Mercer Global Investment Forums

BRISBANE21 March 2017

Mercer Global Investment Forums – Brisbane, 21 March, 2017

Forum Agenda

Contains links to related content on Mercer.com

20 MARCH 2017, MONDAY

18:00–21:30Welcome drinks and buffet dinner

21 MARCH 2017, TUESDAY

07:30–09:00Breakfast

09:00–09:10Welcome and Opening

Anthony SchiavoState Manager – Queensland

The global economy is starting to reflate, with stronger growth and higher inflation expected in 2017. Although we are also seeing the potential for increased volatility in financial markets. We believe investors must seek to identify and understand some of the key drivers of change in today's world. Global fragmentation, an abundance of capital, a shift from monetary to fiscal stimulus and understanding structural changes are four themes we believe will shape and influence the investment environment of 2017 and the years ahead. In this session, we explore how different types of investors can respond to these themes to seek out practical investment opportunities, improve their portfolio outcomes and meet their objectives.

Deb ClarkeGlobal Head of Investment Research

Hendrie KosterHead of Strategic Research – Pacific

Given the current level of bond yields and equity market valuations, portfolios dominated by equities and bonds offer a relatively unattractive risk/return trade-off going forward. One important way investors are looking to address this challenge is by seeking a greater contribution from alternative asset classes across both liquid (for example, hedge fund) and illiquid (for example, private market) opportunities. In this session, we cover some of the interesting opportunities available to investors and explore how investors can build exposure to these alternative asset classes.

Garvan McCarthyPortfolio Manager, Delegated Solutions

Paddy BrownPortfolio Manager, Delegated Solutions, Real Estate

10:20–10:30Lightning Talk: Fees for Alpha – How to Better Use Your Fee Budget

Fee budgets are not unlimited. That's a good thing. It helps enforce disciplined investment choices and creates an efficient use of resources — in terms of both cost and time. The result? The maximising of returns for a given level of fees. In this lightning talk, we outline where you should theoretically expect to get the best alpha per unit of fees, where our A-rated strategies have historically delivered and what our Portfolio Management team's views are in relation to its own alpha plan.

Stuart BirkettSenior Portfolio Manager, Delegated Solutions, Equities

10:30–10:40Mind Games: Navigating Alternate Realities I

Like Alice in Wonderland, the audience is transported through a looking glass to alternate futures. In this three-part interactive game, the audience is asked to create optimal portfolios based on different scenarios. After conferring with their tablemates, everyone in the audience submits a portfolio individually. All submissions are tabulated on a leaderboard. The person who submits the portfolio with the highest value after three rounds is declared the winner of Wonderland. The moderator briefly discusses the winning and optimal portfolio.

Dr Harry LiemSenior Investment Consultant

10:40–11:10Networking and Coffee Break

11:10–12:10Keynote Address: Geography, Globalisation, and the New Order

Tim Marshall discusses how geography is sometimes overlooked as a determining factor in geopolitics using the examples of Russia and China. This reminds us not to forget the picture which is so big that is sometimes easy to miss. He argues that globalization is not going into reverse but it is changing as we move from the Global Order of the post WWII years into Global Order 2. This is based on the interlocking forces of global trade, technology, and demographics but will not be rooted in political ideology. This lessens the chance of conflict based on battling Communism, fascism, or humanitarian intervention. However, the rising tide of nationalism will provoke regional flare ups. The changes will be bumpy and require compromise.

Tim MarshallAuthor and Former Diplomatic Editor and Foreign Correspondent for Sky News

For the foreseeable future, we expect investment markets to remain volatile. For many investors, this provides opportunities, whereas, for others, this uncertainty is a challenge. Previously, we have relied on assets such as bonds to provide 'protection' in periods of significant equity market drawdown; however, with the increased correlation of equities and bonds, does this strategy still remain valid? In this environment of low or even negative yields, we explore other asset classes and investment techniques we believe will provide the protection required.

Michael MaherSenior Investment Consultant

12:30–12:40Mind Games: Navigating Alternate Realities II

Like Alice in Wonderland, the audience is transported through a looking glass to alternate futures. In this three-part interactive game, the audience is asked to create optimal portfolios based on different scenarios. After conferring with their tablemates, everyone in the audience submits a portfolio individually. All submissions are tabulated on a leaderboard. The person who submits the portfolio with the highest value after three rounds is declared the winner of Wonderland. The moderator briefly discusses the winning and optimal portfolio.

Dr Harry LiemSenior Investment Consultant

12:40–13:55Lunch

The Future of Defined Contribution: Integrating Member Experience and Post-retirement Investment Strategies

Marrying needs and wants — behavioural finance tells us that these two don't always go hand-in-hand. However, the success of the retirement system will largely rely on our ability to do this. The capability of behavioural finance to boost member contributions in the accumulation phase has been well documented. Now is the time to harness these learnings to enhance member outcomes in retirement.

Successful funds of the future will utilise behavioural finance in concert with leading technology to enhance their members' experience, delivering an integrated retirement system tailored to the needs of individuals. In this masterclass, we uncover what the industry is doing and what you can do to use these subtle principles to change the thinking habits of your members in order to enhance their post-retirement outcomes.

Jacki EllisSenior Investment Consultant

Richard BoyfieldActuarial Consulting Leader

Super Inventory Check: Examining Accumulation Phase Superannuation Trends

How time has flown — the Cooper Review was delivered almost seven years ago and the dust has settled on the MySuper offerings. Although some funds have not changed their MySuper products, most have significantly enhanced their offerings for members. Those that have undertaken the glide path or lifecycle-style funds are starting to deliver performance track records. We investigate whether MySuper funds have delivered against expectations and bring you up to date on the latest trends in super:
  • Investment objectives setting
  • Asset allocation and strategy
  • Glide path designs
  • Liquidity
  • Communicating with boards, IC and members

Derek MockSenior Investment Consultant

Chris ParkSenior Investment Analyst

Regulatory Fallout: Identifying and Overcoming Compliance Challenges

The wealth management (WM) industry has been significantly reshaped by regulatory change over the last decade, and more change and regulator intrusion is inevitable. WM trustees, management and advisers need to anticipate regulatory changes and trends, adjust to new expectations and adopt a robust framework/blueprint to meet organisational challenge from regulatory-initiated change. They also need to capitalise on opportunities while managing the cost, resourcing and risks of this regulatory burden.

In this master class, we focus on 'the wheel of change' and put forward a framework that a WM organisation could use to anticipate and overcome new regulatory challenges. We use the new RG97 disclosure requirements and proposed super RE governance changes as current examples to apply this framework.

Tony NemecHead of Mercer Legal

Natalie MorcosHead of Product and Solutions Management – Pacific

For many investment professionals, insurers are curious creatures. Asset allocation is a very important support act to run their core businesses, and central to investment decisions is the regulatory risk-based capital requirements. In this master class, we provide insights into risk-based capital and target surplus for Australian insurers and we examine the impact on asset allocation for a range of different insurers. We also discuss current challenges that affect Australian insurers' investment decisions.

Clayton SillsSenior Investment Consultant

Peter HughesSenior Insurance Consultant

Future Maker or Future Taker: Are Your Investments Reflecting Your Mission?

Endowments and foundations (E&Fs) are a critical part of the fabric of our communities, providing funding for research, innovation, education and social services. Longer investment time horizons make E&Fs different from many other asset owners. As an E&F, you are uniquely positioned to be Future Makers, helping to shape the future you are investing into, rather than sitting back and accepting the future that traditional market factors tend to create. In this E&F master class, Alexis Cheang begins with a short presentation on the key character traits of a Future Maker investor. Helga Birgden then interviews two major E&F investors on their experience of being a Future Maker.
Chairs

Helga BirgdenGlobal Leader, Responsible Investment

Alexis CheangResponsible Investment Consultant

Panellists

Michael MarantaNational Sustainability Manager, QIC

Tricia BrandDeputy Vice-chancellor, Division of Services and Resources, James Cook University

14:40–15:10'Trust me, I'm a ...': Exploring the Role of Trust in Regulation and Partnership

In our everyday lives, the axis of trust is changing. We are moving from a system based on vertical axes of trust, where we trusted people who seemed to have more authority than we did ('the experts'), to one now predicated on horizontal axes of trust, as we seek advice from our peer groups ('people like us').

Millennials' trust of technology and preference for networks amplifies this change. For many, the recent failure of most pollsters to correctly predict Brexit and the US election results also reinforces the declining confidence in the 'expert'.

In financial services, the prevalence of performance fees for money managers, bonus/malus arrangements built in to agreements and the blurring line between advisory and discretionary engagements all serve as evidence of the changing nature of trust.

Have we gone too far? Should we be more trusting?

Divyesh HindochaSenior Investment Consultant

Simon EagletonInstitutional Wealth Leader – Pacific

15:10–15:40Creating Robust Reference Portfolios: Principles and Practicalities

Mercer advises more than 3,700 clients around the world — clients from different industries and different tax regimes, and clients with different beliefs, objectives constraints and preferences — and every client receives advice tailored specifically to meet its requirements. That advice, however, is always grounded in core Mercer best practice, from bottom-up manager research to top-down strategic advice and from operational risk management to sustainability. Much of what we consider best practice is captured within our reference portfolios. In this session, we outline what reference portfolios mean to us, how they reflect Mercer's best ideas and how they underpin our advice to clients.

Nick WhiteGlobal Director of Portfolio Construction Research

15:40–16:10Networking and Coffee Break

16:10–16:50Globalisation in a Fragile World: Is it Time for a Rethink?

In this session, we debate whether it is now time for a rethink on globalisation. Andrew Kirton and Dave Stuart will go head-to-head and discuss the implications of globalisation, covering topics such as geopolitics, economics and trade, technology and the implications for investment today. We also encourage audience debate, and you decide where you stand on this topic.

Andrew KirtonGlobal Chief Investment Officer

Dave StuartChair of Global Dynamic Asset Allocation Committee and Chief Strategist for Mercer Funds – Pacific

16:50–17:00Mind Games: Navigating Alternate Realities III

Like Alice in Wonderland, the audience is transported through a looking glass to alternate futures. In this three-part interactive game, the audience is asked to create optimal portfolios based on different scenarios. After conferring with their tablemates, everyone in the audience submits a portfolio individually. All submissions are tabulated on a leaderboard. The person who submits the portfolio with the highest value after three rounds is declared the winner of Wonderland. The moderator briefly discusses the winning and optimal portfolio.

Dr Harry LiemSenior Investment Consultant

17:00–17:15Final Thoughts

Helen MurdochDelegated Solutions Leader – Pacific

18:00–22:00Cocktails and Offsite Dinner

Please meet in the hotel lobby by 6:00pm for a short walk to the venue.

MARCH 22, WEDNESDAY

07:45–14:00Fund Manager Session

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