Economics

Investment Horizons

We are pleased to off er our 11th edition of Investment Horizons, our North American perennial compilation of research articles inspired by our global client engagements.

11/15/2019

The concept of control is an interesting one, both mechanically and anthropologically. Within the investments’ realm, control is often associated with things like volatility management. However, we look at it through the lens of all external investment factors that warrant controlling, and we’ve highlighted some of the recent research we’ve done on this very concept.

Many of our investors focus on controlling or harnessing disruptions. For example, the penetration and proliferation of Electric Vehicles, as well as Cybersecurity and the challenges of controlling our own data, are two topics that always seem to be in the headlines. We look at each from an investment lens.

One thing we can control is what we choose to invest in. Factor investing, for example, allows us to do just that… or so we think. Our Multi-Asset team deconstructs the inherent myths with such strategies and highlights just how much expertise is required to properly manage the risk premia of factors. In addition, here in the US we see extraordinary valuation dislocations between large-cap and smaller-cap companies, particularly within the Private Equity market. We explore this in some detail as well as offer our views on why avoiding extraordinarily high valuations can be one way to lock up (and control) capital more efficiently.

Lastly, we look at divestment, which is a growing topic of interest among our clients—but an often misunderstood practice. We examine ways to effectively bring about change by working closely with companies that exhibit poor governance, not just by selling or avoiding their shares.

As always, we hope you enjoy reading this edition, and if there are any other topics of interest to you please contactyour Schroders representative.

The views and opinions contained herein are those of Schroders’ investment teams and/or Economics Group, and do not necessarily represent Schroder Investment Management North America Inc.’s house views. These views are subject to change. This information is intended to be for information purposes only and it is not intended as promotional material in any respect.