Research

Debunking 130/30 Benchmarks
On the heels of still relatively new directional long/short strategies, actively managed indexes are emerging to benchmark their performance. While on the surface this might seem like a good idea, Russ Kamp, Head of Invesco Quantitative Strategies, argues that this trend is in fact misguided. Investors should instead stick with the same indexes to which they compare their long-only managers since the use of shorting in directional long/short investing is no different than making active under-weight decisions in a long-only portfolio.

The Invesco Learning Center In a concise and clear video format, Diane Garnick, Invesco's Investment Strategist, explains equity indices, tracking error and internal vs. external management.

Strategies for Mitigating Turbulence Risk
Whether or not we choose to classify recent market behavior in the United States as "turbulent" or perhaps the more benign term, "volatile," there is little doubt that equity markets, and to a lesser extent fixed income markets, have in recent months raised the level of angst among plan sponsors and individuals thinking about their retirement assets. Given the damage that sharp financial downturns can inflict on pensions and retirement savings accounts, we believe it is important to factor "turbulence risk" – i.e., the threat of a major draw-down â€“ into the asset allocation decisions of investment portfolios.

Investment Strategies to Bear in Mind
It was difficult, but we were finally able to identify a chart with an upward slope
beginning in the summer of 2007 and continuing through today...

Diversification Deceit
With specialization in the workforce, plan sponsors, consultants, and individual investors need to consider the level of their industry concentration in the context of their entire portfolio. Reprinted from Institutional Investor.

Liabilities plus alpha â€“ good news for plan sponsors
With better risk and return characteristics relative to conventional asset allocation, Liabilities Plus Alpha is an alternative approach to conventional asset allocation strategies that seek to improve asset values but ignore the liability side of the equation. Read about the concepts of portable alpha and alpha sources, potential pitfalls, and how this approach can generate strong performance and be tailored to meet plan objectives. This article was originally published in The Euromoney Portable Alpha Handbook 2008. For further information, please visit www.euromoney-yearbooks.com/handbooks

A Midsummer Night's Risk
A review of the summer's market activity including lessons learned, possible scenarios and implications by Investment Strategist Diane Garnick.

Risk and Reward Risk and Reward is a quarterly publication reflecting the market insights of Invesco's management professionals worldwide.

The opinions expressed herein are based on current market conditions and are subject to change without notice.