The Risk Report
We examined more than 200 institutional equity portfolios, representing more than $200 billion in assets, and what we found may surprise you.
- Active Equity
- Portfolio Construction
- Volatility & Risk
- Factor Investing
Key Points
What this is
We analyzed more than 1,300 equity investment strategies to identify their common compensated and uncompensated risks.
Why it matters
Identifying compensated and uncompensated risks helps inform investors of the portfolio adjustments they need to make to more likely meet their desired outcomes.
Where it’s going
We uncovered six common drivers that may damage a portfolio’s ability to achieve investment objectives.
Summary
The Risk Report
As an investment manager who employs a quantitative risk-aware approach, institutional investors and their consultants regularly partner with Northern Trust Asset Management to gain a distinct analysis of underlying risk components impacting their portfolio’s ability to achieve intended outcomes.
Initially published in 2020, the inaugural Risk Report surfaced six common drivers of unexpected results. Two years later, with the additional analysis of $50 billion of assets, this new edition provides an updated view on how institutional portfolios have evolved in a vastly different market environment.
Each of the institutional portfolios analyzed were built over time and had grown increasingly complex. They were all designed to deliver upon specific objectives; however, intended outcomes were not always achieved and typically experienced two reoccurring problems.
Our analyses focused on identifying compensated and uncompensated risks in equity portfolios to help inform adjustments needed to meet desired expectations.
Contact Us
Interested in learning more about our expertise and how we can help?
Northern Trust Asset Management is composed of Northern Trust Investments, Inc., Northern Trust Global Investments Limited, Northern Trust Fund Managers (Ireland) Limited, Northern Trust Global Investments Japan, K.K., NT Global Advisors, Inc., 50 South Capital Advisors, LLC, Northern Trust Asset Management Australia Pty Ltd, and investment personnel of The Northern Trust Company of Hong Kong Limited and The Northern Trust Company.