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Best read articles of 2016


What did our readers read this year? Quantitative investing remained at the forefront of investor interest in 2016, from questioning whether more factors are needed, to using quant to preserve capital or get more returns in a low-yield environment. Here we present our best-read stories of 2016, including strong interest in taxes, blockchain, and our traditional one-year and five-year lookaheads.

9. T is for Taxes

And for twisting and turning. Aggressive tax policies came under siege after the European Commission imposed a EUR 14 billion fine on Apple. Mark Glazener explains how aggressive tax policies can backfire and put the profitability of companies at risk. Assessing these types of risks forms part of the ESG-related risk analysis we carry out on the companies in our global equity portfolios.

8. It’s time for Plan B

Traditionally the one-year outlook is one of our best read publications and this year is no exception. The dynamic PDF focuses on the rise of populism, and on the fact that it may be time for governments and central banks worldwide to consider Plan B if we are to effectively tackle the challenges we face. Fiscal stimulus, replacing the current overreliance on monetary policy, will be part of that plan.

7. Your future, our future

‘The future of asset management’ is not a gloomy view on ETFs and robo-advisors taking over our industry. But nor does it shy away from looking at innovations that might disrupt how we do business. We think the impact on the asset management industry can be summarized in higher costs, lower fees and the battle to win and retain customers. The first two will lead to consolidation, because scale will be an essential success factor in this new environment.

6. Everything you should know about low-volatility investing

Have we mentioned the word ‘evergreen’ yet? This article was written in 2010 but has somehow popped up again this year as one of the best read articles. The remarkable thing is that the ‘ten things you should know about minimum volatility investing’ are just as valid as they were six years ago. And, of course, the anomaly itself, which was first documented nearly 50 years ago, is still alive and kicking too.

5. Fixed income investors struggle in a low-yield environment

Is there a way to generate attractive bond returns in a low-yield environment? Actively managing a portfolio’s sensitivity to interest rate movements is crucial, as performance is predominantly driven by changes in government bond yields. Robeco developed a quantitative model in the 1990s to forecast yield changes, which has proven to have very good predictive power.

4. Preparing for the future: blockchain

Investors should always be aware of the potential risks and opportunities offered by new innovations and the impact these will have on the world we live in. Distributed ledger technology, such as blockchain, has been gaining a lot of attention as the infrastructure that forms the basis of Bitcoin. Thanks to the open architecture of blockchain’s programming code, many cases for alternative uses are rapidly being developed. How will these impact the financial industry?

3. Capital preservation is everything

‘The formula: Maximum drawdown’ was written in 2015 and it made it to the ‘best read articles of 2015’ list. One year later, it is as relevant as ever and tops our list again. This goes to show how important investors feel it is to limit losses. And rightly so. At Robeco, we use maximum drawdown as one of the key statistics for evaluating our quantitative investment strategies.

2. Have Fama and French gone too far?

Nobel laureate Eugene Fama and fellow researcher Kenneth French added two factors to their three-factor model. But more doesn’t always mean better. The three Robeco researchers who take a closer look at this new five-factor model are not convinced. “This approach can even be considered as a form of tautology, because they use five factors to explain the returns of those same five factors.”

1. Expected Returns 2017-2021: It’s always darkest just before dawn

Our annual five-year outlook was awarded the ‘Investment paper of the year 2016’ by Savvy Investor. But even before it won this prize, the paper went viral. In our Expected Returns, Robeco’s economists look at the prospects for the major asset classes in the coming five years and also address some hot topics, such as debt, climate changes and the possibility of an emerging market revival.

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