DOCSLIB.ORG

Global Balanced Select ADR Factsheet Performance (%; Through 30 June 2021) Annualized

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Global Balanced Select ADR Factsheet Performance (%; Through 30 June 2021) Annualized Lazard 2Q21 Global Balanced Select ADR Factsheet Performance (%; through 30 June 2021) Annualized 3 Months YTD 1 Year 3 Years 5 Years 10 Years Lazard Global Balanced Select ADR – SMA (Gross) 4.17 6.81 21.88 11.05 10.27 8.16 Lazard Global Balanced Select ADR – SMA (Net) 3.38 5.20 18.22 7.72 6.97 4.92 Global Balanced Advisory Custom Index 4.80 6.87 22.45 10.95 9.95 7.25 Performance is presented gross and net of all fees. Net-of-fee performance has been calculated using a 3.0% fee assumption. Gross-of-fee performance is pre- sented as supplementary information, as performance excludes transaction costs. Please refer to the disclosures for important additional details of this composite. The performance quoted represents past performance. Past performance is not a reliable indicator of future results. Strategy Description Lazard Global Balanced Select ADR invests in both equity and fixed income securities. The equity component comprises Lazard Global Equity Select ADR, an unconstrained strategy designed to capture Lazard’s best ideas. The strategy seeks to generate strong relative returns over a long-term time hori- zon by investing in companies across the market spectrum with strong and/or improving financial productivity which trade at attractive valuations. Global Equity Select ADR typically invests in 60–80 companies from both developed and emerging countries. The fixed income component of the strategy invests in ETFs and closed-end funds which provide exposure to fixed income securities from both developed and emerging global markets. Asset Allocation (%)1 Equity Allocations (%)1,3 MSCI Lazard Lazard Region Lazard * ACWI Underweight/Overweight Equity 62.1 North America 59.1 61.6 Fixed Income 35.1 Continental Europe 17.8 12.8 Cash & Equivalents 2.8 Emerging Markets 12.1 12.9 United Kingdom 8.7 3.7 Equity Investment Characteristics2,3 Japan 2.3 5.9 -6 -3 0 3 6 Lazard MSCI ACWI Sector Number of Securities 60 2,975 Information Technology 18.6 21.9 Weighted Average Market Cap ($B) 272.6 344.3 Consumer Discretionary 15.9 12.7 Forward Price/Earnings FY1 (%) 23.4 19.8 Industrials 14.9 9.9 Forward Return on Equity NTM (%) 22.6 14.2 Financials 14.7 14.1 Free Cash Flow Yield (%) 3.2 3.4 Health Care 13.1 11.6 Dividend Yield (%) 1.3 1.7 Consumer Staples 12.7 6.9 Turnover – Trailing 12 Months (%) 16.8 N/A Communication Services 8.0 9.4 1,3 Utilities 1.1 2.6 Top Ten Equity Holdings (%) Materials 1.0 4.9 Lazard -4 0 4 8 *Excludes cash Alphabet 2.4 Microsoft 2.3 1,3 Thermo Electron 1.8 Fixed Income Allocations (%) Wolters Kluwer 1.7 IQVIA 1.7 49.9 25.0 15.1 10.0 Diageo 1.6 Johnson & Johnson 1.6 iShares Short -Term Corporate Bond ETF iShares 3-7 Treasury Bond ETF Aon 1.5 Vanguard Short-Term Treasury Index Fund Admiral Shares Motorola Solutions 1.4 Invesco Fundamental HY Corporate Bond ETF Tencent 1.4 For a complete list of holdings, please visit www.lazardassetmanagement.com SF22998 Holdings (%)1,3 Communication Services 5.0 Health Care 8.1 Materials 0.6 Alphabet Boston Scientific Rio Tinto (ADR) Nintendo (ADR) IQVIA Holdings Utilities 0.7 Tencent (ADR) Johnson & Johnson China Gas Holdings (ADR) Warner Music Group Medtronic Merck (ADR) Fixed Income 35.1 Consumer Discretionary 9.9 Thermo Electron Alibaba (ADR) Cash & Equivalents 2.8 Zoetis Adidas (ADR) BRP Industrials 9.2 Dollar General ABB (ADR) Industria de Diseno (ADR) ASSA ABLOY (ADR) Lowe’s CAE LVMH Moët Henessey (ADR) Canadian National Railway McDonald's Epiroc (ADR) Sands China (ADR) Honeywell International Shimano (ADR) RELX (ADR) Swatch (ADR) Rockwell Automation TopBuild Vestas Wind Systems Wolters Kluwer (ADR) Consumer Staples 7.9 Carlsberg (ADR) Information Technology 11.5 Coca-Cola Accenture Coca-Cola European Partners Hexagon (ADR) Diageo (ADR) Microsoft Pernod Ricard (ADR) Motorola Solutions Procter & Gamble NXP Semiconductors Unilever (ADR) PTC Taiwan Semiconductor Manufacturing Financials 9.1 Texas Instruments AIA Group (ADR) Visa Aon Banco Bradesco (ADR) Charles Schwab HDFC Bank (ADR) Intercontinental Exchange Prudential (ADR) S&P Global Toronto-Dominion Bank (ADR) Notes 1 The allocations and specific securities mentioned are based upon a portfolio that represents the proposed investment for a fully discretionary account. Allocations and security selection are subject to change. The securities mentioned are not necessarily held by Lazard for all client portfolios, and their mention should not be considered a recommendation or solicitation to purchase or sell these securities. It should not be assumed that any investment in these securities was, or will prove to be, profitable, or that the investment decisions we make in the future will be profitable or equal to the investment performance of securities referenced herein. There is no assurance that any securities referenced herein are currently held in the portfolio or that securities sold have not been repurchased. Please note that cash is not viewed as a strategic asset class. 2 As of 30 June 2021. Investment characteristics are based upon a portfolio that represents the proposed investment for a fully discretionary account. Forward looking figures represent expected returns. Expected returns do not represent a promise or guarantee of future results and are subject to change. Forward Price/Earnings is defined as Price/Earnings FY1 and Return on Equity as Return on Equity NTM. Source: Lazard, FactSet, MSCI, Standard & Poor’s 3 As of 30 June 2021. This information is for illustrative purposes only and is supplemental to the “GIPS® Standards Composite Information.” GIPS Standards Composite Information presented represent past performance and is not a reliable indicator of future results, which may Composite Name Lazard Global Balanced Select ADR – SMA vary. A complete list and description of all Lazard composites and pooled funds is available upon Benchmark Global Balanced Advisory Custom Index request. Reporting Date 31 March 2021 Composite Inception Date 01 May 1994 Fee Schedule The maximum fee for Lazard’s Global Balanced Select ADR strategy is 3.00%. All-inclusive SMA Reporting Currency US Dollar fee schedules for each plan sponsor vary and are available through the plan sponsor. Composite Description Benchmark Information The composite returns represent the total returns of all fully discretionary separately managed account As this strategy is now eligible for investment in emerging markets equity securities, as of July 1, (SMA) portfolios with a Global Balanced Select ADR investment mandate. The Lazard Global Balanced 2010, the benchmark is now a linked index consisting of monthly rebalanced blend of 60% MSCI Select ADR strategy invests in both equity and fixed income securities. The equity component World Index (Net) / 40% Bloomberg Barclays US Government /Credit Intermediate Bond Index follows Lazard Global Equity Select ADR, an unconstrained strategy designed to capture Lazard’s through June 30, 2010, and 60% MSCI All Country World Index (Net) / 40% Bloomberg Barclays best ideas. The strategy seeks to generate strong relative returns over a long-term time horizon by US Government /Credit Intermediate Bond Index, afterwards. investing in companies across the market spectrum with strong and/or improving financial productivity GIPS Compliance and Verification Status at attractive valuations. The fixed income component of the portfolio can invest in US government Lazard Asset Management claims compliance with the Global Investment Performance Standards securities, as well as closed-end funds that can have exposure to either developed or emerging global (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. Lazard markets, and which are rated investment grade or below. As of December 1, 2012, the account Asset Management has been independently verified for the periods January 1, 1993 through inclusion criteria minimum has changed from $25,000 to $65,000. Performance presented prior to December 31, 2019. The verification reports are available upon request. A firm that claims compli- January 1, 2006, represents the historical track record of Lazard’s existing Global Balanced composite. ance with the GIPS standards must establish policies and procedures for complying with all the Actual SMA composite results from January 1, 2006 and forward contain all accounts with bundled applicable requirements of the GIPS standards. Verification provides assurance on whether the fees. Gross of fee results are presented supplemental to compliant net of fee results, as no trading firm’s policies and procedures related to composite and pooled fund maintenance, as well as the costs are included. calculation, presentation, and distribution of performance, have been designed in compliance with Calculation of Performance Returns the GIPS standards and have been implemented on a firm-wide basis. Verification does not provide Composite dispersion and standard deviation are based on net returns. Historical and prospective assurance on the accuracy of any specific performance report. Lazard Asset Management is the net of fee composite performance returns are calculated using a 3.0% total fee assumption and “Firm” to which the GIPS Standards apply (Frankfurt office included in Firm definition as of January is presented before taxes. Policies for valuing investments, calculating performance, and prepar- 1, 2003). GIPS® is a registered trademark of CFA Institute. CFA Institute does not endorse or pro- ing GIPS reports are available upon request. The composite and benchmark returns are reported mote this organization,
Load more

Recommended publications
  • Vanguard® 500 Index Fund - Admiral™ Shares 06-30-21
    Release Date Vanguard® 500 Index Fund - Admiral™ Shares 06-30-21 .......................................................................................................................................................................................................................................................................................................................................... Category Large Blend Investment Objective & Strategy Portfolio Analysis From the investment's prospectus Composition as of 06-30-21 % Assets Morningstar Style Box™ as of 06-30-21 % Mkt Cap The investment seeks to track the performance of the U.S. Stocks 99.0 Large Giant 51.39 .......................................................... Standard & Poor‘s 500 Index that measures the investment Non-U.S. Stocks 1.0 Mid Large 33.89 return of large-capitalization stocks. Bonds 0.0 Medium 14.65 The fund employs an indexing investment approach Cash 0.0 Small Small 0.07 designed to track the performance of the Standard & Poor's Other 0.0 .......................................................... Micro 0.00 500 Index, a widely recognized benchmark of U.S. stock Value Blend Growth market performance that is dominated by the stocks of large U.S. companies. The advisor attempts to replicate the target Top 10 Holdings as of 06-30-21 % Assets Morningstar Equity Sectors as of 06-30-21 % Fund index by investing all, or substantially all, of its assets in the Apple Inc 5.92 h Cyclical 31.06 .......................................................................................................
    [Show full text]
  • Equity Index Fund Profile Information Current As of 03/31/2021
    Equity Index Fund Profile Information current as of 03/31/2021 Risk/Reward Indicator Lower Risk/Reward Higher Risk/Reward Investment Objective Investment Managers The investment objective of the Equity Index Fund is to replicate the The Equity Index Fund is comprised of the following manager: return of the Standard & Poor’s (S&P) 500 Index. The Equity Index BNY Mellon Fund offers participants exposure to the stocks of large corporations through a passive investment vehicle. Returns on large cap equities Current Allocation have historically exceeded inflation, but with substantial volatility over short and even intermediate holding periods (risk as measured by standard deviation). Investment Guidelines The Equity Index Fund will invest in a portfolio of equity securities of companies listed on the U. S. securities exchanges that replicates the composition and characteristics of the S&P 500 Index. Fees: NYCDCP Fee versus Institutional Fund Fee NYCDCP Equity Index Fund 0.05% Institutional Median Equity Index Fund 0.07% Performance History After Fee Cumulative$IWHU)HH&XPXODWLYH5HWXUQV(QGLQJ0DUFK Returns Ending March 31, 2021 ,QFHSWLRQ 0R 5DQN <U 5DQN <UV 5DQN <UV 5DQN <UV 5DQN <UV 5DQN <UV 5DQN <UV 5DQN ,QFHSWLRQ 'DWH B (TXLW\,QGH[)XQG -DQ 6 3 -DQ ;;;;; After Fee Year-to-Date$IWHU)HH<HDUWR'DWHDQG$QQXDO5HWXUQV(QGLQJ0DUFK and Annual Returns Ending March 31, 2021 <7' B (TXLW\,QGH[)XQG 6 3 ;;;;; Cumulative Returns vs. Benchmark Top Holdings 7RS+ROGLQJV $33/(,1& 0,&5262)7&253 $0$=21&20,1& )$&(%22.,1& $/3+$%(7,1& $/3+$%(7,1& 7(6/$,1& %(5.6+,5(+$7+$:$<,1& -3025*$1&+$6( &2 -2+1621 -2+1621 Disclaimer Note: The past performance of this Fund does not guarantee future results.
    [Show full text]
  • Evaluating Hedge Fund Performance in the Decade Since the Global Financial Crisis
    Hedge funds for the future Evaluating hedge fund performance in the decade since the global financial crisis Russell Investments Research russellinvestments.com Contents Introduction 3 Has hedge fund performance “disappointed”? 3 The decade since the Global Financial Crisis 4 Level-setting hedge fund performance expectations 4 Performance evaluation 6 Summary of performance versus objectives 6 Details of evaluation versus each objective 8 Conclusions 13 Why the split in performance over the five years periods? 13 Guidance in determining the role of hedge funds going forward 14 Russell Investments / Hedge funds for the future: Evaluating hedge fund performance in the decade since the GFC / 2 Hedge funds for the future Evaluating hedge fund performance in the decade since the global financial crisis Kerry Galvin, CFA, Senior Consultant Over the past decade and a half, hedge funds have become commonplace in institutional investors’ portfolios. During that time, Russell Investments has been working with its clients to implement and monitor hedge fund portfolios; however, the hedge funds that we are evaluating today in investors’ portfolios are not the same as they were 10 or 15 years ago. As hedge funds have grown in asset size and their investor changed to include more institutional investors, Russell Investments has observed many managers increasing their emphasis on operational structure, risk management procedures, transparency, counter party risk and leverage. The evaluation set forth in this paper is meant to assess hedge funds as they exist today: strategies that are meant to provide a reasonable level of return, a high level of alpha and a low level of volatility, by utilizing a variety of investment instruments (e.g., stocks, bonds, futures, forwards) and shorting (i.e., the hedge).
    [Show full text]
  • Disruptive Regulation: a Secular Investment Opportunity
    FEATURED SOLUTION PIMCO Alternatives Disruptive Regulation: A Secular Investment Opportunity AUTHORS It’s been nearly a decade since the global financial crisis Christian Stracke prompted an onslaught of regulations intended to Managing Director Global Head, Credit Research abolish excessive risk-taking and make the financial Tom Collier system safer. Yet the implementation of reforms – and Executive Vice President their disruptive effect on financial business models – Product Manager will peak only over the next few years. As Dodd-Frank and Basel regulations come into force and a further wave of regulatory reform is announced, we believe banks will exit more non-core businesses, specific funding gaps will become more acute and dislocations between public and private markets will become more frequent. Each will create investment opportunities for less constrained and patient capital to capture economic profits being ceded by banks. The lengthy process of financial sector reform is not a surprise given its complexity. Passed in July 2010, for instance, the Dodd-Frank Wall Street Reform and Consumer Protection Act runs to more than 350,000 words. Many details were left to administrators to define – and at the end of 2015, fewer than 60% had been implemented. Basel III regulations, intended to increase liquidity and decrease leverage at banks, were published in late 2009, but will not be fully implemented until 2019. Bankers are already fretting over “Basel IV,” a collection of rules being contemplated that would tighten the screws even further. 2 Featured Solution August 2016 For banks, the cost of Although most banks have increased their capital significantly, they face intense shareholder new regulations is high pressure to improve returns on capital.
    [Show full text]
  • Alternative Funds
    GLOBAL PRACTICE GUIDES Definitive global law guides offering comparative analysis from top-ranked lawyers Alternative Funds Introduction Christopher Hilditch, Schulte Roth & Zabel chambers.com 2020 INTRODUCTION Contributed by: Christopher Hilditch, Schulte Roth & Zabel At the beginning of 2020, many alternative (or private) fund all the evidence, be that multiple broker quotes, third-party managers might have been cautiously optimistic. In the year valuation agent inputs, or whatever, needs to be readily at hand ending 31 December 2019, hedge funds had seen average in the event of a challenge. At the same time, it is important to returns in excess of 12% which, whilst not stellar compared to maintain an open dialogue with the fund auditors to ensure that the extraordinary returns seen in the market, was a welcome they are on the same page come audit time. return to good performance after a number of years of poor returns. Private equity funds also showed double digit returns In times of turmoil, there is a renewed focus on liquidity. The over one-year, three-year, five-year and ten-year time horizons. standard redemption terms of an open-ended fund are predi- Of course, some strategies performed better than others – mac- cated on the anticipated usual liquidity of the underlying portfo- ro and long equity amongst hedge fund strategies and buyout lio. However, a crisis such as the COVID-19 pandemic not only among private equity strategies. causes liquidity issues in the market (potentially exacerbating the valuation concerns mentioned above), but is also likely to Notwithstanding, the fund-raising environment continued to create liquidity pressure on a fund as investors seek to redeem be challenging for many, especially for hedge funds.
    [Show full text]
  • Hedge Fund Standards Board
    Annual Report 2018 Established in 2008, the Standards Board for Alternative Investments (Standards Board or SBAI), (previously known as the Hedge Fund Standards Board (HFSB)) is a standard-setting body for the alternative investment industry and custodian of the Alternative Investment Standards (the Standards). It provides a powerful mechanism for creating a framework of transparency, integrity and good governance to simplify the investment process for managers and investors. The SBAI’s Standards and Guidance facilitate investor due diligence, provide a benchmark for manager practice and complement public policy. The Standards Board is a platform that brings together managers, investors and their peers to share areas of common concern, develop practical, industry-wide solutions and help to improve continuously how the industry operates. 2 Table of Contents Contents 1. Message from the Chairman ............................................................................................................... 5 2. Trustees and Regional Committees .................................................................................................... 8 Board of Trustees ................................................................................................................................ 8 Committees ......................................................................................................................................... 8 3. Key Highlights ...................................................................................................................................
    [Show full text]
  • AIFMD) Frequently Asked Questions (Faqs)
    Alternative Investment Fund Managers Directive (AIFMD) Frequently Asked Questions (FAQs) November 2011 Contents Scope In a nutshell, what is the AIFMD? 3 Who is subject to the AIFMD? 3 Can an Alternative Investment Fund be distributed to EU retail investors? 4 Can an EU feeder AIF with a non EU master AIF benefit from the European passport under the AIFMD? 4 Is it compliant with the AIFMD if a Luxembourg management company delegates it portfolio management functions for an Alternative Investment Fund to a US AIF Manager? 4 Is it compliant with the AIFMD if a US management company delegates it portfolio management functions for an EU Alternative Investment Fund to an EU AIF Manager? 4 Organisational requirements Does an Alternative Investment Fund marketed in the European Union to institutional investors need to be managed by an EU AIFM? 5 Can a UCITS management company also act as an AIFM? 5 Can a MiFID firm act as an AIFM? 5 Can an AIF have multiple AIFM (for example an EU AIFM and a non-EU AIFM)? 5 Valuation Does an EU AIFM need to appoint an external valuator? 5 Leverage Is there any leverage limitation for the AIFs marketed in the EU? 6 Depositary Does an AIF need to appoint a depositary in its home country? 6 Can the depositary be the same entity charged with the risk management functions of the Alternative Investment Fund? 6 Delegation May an EU AIFM delegate the portfolio management to an asset manager based outside of the European Union? 6 Risk management Are the risk management requirements under AIFMD similar to those for UCITS?
    [Show full text]
  • LAZARD GROUP LLC (Exact Name of Registrant As Specified in Its Charter)
    Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2008 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to 333-126751 (Commission File Number) LAZARD GROUP LLC (Exact name of registrant as specified in its charter) Delaware 51-0278097 (State or Other Jurisdiction of Incorporation (I.R.S. Employer Identification No.) or Organization) 30 Rockefeller Plaza New York, NY 10020 (Address of principal executive offices) Registrant’s telephone number: (212) 632-6000 Securities Registered Pursuant to Section 12(b) of the Act: None Securities Registered Pursuant to Section 12(g) of the Act: None Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐ Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒ Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
    [Show full text]
  • Alternative Investment Fund Managers Directive (AIFMD) Real Estate
    Alternative Investment Fund Managers Directive (AIFMD) Real Estate AIFMD requires real estate managers to obtain authorisation, meet on- going operating conditions and comply with transparency and reporting requirements in order to manage and market Real Estate funds within the EU Entities within scope will need to start complying from 22 July 2013 Background AIFMD is likely to affect most Real Estate fund Those EU funds with non-EU managers may be managers who manage funds or have investors in the required to become authorised by 2015 . AIFMs European Union if they are identified as the Alternative managing funds below de minimus aggregate Investment Fund Manager (AIFM) of a particular fund thresholds may only be subject to lighter touch or funds. Limited grandfathering provisions apply, requirements, which include registration with generally exempting closed-end funds which will end regulator, notification of investment strategies, and prior to 2016 or are fully invested by 2013. certain investment reporting. Some of the significant impacts of the Directive Directive area Requirements Impact on Real Estate Remuneration 1) At least 50% of any variable remuneration • Phantom or shadow share schemes will need to be consists of units or shares of the AIF (or implemented if shares in the fund is not permitted. equivalent). • Requirement applies to senior management, those in 2) At least 40% (in some cases 60%) of the variable control functions or individuals whose professional remuneration is deferred over a period of at activities have a material impact on the risk profile of least three to five years (unless the fund life the RE fund they manage.
    [Show full text]
  • KPMG's Global Alternative Investment Practice
    FINANCIAL SERVICES KPMG’s Global Alternative Investment practice kpmg.com/investmentmanagement KPMG INTERNATIONAL 2 KPMG’s Global Alternative Investment practice The growth of the alternative investment industry Investors are increasingly looking to investment management industry provide fund managers with the clarity alternative investments since they since the 2008 financial crisis. and confidence to succeed. We have offer the potential for enhanced more than 800 partners and 10,000 At KPMG, our Global Alternative return from a broader, non-traditional professionals serving alternative Investment practice is focused on investment approach while reducing investment clients in 60 major fund hedge funds, real estate funds, private overall portfolio risk. The latest centers globally, complemented equity funds and infrastructure funds. estimates on global assets under by KPMG’s audit, tax and advisory Our member firms combine their management (AUM) confirm the services and network of member firms depth of local knowledge with our steady re-emergence of the alternative across the globe. global cross-border experience to © 2015 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. KPMG’s Global Alternative Investment practice 3 Shifts in the industry landscape Growing demand for as they look to reduce volatility and • Internally, fund managers encounter diversification manage downside risk in their investors’ a range of challenges, from a portfolios. Alternative investments weak knowledge base among The ongoing low rate environment provide diversification by investment their salesforce (sparking a need has investors considering alternative strategy, portfolio manager, industry for education and training), to investments to provide diversification sector, geography and liquidity needs.
    [Show full text]
  • Wealthstyles
    WealthStyles Investing in insurance Mary and Tom are both 40 years old, he explains to them, is unlike other types of insurance have two school-age children and have in that you can hold a wide selection of investments fully paid off the mortgage on their within a universal life policy. Interest earned by those home in downtown Calgary. Although investments grows on a tax-deferred basis, which retirement is still 20 years ahead of makes universal life an attractive option for people like them, they’ve managed their money Mary and Tom who are already “maxing-out” their wisely and invest the maximum RRSP contributions and are looking for additional tax- amount in their RRSPs each year. advantaged investing opportunities. They’ve also set up an RESP for their The following charts show how the tax-deferral children’s education, and annually advantages of universal life insurance help investments contribute as much as they are allowed grow. We have compared Manulife’s InnoVision to that tax-deferral structure. universal life insurance to an alternative investment Still, they have money left over to invest. They like the that does not shelter earnings from tax. fact that their RRSPs and RESP make it possible for Clearly, the cash value in the InnoVision policy far their assets to compound tax-free, maximizing their exceeds the net investment balance of the alternative returns over the long term, and they wonder if there investment. Moreover, the investment accounts within are other investment solutions that provide similar universal life insurance give Mary and Tom plenty of benefits.
    [Show full text]
  • Index Investing and Asset Pricing Under Information Asymmetry and Ambiguity Aversion
    Index Investing and Asset Pricing under Information Asymmetry and Ambiguity Aversion David Hirshleifer Chong Huang Siew Hong Teoh∗ April 7, 2019 Abstract In a setting with information asymmetry and a tradable value-weighted market index, ambiguity averse investors hold undiversified portfolios, and assets have non-zero alphas. But when a passive fund offers the risk-adjusted market port- folio (RAMP) whose weights depend on information precisions as well as market values, all investors hold the same portfolios as in the economy without model un- certainty and thus engage in index investing. So RAMP improves participation and risk sharing. Asset alphas are zero with RAMP as pricing portfolio. RAMP can be implemented by a fund of funds even if no single manager has sufficient knowledge to do so. ∗Paul Merage School of Business, University of California, Irvine. David Hirshleifer, [email protected]; Chong Huang, [email protected]; Siew Hong Teoh, [email protected]. We thank Hengjie Ai (discussant), David Dicks, David Easley (discussant), Bing Han, Jiasun Li (discussant), Stefan Nagel, Olivia Mitchell, Stijn Van Nieuwerburgh, Yajun Wang (discussant), Liyan Yang, and seminar and conference participants at UC Irvine, National University of Singapore, Hong Kong Polytechnic University, the 27th Annual Con- ference on Financial Economics and Accounting, the American Finance Association 2017 Annual Meeting, the 12th Annual Conference of the Financial Intermediation Research Society, 2018 Western Finance As- sociation Annual Meeting, and 2018 Stanford Institute
    [Show full text]