At the start of October, I was enjoying the heat in Malaga, snacking on orange sorbet and admiring the views from the Giabralfaro castle. Back in London, my latest feature for MandateWire was published, which discussed whether it was a good idea to allow asset owners to express their voting preferences. Two articles I had written for IPE on ETFs were also printed, looking at fixed income trends and sustainable investment strategies. I headed to Manchester for the PLSA’s annual conference which was a satisfying whirlwind of meetings, drinks and dinners. But there was a surprising lack of discussion about what pensions policies a Labour government might pursue. Next month I’ll be hosting my latest networking event – get in touch if you want to come! – as well as moderating two other sessions.
Why asset managers should think twice before offering ‘split voting’ to clients
Is it a good idea for managers to allow asset owners to select their voting preferences? That’s the question I address in my latest feature for MandateWire. While ‘split voting’ might seem a way to give pension schemes agency over their shareholder rights, some are concerned this is a way for managers to side-step political pressures. Decoupling voting policy from engagement makes it hard for asset managers to be effective stewards − the two need to work together to change corporate behaviour. That’s why some larger asset owners which use pool funds prefer to find managers’ whose beliefs are aligned rather than to be offered split voting.
Focus returns to fixed income ETFs
Fixed income is back, baby! In the first seven months of the year, inflows into fixed income ETFs almost tripled compared with the same period last year. In this article for IPE, I discussed the switch away from equities into fixed income and how investors were betting on peak interest rates. The article also looks at how the popularity of fixed income has made sustainable investment less popular as it’s harder to integrate these concepts, particularly into sovereign bonds.
Sustainable fixed income products gain ground
How can we incorporate sustainable investment into fixed income ETFs? That’s one of the questions my second piece for IPE addresses. It’s harder to include ESG characteristics in government bond portfolios and the complexity of embedding sustainability into corporate debt indices means this asset class has been less well developed than equities. These issues are being partially overcome by both governments and corporates issuing more green bonds. To improve trust in sustainable bond products, the current standards being developed by the International Sustainability Standards Board (ISSB) and Taskforce on Nature-related Financial Disclosures (TNFD) will be vital.
What could be a Labour government’s pension policy?
I’m odd. I enjoy standing in an exhibition hall for several days at a PLSA conference, networking my bamboo socks off! With the emphasis on policy rather than an investment at this month’s annual conference, I was struck by how many people mentioned Jeremy Hunt and what might be in the autumn statement. No-one, however, talked about what a Labour government’s pensions policy would be. The day after the conference ended Labour won two by-elections overturning two large Conservative majorities. That inspired me to write this post asking for the pension industry to give this more thought to whether a Labour government would pursue a similar or different agenda to the Tories. It was reassuring to see I’m not alone in thinking the industry needs to bolster its lobbying efforts.