Thought Leadership

Impact investing’ involves investing in companies and investment portfolios that have the intention of generating positive social and environmental impacts alongside financial returns. While environmental, social and governance (ESG) analysis has become a necessary tool for investment managers, screening for positive rather than negative impact remains a niche activity.

Smaller companies are too big a portion of the global investment universe to ignore. They offer a return premium for long-term investors. They bring diversification benefits through exposure to different risks. A large universe and fewer analysts combine to provide scope for active managers to outperform the index.

Why should you care about Chinese onshore equities? How do you invest? Is investing in so-called ‘A-shares’ worth the risks?

Which country has the third-largest bond market in the world after the U.S. and Japan? Few people would guess it is China. For many years this U.S.$12 trillion market was largely off-limits to foreign investors, which meant local-currency Chinese bonds were practically ignored by the major bond indices.

We introduce a new indicator of national progress for 135 countries that measures the extent to which they are persistently economically dynamic and making progress on meeting UN Sustainable Development Goals on environmental, social and governance (ESG) issues. We consider the implications for investors and policy makers.

From the perspective of even the most seasoned investment professional, a series of unprecedented events has occured over the last 40 years. Interest rates have been in almost constant decline. A global financial crisis forced both governments and central banks to step in to support financial markets. The fall in bond yields has led investors to shift into evermore exotic alternative assets.

In this report, we navigate one segment of the energy value chain, midstream energy, as an investable asset class.

Emerging markets are major contributors to global growth, and over the past few years emerging markets debt has gained even more traction as an asset class. Uncertainty in the developed world, whether due to political developments or the potential for rising interest rates, has encouraged investors to take a closer look at the many opportunities emerging economies have to offer.

As part of the collection of sub-asset classes loosely referred to as “real assets,” agriculture is a broad category that includes a myriad of sectors, including commodities, agribusiness opportunities, and farmland investments.

A country’s creditworthiness is fundamentally dependent on its competitiveness and ability to sustain economic growth over the long term. To assess this, investors traditionally look at a range of macroeconomic variables, including public debt, inflation, fiscal deficits and current account balances. Along with political and governance factors, these are enablers of economic development and elements of the country’s willingness and ability to repay its debt.

ESG analysis is a fundamental tool for corporate bond investors. We define what it means to do ‘the right thing’, look at how portfolio managers can incorporate ESG analysis in their investment process, and consider how investors can do ‘the right thing’ and make money.

Fairly evaluating the performance of a multi-asset portfolio requires looking beyond simple correlation measures. In this paper, published in the Journal of Portfolio Management, Aberdeen Standard Investments Investment Director, Stuart Peskin, discusses the limitations of correlation and proposes a range of techniques to help us appraise the effectiveness of these strategies.

The Asia Pacific insurance industry is being reshaped by twin forces: low interest rates and modernizing regulation. We surveyed investors responsible for $4 trillion of assets. We identify five themes that are driving a fundamental change in the way investment decisions are made.

Infrastructure is the foundation of the global economy. However, basic resources such as drinking water, electricity, sanitation and transportation are still not accessible for a significant proportion of the world's population. Demand for the necessary investment in infrastructure continues to increase, giving investors the potential for a variety of opportunities.

Given the rapid pace of economic development, investors can get left behind and miss valuable opportunities if they cling to their old prejudices and assumptions. One of the areas that investors should reevaluate is their perceptions of the differences between emerging and developed markets.