An academic paper published last month by Tim Jenkinson, Howard Jones and Jose Vicente Martinez, entitled "Picking winners? Investment consultants' recommendations of fund managers" has received much attention in the pension industry - and rightfully so.
There are three things the financial press loves to hate: big banks, hedge funds and China. Any time one of these hits a rough patch, journalists seem to have difficultly containing their schadenfreude.
Through most of the past decade there seemed to be a consensus amongst investors that commodities were going through a "supercycle" driven by growth in demand from emerging market consumers and increasingly constrained sources of supply.
With the fiduciary market on the rise and more and more clients turning to this type of management, we are increasingly being asked by sponsors and trustees to review some of the fiduciary offerings being touted by advisers.
On the 22nd of May, Ben Bernanke uttered a few words that sent markets worldwide roiling. Since then 10-year yields on both Treasuries and Gilts have risen over 40 bps, and nearly every sector of the bond market has taken a hit.
As bonds continue their march upwards, we cannot help but think of the now infamous words spoken by Chuck Prince, then CEO of Citibank, in July 2007: "As long as the music is playing, you've got to get up and dance...We're still dancing."
Bond yields are at all-time lows. This is not news - we have lived through a 30 year bull run in Gilts (10 year Gilt yields have fallen from 16% to 2% since the early 1980s).
With the monetary authorities of major developed market economies implementing unprecedented levels of stimulus in lock-step, many investors are worried about inflation over the long-term.
Big news from one of the large investment consultancies – UK pension funds are falling behind their long term targets!