Symposium 2016 - Resources Kit

Symposium facilitates debate on the three pillars of portfolio construction – markets, strategies and investing. Established in 2011, it is THE NZ investment markets and strategies conference of the year. The jam-packed, two day program, featured 22 leading investment professionals offering their expert, high conviction ideas to help build better quality investor portfolios.

This year's special guest keynote was internationally renowned economic and financial historian Professor Niall Ferguson, PhD, Harvard University professor and Stanford University senior fellow, brought to you by PortfolioConstruction Forum, in association with The National Business Review.

Quicklinks

This online Resources Kit is a key feature of the Symposium 2016 program (in fact, all our programs feature an online Resources Kit). It enables all Members (whether or not they were part of the "studio audience" at the live program) to "attend". It's an invaluable set of continuing education material.

This Resources Kit includes all the presentations and papers for each session.

Session titles
Faculty of speakers
Session resources

An overview list of all the sessions from the jam-packed program;
22 leading investment professionals;
Presentations (sync'd video/audio with slides), papers, podcasts, slides and Faculty bios.

Sessions

The jam-packed two-day program delivered 20+ high conviction ideas to help build better quality investor portfolios.

Faculty of speakers

Symposium featured a stellar line up of 23 international and local experts.

Special guest keynote

Professor Niall Ferguson, PhD - in his first visit to NZ and only presentation, brought to you by PortfolioConstruction Forum, in association with The National Business Review
Prof Ferguson is an internationally renowned economic and financial historian. He is the Laurence A. Tisch Professor of History at Harvard University, a Senior Fellow at the Hoover Institution, Stanford University, and a Senior Research Fellow at Jesus College, Oxford. More about Niall

  • Dr Keith Suter, Managing Director, Global Directions (Sydney)

  • Dr Joanne Earl, Assoc Professor & MBA Program Director, Flinders University (Adelaide)

  • Dr Oliver Hartwich, Executive Director, The New Zealand Initiative (Wellington)

  • Tim Farrelly, Principal, farrelly's Investment Strategy (Sydney)

  • Dori Levanoni, Partner - Investments, First Quadrant (Los Angeles)
    - brought to you by Affiliated Managers Group

  • Jacob Mitchell, MD, CIO & PM, Antipodes Global Investment Partners (Sydney)

  • Sam Churchill, Head of Macro Research, Magellan Asset Management (Sydney)

  • Andrew Bascand, MD & Portfolio Manager, Harbour Asset Management (Wellington)

  • Simon Stevenson, Head of Strategy - Multi-Asset, Schroders (Sydney)

  • Bernard Del Rey, CEO, Capital Preferences (New York)

  • Paul Richardson, Director & CIO, Mint Asset Management (Auckland)

  • John Valtwies, Vice President Investment Due Diligence Group, PIMCO (Sydney)

  • Christian Hawkesby, Head of Fixed Income, Harbour Asset Management (Wellington)

  • David Fisher, Global Product Manager Core Fixed Income, PIMCO (Newport Beach)

  • Bevan Graham, AMP NZ Chief Economist, AMP Capital (Wellington)

  • Manusha Samaraweera, Senior Product Associate, PIMCO (Sydney)

  • Mugunthan Siva, Managing Director, India Avenue Investment Management (Sydney)

  • Hugh Giddy, Senior PM & Head of Investment Research, Investors Mutual (Sydney)

  • Adam Grotzinger, Senior VP & Portfolio Manager, Neuberger Berman (Singapore)

  • Graham Rich, Publisher, PortfolioConstruction Forum (Sydney)

  • Andrew Mehrtens, Assoc Director Business Development, NAB Asset Servicing (Sydney)

  • Bruce Edgar, Bruce Edgar Consulting (Wellington)

Session resources

CRITICAL ISSUES FORUM 1

Facilitating debate on the markets, strategies & investing
PortfolioConstruction Forum Publisher and Symposium Moderator, Graham Rich, opened Symposium 2016 in his usual thought-provoking (and entertaining) way.

Graham Rich, Managing Partner & Publisher, PortfolioConstruction Forum (Sydney)

Resources

Pay attention to geo-politics when making investment decisions
The world seems an increasingly dangerous place, driven by uncertainty and conflict – from the break-up of Ukraine, to the rise of religious extremism in the Middle East, and the growing economic and political influence of China. The sense of chaos is exacerbated by a fragmented mass media which seeks to entertain, rather than provide meaningful analysis of global events. Yet on many measures, the world is becoming safer, as the spread of democracy reduces the threat of armed conflict between nations. More than ever, investors need to filter out the noise and consider the emerging geo-political developments which are shaping the world.

Dr Keith Suter, Managing Director, Global Directions (Sydney)

Resources

 

 

Ride the cycle but structural weakness will come to matter more
The Great Recession and, more recently, the weakness in commodity prices has exposed structural weaknesses in many of the world's advanced and developing economies. Structural problems require structural solutions - however, in many countries, the policy response to date has been largely cyclical, with an over-reliance on monetary policy. While that can be good for economic growth and returns in the near-term, long-term investors need to be wary that without much needed reform, structural weaknesses will be the ultimate determinant of longer-term returns.

Bevan Graham, AMP NZ Chief Economist, AMP Capital (Wellington)

Resources

 

CRITICAL ISSUES FORUM 2

 

Time to sell/short beneficiaries of the US high yield debt bubble
The extreme thirst for yield has pushed the US high yield (non-investment grade corporate debt) cycle into unchartered territory, with the stock of debt outstanding and the average leverage ratio expanding significantly beyond the previous 2007 profit cycle peak. The cycle is approaching the shakeout phase. The recent widening of spreads, triggered by commodity market dislocation, is unlikely to remain siloed as interlinked funding mechanisms react to accelerating bankruptcies. There are long/short opportunities amongst the beneficiaries of the current cycle – the issuers that have applied the funds to fast track corporate ambitions via capital spending, M&A and buybacks and, accordingly, attract a growth premium.

Jacob Mitchell, Managing Director, CIO & Portfolio Manager, Antipodes Global Investment Partners (Sydney)

Resources

 

 

Going negative - rethink investing in a world of low returns
Although the world continues to heal from the Global Financial Crisis, progress has been slow. Eight years on and despite deleveraging of household and corporate balance sheets in some regions, overall levels of debt remain formidable. This, combined with increased regulation, a distinct lack of capital investment, unfavorable demographics and a host of other headwinds, has resulted in anaemic levels of growth. In the absence of any real structural reform or fiscal support, central banks have been left to do the heavy lifting. The result? Record low cash rates, unconventional monetary policy and a re-think of the assumption that 0% represented the lower bound for interest rates. While not every country in the world is facing a scenario as extreme as negative interest rates, nearly every investor is confronting the challenge of how to invest in a low growth, low return environment. This situation is expected to persist for the foreseeable future, forcing investors to rethink traditional assumptions and approaches to portfolio construction.

David Fisher, Global Product Manager - Core Fixed Income, PIMCO (Newport Beach)

Resources

 

Secular stagnation or inflection point? The post-crisis world in historical perspective
With a growing number of central banks resorting to negative interest rates and the International Monetary Fund acknowledging the risk of "secular stagnation" in its latest World Economic Outlook, investors could be forgiven for feeling nervous. Fears persist of a US stock market correction, or even a US recession. Yet there is some evidence that the global economy may be at an inflection point. Stagnation seems hard to escape from in Japan and some European economies, but elsewhere the post-crisis inflection point might just have arrived.

Professor Niall Ferguson, PhD, Harvard University professor and Stanford University senior fellow
- brought to you by PortfolioConstruction Forum
   in association with The National Business Review

Q&A Panel

Dr Oliver Hartwich, Executive Director, The New Zealand Initiative (Wellington)
Dr Keith Suter, Managing Director, Global Directions (Sydney)
Tim Farrelly, Principal, farrelly's Investment Strategy (Sydney)

Resources

CRITICAL ISSUES FORUM 3

The risk of inflation will rise
There’s an old saying – if you've seen one cockroach, you haven't seen them all. That's a very important concept today for managing diversified portfolios. We see one cockroach – low interest rates - but what we don't see is the hidden consequences that are throughout portfolios. This hasn't been a problem so far because interest rates have been falling, but the risk is interest rates will start to rise.

Simon Stevenson, Head of Strategy - Multi-Asset, Schroders (Sydney)

Resources

 

Quality is a critical factor in constructing portfolios
Quality is a critical factor in constructing portfolios. Quality is used as an adjective used by investors across many investment styles. Seldom however do advisers and investors get to see how investment managers describe “quality” or screen for “quality”. There are a number of quantitative approaches to measuring quality, perhaps the best known being the Piotroski Score, which is widely used by US-based fund managers. The use of a modified Piotroski indicator as an indicator or screen can significantly add to investment performance in New Zealand and Australia.

Andrew Bascand, Managing Director & Portfolio Manager, Harbour Asset Management (Wellington)

Resources

In a period of sustained sluggishness, quality companies are key
The current state of low global growth and increasing indebtedness is best described as a period of 'sustained sluggishness’. The tepid recovery from 2008’s GFC has surprised almost everyone. Economists the world over have continuously revised down their growth forecasts, as the ongoing stimulus from the monetary authorities fails to deliver the economic benefits intended. These flailing attempts to stimulate growth have had the unproductive consequence of fuelling a sharp rise in financial asset prices and as history has shown us time and again, bubbles eventually burst. Investing in this low growth world requires a very selective stock picking approach, and suggests focusing on both value and quality. Quality companies are best placed to make a reasonable return in this environment as the many headwinds and imbalances throughout the world are likely to continue.

Hugh Giddy, Senior Portfolio Manager & Head of Investment Research, Investors Mutual (Sydney)

Resources

China’s rapid growth is unsustainable
Since the reforms of Deng Xiaoping, China has been on a trajectory of rapid economic growth that is of an unprecedented scale in human history. China's emergence from extreme poverty to become the world's second largest economy was driven primarily by massive export growth, as China became the world’s factory. However, since the Global Financial Crisis, China's growth has become reliant on credit stimulus and a related property bubble. This unsustainable growth model is now coming unstuck. While a "hard landing" is unlikely, China's growth is certain to slow further, and the risks for the global economy and financial markets are significant.

Sam Churchill, Head of Macro Research, Magellan Asset Management (Sydney)

Resources

  

CRITICAL ISSUES FORUM 4

It’s the end of EU-rope as we know it
The European Union has been in crisis for many years. Simultaneous sovereign debt, banking and monetary crises have tested the European institutions to the limit. But if you thought it could not get worse for Europe, you ain't seen nothing yet! The continent is grappling with an uncontrolled influx of migrants, Eastern European countries are moving towards authoritarian structures, while the United Kingdom will hold a referendum on exiting the EU. 2016 will change the nature of the European Union – and might well signify the end of Europe's process of political and economic integration.

Dr Oliver Hartwich, Executive Director, The New Zealand Initiative (Wellington)

Resources
 

 

Don’t believe what you hear – this is a high return environment
While record low interest rates worldwide – even negative in many countries - does mean low returns on government bonds, it doesn’t necessarily mean low returns across the board. Many markets have not adjusted to the new low rate environment but will over the next decade, leading to a period of strong returns. This is not a time to be fearful.

Tim Farrelly, Principal, farrelly's Investment Strategy (Sydney)

Resources

 

The Great Debate
Our day's
Faculty debates two high conviction ideas from the day's program - firstly, the idea that delegates agreed with most and then, the idea they disagreed with most.

Bevan Graham, AMP NZ Chief Economist, AMP Capital
Hugh Giddy, Senior Portfolio Manager & Head of Investment Research, Investors Mutual (Sydney)
Jacob Mitchell, Managing Director, CIO & Portfolio Manager, Antipodes Global Investment Partners (Sydney)

Dr Keith Suter, Managing Director, Global Directions (Sydney)
Dr Oliver Hartwich, Executive Director, The New Zealand Initiative (Wellington)
Sam Churchill, Head of Macro Research, Magellan Asset Management (Sydney)
Tim Farrelly, Principal, farrelly's Investment Strategy (Sydney)

Resources

 

WORKSHOP 1

 

Markets
How to determine your key takeouts from day one, the markets
This highly interactive, Socratic workshop kicked off with each panelist outlining the high conviction idea they agreed with most from the prior day's program - and the portfolio construction implications. Delegates then worked in their tables to determine the same, before reporting back on a table-by-table basis. 

Panel

Tim Farrelly, Principal, farrelly's Investment Strategy
Stephen O'Connor, Director, Mitre Wealth Management
Grant Cleary, Principal, Cleary Wealth Management

Resources

 

WORKSHOP 2

 

Finology
How to identify retirement resources that matter
It's a sad fact that not everyone adjusts well to retirement. It's estimated that about one third of retirees have problems adapting after leaving full time work. So why do some people fail to adapt? Planning plays an important role in promoting better adjustment - but planning in what?

A Dynamic Resource Model provides a potential solution by considering the multiple domains of Physical, Cognitive, Motivational, Financial, Social and Emotional resources needed in any comprehensive plan. Our focus may be trained to be on finances but interrelationships between the resources really make it impossible not to consider other influences such as health, social support, cognitive skills, emotional resilience and goal setting to support a retiree and promote better adjustment.

By the end of this workshop, you will have grown your understanding of the potential impact of retirees adjusting to retirement and further developed your own philosophy about the relevance of a Dynamic Resource Model to client portfolios.

Dr Joanne Earl, Associate Professor - Flinders Business School, Flinders University (Adelaide)

Resources

 

DUE DILIGENCE FORUM 1

 

Equities - Specialty - US
Think differently to find sustainable, secure sources of income
In a world of low (in some cases negative) interest rates, investors need to think differently about where and how to obtain sustainable, secure sources of income. Cash rates globally are low and New Zealand is no exception – sitting on cash is not a long-term solution for real sustainable income. Equity dividend income is not contractual or secured by assets and can be hurt by slowing corporate earnings, while bank hybrids are subordinated structures and potentially dilutive if converted to equity. Further, both equities and hybrids have exhibited significant price volatility recently. US private market home loans – income producing, low credit risk, low volatility assets that can generate a stable flow of monthly income - are one of many investment opportunities today in the US home loan market to consider for portfolios.

Adam Grotzinger, Senior Vice President & Client Portfolio Manager, Neuberger Berman (Singapore)

Resources

 

Alternatives
Currency is the ultimate alternative
The currency exposure embedded in foreign equity portfolios exposes the portfolio to a great deal of noise that is particularly important to deal with in the low return environment we are (and will be) in. It can’t just be ignored, don’t only pay attention to it. Rather, used productively, the opportunity it represents can be captured as the ultimate "alternative asset".

Dori Levanoni, Partner - Investments, First Quadrant (Los Angeles)
- brought to you by Affiliated Managers Group

Resources

 

Multi-asset
You can reach portfolio goals despite negative interest rates
Investors are only slowly awakening to the threat to their goals that negative interest rates globally pose. The impact is likely to be on traditional diversified solutions. For this environment, a diversified fund strategy should have a higher mix of growth assets, and tactical asset allocation should be applied. Further, all securities held must be appropriate to the goals, simplicity is a key as costs must be lower, and fund volatility must be managed lower.

Paul Richardson, Director & CIO, Mint Asset Management (Auckland)

Resources

 

DUE DILIGENCE FORUM 2

 

Debt - Global
Right now inflation is the most important macro indicator
Central bankers successfully tamed inflation in the late 1980s and early 1990s. Through the 1990s and 2000s, inflation became so well anchored around 2% that it fell off the radar; instead investors focused on the economic cycle as an indicator of central bank actions. However, we are now in uncharted territory. Persistently low inflation is the new problem. Old relationships between economic activity and inflation have broken down. Monetary policy will remain highly stimulatory until central banks see definite evidence that inflation is rising and better anchored around 2%. With markets complacent about the inflation outlook, signs of inflation could create a scare. Right now inflation should be the most important macro indicator on the radar of investors.

Christian Hawkesby, Head of Fixed Income, Harbour Asset Management (Wellington)

Resources

 

Equities - Specialty - India
Size does matter when investing in India's growth
Companies generally grow their earnings by increasing sales and/or profit margins. This is driven by the size of the market, the company's market share and the level of industry competition. With India’s youthful, vibrant and sizeable population, it’s demographic dividend creates a significant market opportunity for corporates operating within the ecosystem. For these businesses size really does matter, leading to the potential for exceptional revenue growth. This is unparalleled when comparing corporates domiciled in Australia, NZ or anywhere else in the world for that matter.

Mugunthan Siva, Managing Director, India Avenue Investment Management (Sydney)

Resources

 

Finology
Today’s risk profiling puts us all at risk
Risk profiling is entirely broken. The key to understanding clients is in analysing their actions, not their words, or answers to a risk questionnaire. Game theory, econometrics and distributed computing power are the new tools necessary to reveal a client’s true preferences for risk, loss, uncertainty, time and goals – with scientific precision and in terms that clients can understand.

Bernard Del Rey, CEO, Capital Preferences (New York)

Resources

 

WORKSHOP 3

Strategies
How not to be blindsided by the retirement investment challenge
How will retirees live the dreams they have for retirement? For many, it has meant investing in property, holding shares, or even simply holding onto cash –but just how do those decisions effect their lifestyle when they hit retirement?

This workshop explores the many choices we face in our effort to live our retirement dreams, and think more creatively about retirement planning with clients. Presented in a format that incorporates a game, delegates will be asked to choose one of five investment strategies for three different economic environments. The objective is to produce steady income, without destroying capital so that the client can meet their objectives in retirement.

By the end of this workshop, you will have a deeper understanding of portfolio construction for retirees, and how risk factors drive outcomes, and a deeper understanding of how you can influence and help clients meet their retirement dreams.

John Valtwies, Vice President Investment Due Diligence Group, PIMCO (Sydney)
Manusha Samaraweera, Senior Product Associate, PIMCO (Sydney)

Resources

 

WORKSHOP 4

Strategies
How to develop a robust retirement spending policy
One of the most important decisions facing retirees is working out how much can be “safely” spent without the risk of exhausting capital. Yet it’s an area that has received little attention to date – but this is changing rapidly.

This workshop reviews different approaches to creating formal, written spending policy describing how much confidence is required that funds will not be exhausted; how much can be spent each year; how that spending will be adjusted for changes to costs of living; and, how the spending plan will be reviewed each year to take account of changing circumstances.

By the end of this workshop, you will have grown your understanding of the different approaches to creating a retirement spending policy and what needs to be done to put a policy in place.

Tim Farrelly, Principal, farrelly's Investment Strategy (Sydney)
 

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