Staying active: how to regain trust in active management
We asked 500 institutional investors their views on active management. The results offer a roadmap for active managers to help clients navigate challenging markets - and rebuild trust in active management.
Recent ECB comments suggest that the horizon for a rate hike may be moving further away, based on the central bank’s uncertain growth outlook and concerns over weak inflation. The ECB is also keen to preserve banks’ ability to lend to the euro-zone economy.
The world’s second-most populous country is about to start the world’s biggest exercise in democracy – and reform is on the agenda. Regardless of the short-term noise from these elections, India’s economy looks strong, particularly if the country can take advantage of opportunities arising from US-China trade tensions.
With rising population and changing lifestyles, drinking water supplies are under increasing pressure. More investment in an increasingly outdated water infrastructure is needed to make more efficient and effective use of this valuable resource.
A relatively new metric called the financial cycle can tell investors more about an economy’s medium-term strength than the business cycle. The financial cycle can illuminate risks worth taking or avoiding, helping investors be more selective and active at a time when passively accepting risk may be detrimental.
Disruptive forces and technologies are delivering efficiency, transparency and value by reinventing established models. Asset management is no exception, and the industry’s future success will be shaped by how it embraces and applies disruptive thinking – to place the client at the centre of the business.
While seeking to enhance investment outcomes through technology, we believe human insight and connection are equally essential to successful asset management.
The goal: to find the optimal solution for your needs – and work closely with you to evolve your strategy as those needs change. That way, we live and breathe active asset management.
Investment Themes & Strategy
How can you invest at the end of the cycle?
Not all the world is in the same point in the business cycle, but some countries are certainly later-stage than others. Investors should assess how their holdings might perform in a downturn and look to actively select high-quality securities. A metric called the “financial cycle” can also provide a helpful way to measure an economy’s fundamental health.
All US recessions since 1970 have been predicated by a yield-curve inversion – but despite slowing growth, we don’t expect a recession in the next 12 months. Plus, years of ultra-low rates could make this inversion less significant than others. Investors can still find opportunities to earn income and potential return.
However investors view the problem of climate change – perhaps as a threat to carbon-intensive industries or as an opportunity to contribute to the greater good – ignoring its effects on portfolios increasingly seems like a short-sighted option. Fortunately, there are many ways investors can incorporate this urgent issue into their strategies.
Allianz Global Investors Responsible Investing Report
The report outlines our ESG activities and research, our engagement with investee companies through stewardship, the integration of ESG across our investment strategies and our innovative approach to meeting clients’ evolving extra-financial demands.
Allianz Global Investors is a leading active asset manager with over 730 investment professionals* in 24 offices worldwide and managing more than EUR 505 billion in assets for individuals, families and institutions.
Active is the most important word in our vocabulary. Active is how we create and share value with clients. We believe in solving, not selling, and in adding value beyond pure economic gain. We invest for the long term, employing our innovative investment expertise and global resources. Our goal is to ensure a superior experience for our clients, wherever they are based and whatever their investment needs.