JANA Spark is an online portal designed to provide JANA’s clients with easy access to a showcase of our insights and thought leadership as well as highlighting interesting industry content.

JANA Insights

Green Bonds – The what and the how

November 2018
Els Termaat, Consultant

JANA conducted a survey of global fixed interest managers focusing on their views on Green Bonds, the Green Bond market and if and how they use Green Bonds within their bond strategies.

In this article
  • What are green bonds and how do they work?
  • What are the benefits and challenges for investors?
  • What is the outlook from here?
Read more 15 min read

Key takeaways from the 2018 PRI Conference, San Francisco

David Scollon, Senior Consultant and member of the Responsible Investment team attended the 2018 PRI Conference in San Francisco, which coincided with the Global Climate Action Summit, attracting some of the world’s largest asset owners. Watch David’s summary of the outcomes from this year’s Conference.

The Australian Energy Regulator (AER) has announced proposed changes to gas and electric transmission & distribution utilities’ regulated returns that are expected to have a negative impact on a number of Australian assets held within institutional portfolios. In this post we explore the proposed changes and potential impacts on electric transmission and distribution utilities based on our discussions with multiple infrastructure managers.

In this article
  • Background to the Australian Energy Regulator’s review
  • The impact of the proposed changes to the Weighted Average Cost of Capital (WACC) applied to these assets
  • An update on the regulatory tax review and its potential value impact
  • JANA comment and outlook
Read more 10 min read

JANA Insights

November 2018 Macroeconomic Update

November 2018
Jeremy Wilmot, Principal Consultant

JANA holds fortnightly all-staff research meetings on Monday mornings, and once a month a member of our Capital Markets Group provides the business with a snapshot of JANA’s major economic developments from around the globe.

In this article
    • US – Solid growth outlook remains
    • UK – Brexit uncertainty weighing
    • Europe – Growth moderating
    • Japan – Modest growth outlook expected
    • Australia – Moderate growth outlook remains
    • New Zealand – Moderate growth outlook remains
Read more 15 min read

Quarterly Asset Allocation Review – October 2018

The quarterly Asset Allocation meeting is a key part of JANA’s investment process. In this video Steven Carew and Jeremy Wilmot provide a summary of the discussion and outcomes from this meeting and how it guides JANA’s asset allocation advice to clients.

This paper provides an overview of the different types of hedge fund strategies and touches on several cyclical and structural forces which have acted as headwinds for many strategies since the GFC. We believe some of these are now unwinding and highlight several changing market dynamics which could be highly supportive of the sector looking forward. We remain positive on the role that alternatives can play within an institutional portfolio and argue that the performance set for alternatives will be richer in the next ten years compared to the past ten.

In this article
  • Hedge funds – discussing past performance
  • Absolute return funds
  • Reasons why to be positive on hedge funds
Read more 20 min read

What about listed infrastructure?

Susan Orr, Senior Consultant and Co-Head of the Infrastructure Research team provides her views about the role of infrastructure in a client’s portfolio and whether global listed infrastructure can act as a proxy for unlisted infrastructure.

JANA Insights

Approaching a Responsible Investment Strategy

September 2018
Tim Conly, Senior Consultant

JANA’s Responsible Investment Research team is dedicated to supporting clients who wish to integrate ESG factors, or broader values based on organisational aspirations into their investment programme. This team also assists clients with broader aspects such as policy and regulatory development, climate change monitoring and management, training and development, and analysis and advice on broader responsible investment trends.

In this article
  • Background to the different approaches of Responsible Investment,
  • An update on recent trends in the industry; and
  • An overview of key approaches that institutional investors are taking to address this issue.
Read more 7 min read

Challenges and opportunities in the US

After returning from the 2018 JANA Study Tour, John Coombe and David Surridge share their views of how the US is handling 10 years post GFC, and the impact of disruption.

The rise of the China A Share Market

Bill Dwyer and Raymond Lam recently completed a Global Equities Research trip focussed on identifying the best way for JANA clients to access the China A Share market. In this video interview Bill explores China’s commitment to growth and what it means for Australian and New Zealand investors, through first-hand anecdotes that have shaped his views.

JANA Insights

Equity Allocations – time to move abroad?

September 2018
Jeremy Wilmot, Senior Consultant
Matthew Griffith, Senior Consultant

Historically, Australian institutional investors have had a large bias towards Australian Equities within their overall listed equity exposure. However, over more recent years this bias has reduced in favour of greater exposure to global equities. In this paper we look at the rationale and drivers for moving further away from the large allocation to Australian equities relative to global equities on a medium-term view.

In this article
  • The historical bias towards domestic equities for institutional Australian investors, including economic/policy factors, ease of access, relatively high yield, tax benefits and close linkage to growth in Asia.
  • Looking forward, will these advantages be maintained?
  • The relative attractiveness of Australian versus global equities from an economic, market composition, tax, population growth, alpha potential and valuation perspective.
Read more 10 min read

Global Views

US and China: The bumpy road ahead

JANA has previously highlighted that geopolitical risks provide a significant risk to financial markets. Accordingly, the following article from Wellington, a leading US fund manager is particularly relevant as it provides a fresh, yet brief insight into the current and future challenges of the all-important US-China trade dynamic.

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Liquid alternatives

Liquid alternatives has grown substantially in recent years, yet not without its hiccups. While JANA views the longer-term case for investing in Alternative Risk Premia as robust, the underlying strategies remain cyclical with their own driving forces. One of the pioneers of liquid alternatives, Cliff Asness of AQR, provides a detailed discussion from a practitioner’s view on the current performance of the sector. As per Cliff, “We’ve seen this movie and it had a happy ending”.

Read more 

Applying the scientific method to investing

Disruption has become a constant theme in financial markets. David Harding and his firm Winton Capital who have been at the forefront of applying scientific methods to investing for over 30 years have provided this short video titled applying science to data. David discusses how science will matter even more in the next 30 years.

Read more 

JANA Insights

China A Shares – The Emerging Market of the 21st Century

September 2018
Bill Dwyer, Senior consultant
Raymond Lam, Consultant

China’s onshore A share market is the second largest in the world by market capitalisation, yet to date various issues have resulted in low foreign investor participation. In this paper, Bill Dwyer and Raymond Lam (from JANA's Global Equity Research team) provide an overview of China's A share market and insights from their recent research trip to Shanghai and Shenzhen in China, Hong Kong and Singapore.

In this article
  • The implications of MSCI’s inclusion of China A shares in its flagship indices this year;
  • Access to China’s onshore equity markets; and
  • Fund managers approaches to investing in China.
Read more 12 min read

The acceleration in passive investing, and in particular the rise of Exchange Traded Funds (ETFs) as a popular approach for investing passively, is a phenomenon that is well documented. Without seeking to argue the merits or disadvantages of ETFs or other passive instruments, the growth of its market share and speed of uptake raises an obvious question as to what impact the rise of passive investing is having on markets, be it from an excess return or risk perspective. JANA reflects on this question within this paper.

In this article
  • This paper discusses the rapid growth of passive and ETF investing and considers the potential implications on investment markets, both from a return or risk perspective.
  • It explores the reasons behind the growth in passive and ETF investing.
  • JANA tests whether large passive ownership in companies can cause market distortions.
  • JANA considers whether there are other forces at play that drive broad market returns.
Read more 5 min read

This paper provides an overview of multi-asset style risk premia portfolios, also known as alternative beta and risk premia. It reviews style risk premia as a concept, the benefits and concerns with style investing and potential ways investors may utilise style risk premia strategies within their overall investment portfolios.

In this article
  • Alternative beta strategies are systematic strategies that target constant risk factor exposures.
  • These strategies provide strong diversification benefits, scalability, liquidity and lower fees than many hedge fund and active long only strategies.
  • While many of the risk factors across alternative beta portfolios are similar, implementation skill and the allocation to different risk premia and universe selection will result in large performance dispersions across alternative beta managers.
  • Alternative beta funds should not be expected to provide a smooth and consistent return profile. While their objective is to target returns above cash, they will experience periods of negative returns when viewed on a monthly and even yearly basis.
Read more 11 min read
JANA Insights

Australia – Looking Beyond the Mining Boom

September 2018
Jeremy Wilmot, Senior Consultant
Steven Carew, Head of Research & Investment Outcomes

Australia has been a major beneficiary of the economic rise of China, particularly the urbanisation and massive surge in fixed asset investment that has led to a once-in-a-century mining boom. The benefits for Australia from the mining boom have been experienced through higher wages, capital investment, economic growth and tax revenue. This is a broad discussion paper outlining where Australia has come from over the past 15 years and what are likely to be some of the key economic drivers going forward. It also canvasses potential approaches for accessing these growth sectors within portfolios.

In this article
  • This is a broad discussion paper outlining where Australia has come from over the past 15 years and what are likely to be some of the key economic drivers going forward. .
  • It canvasses potential approaches for accessing these growth sectors.
  • For future investments, investors could look to target areas that are likely to disproportionately benefit from the broader thematic of the emerging Asian middle class.
  • In broad terms, JANA believes three sectors that can effectively leverage Australia’s competitive advantages in order to benefit from the growing middle class in Asia, being agriculture, education and tourism
  • As with all investment, there is no such thing as a free lunch, and pursuing high growth themes does not necessarily result in strong or consistent returns and asset selection remains critical for successful investment outcomes.
Read more 16 min read

JANA Insights

Absolute Return Fixed Income Strategies

September 2018
Robert Moore, Senior Consultant

There is a compelling case for some degree of ARFI type products in investors’ fixed income / defensive alternative portfolios. Investors though need to weigh up a variety of factors when considering which particular product may be the most suitable for their portfolio.

In this article
  • True ‘Absolute Return Strategies’ are completely uncorrelated with traditional market drivers (equity/credit risk, interest rates). Though these types of products are rare.
  • Different styles & strategies, return targets, sectors, and correlations with equity/credit risk are seen across the absolute return universe.
  • Some of the strongest performers in the ARFI space (strong returns, low or zero correlation with credit) can also be volatile : Investors need to weigh up the range of characteristics each product may contain, and assess these in terms of the composition of other allocations within their asset classes.
Read more 15 min read
JANA Insights

An Introduction to Managed Futures and Trend Following

September 2018
Courtney Wilder, Senior Consultant

Many institutional investors are searching for investments that offer high liquidity, lower costs, the ability to profit in rising and falling markets and most importantly diversification. This article considers managed futures as part of a potential solution. This paper provides an overview of investing in managed futures and focuses on the most common underlying strategy of managed futures – trend following, its performance and risk characteristics and portfolio construction considerations.

In this article
  • This introductory paper provides an outline on managed futures focusing on medium to long term trend following and its economic rationale.
  • We review several characteristics of trend following strategies and provide views on some of the preconceptions associated with these strategies.
  • Finally, we briefly review the risks and considerations in allocating to managed futures.
Read more 16 min read