Northern Trust examines how global asset allocation may evolve amid rising rates, expensive equities, and shifting political regimes entering 2017. The paper argues that multi asset portfolios and factor based strategies could outperform traditional approaches, while active managers face fee pressure after years of underperformance.
Global Asset Allocation: Investment and Business Themes for 2017 and Beyond
Northern Trust
Bob Brown
Research
21 Pages
Key Takeaways
Factor Investing Momentum: Northern Trust notes factor based strategies delivered more consistent excess returns over 20+ years as investors increasingly questioned high fee discretionary active management.
Multi Asset Demand: The firm highlights growing adoption of outsourced CIO models and target date funds, with Northern Trust overseeing more than $200 billion in cash and short duration assets.
Fee Compression Intensifies: Active equity managers faced mounting pricing pressure in 2017 as ETFs and lower cost products gained share following several years of weak benchmark relative performance.
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