JANA Insights

Member Outcomes: Bringing Retirement Adequacy to the Forefront

August 2020
Danielle Bose, Head of Retirement Strategies
Neil Maines, Consultant

JANA believes a key outcome of the SPS515 requirements is the enhanced focus on retirement adequacy. That is, what amount of retirement income is a superannuation fund’s default MySuper option expected to deliver for a fund’s members? Assessing retirement adequacy given the complex Australian retirement system can be challenging but we firmly believe this important endeavour can be achieved. We have outlined a practical, robust and flexible framework in the article below.

In this article
  • The key elements of JANA’s Framework for assessing Retirement Adequacy that are covered in this article include:
  1. Step 1: Construction of representative fund members
  2. Step 2: Consideration of appropriate retirement adequacy objectives
  3. Step 3: Assessment of likelihood of meeting retirement adequacy objectives
  •  In this article we have also included analysis from our proprietary model (JANA Solve). 
Read more 15 min read
JANA Insights

The unique role of Technology in investment portfolios

September 2020
Sam Pfitzner, Senior Investment Analyst

Over recent decades we have born witness to an incredible modern era of entrepreneurial innovation and creativity within the technology universe. Today, virtually every industry is now being (or has been) “consumed” by technology, with technology permeating into every part of the global economy, as well as our daily lives. Accordantly, within an investment portfolio, an exposure to technology can often provide unique advantages (and risks).

In this article
  • An overview of the unique and evolving role technology plays within investment portfolios.
  • The benefits of drawbacks of the different ways to access technology exposures.
  • As well as the potential structural impacts brought by COVID-19.
Read more 6 min read
JANA Insights

August 2020 Monthly Economic Update

August 2020
Steven Carew, Chief Investment Officer

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:  While a recovery in economic activity is underway, the ongoing pandemic will remain headwinds
  • UK:  A sharp contraction in economic activity has occurred, but a recovery in output is underway
  • Euro Zone:  While the economy is expanding again, the outlook for growth remains weak
  • China:  After a sharp contraction in the March quarter, economic activity has rebounded strongly
  • Japan:  An already fragile economic outlook is being further weakened by the coronavirus impact
  • Australia:  The scale of the downturn is expected to be less than in many other countries
  • New Zealand:  While the outlook has improved, the economy will need to rely on substantial policy stimulus
Read more 11 min read
JANA Insights

JANA Market Commentary – July 2020

September 2020
Natalie Thomas, Senior Investment Analyst

JANA’s monthly market commentary summarises global news and economic commentary that is material to markets.

In this article
  • The impact on the global economy from the coronavirus pandemic is large and broad.
  • Fuelled by optimism of the potential for a vaccine as well as some better than expected economic and earnings data, global equity markets continued to rally in July. 
  • The Australian Dollar appreciated against most of the major developed market currencies.
  • Most major bond yields fell during the month though the Chinese 10-year yield moved higher as economic data offered positive signs.
Read more 5 min read

In this article
  • Is the cost of your superannuation a casualty of the Coronavirus pandemic?

    Kirsten Temple JANA’s Manager of Research discusses what low interest rates mean for those who are relying on investment returns.

    ‘Superannuation funds and their members face a conundrum: continue to target the same returns knowing that it comes with higher risk – and a greater chance of failing to hit objectives - or accept that the cost of retirement will need to be funded more by current income.

    For each of us this is ultimately a trade-off between our current and future needs. It will be hard to put our future first while the economy remains fragile – but our future still needs taking care of.’
Read more 5 min read

Ausbiz Interview with Tim Conly

Tim Conly appeared on Ausbiz last week to discuss the findings of our recent study into the impacts of climate change for long term investors.

JANA’s market commentary summarises global news and economic commentary that was material to markets over FY 2019/20.

In this article
  • The financial year began reasonably well, supported by accommodative monetary policy.
  • Volatility increased, initially punctuated by back-and-forth US-China trade tensions.
  • From mid-February 2020, attention shifted to the COVID-19 pandemic, leading to record falls in global equity market.
  • Markets have since recaptured much of their losses, despite the continuing uncertainty of COVID-19.
Read more 6 min read
JANA Insights

Steven Carew and Gary Wilson - 2019 Research Trip Overview

June 2020
Steven Carew, Chief Investment Officer
Gary Wilson, Senior Consultant

In late 2019, Steven Carew and Gary Wilson travelled to the US and UK as part of JANA’s ongoing capital markets research program. In addition to macro and markets research, the main objective of this trip was to review active asset allocation strategy within a multi asset portfolio context. Our focus included active asset allocation strategies targeting absolute returns or outperformance of a benchmark comprised of market indices over a short to medium term horizon. For this research, we held detailed review meetings with ten global multi asset managers, covering all of the major aspects of their process. We also met external providers of specialist research engaged by some of the managers

In this article

The key questions we focused on in reviewing these asset allocation processes included:

  • What are the unique elements that differentiate each manager’s process and define an edge?
  • How do all aspects of Philosophy, People and Process work together?
  • How has their asset allocation process evolved over time?
  • Historical performance, and in particular the evidence of active asset allocation alpha.
Read more 7 min read

JANA commenced a research collaboration with the University of Melbourne in 2019. A select number of Honours in Finance students undertake research on topics that are developed in conjunction with their supervisor and JANA. JANA provides an industry lens, proposing questions that are relevant to our clients and acting as a sounding board as the students develop their research questions and methodology. In 2019, the first two students completed their Honours in Finance as part of this collaboration.

In this article
  • Angela Pan: Do commodities enhance portfolio performance? An Australian perspective
  • Kelvin Sun: A study of actively managed fund performance in differing volatility states
  • The students were supervised by Professor Federico Nardari, Dr Jonathan Dark and Dr Thijs van der Heijden.
  • Three new students have commenced work on their Honours in Finance under the collaboration with JANA in 2020.


Read more 20 min read
JANA Insights

Private Equity – COVID-19 preliminary impact

May 2020
Matthew Moon, Head of Private Equity

The COVID-19 outbreak has had an unprecedented impact on the world with many lives lost and many people facing financial hardship across the world. The virus has not only impacted individuals but also businesses, both public and private, and we believe the worse is yet to come before we see any recoveries.

In this article
  • Provides preliminary observations of the COVID-19 impact on the private equity market.
Read more 5 min read
JANA Insights

Pandemic takes massive toll on bond markets

April 2020
Robert Moore, Head of Fixed Income

Our focus is to help clients navigate the challenges the current environment has posed, but we continue to look to the future to ensure they are best positioned to take advantage of the opportunities that are presented. For those comfortable with some risk and with a long-term horizon, there are significant opportunities.

In this article
  • Robert Moore, Head of Fixed Income outlines the opportunities we see in sectors of the credit market
Read more 8 min read
JANA Insights

Australian Equities 2019 in Review

February 2020
Anthony Ballard, Senior Consultant

2019 provided a strong year of returns for Australian Equities, however many active managers struggled with the market environment which saw returns underpinned by a significant increase in valuations, rather than being driven by underlying fundamentals. For the 2019 calendar year, around 55% of active broadcap strategies outperformed, with the full year period actually showing a significant improvement from only 20% outperformers for the year to 30 June 2019. This article provides a review of the Australian Equities asset class for 2019 and highlights the largely unprecedented level of underperformance experienced compared to strong historical results for active managers.

In this article
  • Performance of the asset class
  • Drivers of market returns and themes
  • Performance of active managers
  • Performance of active managers compared to longer term outcomes
Read more 6 min read
JANA Insights

Key Trends in Infrastructure

February 2020
Claire Simpson, Co-Head of the Infrastructure Research Team

Follow the key trends we see so far for 2020 for the infrastructure sector…

In this article
  • What impact will the Coronavirus have on Airport Assets?;
  • Unlisted Airport valuations see an uplift;
  • UK Regulated water assets – is the worst behind us?;
  • GDP-linked Assets See a Slowdown
  • Australian Regulated Electricity Assets - Are They Getting a Jump Start?
Read more 3 min read

CLOs are structured credit securities which give investors different levels of risk exposure to the bank loan market. This paper looks at the degree of sensitivity of “mezzanine” tranches of CLOs (i.e. those tranches rated BB and below) to the underlying bank loan market. The paper also looks at the current attractive levels of spreads in the CLO market.

In this article
  • BB rated CLOs have shown an average sensitivity of 7 times to the movement of BB bank loans, when measured via rolling one year returns.  This shows the “leveraged” or enhanced sensitivity of CLOs to the performance of the underlying bank loan market. 
  • Whilst higher quality CLOs (e.g. AA or A rated tranches) have reduced sensitivity to the underlying bank loan market (i.e. less than 1:1), mezzanine tranches have amplified sensitivity, due to the structured nature of the securities.
  • Current levels of CLO spreads are relatively attractive compared to other parts of the leveraged credit markets.  Risk premiums have expanded in the sector over 2019, and JANA views the sector as attractive for longer-term investors
Read more 6 min read
JANA Insights

Maintaining Portfolio Balance in Global Equities: Will style diversification finally be rewarded?

February 2020
Matthew Gadsden, Senior Consultant
Daniel Kisnorbo, Consultant

The conundrums of style investing late in the economic cycle.

In this article
  • There are no obvious areas of major dislocation offering attractive opportunities for investment. Overall, Value managers are comfortable with how their portfolios are positioned and the (absolute) returns they are generating. Conversely, Growth managers continue to be strong advocates of the “New World” construct. Both present compelling arguments and deserve due consideration in positioning a global equities portfolio.
Read more 5 min read