Risk Wire: China – The Threat of Unchecked Leverage

In the six years since LINKS first covered risks of excessive leverage in the Chinese economy, both understanding of and dealing with leverage has been a key focus for the government of China. Despite this focus and even though the debt is domestically funded, the results of deleveraging are less than encouraging. Sustainability of

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Risk Wire: The Fragile Exposure to Technology

Much has been discussed about the technology sector concentration of S&P 500. Although we find that the degree of concentration is not unusual, once certain myths about the largest companies are dispelled, the nature of exposure and corresponding end-market risks indicate a degree of fragility. The concentration of the US stock market performance in the

LINKS Adviser Partner Program

Build your independent advisory business with the assistance and resources required to succeed. The world is moving away from fixed employment. The regimented hierarchical corporate structures just can’t cope with the pace of change. Unfortunately, building independent advisory practice from scratch is not easy: one has to build a product, a network and market,

Risk Wire: Do Inflationary Concerns Warrant Hedging?

Some sources of inflationary risk are more benign than others. Given the structural headwinds that the global economy faces, a broad inflation hedging programme can be expensive and unnecessary. On the other hand, the likelihood of unexpected inflation driven by regulation or supply shocks is increasing. This points to a more targeted approach when managing

Impact of New Steel and Aluminium Tariffs Imposed in the US

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On February 2, 2018 the US administration announced a new set of tariffs to be applied on imports of steel and aluminium. The tariffs of 25% and 10% respectively will disproportionately affect US' closest ally and trading partner - Canada. The other countries have relatively manageable exposure to the US imports (see the table

Investing in the Age of Disruption

The emerging disruptive forces of technological, political and demographic change threaten to destabilise long-term investment performance. It will take special kind of capacity building and flexibility for institutional investors to benefit from disruption rather than fall prey of it. We live in an age of unprecedented confluence of multiple disruptions. First, there is a generation

Risk Scenarios 2018

What Could Possibly Go Wrong? It is not easy to build plausible yet severe economic scenarios. Doubly so, if those scenarios are assessed in LINKS Mira Agent Based Model (ABM). Unlike conventional models, Mira ABM takes into account unintended consequences of events – both positive and negative. Just like in real life, positive and negative

End of Oil Greatly Exaggerated

Of all the global risk sources at the tail end of 2017, a sudden oil price shock arguably poses the greatest risk to institutional portfolios both in terms of its likelihood and the severity of impact. But perhaps the most troublesome factor is the complacency or lack of attention towards this risk; if anything, investors’

Investment Risk: Higher Rate Drivers

Institutional investors often assume a degree of “return-to-normality” for long-term rates in their investment plans. But what are, if any, the preconditions for return to higher interest rates? And if those preconditions are not met, what could be the expectation range that takes into account the structural drivers of interest rates? The fortunes of pension