10 Key Takeaways from Commonfund Forum 2017

March 29, 2017 |
1 minute read
|

Commonfund recently hosted its 19th annual Commonfund Forum in San Antonio Texas.  The event brought together about 450 institutional investors from the U.S, Puerto Rico and Canada to engage in a 3-day conference to explore cyclical trends and tactical opportunities that can help support the missions of their institutions.  More than 60 experts in academia, public policy and government convened in General Sessions, Major Addresses and Breakout sessions.

Here are 10 key takeaways from Commonfund Forum 2017.

1

The tenets of the endowment model, an equity bias, diversification and capturing the liquidity premium, still have merit but they must be executed differently than in the past to account for how markets have evolved.

2

Passive and active should both play a role in portfolios today – although the likelihood of an institution achieving CPI + 5% without active management is currently low.

3

Diversification is harder than it seems on the surface – correlations might not tell the whole story. Portfolio construction is shifting from top-down dollar allocation to being built bottom-up based on factor analysis.

4

Finding value – across asset classes – requires identifying out-of-favor securities and applying disciplined risk management and portfolio construction techniques.

5

An important lesson to remember – all investors need liquidity to survive a crises.

6

The U.S. is rapidly on its way to energy independence – mostly due to the shale revolution – which has produced huge amounts of oil and natural gas, with the costs of extraction dropping continuously.

7

Due to demographics and constraints on productivity growth, expect economic growth in the U.S. and most developed countries to be lower than historical averages over the coming years.

8

In the U.S., populism, anti-globalization and anti-immigration policies could hold back growth while lower taxes and fiscal spending could support it (at the cost of larger deficits down the road).

9

The keys to investment success when distributions are bimodal are optionality, resilience and agility.

10

Longevity is an opportunity and a risk – nonprofit institutions have an opportunity to consider investments based on secular trends that may take years to play out but can also prove to be very profitable.

 

 

 

Interested in learning more about Commonfund Forum? Click here for more details on the program.

Stay connected with the Insights Blog

Popular Blog Posts


Governance And Policy | Insights Blog

What is an OCIO?

Outsourced investment management, once primarily a solution for small institutions with limited resources, is now used by a broad range of long-term investors. When properly implemented, outsourcing...
Investment Strategy | Insights Blog

Balancing Purpose, Payout, and Permanence: A Strategy Guide for Foundations

In partnership with the Council on Foundations, the National Center for Family Philanthropy has released Balancing Purpose, Payout, and Permanence: Strategy Guide. Commonfund Institute is very happy...
Investment Strategy | Insights Blog

Chart of the Month | Inflation Expectations Surge, Driving Real Interest Rates Down

Chairman Powell’s speech at Jackson Hole during the last week of August confirmed the Fed’s dovish policy stance, giving investors ample support in terms of low rates and a flexible inflation...

Disclaimer

Information, opinions, or commentary concerning the financial markets, economic conditions, or other topical subject matter are prepared, written, or created prior to printing and do not reflect current, up-to-date, market or economic conditions. Commonfund disclaims any responsibility to update such information, opinions, or commentary. To the extent views presented forecast market activity, they may be based on many factors in addition to those explicitly stated in this material. Forecasts of experts inevitably differ. Views attributed to third parties are presented to demonstrate the existence of points of view, not as a basis for recommendations or as investment advice. Managers who may or may not subscribe to the views expressed in this material make investment decisions for funds maintained by Commonfund or its affiliates. The views presented in this material may not be relied upon as an indication of trading intent on behalf of any Commonfund fund, or of any Commonfund manager. Market and investment views of third parties presented in this material do not necessarily reflect the views of Commonfund and Commonfund disclaims any responsibility to present its views on the subjects covered in statements by third parties. Statements concerning Commonfund’s views of possible future outcomes in any investment asset class or market, or of possible future economic developments, are not intended, and should not be construed, as forecasts or predictions of the future investment performance of any Commonfund fund. Such statements are also not intended as recommendations by any Commonfund entity or employee to the recipient of the presentation. It is Commonfund’s policy that investment recommendations to its clients must be based on the investment objectives and risk tolerances of each individual client. All market outlook and similar statements are based upon information reasonably available as of the date of this presentation (unless an earlier date is stated with regard to particular information), and reasonably believed to be accurate by Commonfund. Commonfund disclaims any responsibility to provide the recipient of this presentation with updated or corrected information. Past performance is not indicative of future results. For more information please refer to Important Disclosures.