Market Narratives

Ageing populations in the west causing shrinking of the workforce, mismatches in jobs and qualifications, and the rise of new technology is all contributing to the transformation of the labour markets, according to PGIM’s latest megatrends report.

Participant:
• Jakob Wilhelmus, director at PGIM’s Thematic Research group

Moderator:
• Julia Newbould, managing editor at Conexus Financial

Greater access to information from companies and associations on geospatial analysis combined with the acceleration and exponential destruction of the ecosystem has prompted biodiversity to becoming a hot topic in making investment decisions. Conexus Financial managing editor Julia Newbould talks to Newton Investment Management global head of sustainable investment Therese Niklasson 

Our food system needs to be more productive and sustainable with increased demand, changing diets and an outdated production system. According to PGIM thematic research group director Jakob Wilhelmus, there are two main challenges in the food chain right now – our current food system is outdated and secondly the devastating impact on the environment and climate change.

With volatility a strong theme of markets and economies over 2022, some investors have de-risked their portfolios and lost their stomach for riskier emerging markets investments but Alex Khosla, emerging markets and Asia equities portfolio manager at sustainable investment manager Newton Investment Management, argues emerging markets still offer value if you know how to find it. 

Private assets are appealing for their attractive risk-return properties and diversification potential not available to investors limited to public markets, but as demand rises for private assets in the search for alpha, liquidity risk has become a growing concern for investors Michelle Teng, vice president of PGIM's Institutional Advisory & Solutions group explains in an interview with Amanda White. Teng argues that funds can closely manage volatility risk in their portfolios and survive periods of short-term volatility, but sustained liquid asset drawdowns are a greater concern and can cause lasting damage to portfolios. 

While many asset allocators might view emerging market debt as volatile and a tactical investment, there's perhaps more strategic value in the asset class than many give it credit for, Aaron Grehan, Aviva Investors deputy head of Emerging Market Debt and hard currency portfolio manager explains in an interview with Matthew Smith. Grehan argues that blending of investment grade and high yield could change the frame of reference for many institutional investors who consider EMD highly volatile to something more defensive.

Technologies that have decimated and transformed the retail and manufacturing sectors are finally 'knocking at the doors' of the services sector, Taimur Hyat, chief operating officer at PGIM explains in an interview with Amanda White. Hyat argues that institutional investors need to build a higher level of technology education within their in-house sector specialist teams to stay ahead of the curve.

Amid increasing allocations to real assets by asset owners and pension funds globally, PGIM's Harsh Parikh puts forward a framework for thinking which encourages funds to tailor their approach to each individual asset and avoid making assumptions by using off the shelf benchmarks and historical averaging. Parikh also puts some numbers around the strengthening interest real assets among asset owners as inflation expectations have also risen. 

In one of the first interviews with David Breach since he became President of Vista Equity Partners, the global investment firm focused exclusively on enterprise software, data and technology-enabled businesses, Investment Magazine managing editor Matthew Smith talks through the ecosystem approach Visa takes to extracting and nurturing value in its portfolio companies. During the interview Breach also uses a local Australian case study to highlight the advantages that can be derived from co-investing with asset owners and he raises the importance of a committed approach to diversity, equality and inclusion for him and Vista’s Founder, Chairman & CEO, Robert F. Smith, in the all-pervasive technology sector.

All views expressed on this podcast are subject to change and do not necessarily reflect the views of Conexus Financial. This podcast is for educational purposes only and should not be relied upon as investment advice.