Data points ?? ?? ??

Hey, hi! It's been a week ...

Lots of data around—more on that later—but the only data point that really matters is surely the 26-25 scoreboard at Twickenham last Saturday (where England beat France, if you haven't heard!). I was there and I think my voice has just about recovered from all the cheering inside the stadium—shoutout to rugby friends who I believe are newsletter readers! It was even more pleasing as I had watched England capitulate to France 53-10 two years ago from almost exactly the same seats.

We did have a Guinness or two, and I tell you, I can't bounce back from those kinds of big days out like I used to. Nowadays, my Oura readiness data makes that painfully clear—it's been in a drawdown since last Friday. I do blame toddler sniffles for that as well...

Meanwhile, I hear there was a bit of a kerfuffle back at home as the boys (aged 4 and 2) watched probably one of their first England vs. France games with mum and grandparents. Allegiances were being worked out, and I still need to carefully get to the bottom of exactly where we stand. Probably best to make sure I'm around for that next year...

Rounding out a fun-filled weekend, we had a family outing to see The Gruffalo stage play at our local theatre on Sunday.

What a pleasure to see it still LIGHT in the sky after 5pm now—spring is around the corner!

Markets mumble

We've had a raft of crunch data on tariffs, inflation, earnings, and, of course, a barrage of executive orders and headlines from the US, which continues to dominate the airwaves. Markets haven't moved dramatically:

• Stocks are up, within a whisker of all-time highs around the world.
• The rotation is still in play, with Europe (blue in chart below) and the UK doing well.
• Financials and healthcare sectors are having a moment.
• 10-year government bond yields are stable-ish around the 4.5% area.

Things I'm reading

1. Easier Said Than Done: How the Chancellor Can Deliver on UK Infrastructure and Growth Ambitions

Raoul Ruparel OBE on Linkedin

Between the lines: Growth and infrastructure are intertwined in the UK right now and intersect with the pensions/investment world so it's clearly a theme with legs ...

• Implementation matters. Delivering on these promises will be crucial, especially in large infrastructure projects, where the UK has historically faced high costs and slow delivery. We typically pay twice as much per km of road as France and three times for rail.

As former Prime Minister Tony Blair explained on Jimmys Jobs podcast recently, "If I take a decision in the Cabinet Room presumably something happens, after a time you realise nothing happens…you have to focus on implementation.”

• Fixing Supply Chains & Skills Gaps: Addressing fragmented supply chains, chronic skills shortages, and inconsistent investment cycles is essential for long-term infrastructure success. A danger there aren't enough skills for what we want to build.
• The private sector needs long-term stability to adjust. The Treasury must take an active role in driving project implementation, aligning priorities, and ensuring efficient resource allocation across government.

2. Toby Nangle wins dataviz of the week with this gem on Local government pension scheme returns over the last decade. Post here. Ft article here

For me the first question this helps answer is "what's a reasonable return for large asset owners?". There's a range here, but solid clustering in the 7-8% p.a. bracket. Few have got close to the c12% p.a. returns of pure global equity, but most have done better than the 6% p.a. of UK Equity (three cheers for global diversification). It's been a decade of listed stock market dominance, so "clever stuff" has just not been rewarded

Would love to see global peers eg Canadian and Australian funds on same chart on a comparable basis. Data up to 2018 had Canadian funds with a real edge but a lot of that will presumably have been diminished with the outperformance of listed markets.

There is a lot of cool data in the piece (FT sub needed) and a fantastic overview of how the LGPS works. One takeaway is it's complicated, funding levels are broadly pretty good, but contribution rates not funding levels is what really matters, these vary a lot.

3. Kristina Hooper 's Market Compass provides a great overview of the last week in market data and what it means for the bigger picture.

Tariff talk is here to stay, tech earnings showed some dangers of high expectations, US inflation expectations and actuals both shifted higher while the US administration tried to talk down the 10-year yield.

Could be less Fed hikes coming than thought, Kristina is looking out to one in late in Q2, others arguing for no more hikes. Markets don't seem too bothered by it.

Overall it's been a solid earnings season, with c80% of companies beating expectations by an average of 7% (according to Jurrien Timmer here). You could even say the US is looking fairly priced. The much talked about earnings-broadening story is still in play. If I had a Guinness for every time I heard something about "earnings doing the heavy lifting now" then ... well ... I'd be in a bad place.

Two things I'm listening to

1. Michael Mauboussin was on the Rational Reminder podcast (link)

The one job of an equity investor - Find your edge.

He also mentions the work he did last year looking at economic profit (different to accounting profit) and the stunning result that the top-10 stocks account for more than 50% of the whole market's economic profit, posing a counterpoint to those who worry about concentration.

2. Daniel Crosby, Ph.D. 's podcasts on meaning are going hard at the moment!

Knowing yourself - what does it mean to be authentic ( web | apple)

Daniel unpacks what authentic means by way of existentialist philosophy, to get past the unhelpful "just be yourself" inanity. Authenticity links to authority (over oneself), it's not just about connecting with your intrinsic characteristics but also what you are choosing to go after.

David Clark is back with a graphic showing what a tough, skewed game Venture Capital is with a vanishingly small proportion of companies generating all the value (link)

Grab bag

The rise of the Asset Owner Voice - Attracta Mooney writes in the FT (link)

Asset owners are focusing more on the alignment of their managers with their own policies. Great comment here from our head of RI, Leanne Clements. In a negative environment for headlines in this area it is great to see something solid but realistic to move forward from.

Achieving critical mass - another quick mention of our own paper, written by Toby Nangle on pension funds investing in private markets. Obviously biased, but I think it's a really comprehensive review of all the available data, literature and global best practice on the issue in one place. No salesy stuff. (link)

A 2,000 year old roman basilica was discovered in the City of London while renovating a building on Gracechurch street.

Apologies for the Friday running this week, been one of those weeks. For readers that are also fans of Pete D's TFTL (like me) that gives you a double dose of reading for today so I suggest grabbing a coffee, sitting in a comfy seat and digging in.

No rugby this weekend, see you all "in spring" for the next update.

A good reminder -