Highlights from the 4th Annual Global Portfolio Managers Panel
Thursday, October 5, 2017
CFASF’s 4th annual Global Portfolio Managers Panel presented by the Women’s Initiative Committee drew together five senior PMs from across the country in conversation on wide ranging subjects from portfolio management perspectives, asset class allocation, discussion on where markets may be headed, the case for active management, the latest on diversity hiring practices and research, and more. Here is a recap of the discussion in case you missed the event:
Comments on where there is value:
The biggest opportunities are outside of the US now. Valuations are better outside the US. The US has outperformed for 19 months and can’t continue like this indefinitely.
International markets where earnings growth is just coming through after a few years of no growth.
Inflation linked assets may be undervalued.
On career path and diversity:
Diana Strandberg from Dodge & Cox noted, “Our business is a high error rate business; we want people who are resilient and who can handle failure.”
Michelle Borré from Oppenheimer encouraged, “When making choices in your career, focus on working with people you really like and respect. The initial thing you are working on is not as important. If you work well together, you will be given more responsibilities.” She also remarked: “When looking for an analyst, it is relatively easy to find a specialist and it is relatively easy to find a generalist. What we look for is ability to both look broadly at investment opportunities as a generalist and get deep in some areas as a specialist.”
Jody Johnson from Capital Group offered, “Creativity is important in evaluating a candidate. One also needs to be self-aware, comfortable with his/her own strengths and weaknesses.”
Ellen Safir offered that “Interviewers need to be good listeners and appreciate the difference in communication styles between a male candidate and a female candidate.”
An investment career is a marathon, not a sprint. Think about how you spend your time every day; are these people with whom I would enjoy working with for a long time?
Diversity cannot be built top-down. You must make the business case for diversity.
We recognize that diversity of thought and perspective is important to what we do. Having colleagues with different backgrounds and skills makes our investment process better.
On passive vs. active management:
Passive does not own the low fee argument. Active can have low fee too. Investors need to think about solutions and outcomes instead of just fees, particularly downside protection.
Sometimes going passive means low risk to the people who make decisions, not low risk to the pension plan participants.
“Just matching a benchmark is so unambitious!”
There is no true passive investing in the fixed income field. No one can possibly own all the issues in the index. In 2008 index-tracking funds in fixed income had very different performance vs their benchmarks.
In fixed income portfolio, biggest upsides tend to come from your conviction when a certain debt issue is going to be downgraded/upgraded. Passive takes this away.
With spreads at a low level in historical context, passive is happening at the wrong time.
We’d like to thank all our sponsors who helped make this panel a success, Matthews Asia, OppenheimerFunds, S&P Global Market Intelligence, State Street Global Advisors SPDR, Thomson Reuters, and Wells Fargo Wealth & Investment Management.
We look forward to seeing you all next year for the 5th Annual Global Portfolio Managers Panel and keep an eye out for event photos in the coming weeks!