February - March 2020
Embracing change:
Humans plus machines
Technology, for asset managers and their clients, is less about technology stocks and more about the way disruption affects corporate performance. But what are the implications for active equity asset managers and, by extension, their clients as asset allocators?  

A case for ESG investing in Texas public plans
Environmental, Social, and Governance, or ESG, investing has seen a rapid growth in assets over the last few years. In 2018, over $12 trillion was invested in the United States under sustainable investing strategies incorporating ESG factors, a 38% increase since 2016. ESG investing is forecasted by many research organizations and asset managers to continue to skyrocket over the next decade, and many expect public pension plans to lead that charge.

The next credit cycle
The corporate credit markets have evolved over the past decade in a way that has created pitfalls that will likely materialize when the credit cycle turns negative or a recession occurs. We expect that the corporate credit markets will behave differently during the next credit cycle than they have during previous cycles. 

Remastering volatility:
Reducing noise in equity allocations
Volatility is a challenge that has vexed equity investors for decades, yet its root causes are often misunderstood.  Understanding how a company’s business profile determines a stock’s risk can help investors prepare for uncertainty and make better decisions when market turbulence strikes.

Revisiting emerging market smaller companies
We believe that, as an asset class, emerging markets, or EMs, are underappreciated. This is clear when we consider the outsized representation of global client allocation of 5% against a global GDP contribution of 37% as of 2019 year end. This is in light of the fact that about 65% of growth in the world economy has been driven by EMs over the last 10 years. 

TEXPERS | 713-622-8018 | texpers@texpers.org | www.texpers.org
About Us 
The Texas Association of Public Employee Retirement Systems (TEXPERS) is a statewide voluntary nonprofit association that provides education and legislative advisory services to the trustees, administrators, professional service providers and employee groups that manage the retirement money of police, firefighters, municipal and district employees in cities across Texas.