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March 10, 2021

BITCOIN FOR THOSE WILLING TO LOSE

The motivation for most bitcoin investors is they want to buy it at $50,000 and watch it go to hundreds of thousands of dollars, says Michael Arone, chief investment strategist, ETFs, State Street Global Advisors. Speaking at its ‘The Way Forward: 2021 U.S. Sector and Industry Ideas’ session, he said if that is the aim, there is a spot in a diversified asset allocation for speculative assets where investors are willing to lose, potentially, their entire investment. “But, if I compare it to something like gold, people use gold as a way to hedge against many risks in the market due to its low correlation to other asset classes to help manage draw downs. And that’s because of the stability in gold,” he said. However, bitcoin does not have that same stability. It is eight times more volatile than gold and 17 times more volatile than the U.S. dollar. “If you can withstand that type of volatility in a speculative asset and a diversified portfolio and you want to speculate, go for it, but don’t use it as a hedge against risks against fiat currency or inflation,” he said.

March 10, 2021

MDI HELPED OPTRUST NAVIGATE TURBULENCE

In 2020, OPTrust achieved an investment return of 8.9 per cent and lowered its discount rate. Its 2020 funded status report, ‘Taking Care,’ says during 2020, its member-driven investing (MDI) strategy helped the plan navigate the market turbulence caused by the COVID-19 pandemic, reflecting the diversification within the portfolio and the strong performance of its risk-mitigating strategies. MDI was designed to weather market volatility by maintaining the funded status of the plan at the lowest risk possible. “While no one could have predicted the events of the past year, we know that periods of volatility are always possible,” said Peter Lindley, president and CEO of OPTrust. “The effectiveness of our member-driven investing strategy was evident in the way the portfolio remained resilient and the high level of liquidity we maintained which enabled us to take advantage of opportunities that arose.” In keeping with the long-term focus of the plan, it bolstered its commitment to sustainability in 2020 by completing carbon risk assessments, including measuring the carbon footprint of the public equity, fixed income, private equity, and infrastructure portfolios. It also reviewed its policies and practices through a diversity lens, signed the BlackNorth Initiative Pledge, and is continuing to pursue EDGE certification as a gender-balanced workplace.

March 10, 2021

THEMATIC ETF EXPOSURE INCREASES

Investors are increasing exposures to thematic ETFs after a year of strong performance, but they also want a higher minimum of assets before buying a fund, says a survey by Brown Brothers Harriman & Co. It found thematic ETFs are going mainstream with eight in 10 investors planning to increase exposure to thematic ETFs this year. Internet technology funds generated the most interest, followed by ETFs focused on robotics and artificial intelligence, environment and sustainability, digital assets, and healthcare. The survey also found thematic products may move beyond satellite positions for some investors. Over the next five years, more than one-third of respondents said thematic ETFs would account for 11 per cent to 20 per cent of their portfolios. That compares to almost one-quarter who said thematic ETFs would make up 21 per cent to 50 per cent and just fewer than one-third who said thematic positioning would account for six per cent to 10 per cent.

March 10, 2021

GROUPHEALTH ACQUIRED

Munich Re, through its subsidiary, Munich Re New Ventures, Inc (MRNV) will acquire Group Health Group Holdings, Inc. (GroupHEALTH), a third party group insurance administrator in Canada. It delivers plan designs and administration solutions to Canadian businesses. Following the transaction, MRNV will own 100 per cent of GroupHEALTH. It previously held a 40 per cent interest in the company.

March 10, 2021

FOCUS GOES ON INVESTMENT OPERATIONS

Northern Trust Front Office Solutions has launched ‘Operational Risk Consulting,’ a bespoke service that provides management consulting with a specialized focus on investment operations. It can provide enhancements to front, middle, and back offices, advising on the adoption of new technologies and recent trends toward consolidation. Solutions can be provided through a variety of disciplines, including advisement on operating model enhancements and risks, technology and system evaluations, vendor and service provider assessments, and operational process gap analysis.

March 10, 2021

DATA ENTRY AUTOMATED

Proof Zero has launched SureConnect, a data automation platform aimed at making manual data entry a thing of the past. It takes the data from PDFs, legacy systems, and other sources that were once thought to be impossible to integrate and places it in documents, Excel templates, agreemen