There are 41 results for 'Best Practices'

Callan’s Detailed Investment Management Fee Study Highlights Key Industry Trends

Callan has just published the 2019 Investment Management Fee Study, which provides a detailed analysis on fee levels and trends across multiple asset classes and mandate sizes for both active and passive management. The analysis gives insight into what institutional...

ESG: What the Future May Hold

Incorporation of environmental, social, and governance (ESG) factors has seen a meteoric rise in usage among institutional investors over the last several years. While not every institutional investor actively incorporates these factors into their investment decision-making process today, the rate...

Callan Survey: ESG Here to Stay in the U.S.

Institutional investors have been grappling for years with the issue of quantifying non-financial investment considerations and applying them to an investment decision-making framework. This is true for defining environmental, social, and governance (ESG) factors, but despite the challenges investors are...

Tips for Emerging and Diverse Managers

We work regularly with diverse and emerging investment managers, including through our Callan Connects program,  which we established in 2010 to help managers foster better outcomes for institutional investors and their participants/beneficiaries.(Estimated reading time: 2 min 36 sec)To further...

Have We Learned the Lessons of the GFC About Liquidity?

After a 10-year bull market in equities, the Global Financial Crisis (GFC) may seem like a distant memory. Yet the financial lessons of those times should be branded into our memory as fiduciaries. As financial markets collapsed, the lack of...

The OCIO Model: How Do We Measure Success?

The outsourced chief investment officer (OCIO) industry has grown significantly over the last 10 years. Low barriers to entry have contributed to a proliferation of providers in this space, from boutique firms to larger investment management and investment consulting organizations....

The Importance of Defining Fundamental Investment Beliefs

In Callan’s 46 years as an institutional consulting firm, we have advised the fiduciaries and staffs of many hundreds of funds on their investment strategies and policies. We believe that the primary objective of these investment reviews is to develop...

How to Build an Effective Transition Management Pool

Transition management is the cost-effective and efficient restructuring of institutional portfolios from single or multiple investment managers/asset classes to a new allocation over a short-term horizon, with risk management at the core of the process. Transition managers are the discretionary...

ESG Mythbusters: The DC Plan Summer Blockbuster?

Growing interest in environmental, social, and governance (ESG) investing is apparent across the institutional investment industry. ESG has also captured the attention of policy makers; for instance, the White House, the Senate Committee on Banking and Finance, the Labor Department, ...

The Essential Elements of Culture

As Callan’s executive chairman, Ron meets regularly with fellow employees and industry leaders to discuss issues of broad concern to institutional investors. In this blog post, drawn from his recent paper “Nurturing Strong Cultures at Professional Firms, ” Ron...

A Primer on the Role of Custodians

A custodian is a specialized financial institution (typically, a regulated entity with granted authority like a bank) that holds customers’ securities for safekeeping in order to minimize the risk of their misappropriation, misuse, theft, and/or loss.(Estimated reading time: 2 min...

The Cobbler’s Shoes

In a recent white paper I wrote with my colleague Matt Loster, “The Cobbler’s Shoes: How Asset Managers Run Their Own 401(k) Plans, ” we used federal government data and Callan’s database to examine the practices of asset managers...

Opportunity Knocks for Taxable Investors

Last year’s Tax Cuts and Jobs Act created the Qualified Opportunity Zone (QOZ) program, designed to encourage investments in low-income census tracts or census tracts contiguous with low-income census tracts. This blog post provides a high-level overview of the program, ...

ESG’s Regional Regulatory Conundrum for Managers

Despite the climate change concerns of many Americans, our political and regulatory stance on environmental issues has diverged from much of the rest of the world. America’s withdrawal from the Paris Agreement, the administration’s easing of environmental regulations and enforcement, ...

2018 Study Finds Nuclear Decommissioning Funding Stable

Callan’s annual Nuclear Decommissioning Funding Study offers insights into nuclear decommissioning funding in the U.S. Our key findings show the health of nuclear decommissioning funding improved in 2017 as the funding level reached 78%, up from 70% in 2016. Other...

Investors and Climate Change: In It for the Long Haul

Long-term investors recognize the need to be focused on issues beyond the quarterly noise. The ever-increasing speed (and absurdity!) of the daily news cycle can be addictive, but like a long-haul trucker, institutional investors need to keep their focus on...

How Can an Organization Achieve Gender Diversity?

In a recent white paper I addressed the problem of gender diversity in the investment management industry. I reviewed the industry’s track record on the inclusion of women, explored why diversity is important, and outlined why many firms have found...

ESG Hitting Its Stride in U.S.

Although the U.S. has strong historical roots to Europe—who can forget the Niña, Pinta, and Santa Maria?—we’ve tended to carve our own path, from the Revolutionary War onward. The evolution of environmental, social, and governance (ESG) investing has been no...

Untangling the Gordian Knot of ‘Cash Drag’

Modern portfolios are increasingly complicated as they have expanded beyond stocks and bonds. The management of those portfolios—and the attendant illiquidity that can come with alternative investments—has many asset owners staring at a Gordian knot very much in need...

Examining MiFID II After Implementation

Last August Callan outlined some of the issues raised by MiFID II, the second iteration of the Markets in Financial Instruments Directive. We wanted to provide an update on the directive, which took effect at the start of this...

Rebalance Your Portfolio, or Let It Ride?

With the return of market volatility, investors are asking whether it is an appropriate time to rebalance their portfolios. Our view: Yes! This sometimes-overlooked procedural discipline is extremely important.(Estimated reading time: 3 min 50 sec)Asset allocation may be the most...

Active Share Is Not a Litmus Test

A recent deal between the New York state attorney general’s office and major investment firms highlighted the role of “active share” in evaluating mutual funds or other pooled investment vehicles. While the New York deal, in which 13 firms representing...

Managing an NQDC Plan Investment Menu

In an article for the latest edition of our DC Observer, I discussed non-qualified deferred compensation (NQDC) plans, the investment menu structure, and hedging strategies. Unlike a qualified defined contribution plan, in which plan assets are segregated from the employer’s...

Callan Poll: How Many Funds Are Considering Gun Divestiture

At the request of one of Callan’s large public fund clients, we conducted a timely “micro-poll” last week to understand where these investors stand on the issue of divestiture from gun manufacturing companies (note this poll did not inquire about...

Our Manager Search Process

I’m always struck by the number of media articles with titles such as, “How to get into consultant XYZ’s search process.” While it is certainly necessary to know how each consultant operates, a consultant's search process should ultimately be able...

Divest or Engage? Our Advice

The recent spate of deadly shootings in the U.S.—especially those involving schoolchildren—has prompted some institutional investors to ask about ways to use their portfolio assets to signal they would like to see meaningful change related to firearms and their role...

Tax Bill’s Impact on Foundations and Higher Ed

By Steve Center and Karen HeifferonThe tax overhaul bill signed into law by President Trump at the end of last year could have significant long-term effects on endowments and foundations—particularly nonprofit organizations dependent on charitable donations and certain private colleges...

Securities Lending 101

By Kyle Fekete and Mark KinoshitaAs passive investing becomes a larger part of fund sponsors’ portfolios, investors are encouraged to look underneath the hood of their indexing strategies to evaluate securities lending. This has played an integral role in maintaining...

Diversification: Where’s My Free Lunch?

Much of asset allocation work rests on the back of modern portfolio theory, which asserts that diversification stands as the lone “free lunch” offered up by the market gods. But in reality, the ascent of target date funds (largely built...

On Charitable Giving

It’s been said that 80% of life is just showing up. While real life is certainly more complicated than that, showing up is actually what charitable organizations value most. Showing up demonstrates that you care about what the institution has...

The Power of Savings

While the institutional investing industry spends enormous time and effort on the details of glide path design for target date funds in defined contribution plans to improve retirement for participants, it might be as important to revisit the role savings...

Thoughts on Relevance

Staying competitive in our industry is critical for all of us, but it is becoming more challenging. We are all well aware of the many issues our industry faces. However, from my perspective as a 40+ year industry veteran, it...

Our 2017 Nuclear Decommissioning Funding Study

Callan’s annual Nuclear Decommissioning Funding Study offers key insights into the status of nuclear decommissioning funding in the U.S. to make peer comparisons more accurate and rel­evant. The 2017 study covers 27 investor-owned and 27 public power utilities with an...

So What the Heck Is SUBICO?

Callan is committed to original, path-breaking research to help educate the financial industry and serve our clients. That commitment began with the firm’s founding and continues today with a research operation that spans every major asset class and investing strategy.(Estimated...

How DTS Helps Us Evaluate Bonds

Evaluating bonds and fixed income portfolios can be complex and challenging, and to help make that process easier I developed a way for Callan to use a metric developed by practitioners called DTS, or duration times spread, which measures systematic...

Open Protocol: Comparing Apples to Apples

Evaluating the risks of a large cap value portfolio against those of another has long been a relatively easy exercise for investors. However, evaluating the risks of an absolute return-oriented risk premia fund versus those of a relative value multi-strategy...

More than Words: The Asset Manager Code of Professional Conduct

The perception and validation of ethical standards in investment professionals builds client trust in an advisor and strengthens the resolve to stay the course when the advisor’s strategy is out of favor.(Estimated reading time: 2 min, 15 sec)If you think...

Top 10 Tips for Investment Committees

Investment committees face complex challenges overseeing institutional investment funds. They must navigate myriad laws and regulations, select the right managers and strategies, monitor their portfolios, and ensure their funds can deliver the returns needed for their beneficiaries.(Estimated reading time: 2...

Saving Public Defined Benefit Plans: Talking Points

The funded status of public employee defined benefit (DB) retirement plans continues to garner great debate in the industry and press. DB plans are the primary vehicle for ensuring retirement income security for public workers, and Callan believes these plans...

Built to Last: Strategic guidance for effective investment committees

In this paper, authors Elizabeth Hood, CFA, and Cody Chapman, CFA, CAIA, offer advice in areas including committee membership, investment policy statements, review processes, and fiduciary training and ongoing education.Key points include: Investment committees are increasingly essential to the success...

Ethical Mindfulness

Studies show that the key to ethical behavior is to keep promoting, discussing, and practicing ethical principles. Here, we present eight important points on ethics: Implementing high ethical standards in the investment industry is not only the right thing to...