Cross-Team Collaboration Sparks Fresh Perspectives
In an increasingly complex and dynamic world, there are ever more challenges and opportunities for the investment industry. Macroeconomic and political uncertainty is increasing after two decades of relative stability. Technology, particularly rapid development in AI, continues to evolve at a pace that exceeds our expectations. More extreme weather events reflect a rapidly changing physical world — one that is likely to significantly shift resource allocations and impact regional economic growth. In financial research, we must accordingly adapt, yet at the same time stay true to our principles.
The philosophies of investing have not changed despite these rising complexities. Intelligent investing is about identifying investments which reflect real economic value, and to put them together in portfolios where valuation, diversification, downside risk, transaction costs, and liquidity are all taken into account. To be a successful investment manager today requires broader insights and greater expertise across a wide range of subjects. As a research-led asset manager, we believe that cross-functional, cross-team collaboration is more important than ever.
State Street Global Advisors enjoys a competitive advantage in this complex world because of our focus on collaboration and innovation. Bringing together diverse perspectives pushes our investment professionals into new ways of thinking. We want to highlight examples of how we are pushing the boundaries of innovation. The following articles have their roots in our recent investment summit in which members of various teams gathered to present new research to their peers, to hold discussions that foster creativity and collaboration, and to capture diversity of thought:
- Market Concentration, Dispersion, and the Active-Passive Debate
Jennifer Bender, Ph.D.
Head of Solutions
Senior Managing Director — Systematic Equity Team
Altaf Kassam, CFA
Managing Director
EMEA Head of Investment Strategy & Research
Kamal Gupta, CFA, FRM
Investment Strategist
Investment Strategy & Research
In this piece, we explain why now might be the time for market concentration to fall and for active managers to be placed in a better operating backdrop. However, we stress that improving conditions for active management by no means imply that indexing should be abandoned; rather, a combination of active and index investing offers the best diversified approach in our opinion.
- Is AI the Right Prescription for the Health Care Industry?
Stephen W Kao, CFA
Senior Equity Research Analyst
Fundamental Growth and Core Equity Team
We outline some of the main ways that AI is making an impact on the health care space. This industry has long been burdened by significant cost pressures and protracted R&D periods. AI can make an outsized impact on these areas, and others, and can be particulary transformative in biopharma.
- Putting Investment Decisions Into Context
Barry McAndrew, CFA
Senior Portfolio Manager
Active Fixed Income Team
In this piece, we discuss how a cycle-aware approach can be a useful starting point for determining the appropriate level of risk taking in each segment, especially once then weighed against any unique features of the current environment.We discuss a new way of evaluating economic regimes and a methodology for collecting return data about the 12-month forward periods following regimes. In this way, we can go a step further and look at how markets hare currently priced, relative to history, based on the regime we are in.
The Bottom Line
Fostering a culture of innovation, open dialogue and debate is paramount for today’s investment managers. Our own experience has taught us the key role that cross-team collaborations have to play in building the type of research culture we need to succeed. Sharing insights across different priors and views of the world, and across geographies, asset classes, and backgrounds, allows us to broaden our knowledge base beyond the sum of the parts.