The events of 2018 generated concern in investment performance and newspaper headlines alike; the worst year in equity markets since the GFC was intensified by constant reminders of geopolitical unease. In our latest Strategy Insights letter, we turn to two legends of passive investing to remind us that maintaining discipline in the face of hardship pays handsomely in the long term.
Diligently adhering to these six principles ensures that we stick to our competitive edge: constructing high-quality portfolios that balance short-term risk and long-term risk by taking a bottom-up approach to asset allocation and seeking to partner with extraordinary investment managers.
We believe the formal incorporation of ESG considerations into our investment activities sharpens our ability to identify potential risks and opportunities leading to attractive long-term risk-adjusted returns. As such, we feel it is imperative to partner with best-in-class managers whose objectives and culture are aligned with our own.
The credit crunch under way now for five years in Europe may have already created permanent and irreversible damage to those economies. We ask the question: Is Europe on its way to a lost decade?
The Chinese growth “miracle” is enabled by a series of policies that purposefully distort input markets in order to facilitate industrial development. In order to transition to a consumer-led economy, China needs to dismantle the distortions it put into place that led to the Chinese growth boom. That is a tall order.
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