Standard Life Investments

Investment Insight

Thought-provoking analysis of key investment issues

Our series of Investment Insight papers deliver thought-provoking analysis of key investment themes. Through focused and unique insights into topical issues, we seek to provide investors with a deeper understanding of the current challenges and opportunities within global investment markets.

How insurers are navigating persistent market volatility and Solvency II

How insurers are navigating persistent market volatility and Solvency II

Bruce Porteous - Investment Director, Insurance Solutions

The arrival of the Solvency II regulatory regime in Europe on 1 January 2016 triggered a paradigm shift in asset allocations among Europe’s insurance firms. This trend is gaining traction as the industry grapples with an uncertain market, while navigating changing financial regulations in the UK and Continental Europe.

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From UK Mutual Life Insurer to Global Investment Company – Standard Life’s transformation

From UK Mutual Life Insurer to Global Investment Company – Standard Life’s transformation

Bruce Porteous - Investment Director, Insurance Solutions

Over the past 20 or so years, Standard Life has transformed itself from a traditional UK-focused mutual life insurer, owned by its members, to a successful, publicly listed global investment company. At Standard Life Investments, we increasingly encounter real interest from existing and prospective insurance clients around the globe as to how we achieved this transformation. In this paper, we document that journey.

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Populism and the Threat to Globalisation

Populism and the Threat to Globalisation

Jeremy Lawson - Chief Economist

We live in an era of globalisation. And an era of increased income inequality. Are the two linked? And are they the driver behind the rise of populist parties in Europe, the election of President Trump, Brexit? In this paper we explore these issues alongside the social and cultural changes that have happened in tandem. We consider the implications for the future of globalisation and for markets.

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The Investment Challenges of Decumulation, Part 2

The Investment Challenges of Decumulation, Part 2

Following on from our paper ‘The Investment Challenges of a Decumulation World’, this second paper explores further the investment aspects of the decumulation challenge. In particular, it seeks to illustrate:

  • the substantial added value of a multi-asset growth approach to savings in retirement compared with passive equity, even after fees and
  • whether there is a single ‘drawdown’ level that is appropriate for all.

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The Investment Challenges of a Decumulation World

The Investment Challenges of a Decumulation World

The 2014 UK pension reforms presented UK pension savers with significantly greater freedom than previously. The reforms have major implications for DC scheme investment strategies — in particular for the lifestyle strategies adopted, and for individuals’ investment choices regarding the post retirement period. In this paper, we examine some of these challenges. To do this, we model different investment strategies using historical financial and economic data, to determine the impact on member outcomes and the certainty of achieving these.

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Embracing Alpha in a Low Return World

Embracing Alpha in a Low Return World

Jonathan Price - Global Head of Product & Investment Specialist

With future investment returns likely to be lower than previously enjoyed, what can investors do to increase returns. This paper suggests if market beta contributes less to overall returns than before, alpha will become an ever more important return component. We discuss how alpha can be captured across equities, bonds and private markets.

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Impact Investing

Impact Investing

Amanda Young - Head of Responsible Investment

Impact investing – once a niche corner of the market – has entered the mainstream. This has been driven by increasing awareness among investors of the important role they can play in order to help address the world’s many environmental and social challenges. Impact investing allows them to meet this desire – while still seeking a financial return. This paper looks at the various types of impact investing, how it is measured and what lies ahead for this compelling proposition.

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 Time to rewrite the UK’s fiscal rulebook

Time to rewrite the UK’s fiscal rulebook

James McCann - UK/European Economist

Stephanie Kelly - Global Strategy Analyst

The first in a series of Public Policy Perspectives, a new research publication that aims to broaden the debate on policy issues across a range of economies and make neutral, evidence-based recommendations.

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The Investment Landscape

The Investment Landscape

Guy Stern - Head of Multi-Asset & Macro Investing

The investment landscape has changed dramatically over the last 20 years. It has certainly become more complex and volatile. As a result , investor needs have evolved, evidenced particularly by the increase in outcome-orientated approaches. This paper explores why success in decoding client, market and portfolio signals is crucial to ensuring asset managers create value for their clients.

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Absolute Return Bond Strategies

Absolute Return Bond Strategies

Alex Gitnik - Investment Director

In this paper, we examine the case for absolute return fixed income investing and the key attributes of these investment solutions.

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Forward-Looking Scenario Analysis

Forward-Looking Scenario Analysis

Malcolm Jones - Investment Director, Absolute return and multi-asset investing

Historical stress testing is now an established approach to tail-risk management. However, there is less consensus on how best to undertake forward-looking scenario analysis. This paper examines how we might incorporate expert opinions into projections of portfolio outcomes. We also illustrate that using a diversified multi-asset approach can help mitigate losses in such extreme market scenarios.

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Evaluating Multi-Asset Strategies

Evaluating Multi-Asset Strategies

Stuart Peskin - Investment Director, Multi-Asset Strategies

To fairly evaluate the performance of a multi-asset portfolio requires looking beyond simple correlation measures. In this paper, we discuss the limitations of correlation and propose a range of techniques to help us appraise the effectiveness of a multi-asset strategy.

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UK Pension Reform - One Year On

UK Pension Reform - One Year On

Malcolm Jones - Investment Director, Absolute return and multi-asset investing

The 2014 UK pension reforms have implications for pension savers and providers. In this article, we assess some of the developments that have occurred throughout the year and compare DC savers’ actions with those expected when the changes were announced. We also look at what DC plan providers might do to ensure individual member needs can be accommodated.

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Food Security in China

Food Security in China

Amanda Young - Head of Responsible Investment

China is the world’s most populous country. As such, issues around food production are of paramount importance. This extends to the environmental and social risks associated with the food industry. These include water scarcity, pollution and food safety standards. Rebecca Maclean, Responsible Investment Analyst, recently visited China, meeting with companies, government officials, specialists and farmers to discuss key issues surrounding the sector. This paper highlights her intriguing findings and their implications for investors.

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Managing a Matching Adjustment Portfolio

Managing a Matching Adjustment Portfolio

The Solvency II Directive codifies and harmonises EU insurance regulation. The directive, in force since 1 January 2016, relates primarily to the amount of capital insurers within the EU must hold in order to reduce insolvency risk. The purpose of this paper will be to examine, from an investment manager's perspective, how EU insurers can use Solvency II's Matching Adjustment (MA) provisions. The MA provides insurers with a capital efficient mechanism for holding eligible long-term assets to match eligible life or annuity insurance obligations.

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The Rise of the Millennials

The Rise of the Millennials

Amanda Young - Head of Responsible Investment

The financial industry and the products it supplies have always evolved to meet market challenges and opportunities. Today is no different. One of the key factors that will drive the industry over the coming years is the rise in prominence of the so-called Millennials (also known as Generation Y). This is the generation born between the early 1980s and 2000. The expectations and values of this tech-savvy group differ from those that have gone before them, most notably when it comes to social, economic and environmental issues.

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Unconstrained Investing - The Freedom to Perform

Unconstrained Investing - The Freedom to Perform

Mikhail Zverev - Head of Global Equities

What exactly is 'unconstrained investing'? More importantly, why do investors increasingly need to consider this key investment strategy as a complement to their equity allocation? This paper explains the significant return, risk and diversification benefits that unconstrained strategies can bring to portfolios.

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The Environment – Considerations for companies and investors

The Environment – Considerations for companies and investors

Amanda Young - Head of Responsible Investment

This paper outlines how environmental risks and opportunities can influence company valuations, the sectors most exposed and our approach to integrating these considerations into the investment process.

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Anti-Bribery and Corruption

Anti-Bribery and Corruption

Andrew Mason - Responsible Investment Analyst

The clandestine practices of bribery and corruption are often seen as ‘how business is done’ in certain sectors and regions. However, these views are starting to shift, as governments, companies, investors and civil society demand that these practices be eradicated. In this paper, we examine the risks and challenges facing investors in this complex area and outline our approach to ensuring better client outcomes.

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Stranded Assets – Challenging the status quo

Stranded Assets – Challenging the status quo

Rebecca Maclean - Responsible Investment Analyst

Fossil fuels have been integral to global economic development. Recent research questions whether oil, gas and coal assets will be extracted and burnt indefinitely. In light of climate regulation, we consider environmental, social, political and economic factors that are changing the outlook for fossil fuels and the implications for long-term investors.

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