Asset Management

Why invest into emerging markets?

White Paper
Emerging Markets

Emerging market assets have always been alluring to investors because of their attractive risk-return characteristics. Nevertheless, investors dedicated only marginal portfolio allocations to this asset class in the past. However, recently, these allocations have been rising. Current estimates on Swiss pension fund allocations to emerging markets range from 5 to 7 % and they continue to grow. Dutch pension funds have already taken a leap forward by allocating as much as 15 % to emerging markets. This indicates that acceptance among investors of emerging markets as an asset class is increasing and also reflects the fact that emerging markets are now treated as a separate category. For example, leading Swiss pension fund indices, such as the Pictet BVG 2015 Index family, now include a separate emerging market bond component of 5% for all client risk profiles. However, our view is that for many investors, an allocation of 5 % is far too low.

Growing strategic allocations to emerging markets come with challenges. This paper sheds light on the forces driving the fundamentals of emerging markets on a strategic level and challenges some of the most common beliefs that investors hold on emerging market equities and bonds. Then, we reveal the key factors to consider when defining your emerging market investment approach.

Multi Asset Boutique
White Paper

Why Long-Term Investing Still Pays Off

Humans enjoy extrapolating past successes into the future – including when it comes to returns on their investments. Accordingly, baby boomers harbor ambitious expectations whereas millennials do not trust investing. Patterns witnessed over 300 years of financial market history explain what matters when it comes to investing in the current climate. The guide to our return estimates reveals the long-term potential of asset classes and our estimation methods.

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Asset Management
Sustainable Investing

Active approach meets ESG challenges head-on

Should investors looking for “sustainable stocks” go active or passive? Some market participants suggest the latter, proclaiming exchange-traded funds (ETFs) to be the future drivers of growth in sustainability investing. The problem with these passive, index-based vehicles is that they too often fail to distinguish between companies with the best ESG credentials and those that are just scraping by. Therefore, we believe an active approach is warranted.

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