AIQ: Investment Thinking

Recent thinking

Equities

Pricing power is the magic ingredient for equity investors

27 Nov 2020

Evidence that a company wields pricing power in its industry is the best indication of a sustainable competitive advantage, argues Giles Parkinson.

Responsible Investing

The client lens: An interview with Faith Ward

19 Nov 2020

Brunel Pension Partnership’s chief responsible investment officer discusses climate change, greenwashing and the urgent need to repair flaws in the financial system.

Real Assets

Navigating the path to net zero: An interview with Jill Rutter

12 Nov 2020

There is a large gulf between the concept of ‘net zero’ and the practical policies that will deliver it. Jill Rutter, senior fellow at the Institute for Government, takes a hard look at the UK’s progress towards the 2050 target.

Responsible Investing

Carbon capture: Solution or pipedream?

10 Nov 2020

Reducing the amount of carbon dioxide in the atmosphere is becoming an increasingly urgent priority in the fight against climate change. Both new and established pathways to remove the gas are under scrutiny, as decision makers around the globe grapple with how to take the most effective action.

Fixed income

Sustainability in credit: Why ESG scores don’t tell the whole story

5 Nov 2020

ESG ratings are a helpful baseline to assess companies, but views on their ESG risks and opportunities can be honed – and sometimes corrected – through deeper research, trend analysis and meetings with company executives.

Equities

Once bitten, twice shy: Is there value in tech by avoiding the FAANGs?

30 Oct 2020

The gravity-defying rally in technology shares has led some commentators to draw comparisons with the dot.com bubble of the late 1990s. However, Mikhail Zverev and Alistair Way believe there are still opportunities to be found in some of the sector’s less-fashionable stocks.

The Little Book of Data

29 Oct 2020

Our annual showcase of the most beautiful, concise and insightful data visualisations we have found in the past year, The Little Book of Data 3 aims to provide investors with a different perspective of the world, helping to bring about more informed decisions.

Fixed income

US Election 2020: Expect the unexpected

29 Oct 2020

As the US presidential election looms, we explore potential scenarios – from a Democratic “blue sweep” to a Trump re-election to a divided government – and assess the implications for investors.

Real Assets

Real assets and net zero: Now for the hard part

29 Oct 2020

There is no lack of willingness among investors in real assets to play their part in helping countries reach net zero by 2050. But much needs to change – and quickly, as Laurence Monnier explains.

Insurance

Race, ethnicity and investing: Practice what you preach

28 Oct 2020

In the second article in our series on racism, we explain why asset managers need to get their own house in order to be a credible agent for change at the companies they invest in.

Insurance

Race, ethnicity and investing: A time for action

28 Oct 2020

In the first of a two-part series on anti-black racism, we look at five areas asset managers need to focus on if their engagement efforts are to make a positive difference.

Fixed income

Global high yield: Stimulus fuels the march of the zombies

27 Oct 2020

Zombie companies are the talk of the town. Will they limp on forever, storing up potential trouble for investors’ portfolios, or can they revive and thrive after the COVID crisis?

Real Assets

Remote working is on the rise, but the office remains indispensable

26 Oct 2020

While the COVID-19 lockdown has highlighted the possibilities of home working, bringing people together in offices is still the best way to spur innovation and productivity, says Jonathan Bayfield.

Insurance

Prime time: How streaming is reshaping film and TV

22 Oct 2020

The last ten years have seen the film and television industry transform beyond recognition. In the latest instalment of our editorial series, Link, experts from our credit and equity teams discuss whether streaming will continue its inexorable reshaping of the media landscape.

Equities

Turn and face the change: How to invest dynamically in an uncertain world

21 Oct 2020

Equity markets are slow to price in the implications of change. This creates opportunities for dynamic, style-agnostic investors to take advantage, argue Caroline Galligan and David Cumming.

Economic Research

Suga rush: Can Japan’s new PM deliver on reform promises?

20 Oct 2020

Former Chief Cabinet Secretary Yoshihide Suga has replaced Shinzo Abe, Japan’s longest serving prime minister. As he faces the twin challenges of leading the country out of a pandemic and pushing through much-needed structural reforms, what can investors expect from the new administration?

AIQ: The Risk Edition

COVID-19 has shown how quickly a single event can disrupt a globalised economy. AIQ explores some of the biggest threats facing the world, from cybersecurity to environmental disasters, and considers the investment implications.

Find out more

AIQ: The Climate Edition

Can the world get back on track towards meeting the commitments of 2015’s Paris Agreement? From science to psychology; from land use to big data; we examine the challenges posed by climate change and assess potential solutions.

Find out more

The Little Book of Data

Visual vignettes to help us better understand the world and provoke thought, sign up to receive our hard copy coffee table book of data visualisations, The Little Book of Data.

Find out more

AIQ Features

Roll of the dice: Risk and resilience in an age of uncertainty

The coronavirus pandemic has highlighted the difficulties of managing risk in an increasingly globalised and interconnected world. We explore how organisations can stay resilient through an era of radical change.

The evolution of ESG: More than just a risk mitigator

Once dismissed as a virtuous endeavour that compromised investment returns, the ability to gain a more holistic view of risk by considering environmental, social and governance factors is increasingly appreciated by investors. We assess the evolution of ESG across asset classes, as well as its role as a risk mitigator and opportunity spotter.

The Technocrat: Lord Adair Turner

With developed economies stuck in a high-debt and low interest rate trap, the former head of Britain’s financial watchdog believes central banks should break a long-held taboo and finance governments directly.

Economics and ethics: Why diversity matters

In business, diversity can be the difference between success and failure. But while progress towards it has been frustratingly slow in many areas, the pressure is mounting on companies to act.

Pandemic risk: When will we learn our lesson?

COVID-19 has reminded us that the sources of economic and financial crises can be wildly unpredictable. However, while spotting patient zero in advance was nigh on impossible, pandemic risk was well telegraphed. In the first part of our mini-series, The source of the next crisis, we consider whether an infectious disease could wrong-foot us again or whether governments will learn their lesson.

Cybersecurity in the fourth industrial revolution

COVID-19 shocked investors into taking pandemic risks more seriously. In an increasingly connected world, where data is the new oil, could cyberattacks be the next big threat?

Inflation hawks: Crying wolf?

Twelve years on from the financial crisis, inflation hawks are back. They were proved wrong then, but could this time be different? In part three of our mini-series on the source of the next crisis, we explore the extent to which inflation poses a risk to the global economy and financial stability.

Geopolitics: Could the coronavirus pandemic lead to a new Cold War?

The US-China relationship has deteriorated in the midst of the COVID-19 pandemic. What does this geopolitical rivalry mean for the global economy and markets?

Nature and neglect: The era of ecological disasters

As the frequency and ferocity of natural hazards increase, in part five of our mini-series on the source of the next crisis AIQ considers the economic and investment implications and what we can learn from past mistakes.

The Economist: John Kay

AIQ speaks to economist and author John Kay about risk, uncertainty and the longer-term implications of the coronavirus pandemic.

The risks on the savings and retirement journey

COVID-19 has caused significant volatility in financial markets, creating headaches for defined contribution pension schemes seeking to deliver robust outcomes. Overcoming this requires a full map of risks along the savings and retirement journey, argues Francois de Bruin.

Policy moves into the great unknown, but at what cost?

Policymakers are dreaming up ever more radical experiments to try and pull economies out of what could be the deepest recession in living memory. But until the world can cure its addiction to debt, financial markets will remain on a knife edge.

Trial and error: The value of learning from mistakes

A common characteristic of successful people and organisations is an ability to recognise and quickly learn from their mistakes. UK Equity Income Fund Manager Chris Murphy shares the lessons he has learned from an eventful career.

Will COVID-19 concentrate corporate power

The fallout from the coronavirus pandemic could see large firms cement their dominance over weaker rivals. We examine the implications for investors.

Resilience in credit: All calm for now, but big tests lie in store

For credit investors, resilience is about taking appropriate levels of risk, understanding market dynamics, and identifying companies best prepared for the future. All these qualities could be tested given the wide range of possible outcomes as the world begins to recover from COVID-19.

Real assets and the quest for resilient income

COVID-19 has made life harder for already yield-starved investors, and each asset class faces its own challenges. We draw on the latest thinking from our Real Assets House View and research team to highlight where reliable income sources can still be found in real asset markets.

View all AIQ Features

Equities

Pricing power is the magic ingredient for equity investors

Evidence that a company wields pricing power in its industry is the best indication of a sustainable competitive advantage, argues Giles Parkinson.

Once bitten, twice shy: Is there value in tech by avoiding the FAANGs?

US Election 2020: Expect the unexpected

Turn and face the change: How to invest dynamically in an uncertain world

Equity markets are slow to price in the implications of change. This creates opportunities for dynamic, style-agnostic investors to take advantage, argue Caroline Galligan and David Cumming.

Don’t feed the troll: Social media companies face reckoning over hate speech

Facebook, Twitter and other platforms are drawing criticism for their failure to tackle hate content. But will the hit to their reputation do any lasting commercial damage?

Investing in the gut: Fixing the bacterial bugs in our microbiome

COVID-19 has intensified interest in the human microbiome, as researchers contemplate whether bacteria living in the gut might affect susceptibility to infection. Drawing on our experience in public markets and Ahren Innovation Capital’s knowledge of private markets, we look at the companies making strides in live biotherapeutics, using ‘bugs as drugs’, and key challenges that need to be overcome.

Why limit yourself? The benefits of style-agnostic investing

Investors wanting to consistently exploit market inefficiencies should leave style biases behind, argues Mikhail Zverev.

Out with the old: Why income investors must be on the right side of change

It has been a difficult year for income investing, as many companies have announced cuts or suspensions to dividends. But there are opportunities for investors willing to do some digging to find resilient businesses, says Richard Saldanha.

The clockmaker and the longitude problem: A lesson for investors in bottom-up problem solving

Bottom-up thinking is not a typical hallmark of multi-asset investing. However, Francois de Bruin believes the granularity that comes from this approach offers useful diversification and risk benefits.

The new rules of client engagement

As the coronavirus pandemic reshapes our working lives, asset managers must find new ways to interact with their clients, says Apiramy Jeyarajah.

Electric avenue: EVs and the transformation of autos

In the latest instalment of our editorial series, Link, experts from our infrastructure, credit research and equity teams discuss why efforts to ‘build back better’ as economies recover from COVID-19 could further accelerate investment in electric vehicles and associated infrastructure.

Chinese equities: A rally of substance?

Chinese equities have risen sharply in recent weeks, mirroring trends in global markets. While some commentators have warned efforts by Beijing to juice share prices are inflating an unsustainable bubble, Alistair Way and Xiaoyu Liu argue valuations are far from excessive.

As earnings season unfolds, equity investors must focus on the bigger picture

Investors are poring over grim corporate earnings reports, but it is crucial to look beyond quarterly figures to assess long-term value, says Giles Parkinson.

Education, entrepreneurship and biological age: An interview with Andrew Scott

In part two of our interview with Professor Andrew Scott from London Business School, we look at how policy will shift to take account of people living for longer and how service providers will respond.

Longevity, policy and technology: An interview with Andrew Scott

Living longer brings enormous opportunities to reshape how we spend our time. But in the first of a two-part interview, Andrew Scott from London Business School explains how advances in longevity and technology have not been matched by innovation in social structures or our approach to financial planning.

Trial and error: The value of learning from mistakes

View all equities

Fixed income

Sustainability in credit: Why ESG scores don’t tell the whole story

US Election 2020: Expect the unexpected

Global high yield: Stimulus fuels the march of the zombies

Zombie companies are the talk of the town. Will they limp on forever, storing up potential trouble for investors’ portfolios, or can they revive and thrive after the COVID crisis?

Home and leisure in a pandemic: Girls (and boys) still want to have fun

From cinemas to cruises, the consumer-driven home and leisure sector was hit hard by lockdown restrictions. With economies reopening in a disjointed manner, some sub-sectors have rebounded quickly while others continue to struggle. Here, we look at how the pandemic is reshaping the industry and the implications for investors.

Fed’s policy shift may spell long-term trouble for bonds

Bond markets have taken the recent shift in the Federal Reserve’s policy framework in their stride, partly because interest rates are now expected to stay lower for even longer. But they look vulnerable if the Fed can revive inflation.

Emerging market debt: A path less volatile

After one of the most volatile periods on record, hard currency emerging market debt is once again drawing investor interest, thanks to attractive yields and its diversification potential. But while markets recovered quickly from the volatility, investors should remain cautious for the challenges ahead.

The new rules of client engagement

As the coronavirus pandemic reshapes our working lives, asset managers must find new ways to interact with their clients, says Apiramy Jeyarajah.

Electric avenue: EVs and the transformation of autos

Education, entrepreneurship and biological age: An interview with Andrew Scott

Longevity, policy and technology: An interview with Andrew Scott

Reality bites: Retailing in a health crisis

In the latest instalment of our editorial series, Link, experts from Aviva Investors’ credit, equities and real asset teams discuss the consequences of COVID-19 on the retail sector and their implications for investors.

Where can investors put cash to work when rates go negative?

Just when investors thought they couldn’t sink any lower, the economic shock caused by COVID-19 has put further downward pressure on interest rates in developed markets. Caroline Hedges, head of global liquidity portfolio management at Aviva Investors, looks at the impact on money market funds.

Resilience in credit: All calm for now, but big tests lie in store

Health first: Finding resilience in pharmaceuticals

COVID-19 has led to a new appreciation of the importance of healthcare in ensuring all members of society thrive. So where should investors be looking to find resilience in an industry facing enormous change?

What do rising US-China tensions mean for global markets?

In the latest instalment of our editorial series, Link, Aviva Investors experts discuss the prospects for financial markets and the world economy in the face of escalating hostilities between the US and China.

Defined Benefit pensions de-risking: A covenant and investment view

In the midst of the COVID-19 shock, Felix Mantz from Lincoln Pensions and Joachim Sudre from Aviva Investors explore how defined benefit pension schemes should plan their journey towards an end game and adopt a more holistic approach to risk.

View all fixed income

Multi-asset & multi-strategy

Multi-asset allocation views: Changing seasons, changing dynamics

After a strong summer, conditions are changing in asset markets. Sunil Krishnan assesses the risks and opportunities for investors.

Short story: Why Fed action could be bad news for the dollar

With US real interest rates sinking ever more deeply into negative territory as the Fed signals it is on hold for a prolonged period, the outlook for the dollar is bearish for the first time in a decade, argues Mark Robertson.

Sustainability: Drawing force from lines of tension

Much like a gem is forged under pressure, the ESG movement is powerful because it results from tension at multiple levels: between art and science, absolute and relative, exclusion and engagement. Francois de Bruin explores the lines of tension underpinning the investment approach to sustainability.

The clockmaker and the longitude problem: A lesson for investors in bottom-up problem solving

COVID-19: Can a lasting recovery happen without a vaccine?

With the notable exception of China, countries around the world have struggled to get their economies firing on all cylinders without COVID-19 infections flaring up again. Until a way to contain the virus is found, recoveries are likely to remain stop-start and fragile, argue Ian Pizer, Mark Robertson and Sunil Krishnan.

COVID-19 and antimicrobial resistance: The next health crisis?

As the world grapples with COVID-19, antibiotics used to treat serious secondary bacterial infections associated with the coronavirus are making their way into wastewater with potentially dire consequences. Abigail Herron questions whether investors appreciate the seriousness of what antimicrobial resistance could lead to.

Multi-asset allocation views: What we can learn from earnings season

Investors have faced several surprises during Q2 earnings season. Sunil Krishnan discusses what the current results round means for multi-asset investors over the coming months.

Education, entrepreneurship and biological age: An interview with Andrew Scott

Longevity, policy and technology: An interview with Andrew Scott

Multi-strategy investing and the COVID crash: Resilience and redemption?

The COVID-19 pandemic has brought many things into focus, reminding investors of the shock of a market crash. With bond and equity prices already back at levels that seem to belie the harsh economic reality, Peter Fitzgerald and Mark Robertson believe it could be time to reconsider absolute return multi-strategy investing once more.

The risks on the savings and retirement journey

Multi-asset allocation views: Finding opportunities in the crisis

Despite uncertainty around lockdown exits and economic recovery, the role of a fund manager is to explore hidden opportunities as well as protect capital. Sunil Krishnan discusses why investment-grade credit and European assets could fit the bill for multi-asset portfolios.

Multi-asset allocation views: How long will the COVID-19 damage last?

Nearly three months after COVID-19 caused markets to crash and sent countries across the globe into lockdown, debates continue over what the post-COVID world will look like and the extent of the long-term damage. Sunil Krishnan remains cautious.

What do rising US-China tensions mean for global markets?

Defined Benefit pensions de-risking: A covenant and investment view

Cinderella science? Why portfolio construction holds the key to resilient investment outcomes

It is one thing to have a good investment idea, but quite another to extract the maximum potential from that idea and combine it with others to create an optimal portfolio. This is where portfolio construction comes in.

View all multi-asset & multi-strategy

Real assets

Navigating the path to net zero: An interview with Jill Rutter

Real assets and net zero: Now for the hard part

There is no lack of willingness among investors in real assets to play their part in helping countries reach net zero by 2050. But much needs to change – and quickly, as Laurence Monnier explains.

Remote working is on the rise, but the office remains indispensable

While the COVID-19 lockdown has highlighted the possibilities of home working, bringing people together in offices is still the best way to spur innovation and productivity, says Jonathan Bayfield.

Overcoming underwriting obstacles in a pandemic and beyond

The near-term disruption caused by the coronavirus has been testing for real estate borrowers seeking finance and originators. Gregor Bamert explains why new deals are still possible for those able to look through short-term uncertainty.

When equity becomes debt: The untapped potential of amortising-lease real estate

Pension schemes seeking alternatives to bonds may find amortising leases a compelling option, writes Luke Layfield.

Fit for the future: Unboxing ESG in real assets

Recent events have highlighted the importance of the environmental, social and governance characteristics of real asset investments – not only as part of COVID-19 recovery programmes, but also as a way of futureproofing portfolios.

Fibre broadband: The need for speed

Lockdown measures imposed during the COVID-19 pandemic have highlighted the importance of digital connectivity. Tim Perry looks at the investment opportunities and challenges associated with European economies transitioning from copper to faster fibre broadband networks.

Swipe right: The Tinder effect on real estate

It can be hard to perceive how society, and consequently our use of real estate, is changing. Sometimes, major structural trends are hiding in plain sight, says Chris Urwin.

Five charts that show Manchester is a city of the future

In this short, visual article we present five charts that show why Manchester is such a rich, vibrant and economically prosperous city. Our view is that the ingredients of connectivity, culture, talent, scale and scientific heritage make the city well-equipped to thrive in the coming years and decades.

The new rules of client engagement

As the coronavirus pandemic reshapes our working lives, asset managers must find new ways to interact with their clients, says Apiramy Jeyarajah.

Electric avenue: EVs and the transformation of autos

Education, entrepreneurship and biological age: An interview with Andrew Scott

Longevity, policy and technology: An interview with Andrew Scott

Reality bites: Retailing in a health crisis

How to build back better, greener and faster: A 10-point plan for UK infrastructure

Boris Johnson has called for an ‘infrastructure revolution’ to help lift the UK economy out of its coronavirus-induced malaise. Private capital could and should play a large role alongside the public purse in delivering on that ambition, as Darryl Murphy sets out in a blueprint for the industry.

Real Estate: The Last Dance for gut feel investing

Commercial property investors could learn a lot from the data-led revolution that has taken place in basketball in recent years, as Chris Urwin explains.

View all real assets

Responsible investment

The client lens: An interview with Faith Ward

Brunel Pension Partnership’s chief responsible investment officer discusses climate change, greenwashing and the urgent need to repair flaws in the financial system.

Navigating the path to net zero: An interview with Jill Rutter

Carbon capture: Solution or pipedream?

Sustainability in credit: Why ESG scores don’t tell the whole story

Real assets and net zero: Now for the hard part

There is no lack of willingness among investors in real assets to play their part in helping countries reach net zero by 2050. But much needs to change – and quickly, as Laurence Monnier explains.

Turn and face the change: How to invest dynamically in an uncertain world

Equity markets are slow to price in the implications of change. This creates opportunities for dynamic, style-agnostic investors to take advantage, argue Caroline Galligan and David Cumming.

Fit for the future: Unboxing ESG in real assets

The evolution of ESG: More than just a risk mitigator

Health first: Finding resilience in pharmaceuticals

COVID-19, comp and doing the right thing: Why corporate values have never been more critical

With annual general meetings now taking place virtually, shareholders, employees and suppliers have had to adjust to lockdowns. While some of the immediate impacts will be phased out with the opening of the economy, stewardship priorities and corporate values may change forever.

Evidence and ambition: The new rules of engagement on climate change

Mirza Baig explains why far-off commitments on climate change by energy companies and their lenders are no longer enough, and why COVID-19 has catalysed rather than derailed investor engagement on the issue.

Will COVID-19 prove a watershed for ESG?

COVID-19 has thrown new light on the interdependencies in human and natural ecosystems, and the vulnerabilities of a closely networked world. Aviva Investors’ responsible investment specialists ask whether this will prove a turning point for environmental, social and governance issues.

The AIQ Podcast: Climate emergency

This latest episode of the AIQ Podcast goes back to basics on climate: we explore leading scientists’ understanding of how the world is changing, as well as the investment community’s response.

The AIQ Podcast: The psychology of climate change

This latest episode of the AIQ Podcast explores the psychology of climate change and how to engage individuals in the quest for solutions.

Climate change: The journey from denial to crisis

More than 40 years since a senior NASA scientist told US Congress of concerns about human activities disrupting the climate, experts are warning of an impending climate catastrophe and the financial sector is wrestling with the implications.

Why asset managers cannot be passive on climate change

As active investors step up their engagement efforts on the climate crisis, discussions need to be at the CEO rather than board level, argues David Cumming.

View all responsible investment

Economic research

Navigating the path to net zero: An interview with Jill Rutter

US Election 2020: Expect the unexpected

Race, ethnicity and investing: Practice what you preach

In the second article in our series on racism, we explain why asset managers need to get their own house in order to be a credible agent for change at the companies they invest in.

Race, ethnicity and investing: A time for action

In the first of a two-part series on anti-black racism, we look at five areas asset managers need to focus on if their engagement efforts are to make a positive difference.

Prime time: How streaming is reshaping film and TV

Suga rush: Can Japan’s new PM deliver on reform promises?

Fed’s policy shift may spell long-term trouble for bonds

The AIQ Podcast: The source of the next crisis

The latest episode of the AIQ podcast explores what we know about complex risks. With what we know now, can we anticipate where the next crisis will emerge?

COVID-19: Can a lasting recovery happen without a vaccine?

COVID-19 and antimicrobial resistance: The next health crisis?

The new rules of client engagement

As the coronavirus pandemic reshapes our working lives, asset managers must find new ways to interact with their clients, says Apiramy Jeyarajah.

The AIQ Podcast: Risk and resilience in an age of uncertainty

The latest episode of the AIQ podcast explores the nature of risk in an uncertain world. How can we stay resilient when the unexpected occurs?

Education, entrepreneurship and biological age: An interview with Andrew Scott

Longevity, policy and technology: An interview with Andrew Scott

Roll of the dice: Risk and resilience in an age of uncertainty

The Technocrat: Lord Adair Turner

View all economic research

AIQ Client Matters

Analysis and commentary specific to you and your industry.

Have traditional safe havens lost their edge?

Recent thinking

AIQ: The Risk Edition

AIQ: The Climate Edition

The Little Book of Data

AIQ Features

Equities

Fixed income

Multi-asset & multi-strategy

Real assets

Responsible investment

Economic research

AIQ Client Matters

Professional investor

Private investor