Preliminary Agenda (as of 2/15/2012)
Subject to change
Download the Chicago agenda
Download the New York agenda
7:30 am - 8:30 am
Registration and Networking Breakfast
8:30 am – 8:45 am
Speaker: Brian Birnbaum [CONFERENCE MODERATOR - SAN DIEGO]
Mercer Investment Consulting
Byron Willy, CFA[CONFERENCE MODERATOR - CHICAGO & NEW YORK]
Mercer Investment Consulting
8:45 am - 9:15 am
PRESENTATION: The Evolution of Fixed Income Investing
The sophistication of fixed income management techniques outpace those of the equity side. Unfortunately those techniques are employed against benchmarks and structures of the last century. Total return fixed income investors should move away from benchmark-driven strategies and embrace the globalization trends taking hold in equity markets. With traditional fixed income benchmarks' exposures of 70% or more to low returning assets, investors should reconsider their exposures. Investment and non-investment grade credit, emerging markets and other global fixed income securities can be combined to produce a portfolio that maintains existing levels of expected volatility, while increasing expected return and credit profile. Utilizing active management in these markets has shown to add another source of return. This type of approach is more likely to generate the returns investors require, and minimize the potential for rising rates in the U.S. associated with easy monetary and fiscal policy, and deteriorating credit fundamentals.
9:15 am – 9:55 am
WORKSHOP: Expanding the Comfort Zone
Conditions in global bond markets continue to be challenging, requiring investors to identify new strategies to cope with this low yield, high uncertainty world. Reducing allocations is rarely an option since fixed income remains an essential asset class for most investors. Fresh approaches to managing bond strategies and portfolio construction may be required, including:
- What sectors offer the most value in today's environment?
- How can you increase the diversification of your portfolio?
- Are your guidelines keeping you from reaching your goals?
9:55 am – 10:40 am
PANEL DISCUSSION: LDI and the Challenge of Low Interest Rates
It’s estimated that only 50% of U.S. corporate pension plans are using liability driven investing. The main likely culprit here is low interest rates, but does that mean that LDI just isn’t the universal solution many have said it is? This panel discussion will examine LDI in the era of low interest rates, focusing on the challenges for both those plans that have implemented it and those that have not.
10:40 am – 11:00 am
11:00 am – 11:40 am
WORKSHOP: Alternatives to Core
Are you questioning your core allocation to Fixed Income? Are you rethinking the role Fixed Income should play in your overall portfolio? What should your core allocation look like? After disappointing active manager performance in the core/core plus space in recent years, we’ll reexamine the role of fixed income and provide several considerations for core fixed income allocations.
11:40 am – 12:20 pm
WORKSHOP: LDI in 2012 – Time for Action
This workshop will review a case study of a corporate and a public defined benefit pension plan, comparing the funded ratio volatility and contribution volatility of the plan’s current investment allocation to a comprehensive LDI strategy. The workshop will then investigate the impact of various interest-rate scenarios on the plan’s funded status, again comparing the current allocation with a LDI approach. Finally, the workshop will construct a multi-dimensional milestone plan, incorporating funded ratio and interest-rate considerations and attempt to answer the question of when to de-risk and when to re-risk.
12:20 pm – 1:30 pm
1:30 pm – 2:10 pm
PRESENTATION: What Investors Really Want: Lessons from Behavioral Finance
We want more from our investments than profits equal to risks. We want to nurture hope for riches and banish fear of poverty. We want to win, be No. 1, and beat the market. We want to feel pride when our investments bring gains and avoid regret when they inflict losses. We want the status conveyed by hedge funds and the virtue conveyed by socially responsible funds. We want financial markets to be fair but we search for an edge that would let us win. We want to leave a legacy for our children when we are gone. And we want to leave nothing for the tax man. An understanding of investors’ wants and a distinction between wants and errors matters to all investment professionals, from money managers, to plan sponsors, and to financial advisors. Speaker: Meir Statman | Glenn Klimek Professor of Finance | Santa Clara University
2:10 pm - 2:50 pm
WORKSHOP: Best Practices for Evolving Traditional Fixed Income Investment Guidelines
Many fixed income Investment Policy Statements (IPS) continue to utilize investment guidelines drafted prior to the 2008 financial crisis. As such, these guidelines may not account for risk factors that emerged as a result of structural changes in the fixed income market. Increasing interest rate sensitivity and governmental regulatory risks of agency mortgages are just two such changes. This presentation will outline why investment guidelines must progress to align investor risk tolerances with the changing fixed income landscape, and provide some best practices to consider when establishing or updating fixed income IPS guidelines.
2:50 pm - 3:35 pm
PANEL DISCUSSION: Finding Yield in Unlikely Places
Fixed income used to be the boring end of the investment market. Investors knew what securities were available and how they would behave. They knew the shape of the yield curve and the strategies that would deliver the goods. Today, it’s a bit more complicated. This panel discussion will look at how the bond markets have changed, with a focus on the influence of new securities and new derivative instruments. Is it harder or easier to navigate in this brave new world?
3:35 pm – 3:55 pm
3:55 pm - 4:35 pm
WORKSHOP: Investing in a Bazooka World: Navigating the Structural Changes in the Global Fixed Income Markets
The Global fixed income investment landscape is in the midst of secular change and has implications for the way investors assume risk.
- Leverage across global economies continues to pose a serious threat to recovery and stability;
- The events of 2008 onward have resulted in transformational changes in global markets which requires a different way of thinking;
- In order to navigate the shifting cross-currents, investors must understand asymmetry, volatility and liquidity in portfolio construction
PANEL DISCUSSION: Where Now for Fixed Income?
Last year, those attending this conference were unanimous in their agreement that rates were set to rise. Today, no one is unanimous on anything. So what does the future hold for fixed income investors, with sovereign risk rising, benchmarks coming under scrutiny and rates staying stubbornly low. This panel discussion takes on the future and what it holds for fixed income investors.
5:20 pm – 6:30 pm
Closing Cocktail Reception