A minority Conservative government in the UK would be the best option after Britons go to the polls next month, says Léon Cornelissen. Read more ...
The Volvo Ocean Race competitors have arrived at the fifth stopover port in Itajai after sailing from Auckland. Our new e-magazine focuses on the varied investment opportunities in Latin America. Read more ...
In 2010 a new financial term was born. The Brazilian Minister of Finance accused the US of fomenting a 'currency war'. The US started purchasing government bonds on a grand scale to stimulate the economy and this led directly to lower interest rates. This in turn caused capital to seek higher returns elsewhere and a subsequent weakening of the dollar.
In 2014 Robeco went live with its Factor Investing Solutions: tailored solutions based on multiple factors. “Robeco is not the founder of factor investing, but we are among the first to translate the theory into practical investment solutions,” says Robeco’s Head of Factor Investing Research Joop Huij with pride.
Navigating difficult waters. Taking risks – but only if they are justified. There are many parallels between investing and sailing. In this edition of the Volvo Ocean Race Update on RTL-Z, Arnout van Rijn, head of Robeco's Asia Pacific team in Hong Kong reveals how you can be successful in China.
The growing popularity of passive investing using index trackers has enabled many investors to access emerging markets, of which Brazil is a prominent member, at relatively low cost. However, trackers lack the positive exposure to factors which can identify the most attractive stocks.
For about a decade many investors believed investing in the four BRIC countries – a concept launched by Goldman Sachs Asset Management – was the easiest way to profit from growth in emerging markets. But times have changed. Simplification is not always the best approach.
In its outlook for the second quarter of this year, Robeco’s Global Fixed Income Macro Team sees opportunities in US, UK and especially Australian govvies, the long end of the European periphery and subordinated financials. Still, in all market segments it’s important to be selective.
S&P Dow Jones launched the S&P ESG Pan-Europe Developed Sovereign Bond Index on April 8. This first ESG-weighted bond index from S&P Dow Jones is based on the extensive ESG database of RobecoSAM, Robeco’s Zurich-based Sustainability Investing subsidiary.
The Brazilian economy is in dire straits. However, if the government moves forward with fiscal austerity, the economic and political crisis can be overcome, thinks portfolio manager Daniela da Costa-Bulthuis. Crumbling political support could certainly still throw a spanner in the works though.
Royal Dutch Shell is forking out EUR 64.3 billion for British BG in the biggest takeover in the industry in the last ten years, and is paying a 50% premium on its current share price. While this takeover is the biggest M&A deal this year and likely to remain so, it will certainly not be the last takeover in the energy sector.
We’re now a quarter of the way through the year, and it’s been a fairly bumpy ride so far. Geopolitical risk reemerged with the threat of a Greek exit from the Eurozone, while the US Federal Reserve more clearly outlined the criteria that would be used to trigger any future rate hike.
The Volvo Ocean Race competitors have arrived at the fifth stopover port in Brazil after three weeks’ sailing from New Zealand. Our new e-magazine focuses on Brazil, the ‘BRICs’ and investing in emerging markets. Read how both Robeco and Team Brunel manage risk on land and sea; see why there is no ‘Plan B’ for rescuing the Brazilian economy; and how three brave Team Brunel sailors finally achieved their dream of ‘Rounding the Horn’.
Recently Rikkert Scholten, Portfolio Manager Fixed Income, visited Australia to meet with, amongst other people, the Minister of Finance and central bank officials. The take-away from these meetings reaffirms the case for our investments in Australian government bonds.
There are finally some rays of light for the European economy. Even before the ECB started its Quantitative Easing (QE) program, consumer data surprised on the upside helped by a cautious recovery in labor markets and lower oil prices.
The renowned British physicist, Stephen Hawking, predicts that the advent of artificial intelligence will mean the end of mankind. Elon Musk, founder of PayPal and Tesla, thinks that robots could be potentially more dangerous than nuclear weapons. Dutch minister Lodewijk Asscher is somewhat less gloomy but feels that robots do pose a threat to employment.
As the demographic dividend is used up in many Western countries and dependency ratios are increasing, the current set-up of many pension schemes is unsustainable. We see four trends that are likely to influence global pension systems. Fully integrated insurance companies, ICT providers and financial planners are most likely to benefit.
On March 20, 2015 a solar eclipse will pass over the Atlantic Ocean between 08:40 and 12:50 CET and will be visible across Europe. The reduction in solar radiation will directly affect the output of solar (photovoltaics) electricity and for the first time this is expected to have a relevant impact on the secure operation of the European power system.
As a sustainable investor, Robeco is convinced that engaging with companies on the most material sustainability issues enhances their competitiveness and profitability. In addition, it generates measurable benefits for investors and society as a whole. We recently closed a successful engagement with mining company Freeport-McMoRan on its mining waste management in Indonesia.
Korea is a modern and wealthy country, but equities there trade at a significant discount. The reason for this – low dividend payments – is not going to go away any time soon. The idea of shareholder value has not yet found any traction in the minds of Korea's decision-makers.
Investing is a risky business. Before you decide to take on risk, you need to be convinced that it will pay off. Creative investors are not afraid to investigate exotic ideas in the search for a better understanding of how to limit risk. But would you make an investment recommendation based on the position of the planets? Or on the basis of a cyclically weighted average of the number of sunspots? Nor do I think that many of you would dare to bother a respected client with theories surrounding recent data on the orbits of Mars and Saturn.
Investing in a purely passive manner is increasingly popular. Although we do not deny that passive investing has its merits, we argue that enhanced indexing may be an even better alternative. It is supported by theory and evidence, allows for better ESG integration, and contributes to a liquid and efficient market.
The Smart Factory’, ‘Industrial Internet’, ‘Factory 4.0’: these concepts are all related to one of the most powerful secular trends in the global industrials sector: Industrial Automation. We have explored this topic in-depth, assessing how our funds can benefit. This journey led us to fascinating companies across the globe, ranging from highly secretive Japanese robot manufacturers to leading innovators in the US and Europe.
Commodity paradise Australia is suffering from lower prices for its natural resources. The economy is struggling to keep its head above water, but the country does offer interesting opportunities for fixed income investors right now.
9 March 2009 entered the history books as the day on which equity markets hit rock bottom, a few months after the fall of Lehman Brothers and the deepest point of the financial crisis. On that day, the S&P 500 touched 666 points, rebounding from that moment on. This week – precisely six years later – the index is now 200% higher.
Robeco is committed to sustainable investing. All Robeco Quantitative Equity strategies already integrated ESG factors (Environment, Social and Governance), and since December 2014, we have taken this one step further.
The dairy industry is faced with sustainability challenges such as food safety and greenhouse gas emissions. “Companies that are able to address these challenges can benefit from a fast-growing market with very good prospects,” says Jürgen Siemer, RobecoSAM’s agribusiness analyst.
Economic developments in Australia and New Zealand are not running in tandem. Commodity-price developments play a role, but this is not the only explanation, according to strategist Peter van der Welle.
While many institutional investors may have the ambition to integrate sustainability into their investment processes, they often don’t know where to start, struggling to make more concrete steps. “We can help them by making a step-by-step roadmap to implement sustainability investing and keep in control of their progress”, says Lucas van Berkestijn, Sustainability Investing Client Specialist for RobecoSAM.
Looking back at 2014, one of the more remarkable developments in the financial markets was the comeback of the US dollar. And we have not seen the end of it yet, thinks Peter van der Welle, strategist at Robeco.
In the Genesis video clip ‘The land of confusion’, the world is depicted by Spitting Image dolls of politicians who go about messing up the world in utter confusion. This video clip vividly came to mind when attending several ESG events.
Alea iacta est – that’s what ECB Chairman Mario Draghi must have been thinking when he announced the euro bond-buying program at the ECB’s press conference on 22 January 2015. The very same words uttered by his fellow countryman Julius Caesar in 49BC, when he crossed Italy's Rubicon river.
Last June, British newspaper The Guardian reported that farmed prawn producer Charoen Pokphand Foods (CP Foods) buys fishmeal from some suppliers that own, operate or buy from fishing boats manned by slaves. An investor coalition headed by Robeco subsequently started an engagement with CP Foods.
The drive to including sustainability factors into mainstream investing has become unstoppable – but investors approach it in different ways. Robeco recently held a series of round tables with existing and prospective clients to find out how investment professionals now tackle the subject.
Usually focusing on how to design the best low-volatility strategy, David Blitz, Matthias Hanauer and Pim van Vliet have set out to construct a very bad low-volatility strategy. Comparing good and bad low-volatility strategies they found very different performance characteristics. Clearly, not all low-volatility stocks are created equal. The results highlight the importance of being selective when investing in low-volatility stocks.
Suppose for a moment you are a Japanese investor. You don't believe in equities. Things were going okay some 25 years ago, but over the last ten years, it was basically a case of buying high and selling low. Even smart investors who bought in after the crash in the early nineties and didn't take any further action have gained nothing on balance.
Flexible bond funds have become increasingly popular. Being benchmark unaware, their portfolio allocation can shift quickly over time and across fixed income asset classes – and sometimes beyond. However, these dynamics and the diversity in flexible bond funds make them difficult to evaluate and compare. In our white paper ‘Navigating through flexible bond funds’, we provide a list of focus points that can help.
Markus Reichling is the European General Manager for Environmental Affairs at Panasonic, the Japanese electronics manufacturer. In this article he reveals how one of the world’s largest companies is developing modern business solutions for age-old sustainability problems, particularly in consumer products such as light bulbs.
Some argue that the mere mechanism of rebalancing increases returns, and that this explains the success of factor investment strategies. Although factor strategies do need rebalancing to maintain their exposures, there are several reasons why it is unlikely that this is their source of added value.
Health & wellness considerations are increasingly important in a world where salt, sugar and fat (SS&F) make up the majority of packaged foods. Reducing SS&F is a challenge for food manufacturers because of costs and picky taste buds. Ingredient companies hold the key.
Tightening legislation on toxic chemicals has an important impact on chemical companies. As consumer awareness on the dangers of certain substances grows, companies are evaluating the negative impacts of hazardous chemicals on their image and competitiveness.
Water is a precious resource in short supply. Long-term trends such as population growth, increasing water consumption per person, and pollution are major drivers of water scarcity. This is aggravated by an inadequate water infrastructure.
China’s rapid growth is now being fueled by e-commerce as the country becomes more consumerist, says Chinese Equities portfolio manager Victoria Mio.
Government bonds posted strong returns in 2014 as yields declined in the US, Germany and Japan. The duration model performed well as it captured these moves in the second half of the year and in the first months as well.
The year has only just started but it already seems to have lasted an eternity. The oil price has not rebounded and interest rates have just carried on falling. The equity markets experienced corrections, but bounced back just as quickly. What else does 2015 have in store for us?
Bart van der Grient explains how Robeco ensures good data quality, which is vital for selecting stocks and conducting empirical research. “Our approach makes the stock selection and portfolio construction process more transparent,” he says.
Chinese economic reforms continue, but the authorities are going about it carefully. After all, they don't want to risk missing their growth targets. Oil-price declines and the US growth recovery are providing some welcome wind in China's wings.
Robeco High Yield Bonds recorded a total return of almost 4% gross of fees over 2014, outperforming its underlying benchmark by 150 basis points . Over a three-year period, the fund also recorded a remarkable performance of 9.97%% annualized, against 8.54% for the benchmark. This puts it in top place amongst its peers (source: Morningstar).
The Volvo Ocean Race competitors have arrived at the third stopover port in Sanya, southern China, after a month at sea sailing from Abu Dhabi. Our new e-magazine focuses on opportunities in China and Asia, one of the greatest growth areas in the world. Find out why China has adopted a ‘gently does it’ strategy; how e-commerce is leading growth as a cultural lifestyle; and why we believe some things are more equal than others.
What effect will the divergent policies of the Fed and the ECB have in 2015? Robeco expects that this could have a negative influence on the stock markets, while two major banks have a different opinion.
Capitalism is a complex system and easily misunderstood. But it’s still the best we have available, says economist and bestselling author Ha-Joon Chang. There is the constant necessity to improve it, though.
The Shanghai stock market ended 2014 with an impressive 53% gain for the year, but Victoria Mio, portfolio manager Robeco Chinese Equities, thinks the rally can continue. According to Mio the past year marked ‘the beginning of a multi-year bull market’ in Chinese A-shares.
Former European Commission President Barroso thinks that Europe should bridge its internal differences. Unity seems a long way off – with controversy over budget policy and threat of British and Greek secession from the union. Why is Robeco Chief Economist Léon Cornelissen not too worried about these issues?
Intensified legislation on toxic chemicals impacts chemical manufacturers and retailers. As consumer awareness grows, these companies are evaluating the negative implications of hazardous chemicals for their image and competitiveness. At the same time, they are investigating opportunities to develop less toxic alternatives. We believe investors should be considering these implications in their analysis. The topic provided a nice platform for trying a new engagement tool: a roundtable with chemicals companies.
Low-volatility investing is a great place for investors and researchers. For long-term investors, it can create a simple tilt that offers an attractive alternative to following market capweighted equity indices, generating at least the same return for two-thirds of the risk.
Although most factor research focuses on the equity market, the concept and benefits of factor investing apply equally well to the corporate bond market. A smart way of investing is combining the factors into a multi-factor credit portfolio in order to diversify across factors.
The Fundamental Law of Active Management by Grinold and Kahn is designed to assess the value of active management, as expressed by the information ratio, using only two variables. The first is the portfolio manager ‘skill’ in selecting securities and the second is the number of independent investment opportunities.
The second edition of the first and only book to focus on the volatility effect, "Low-Volatility Investing" by David Blitz, PhD, Head Robeco Quantitative Equity Research and Pim van Vliet, PhD, Senior Portfolio Manager, Robeco Conservative Equities, presents our research on low-volatility investing from a number of different angels important to investors.