Benchmarks stop us thinking: AXA IMBY BEN COLLINS | TUESDAY, 31 JUL 2012 11:45AMThe shock of the GFC, the impacts of the Euro crisis and moribund world capital markets ever since are forcing institutional investors to confront the reality that their traditional investments models aren't working, said AXA Investment Managers. |
Editor's Choice
Australian Unity to shed 195 roles
Australian Unity is reducing its workforce by 195 positions due to underperformance stemming from delays in government support for its Home Health platform and the integration of several businesses.
Count shutters limited-advice business, slips in size ranking
Count Financial has reportedly wound up its restricted SMSF/limited-advice service, losing some 26 advisers on the Financial Adviser Register, latest data shows.
First Super recruits head of investments from Prime Super
First Super has appointed a new head of investments, replacing Chris Artis, who was in the position for the past three months on an interim basis.
BMO eyes Euroz Hartleys' capital markets business
Euroz Hartleys confirmed it is in discussions with Canada's BMO Financial Group for a potential sale of its capital markets business for $145 million.
Products
Expert Feed
When geopolitics becomes a portfolio risk
Geopolitics is back - again - and Australian investors can no longer treat it as distant background noise.
Does association membership still matter?
With all the changes the advice sector has experienced in recent years, such as regulatory reform and increased education and professional standards ...
Digital assets and where they stand in 2026
So far in 2026 digital assets have captured the headlines largely for the wrong reasons, but that doesn't tell the full story.
Rethinking default design in a changing market environment
The evolution underway in the US DC system highlights the value of periodically reassessing default design assumptions.
Featured Profile
David Woodall
CHIEF EXECUTIVE OFFICER, SUPERANNUATION
INSIGNIA FINANCIAL LTD
INSIGNIA FINANCIAL LTD
Facing his greatest test yet in metamorphosing MLC Super, Dave Woodall is adamant the juice will be worth the squeeze. Jamie Williamson writes.
Often one of the products of smart-beta portfolios is the creation of blended benchmarks. There are some pretty substantial operational costs and risks associated with this new approach to benchmarking using blends and customised hedges. The choice of benchmark architecture should definitely not be an afterthought. Picture an example combining FSTE ASEAN EX-Singapore Hedged into SGD 50% blended with FSTE Singapore in SGD 50% assuming daily modelling? The issues dictated by who designs the rules of the blend, the calculation methodology, whether the creation of the new benchmark levels are calculated in-house or by a specialist provider, the availability of a license to calculate blended outcomes and general governance of business justification can all drive complexity, inefficiency and leave a difficult to foresee "event" risk. Now imagine scaling implementation and opps up to cope with systemic blending of benchmarks for trade management, compliance, risk and performance attribution in-house - one of the popular choices. However you measure the likelihood of an unfavourable event occurring regarding the blending, the impact of errors in a calculation may include paying out multi-year penalty fees and substantial reputational damage. RIMES recommends spending some time considering risk management and a review of externally available solutions to support blends and benchmark customisations.