Global Views

Pimco's Thoughts on Global Macro

February 2019

In this article

Climate change and ESG risks are often evaluated in respect to the impact they might have on asset valuations. Joachim Fels, PIMCO’s economic advisor, looks at it from a different angle, namely what impact climate change could have on government processes and especially the conduct of monetary policy.

He mentions a speech from ECB Director Benoit Cœuré, who highlights the difficulties climate change creates for central banks. Cœuré’s reasons apply equally to conducting investment and asset manager research. Climate change creates more noise for investors, more idiosyncratic events affecting performance and individual events having a more material impact. All factors which can make it potentially more difficult to assess and compare investment returns going forward.

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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”.

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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.

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