Investment Strategies

• Articles

  • From DB to DC: Adopting Winning Strategies (2012 Issue 3)

    By leveraging the best defined benefit plan approaches, defined contribution plan sponsors can help improve participants' retirement savings outcomes.

  • The Ascendancy of Quality Investing (2012 Issue 3)

    Strategies attract investor interest by offering the potential for downside protection and better performance over market cycles.

  • Patience Brings Rewards for Private Equity Investors (2012 Issue 3)

    Investors can trade illiquidity for greater diversification and the potential to earn higher returns.

  • Exploring Secular Themes (2012 Issue 3)

    Investors are examining secular themes in an attempt to find new sources of return, while further diversifying their portfolios.

  • Managers Optimistic About Housing Market Rebound (January 2013)

    Northern Trust survey finds investment managers are also more positive about other key economic measures.

  • Building Out Infrastructue Allocations (October 2012)

    Global listed securities offer institutional investors attractive yield and inflation-protection characteristics.

  • The Evolution of DC Plan Diversification (October 2012)

    As defined contribution (DC) plans evolve as the primary retirement vehicle for many people, plan sponsors pursuing diversification are taking a page from the playbook of defined benefit (DB) plans.

  • Outlook Identifies Key Economic, Market Themes (October 2012)

    Northern Trust’s Capital Market Assumptions working group releases its perspective on risk-return assumptions for key asset classes.

  • Focus Should Move Beyond Yield (August 2012)

    Investors need to give risk and liquidity the same consideration as yield in the portfolio construction process.

  • New Climate for Short-Term Investments (2012 Issue 2)

    Investors face multiple challenges, including declining yields and constraints on traditional short-term investments.

  • Rethinking Cash Portfolios (2012 Issue 2)

    A segmentation strategy can help institutional investors boost the yield of their short-term portfolios.

  • Finding Yield in Volatile, Low-Interest Rate Markets (2012 Issue 2)

    U.S. high-yield corporate and emerging markets bond issues offer investors two compelling choices.

  • Four Themes to Shape Institutional Portfolios (April 2012)

    Investor awareness of bigger picture can enhance the likelihood of reaching investment goals and objectives.

  • All Glidepaths Are Not Created Equal (April 2012)

    With the growing popularity of target retirement date funds, plan sponsors must consider the underlying methodology evaluating alternatives.

  • Changing Perspectives on Passive Investing (April 2012)

    Customized beta gains attention as institutional investors shift focus to fund objectives rather than relative performance.

  • Beyond Modern Portfolio Theory (April 2012)

    Northern Trust’s Michael DeJuan explains how innovations have advanced portfolio construction techniques in response to a changing market environment.

  • Managing Volatility in Your Portfolio (2012 Issue 1)

    Despite negative perceptions, volatility can create opportunities for institutional investors.

  • Examining Global Investments with a Fresh Perspective (2012 Issue 1)

    Despite the perception the world is in an economic downturn, there are investment opportunities if you know where — and how — to look.

  • Managing Equity Risk in Volatile Markets (2012 Issue 1)

    Long/short equity strategies seek to offer investors access to the upside of equity markets — with less volatility and lower drawdown risk.

  • Responsible Investing Goes Mainstream (2012 Issue 1)

    Appreciation for responsible investing grows as it is integrate into more traditional investment portfolios.

  • The Search for Yield (2012 Issue 1)

    Income-seeking institutional investors face a challenging global financial environment as they look to the enhance the yield of their investment portfolios.

  • Engineered Beta (Fall 2011)

    Between active management and passive management, investors are charting a third path: engineering their own beta.

  • New Engines of Global Growth (Fall 2011)

    Strong economic growth from emerging and frontier markets is expected to continue as the world’s population and economic centers shift.

  • Active Design Is the Next Wave in Passive Management (Spring 2011)

    The boom in index-based fund management has not removed the need to customize portfolios in efforts to achieve desired risk/return exposure profiles.

  • Sovereign Debt: Not all Nations are Created Equal (Spring 2011)

    A painful, lingering global recession has thrown the spotlight on the different ways that nations handle debt.

  • Striking the Proper Balance in Multi-Manager Portfolios (Spring 2011)

    Diversification, not dilution, should be the objective when assembling an investment roster.

  • A Second Helping of Quantitative Easing (Winter 2011)

    The Federal Reserve’s second round of stimulus looks more promising than the first.

  • European Sovereign Debt: Challenges and Opportunities (Winter 2011)

    Institutional investors may want to consider including European sovereign debt to capture higher yields.

  • Securities Lending: Monitoring Borrower Demand Trends (Winter 2011)

    Patience may prevail and borrowing levels stabilize.

  • High-Yield Balancing Act (Winter 2011)

    The high-yield bond market may provide the best of both worlds: less risk and lower volatility than equities but higher potential returns than other fixed-income investments.

  • The Ins and Outs of Crossing (Summer/Fall 2010)

    Northern Trust experts discuss the benefits and costs of crossing trades.

  • Evaluating OTC Derivatives Exposure (Summer/Fall 2010)

    In response to increased regulation, many firms focus on over-the-counter derivative valuations and collateral management.

  • The "Pop" in Population Growth (Summer/Fall 2010)

    Demographic trends are useful when assessing potential for growth and investment returns.

  • Is the SEC's Proposal on Target? (Summer/Fall 2010)

    Jim Danaher, senior investment product manager in the DC solutions Group at northern trust, discusses the security and exchange Commission's proposed rule amendments regarding target date fund communications.

  • How and Where to Take on Risk in a Diversified Portfolio (Spring 2010)

    There is no such thing as bad risk; there is only bad premium.

  • Managing Liquidity in the Private Equity Market (Spring 2010)

    Investors look to better understand capital calls and distributions.

  • Legislating Transparency (Spring 2010)

    Global efforts to legislate the transparency of investment strategies and vehicles.

  • Scrutinizing the Fixed-Income Landscape (Spring 2010)

    Insights on short- and long-term changes within the global fixed-income markets.

  • International Completion Strategies (Spring 2010)

    Developed international small-cap, emerging and frontier markets can help investors better align their portfolios with the global economy.

  • Derivatives-based Investment Solutions (Fall/Winter 2009)

    Customized strategies offer potential to add return, manage risk.

  • Changes Pending for MMFs (Fall/Winter 2009)

    Proposals for new regulations aim to increase transparency and better manage systemic risk.

  • Perspectives on Securities Lending (Summer 2009)

    Institutional investors revisit securities lending with a stronger awareness of the risks, returns.

  • The Road Ahead for Fixed Income (Summer 2009)

    Signs of normalcy return to the market after recent upheaval.

  • Transitioning a Fixed-Income Portfolio (Summer 2009)

    Moving bond portfolios presents different challenges for investors.

  • Investment Program Outsourcing (Spring 2009)

    Plan sponsors are more comfortable using external resources to meet new challenges.

  • Perspectives on Global Equity Investing (Spring 2009)

    Investing focus shifts toward best-in-class companies and away from geography.

  • Frontier Markets (Spring 2009)

    Institutional investors have new opportunities to broaden international exposures.

  • Small-Cap Stocks and Recessions (Spring 2009)

    Evidence indicates smaller stocks have outperformed large-caps during economic recoveries.

  • The Right Time for Global Real Estate? (October 2008)

    Overseas opportunities could provide enhanced returns, reduced risk.

  • The Outlook for Private Equity (October 2008)

    Liquidity crunch, economic concerns don’t dampen investor interest.

  • Emerging Markets and the Credit Crunch (October 2008)

    Local debt markets provide buffer for developing economies.

  • The Shifting Corporate Pension Landscape (October 2008)

    Investment product innovation helps U.S. plan sponsors tackle an evolving set of challenges.

  • The Demand for Commodities (October 2008)

    Demand for commodities from emerging and developed economies continues.

  • Perspectives on Investing in China (July 2008)

    Assessing the risks and growth potential for China’s evolving stock market.

  • No Time Like the Present for LDI (July 2008)

    Pension fund sponsors examine the merits of liability driven investing.

  • A Holistic Approach to Risk Budgeting (July 2008)

    Approach helps U.S. plan sponsors balance short- and long-term funding considerations.

  • Risk Management or Risk Shifting? (April 2008)

    Popular academic theory meets real-world pension plan investment strategy.

  • Cash as a Strategic Asset (April 2008)

    As investors take a more active approach to their short-term portfolios, they must balance the potential for enhanced returns against risk and liquidity considerations.

  • London: Hub of Foreign Exchange Activity (April 2008)

    Multiple factors converge to keep the city at the crossroads of the burgeoning global currency marketplace.

  • Overcoming Home-Country Bias (April 2008)

    Institutional investors continue to shift their focus toward foreign markets.

  • Outcome-Oriented Investing (April 2008)

    Investors adopt outcome-oriented strategies for their investment programs.

  • The Dividend Puzzle (January 2008)

    Stock repurchases are replacing dividends for a new generation of companies.

  • The Winds of Change (January 2008)

    Investors evaluate the opportunities and risks resulting from global climate change.

  • The Growth of Global Investing (January 2008)

    Institutional investors adopt a global perspective in pursuit of investment opportunities.

  • Derivatives Surge in Popularity (October 2007)

    Use increases as plans sponsors look to manage risk and boost returns.

  • Employing Leverage (October 2007)

    The common denominator in some of the most innovative investment strategies is leverage.

  • Walking the Beta Line (October 2007)

    Managers seek to add value by separating true alpha from hedge fund beta.

  • Exploring New Horizons (October 2007)

    Large foundations and endowments reap the benefits of alternative investing.

  • Greater Acceptance of “Alternative” Investments (October 2007)

    Pension sponsors embrace alternatives to address underfunded liabilities.

  • Opportunities in the Eurozone (July 2007)

    A combination of events has put short-term fixed-income strategies in the spotlight.

  • Inside Target Date Funds (July 2007)

    Defined contribution plan sponsors look to select target date strategies that benefit their plans.

  • The Growth of Derivatives Markets (July 2007)

    Investors looking to hedge risk are fueling growth in the derivatives markets.

  • Handing Over the Investment Reins (July 2007)

    Total investment program management can allow investors to focus on core competencies.

  • Outsourcing as a Solution to Plan Administration and Investment Challenges (April 2007)

    Plan sponsors are increasingly turning to outsourcing to gain simplicity in plan management.

  • Portable Alpha: A Risk-Efficient Approach to LDI (April 2007)

    Portable alpha provides the building blocks to engineer more risk-efficient LDI strategies than traditional investment approaches.

  • Currency as an Asset Class (April 2007)

    As investors look beyond traditional hedging opportunities, currency trading grows into a stand-alone asset class.

  • Exploring the Hedge Fund Universe (April 2007)

    With an increasingly crowded marketplace, the challenge in hedge fund investing will be identifying new market inefficiencies.

  • The Evolution of Responsible Investing (January 2007)

    Next-generation socially responsible investment strategies allow investors to evaluate the impact of social and environmental factors on financial performance.

  • New Tactics for Investors of Balance Sheet Asset Pools (January 2007)

    Often found on an organization’s balance sheet, taxable asset pools are being invested in innovative ways.

  • Relaxing the Long-Only Constraint (January 2007)

    Active extension strategies are a natural next step for institutional investors seeking a risk-efficient method of capturing alpha while maintaining beta exposure.

  • Implementing LDI in Pension Plans (January 2007)

    Tougher funding and disclosure requirements are spurring pension plan sponsors around the globe to reconsider the context of how they view their assets and liabilities.

  • Sticking with Emerging Markets (January 2007)

    Emerging market equities have demonstrated why they should be a core element in a long-term international portfolio.

  • The Global Pension Shift (October 2006)

    Pension plans around the globe are adopting new investing mindsets and changing behaviors as they grapple with aging populations, funding issues and new regulations.

  • Beyond the Great Wall (October 2006)

    From private pension systems to cross-border investing, China’s emergence in the global economy presents risks and rewards.

  • Perspectives on Private Equity (October 2006)

    Successfully navigating the private equity waters takes persistence, perseverance and patience.

  • Asset-Mix Shifting in Institutional Portfolios (October 2006)

    Maximize excess returns and manage liabilities.

  • Private Equity in the Public Eye (July 2006)

    Private equity funds are coming off of a banner year. Institutional investors are taking a look at how they can safeguard their private equity portfolios.

  • The New Appeal of Emerging Markets (July 2006)

    Emerging markets are finding a home in institutional investors’ portfolios, where achieving an effective policy allocation can still be a challenge.

  • The Search for Efficient Asset Class Exposure (July 2006)

    Broadening the opportunity set of investment strategies is a critical first step to meeting an institutional investor’s performance objectives.

  • Sudan-Free Investing Exemplifies A Broader Trend (July 2006)

    Sudan-free investing exemplifies efforts to achieve more than investment goals.

• White Papers

  • Path Forward: Importing Winning DB Strategies to DC Plans (October 2012)

    The 2012 installment of Northern Trust's defined contribution plan research series.

  • 3Q Multi-Manager Survey (October 2012)

    Managers see housing market rebound, less downside risk in GDP growth.

  • Five-Year Outlook: 2012 Edition (October 2012)

    Northern Trust's Capital Market Assumptions working group releases risk-return assumptions for key asset classes.

  • Gaining Exposure to Infrastructure (September 2012)

    Listed infrastructure may offer attractive cash flows, inflation protection, dividend yields.

  • Proprietary Quality Philosophy (July 2012)

    Focusing on quality companies to seek outperformance, controlled volatility.

  • Adding Value With Ultra-Short Fixed Income (April 2012)

    Northern Trust paper explains how investors can potentially improve returns while still seeking to preserve principal, even in a rising interest rate environment.

  • Quality, Dividends and Portfolio Application (March 2012)

    Northern Trust research identifies ways to overcome the limitations of traditional low volatility portfolios.

  • Customized Beta: Changing Perspectives on Passive Investing (March 2012)

    A new range of passive strategies has emerged, moving away from traditional index weightings to alternative, customized approaches.

  • Making Target Retirement Date Funds Work—Glidepath Analysis (March 2012)

    Examining the Northern Trust glidepath construction methodology.

  • Focus on Quality: The Core of New Equity Strategies (March 2012)

    Northern Trust research identifies ways to overcome the limitations of traditional low-volatility portfolios.

  • Minimum Variance Portfolios—Challenging the Traditional Concept of Risk & Reward (March 2012)

    Low-volatility QDF portfolios provide investors the potential for higher risk-adjusted performance.

  • Emerging Markets Debt Offers Investment Opportunities (2012 Issue 1)

    Northern Trust white paper explains the benefits of the asset class, including attractive yields and absolute returns as well as appealing diversification and risk characteristics.

  • Controlling Volatility in Small-Cap Equity Portfolios (2012 Issue 1)

    Northern Trust paper explains why investors aren’t always compensated for the risk in small-cap stock portfolios, and what they can do about it.

  • Survey Finds Changing Views on Risk, Market Volatility (Fall 2011)

    The Northern Trust Investment Manager Survey reveals increasing risk aversion among managers and concern about higher volatility through the remainder of 2011.

  • 1Q 2011 NTGA Manager Survey (Winter 2011)
  • No Contest: Emerging Managers Lap Investment Elephants (October 2010)
  • Insights on Demographics: It's More than Just the Numbers (June 2010)
  • First Quarter 2010 NTGA Manager Survey (April 2010)
  • 2010 Investment Outlook (March 2010)
  • International Transitions Costs and Risks (March 2010)
  • Insights in Private Equity Investing: The Fundamentals of the Asset Class (March 2010)
  • Fourth Quarter NTGA Manager Survey (December 2009)
  • The Added Risks of International Transitions (December 2009)
  • The Future of Money Markets (October 2009)
  • How to Select a Transition Manager (September 2009)
  • Understanding the Fixed Income Landscape (December 2009)
  • Buyer’s Market in Municipal Bonds (July 2009)
  • The Future of Alternative Investments (July 2009)
  • Dividends’ Impact on Taxable Investors (June 2009)
  • Emerging Markets (April 2009)
  • Currency Hedging – The Impact of Exchange Rate Volatility on Currency Hedged Classes (April 2009)
  • Liability Driven Investing Implementation (October 2008)
  • Global Real Estate Investing (June 2008)
  • Private Equity Indexes – Insight or Self-Deception (August 2008)
  • International Equities: Seeking a More Complete Definition (May 2008)
  • Transition Management: A Review of Market Volatility and Implications When Restructuring Assets (May 2008)
  • Investing in Chinese Equities (February 2008)
  • Transition Management: Understanding & Evaluating Interim Investment Management Solutions (February 2008)

• Audio Podcasts

  • Whistlejacket Restructuring Update (7 min./4.81 MB)

    The restructuring of the insolvent Whistlejacket SIV made significant progress in April and early May. Listen to this podcast to learn about what we believe will be final resolution of this restructuring.

    Listen now to Whistlejacket Restructuring Update (To download, right click on the link and select "Save As.")

  • Megatrends in Institutional Investing (10 min. 37 sec/7.5 MB)

    What global trends are transforming the asset servicing industry? Four key mega-trends are affecting institutional investors and investment managers. In this podcast, we examine all four trends and the environments in the United States and Europe that helped incubate each.

    Listen now to Megatrends in Institutional Investing (To download, right click on the link and select "Save As".

  • U.K. REITS (13 min. 18 sec/9.35 MB)

    Real estate investment trusts, or REITs for short, are one of the most talked about and long-awaited investment vehicles on the United Kingdom investment scene. Find out what their arrival in 2007 really means for property companies and investors in the United Kingdom.

    Listen now to U.K. REITS (To download, right click on the link and select "Save As.")

  • Sudan-Free Investing (5 min. 13 sec/3.59 MB)

    Why have some investments been divested from companies that do business in Sudan or distribute products made in Sudan? This timely and comprehensive podcast provides some answers.

    Listen now to Sudan-Free Investing (To download, right click on the link and select "Save As.")

  • Target Date Funds (7 min. 13 sec/5.1 MB)

    While target date funds have been in existence for several years, the recent surge in interest is a result of the Pension Protection Act which was signed into law in 2006. Many plan sponsors are adopting target date strategies as their new default investment option. Listen to this podcast to find out more about Target Date Strategies.

    Listen now to Target Date Funds (To download, right click on the link and select "Save As.")

  • Portable Alpha (7 min. 52 sec/5.4 MB)

    Considering alternatives to traditional portfolio management? There has been considerable interest by Institutional Investors around portable alpha. Several factors have contributed to this interest; listen to find out more.

    Listen now to Portable Alpha (To download, right click on the link and select "Save As.")

  • Investing in China (8 min. 43 sec/6.0 MB)

    There is no question that China is booming. The country boasts the world’s fastest growing economy, one of the fastest growing middle classes and a manufacturing and industrial base set to rapidly expand for the foreseeable future. So what should an investor know before contemplating an investment in China?

    Listen now to Investing in China (To download, right click on the link and select "Save As.")

  • A Structured Approach for Small-Cap Investing (11 min./7.5 MB)

    For the past 5 years, the small cap equity asset class has been one of the leading contributors to investors’ overall performance. Fueled by today’s low equity return environment, the demand for small cap products continues at a rapid pace – despite many top-quartile managers closing their doors to new investors.

    Listen now to A Structured Approach for Small-Cap Investing (To download, right click on the link and select "Save As.")

  • Global Pension Shift (18 min./12 MB)

    Pension plans around the globe are adopting new investing mindsets and changing behaviors as they grapple with aging populations, funding issues and new regulations. This podcast is intended for institutional investors who want to learn more about how pension plans around the globe are responding to new pension funding laws and regulations, and the strategies - such as liability driven investing - that are being developed to deal with these issues.

    Listen now to Global Pension Shift (To download, right click on the link and select "Save As".

  • The Top Five Myths of Transition Management (8 min. 50 sec./6.07 MB)

    Each year, institutional investors shuffle between $2 trillion and $2.5 trillion dollars among portfolios. Given the continued search for alpha and new funding and reporting requirements, most industry analysts expect the number of portfolio restructurings to increase. As the pace of fund restructurings continues to accelerate (due to these changes), it’s important to separate truth from the transition management myths.

    Listen now to The Top Five Myths of Transition Management (To download, right click on the link and select "Save As.")

  • The “Forced” Institutionalisation of the Hedge Fund Industry (21 min./14 MB)

    With hedge fund stories constantly in the press, this podcast will be of interest to anyone who wants to find out more about the impact of inflows of institutional money on the hedge fund industry. Northern Trust seeks to explore the consequences that institutionalisation is having on investors and managers alike.

    Listen now to The “Forced” Institutionalisation of the Hedge Fund Industry (To download, right click on the link and select "Save As.")

• Videos

  • Fixed Income Market Update Biweekly Video Podcast

    By Colin Robertson, Managing Director of Fixed Income

  • Loose Ends? Europe: Outlook for Interest Rates, Oil

    By Paul Kasriel, Chief Economist, Northern Trust

  • To QE or Not to QE? Questions on the U.S. Economy

    By Paul Kasriel, Chief Economist, Northern Trust

  • Insurance Regulatory Reform Webinar

    Northern Trust and Deaver Logic LLC explore the implications to insurance companies on the move from Statutory Accounting to IFRS, the Dodd-Frank Act and Solvency II.

  • Japanese Aftershocks : Asia-Pacific and Emerging Markets

    By Paul Kasriel, Chief Economist, Northern Trust

  • Winners and Losers - Coming Out of the Economic Downturn (6 min. 14 sec.)

    This session features Paul Kasriel, Northern Trust’s Chief Economist and Leo Abruzzese, Editorial Director/Americas for the Economist Intelligence Unit. Together, they analyze lessons from the great historic downturns of the 1930s and 1970s, and how we can apply them to today’s environment.

  • Looking Forward: Investing in the Post-Crisis Environment (6 min. 14 sec.)

    Northern Trust Global Investment’s Chief Investment Officer, Bob Browne, and Chief Investment Strategist, Jim McDonald provide insights into our investment philosophy and asset allocation strategy as well as discuss potential challenges in the market and where they see upside opportunities for institutional investors.

  • Johnny One Note and the Green Shoots — Part 1: U.S. Economy Keeps Playing the Same Tune (6 min. 29 sec.)

    The U.S. economy keeps playing the same tune. Whether it concerns growth, inflation/deflation or employment, as Paul Kasriel explains, it always gets back to bank credit. Paul shares some unconventional ideas to spur growth.

  • Mixed Bags, Setting Suns and Competing Currencies — Part 2: Outlook for Eurozone, Japan and China (7 min. 10 sec.)

    Paul Kasriel trips across the continents, showing what drives the German export machine, how population impacts Japanese productivity, and why China is promoting the renminbi.

  • Monthly Investment Perspective Highlight

    Bob Browne, chief investment officer for Northern Trust, discusses recent market events, including a slowing recovery, a potential Fed rate hike, and how the Greek and EU debt issues eventually must be addressed in the United States.

  • Hopeful Signs and Hidden Landmines, Part 1 (8 min. 54 sec.)

    The global recovery feels different, depending on where you are. Paul Kasriel, Northern Trust’s Chief Economist, looks ahead at prospects for jobs and global growth — and some tripwires along the path.

  • Hopeful Signs and Hidden Landmines, Part 2 (10 min. 13 sec.)

    The global recovery feels different, depending on where you are. Paul Kasriel, Northern Trust’s Chief Economist, looks ahead at prospects for jobs and global growth — and some tripwires along the path.

  • Emerging Markets (1 min. 58 sec.)

    Greg Behar, senior investment strategist at Northern Trust, offers analysis and commentary on the future of emerging markets.

  • Retirement Solutions On Demand Series

    In this ongoing series, Pensions Insights magazine interviews experts within Northern Trust’s Retirement Solutions Practice about issues facing retirement plans.

  • Waking Up in Recovery, Part 1 (7 min. 50 sec.)

    Paul Kasriel, Northern Trust's Chief Economist, takes a fresh look at the economy, the headwinds we face, and future engines for global growth.

  • Biweekly Fixed Income Market Updates

    Gain insights into how liquidity, volatility and government actions are impacting the credit markets and the economy.

  • Monthly Perspectives Highlights

    A discussion of emerging markets, economic growth and performance of broad indexes.

  • Waking Up in Recovery, Part 2: A slow return to health (8 min. 50 sec.)

    What happens after the stimulus spending wears off? Paul Kasriel, Northern Trust's Chief Economist, shares his prognosis on inflation, the U.S. dollar and the year ahead.