September Newsletter: Land of the rising yield

Japan may soon abandon yield curve control and the negative interest rate policy, ushering in a new era for the country, our monthly outlook says. This month we proudly launch our new Big Book of Sustainable Investing, offer eight things you need to know about next-generation quant, and ask whether football stocks are a good play, or need a yellow card.

Land of the rising yield

One of the world’s largest experiments in financial engineering may be about to come to an end, spelling a new era of higher yields in Japan.

• Japan may end yield curve control and negative interest rate policy
• Tipping point reached for Japanese government bond yields to rise
• We believe the move creates a ‘shorting’ opportunity on any asset price falls

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Who owns (un)sustainable companies?

Robeco has a long track record of investing sustainably. In many strategies, we prioritize investments in sustainable companies and avoid investing in unsustainable ones. This begs the question: Who does invest in unsustainable companies, and why?

• SI initiatives surprisingly have little influence on unsustainable ownership
• External pressure can induce lower ownership of poor scoring companies
• Country of origin and support levels for the SDGs are major determinants

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The new Big Book of Sustainable Investing

In 2018, Robeco published its first Big Book of SI to give investors a comprehensive reference guide to sustainable investing (SI). But even great guidebooks need a periodic revamp.

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The alpha and beta of emerging markets equities

Robeco’s approach to emerging markets investing was initially met with considerable scepticism, but the live performance of our model has exceeded expectations. David Blitz, Robeco’s Chief Researcher, shares his thoughts on quant investing in emerging markets.

• Emerging markets have proven to be fertile ground for quant investing
• Emerging markets offer growth at value prices, amid risks and ESG concerns
• In new paper we discuss the asset class and active management approaches

Emerging markets appear to be a case of growth – at value prices. - David Blitz, Chief Researcher

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Do investors score with football stocks?

As anticipation builds for the new football season, we delve into the risk and return dynamics of football club stocks.

• Football club stocks are a rare example of both low beta and high volatility
• Their poor long-term performance is similar to risky stocks and unlike defensive stocks
• Football stocks are like lottery tickets and best left to speculators or die-hard fans

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8 things you should know about next-gen quant

What are '8 things you should know about next-gen quant' - but might have been afraid to ask? Navigating the frontier of quant investing can be confusing, but we’re here to demystify some of the complex concepts that are suddenly becoming household terms. From alternative data and sustainable alpha to NLP and GPT, our new publication covers the whole fabric of next-generation quant investing.

Download here