What ESG theme is most important to clients? What size allocation do adopters make to ESG investing in their managed portfolios? Do adopters prefer active or passive ESG investing strategies? How important is ESG investing to the value proposition advisors and wealth managers offer their clients? Get the answers to these questions and more in the 2021 Research Affiliates ESG Survey Report of financial advisors and wealth managers.
We compare the current value of bonds versus stocks within the context of the equity risk premium. We couple this analysis with an evaluation of possible Fed policy direction. Our conclusion is that risk assets, such as US equities and corporate bonds, are poised to benefit as are gold and other commodities due to tumbling real yields and dollar weakening.
In late 2020, UK stocks, and notably UK value, reached very cheap levels relative to value stocks in other developed economies. The added tailwinds from a final Brexit deal and rapid rates of UK COVID vaccination should lead to a vigorous bounce back in UK stocks, in particular UK value stocks, making this sector of the market a “trade of the decade.”
Learn more about the latest findings from the Research Affiliates' research team and how we are incorporating these insights into our strategies.
By buying or overweighting characteristics-based factor exposure and selling or underweighting beta-based factor exposure, investors can position their portfolios to reap the rewards of factor investing while bearing less risk.
Recognizing that the management of taxable portfolios has advanced in the past 25 years, the authors of the present paper update a seminal 1993 study in which Robert H. Jeffrey and Robert D. Arnott introduced the concept of a normally negative “tax alpha” and formulated tactics to reduce its detrimental impact on investment results.
Not every factor profits investors when implemented through a passive strategy. Size and quality show weak robustness, and liquidity-demanding factors, such as illiquidity and momentum, are associated with high trading costs.