Before you get stuck in
Laura BampfyldeDirector, WealthFind me on LinkedIn
Welcome to our first edition of Investment Edge for 2023.
As usual, our plan is to bring you thought-provoking comment and insights you can enjoy over a coffee break. In this edition our thoughts come from four experts in their respective fields.
Kicking off (not in the trouble-making sense) is our CIO Pete Drewienkiewicz. We asked Pete for his thoughts on stock/bond correlations given 2022’s ‘misbehaviour’ between the two asset classes. Pete shares some interesting insights, not least a fascinating graph that shows the relationship between correlations and high(ish) inflation.
Unsurprisingly, we’ve been having more conversations with firms about many aspects and implications of Consumer Duty. In particular, how ‘The Duty’ creates an expectation that client communications are understandable and actionable. So, we asked Robin Harries, our good friend from Quietroom (consumer communication experts who specialise in ‘using words people understand’) for his thoughts. Robin argues that many of us are ‘cursed with knowledge’, making it harder to distill complex topics into simple language and that it’s worth investing time to build a communications bank. Two phrases ring true here: Einstien’s ‘if you can’t explain it simply, you don’t understand it well enough’ and Abraham Lincoln’s ‘Give me six hours to chop down a tree and I will spend the first four sharpening the axe’… understanding perhaps isn’t enough under the new rules, preparation will be key.
Speaking of experts, I know none better on the subject than our Head of Stewardship and Sustainable Investment, Paul Lee. We spotted a trend of organisations seemingly rowing back from Net-Zero commitments and wondered what has been going on? Paul discusses whether this is to do with independent thinking, political influence or fiduciary duty to investors. Given it seems quite prevalent in passive investing, Paul argues that index managers need to become even more active in their stewardship approach.
And, speaking of an active approach, our Head of Manager Research, Nick Samuels explains a change in the way we manage our research agenda. Post-LDI theatrics, nature-based solutions and alternative sources of return are just some of the items on his team’s agenda for the coming year.
Enjoy the read and, as ever, we would love to hear your views and questions.