AIQ: Cleaning up capitalism

Regulatory authorities around the world are targeting the big US tech giants. However, while investors need to keep a watchful eye on developments, Big Tech’s stranglehold and influence on numerous economic sectors will be hard to loosen.

Like Washington and Brussels, Beijing is worried about the growing power of large technology companies. But China’s regulators are taking swifter, more radical action than their peers in the West.

The tech-driven trend toward direct-to-consumer is transforming consumer brands, their intermediaries and their marketing. Intimate relationships with customers and new shopping experiences are alluring, but companies must tread a fine line between hyper-personalisation and intrusion.

Quantum computers have the potential to shake up finance, cybersecurity and other sectors. But investors hoping to profit from the new technology must be patient – and separate reality from hype.

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?

No single technology is enough to tackle the climate crisis, a global and systemic issue that requires joined-up thinking. We flag different pathways to address warming gases in the atmosphere – five nature-based and five technical – and ask what steps are needed next.

The coronavirus pandemic has spurred companies to upgrade their digital capabilities, boosting productivity and creating investment opportunities in previously overlooked niches.

Technology firms are often favoured by ESG funds because of their ostensibly clean, asset-light business models. But investors need to look deeper and challenge unethical and unsustainable practices across the industry, argue Louise Piffaut and Charles Devereux.

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.

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.

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.

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.

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.

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?

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.

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 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?

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

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.

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.

In troubled times, the benefits of portfolio diversification can be boosted by taking a fresh look at the drivers of resilience, as the following five charts illustrate.

AIQ speaks to the world-renowned risk expert Didier Sornette about the coronavirus pandemic and how organisations can stay resilient in the face of unexpected crises.

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.

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

In an increasingly complex world, understanding the connections between people and ideas is crucial. AIQ looks at how organisations can put connected thinking into practice.

In an effort to understand how best to approach idea generation and collaboration, two critical components of successful investing, AIQ speaks to leading academics in the fields of analogical and model thinking.

Marte Borhaug explores the ethical dilemmas and unintended consequences that can result from trying to do the right thing.

Correlations between groups of assets and within individual asset classes have changed in unexpected ways thanks to a decade of easy monetary policy. Our portfolio managers tell us what impact this has had on the way they manage money.

Today, a handful of urban centres are pulling away from their rivals – creating more innovation, more growth and more jobs. Those changes have deep implications; understanding them and what they mean for local communities takes joined-up thinking.

The evolution of wireless technology has fuelled a host of new mobile applications and helped propel companies such as Netflix. 5G, its next iteration, promises speeds up to 20 times faster than the current 4G. But to think only in terms of speed severely underestimates 5G’s potential to fundamentally transform the business landscape – though not without tremendous risk.

This latest episode of the AIQ Podcast explores the role of connected thinking in technology, business and the environment.

A new wave of tech-driven automation promises improved productivity and economic growth. But as humans are replaced by robots, a political backlash is building.

With the US and China locking horns, we take a deeper look at the tangled and complex web of multinational relationships in the global economic ecosystem.

With society facing many urgent and complex challenges, deciding who is best-placed to deliver solutions has become an emotive and often political subject. We assess whether there is a better way to utilise the skills and resources of the public, private and third sectors for the greater good.

A lot has been said about how blockchain may spark a technological revolution across every corner of the economy – not only in finance, but also areas such as medicine, marketing and supply chain management. What is less clear is how it could pose a hefty social challenge as well.

The idea that in one’s sixties it might be time to step out of work and retire into a life of leisure is relatively recent. But with more people living longer, expectations of retirement are being reshaped.

The idea that in one’s sixties it might be time to step out of work and retire into a life of leisure is relatively recent. But with more people living longer, expectations of retirement are being reshaped.

Around the world, political and economic liberalisation have gone hand in hand since the early 1980s. However, as more countries turn to populist leaders, could the world be about to fall out of love with free-market economics too?

As we approach ‘peak oil’, what does this mean for the fossil fuel industry and alternative sources of energy?

Cities will face severe challenges over the coming decades, including digital disruption, population management and climate change. How they adapt to these pressures will determine the winning – and losing – cities of the future.

The insurance industry has evolved rapidly since the financial crisis. The next decade is shaping up to be every bit as transformative as firms grapple with a host of factors, most notably the unfolding regulatory framework, digital disruption and climate change.

In our Big Interview, David Miliband talks to AIQ about the growing humanitarian emergency in war-torn countries, the retreat from global engagement by the West and the future of centre-left politics.

Brexit continues to dominate headlines in the UK, but the European Union faces other long-term challenges, from the rise of Euroscepticism in Italy to the stalled progress of euro zone reform.

Central bank independence is widely regarded as a prerequisite for successful monetary policy. However, with economies having struggled over the past decade and inflation no longer seen as a problem, that view is being contested, argues Stewart Robertson, chief economist at Aviva Investors.

How will the rise of emerging Asian economies affect the global balance of market and economic power? AIQ speaks to a leading authority on the subject.

Why an agnostic approach beats equity style biases.

How do unconscious biases influence our behaviour? Learn more in this video.

This latest episode of the AIQ Podcast investigates how behavioural finance is being transformed by data science.

We consider how technological advances, alternative data sources and shifting investor flow dynamics are changing the face of fixed income markets.

In a new column, AIQ imagines how hypothetical scenarios in finance and economics would play out. In this issue, we explore how the world would look if China had never joined the World Trade Organization.

The idea unconscious biases influence decision-making in financial markets is nothing new. But behavioural finance has taken on new relevance in the age of Big Data and artificial intelligence.

Shinzo Abe’s policy programme has started to lift Japan out of its long deflationary slump. But the road ahead is still a long one and political scandals could prevent him from finishing the job.

Market indices are inherently inefficient. That can pose a problem for fund managers who rely too much on them as performance and risk benchmarks, explains Josh Lohmeier, head of North American investment grade credit at Aviva Investors.

Government debt-to-GDP ratios in many advanced countries are approaching post-World War II highs, leaving them increasingly vulnerable to a worsening in economic conditions and demographic forces, argues Stewart Robertson, senior economist for the UK & Europe at Aviva Investors.

As tech titans such as Google and Amazon attempt to conquer new markets and conglomerates continue to dominate in emerging economies, we look at the ingredients that determine whether diversification succeeds – or fails.

The global economic architecture built from the ruins of World War II is under threat, with profound implications for investment.

From Russian hackers interfering in foreign elections to high-profile corporate breaches, people are waking up to some harsh realities around data. We look at what the European call for a ‘Magna Carta’ for data has led to, and explore the investment implications of the growing scrutiny over data privacy.

Despite a torrid few months, frontier bond markets still have an important role to play in investors' portfolios.

A growing number of investors are looking to private assets to provide higher yields than liquid alternatives, but few are targeting illiquidity premia explicitly, writes John Dewey.

With the global economy improving, central banks need to be ever watchful, and tighten policy in good time, to ensure siren calls on asset bubbles continue to ring hollow, says Michael Grady.

Income inequality is rising across developed countries. What are the implications for economic growth?

A recent trip to Central America and the Caribbean revealed much about the attractions and pitfalls of frontier markets, explains Aaron Grehan.

In a wide-ranging interview, influential economist Pippa Malmgren considers the Trump presidency, Brexit and the future of capitalism.

The positive link between education and economic growth is well established. Bryony Deuchars explores what this means for emerging-market investors.