In new statements on the extent of greenwashing in the fund management industry, Desiree Fixler highlights some uncomfortable truths about sustainable investing.
Despite oil dropping to its lowest level for six months in the middle of last week, Konyn believes this is far from the end of its super-cycle. At the same time a supply and demand imbalance is likely to continue, and RCM is not looking to invest in companies that are facilitating the rectification of the supply gap.
ôIn the past the big problem has been oil companies have invested massively in infrastructure,ö he says. ôBut in this cycle companies have tended to under-invest or invest at a more measured pace than before as demand has picked up.
ôCompanies are not able to invest enough to reduce the demand for oil and the market is not likely to become more balanced for at least 18 months so oil company cash flow is likely to remain very strong.ö As a result RCM is maintaining a high level of commodity exposure, with its balanced fund showing a 7.8% tilt compared to 7.2% six months ago in energy stocks.
In other asset classes, Konyn believes, asset managers should be prepared for a decline in earnings and, he adds, this is likely to mean investors are likely to have to temper their return expectations in the next year.
ôThe difference between good fund managers and the not so good are likely to become more apparent and this means investment houses are going to have more conviction in their key holdings,ö he explains. ôInvestment returns are likely to fall as a result and we expect around 8% or 9% from our balanced funds in 2007, compared to 12.7% in the year to date, which is not a bad result.ö
A shallower pool of returns, according to Konyn, will lead to greater emphasis on stock picking and proprietary stock research.
CDPQ's Ivanhoe Cambridge hires ex-GIC real estate expert; NZ Super adds board member; Future Fund appoints chief people officer; BlackRock real estate CIO joins Singapore's Capitaland; AMP Capital hires MD for energy; Northern Trust AM names new CIO; T Rowe Price hires AU and NZ institutional head; Nuveen hires Southeast Asia institutional head; Citi names sustainability head in Singapore; and more
Investors are increasingly turning to private companies and private debt in their hunt for ESG alpha, but the age-old problem of transparency and due diligence remains
Already on the rise pre-Covid, investments into data centre assets in Asia have accelerated in the past year, fuelled by interest from investors across the spectrum.
Actively managed funds were also not found to have better odds of higher returns than more passive funds.