefore investment environment.

The following article provides an overview of the potential to add value by incorporating liquid alternative investments in a portfolio context, and of some of the available strategies and risk premiums.

Learn how industry views of alternatives are evolving, and what that means for your organization.

This survey provides the investment industry with vital data on investor attitudes towards RI. The first part of this report examines investor perspectives on RI in general. The second part, In Focus, hones in on investor attitudes towards two important gender diversity issues–women on boards and gender pay equity.  https://www.riacanada.ca/

Academic studies are beginning to shed light on how passive ETFs are influencing markets.

In 2016, Express Scripts Canada’s analysis of private-plan spending trends once again reflected opposing cost forces. Factors driving an increase in drug spend have outweighed downward pressure on drug costs. At the same time, high-cost drugs and high-cost patients continued to create troubling trend acceleration.

We are now at a crossroads—the cost impact of patent expiries is slowing, while that of high-cost drugs and patients with multiple chronic conditions continues to accelerate.

It’s easy to become overwhelmed by the details, especially when they are being reported around the clock, 140 characters at a time. However, today’s headlines mostly revolve around things we can’t control and create market imbalances we can’t control, so while it’s important to be aware of the macro backdrop, the fixed income team at TD Asset Management
(we) believes investors will be better served by focusing on the things they can control.

CLIMATE CHANGE is one of the most significant challenges facing the world today and increasingly complex to navigate as a large, global investor.  Bold steps and ingenuity will be required to reduce the effects of climate change in the coming decades. Equally, bold steps will be required to help investors understand and mitigate the risks that climate change presents to our portfolios.

The fifth AODP Global Climate 500 Index launches after a year of rapid developments in articulating the financial risks of climate change to the global economy.

Growing interest in environmental, social and governance (ESG) credentials among institutional investors reflects a view that ESG insights and perspectives can address multiple objectives. In addition to targeting positive social or environmental impacts, ESG criteria are increasingly recognized as material to long-term financial outcomes. https://www.ssga.com/na/ca/permitted-client/en/home.html

Learn about the multiple symptoms of IBS and the impact these symptoms have on employee quality of life, physical health, mental health and productivity at work.

Key global industries are being disrupted by technological innovation, changing consumer preferences, and political or regulatory initiatives. These changes may produce extreme performance gains for winners. David Eiswert, CFA, portfolio manager of T. Rowe Price’s Global Focused Growth Equity Strategy, shares his insights on how a portfolio structure that allows investors to compare opportunities across geographic regions can leverage fundamental stock-picking skill.

Economic conditions, longevity and other risks related to defined benefit (DB) pension arrangements have left many questioning the traditional DB model. Defined contribution (DC) arrangements have seen growth but they too have flaws. As a response, many jurisdictions in Canada are considering new pension structures. Discussed in part 1 – Motivation for change and, in part 2, Investing strategically.

Progressive approaches to support chronic weight management
Imagine being able to reduce or prevent benefits costs associated with some common chronic conditions. How? By changing the ways private health plans think about and respond to obesity.
Novo Nordisk Canada gathered together key industry opinion leaders for insights on progressive ways to address obesity as a chronic disease, both in plan design and wellness programming. Read more about how the industry can open the door to healthier, more productive employees.

In the Canadian equity manager universe, there is no evidence that tracking error risk is proactively managed. This is especially surprising given that tracking error is an important measure of active investment management risk as it provides investors with a tool to estimate the expected variability of their manager’s value added. This paper examines two different techniques a Canadian equity manager can employ to manage tracking error risk.

Capturing the growth potential of the mid-market private equity universe.