1 minute with the CIO

Macro risk drivers
We believe that buoyant market conditions are ending and that we are entering a new phase punctuated by low returns and high volatility. Total debt has continued to grow as, while the private sector deleveraged, government debts have increased. And we believe Central Banks are running out of weapons.

Cast a wider net
We have seen many times the hubris of investors that believe they will be able to exit "just in time" before a bubble bursts.
In this new environment we believe a major rethinking of portfolio construction is required, with much wider diversification than in the past since no one asset will be dominant.

Alpha and beta in play
There are few uncorrelated markets and those that are can be unstable in periods of market volatility. Thus, active investors should follow their markets closely. Selecting the right markets is important: the alpha, or outperformance, should not be correlated with the underlying beta market move.

Watch the win-loss ratio
How much of return is determined by manager skill, and what do we mean by manager skill? It is one thing to pick winning assets, but knowing how to manage those positions is also valuable.
Behavioural analysis, and the ability of a manager to maximize their win/loss ratiocan help drive sustainable alpha.