Research

How to balance local currency versus hard currency in Emerging Market Debt

In this Altis Flash Report we will compare the key characteristics of hard and local currency Emerging Market Debt and will also reflect on 2016 performance. Strategic and dynamic weighting considerations between the two categories are covered as well.

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Moral hazard in the high yield market: Risk Retention and implications for Leveraged Loans

Regulation in response to the Great Financial Crises has had important implications for the functioning of the broader High Yield market. In this Altis Flash Report we review 'Risk Retention' regulation which has important implications for the market for Leveraged Loans.

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Carbon Investing: a burning issue?

This Altiscope is the first one in a series on the broader concepts of Sustainable Investing: Carbon Investing, ESG Best-In-Class and Impact Investing. In this edition, we will provide a landscape study and zoom into the concept of Carbon Investing whereby we will also discuss carbon data quality issues and market solutions.

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Three decades of investing in Emerging Markets Equities – Distinct, Diverse and Dynamic

Investments in emerging markets (equity and fixed income) have found their way into most institutional and private investment portfolios over the last couple of decades. Once loved by investors, emerging markets thrived well for many years.

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Investing in US Dollar fixed income assets in EUR-based client portfolios

Being globally invested can improve the risk/return profile of a portfolio. Within credit investments, especially for relatively lower yielding asset classes like Investment Grade, leaving related currency exposures open can overwhelm the volatility of returns.

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Investing in Corporate Bonds: alpha drivers and portfolio positioning

The trend of lower yields has reduced the absolute level of compensation provided for credit risk. However, investment grade corporate bonds exhibit low absolute credit risk and the credit risk is substantially lower than in other markets, like high yield. Also they are characterized by a fair amount of liquidity.

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MSCI Separates Real Estate from Financials Sector

In November 2014, MSCI and S&P Dow Jones Indices announced their coordinated decision to reclassify and elevate Real Estate Investment Trusts (REITs) out of financials into a new 11 th real estate sector in the Global Industry Classification Standard (GICS).

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Infrastructure: the backbone of the economy

Infrastructure is the engine that drives the global economy, and like any engine, it requires regular maintenance and repairs. Globalization, population growth, aging societies, climate change and urbanization are all factors that put a strain on infrastructural facilities.

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An innovative approach to equity investing within developed markets

In the AltiScope edition of October 2015 1 , we have introduced the ‘Core-Satellite 2.0’ approach. In this edition we will further elaborate on the possible implementation and risk budgetting considerations within this portfolio framework.

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Emerging Market Debt: Are “Good Days” just around the corner?

Altis recently concluded a review of Emerging Market Debt (EMD) managers. In this Altisscope, we use the insights gathered from research and discussions with EMD managers across the globe.

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The impact of Fallen Angels on the High Yield market at the start of 2016

Over the first quarter, there was an exodus – a massive one, by historical standards – from the investment grade universe, as the rating agencies took a fairly big knife to the ratings of numerous, previously rated investment grade companies.

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Green Bonds: a look at the unique aspects of an innovative asset class

Green Bonds are an innovative development in the bond market. The issuer of the green bond links the use of proceeds to projects that promote environmental sustainability.

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The Role of Loans within a High Yield Portfolio

The investment category ‘High Yield’, as we interpret it, consists of debt issued by sub-investment grade corporates and can be divided between “High Yield Bonds” and “Senior Secured Loans”.

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Harvesting by investing in farmland

More and more investors are considering alternative investments for their traditional investment portfolios. The current low interest rates and uncertain macroeconomic outlook, as well as the undefined inflation expectations, make real assets especially attractive.

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High Yield Bonds

There has been significant media attention on the high yield bond market over the last few days, with reports focusing on the negative returns but also on the gating of the ‘Third Avenue Focused Credit Fund’ (FCF) which will proceed to liquidate its assets over the next months

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Separating Factor Premiums and Selection. Alpha: a different view on Core-Satellite!

Within equities, two investment solutions have come to the fore over the last decade, being factor investing and alternative weighting methods. A closer look at these solutions show that research and product innovation are gaining momentum. Although the quality of these solutions varies widely, we can indeed identify a number of interesting investment solutions, which only recently became available to investors.

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Promises to the young, old, creditors and investors

One of the most passionately debated topics at economic and investment round-table discussions is the impact on economic growth of the “internet-of-things” and other innovations. After a century of life-changing innovations that spurred productivity and growth, is human progress coming to a halt, or are we going to see a new age of inventions and miracles that will upgrade the standard of living for generations to come?

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What is going on in China?

The Chinese equity market sold off sharply in the last few weeks and many local stocks have been suspended from trading. In this flash report we discuss the volatile market period of the last 12 months as well as the major drivers behind it. We also briefly discuss how our managers are currently positioned and how they navigate through this storm.

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Factor Investing and Smart Beta

The interest in factor investing has increased significantly in the past years. The term ‘factor investing’ is being used widely in the market and comprises both implicit and explicit approaches.

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A Current Perspective on Active and Passive Investing in Equities

In the ever continuing discussion about active versus passive investing, the odds seem to be in favor of passive investing at the moment. Performance of active funds was relatively weak in 2014. In addition, the offering of index funds and ETF’s continues to grow, offering more flexibility and more choice.

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Return Fixed Income peer groups: looking back at 2014, and expectations for 2015

In this ALTIScope we take a look at the performance of active management within Emerging Market Debt and within the Credit space. 2014 proved to be a tough year, in particular for managers investing in Emerging Market Debt Hard Currency and in High Yield.

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Dutch houses: foundation of the portfolio?

Looking at the Dutch real estate market, we believe the longer-term fundamentals for the housing sector are attractive and superior relative to office buildings and retail and logistics real estate.

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The Equity Market Cycles

In this edition we will take a longer-term perspective and review the market cycles that we have experienced over the last decade. We will zoom into European equities, describe the main drivers of each cycle and clarify how active managers have performed in each cycle.

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A closer look at the search for yield

When screening the investment universe in the search for yield, high yield bonds are luring the interest of institutional investors. Yet the prospect of potentially rising interest rates raises doubts among both investors in and managers of these non-investment grade bonds.

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What makes a private equity manager successful?

As an asset class, private equity (investing in unlisted companies) has developed significantly since the 80s. Even though private equity allows for investing in different types of companies, investing in mature companies (buyouts) is the largest and most important segment of the asset class.

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Is it time for cyclical stocks?

Investors in stocks can look back on a good trading year. The MSCI World Index, for example, returned more than 16% over the past twelve months. Yet this rally does not mean that all equity managers can look back on a good year for their investments

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Behind the dynamics of active management

In this first ALTIScope we look back on the year 2012 and we look forward as well, from the perspective of manager selection. This time we focus on the fixed income markets. In subsequent editions we will also discuss equities and ‘alternatives’.

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