The 2007 PortfolioConstruction Conference program again challenged delegates' thinking about how they design and build investor portfolios - and it would have been hard to pick a better time to bring together 500 of Australia's leading portfolio construction professionals...

It's not often you get an opportunity to listen to an investment expert of the calibre of The Honourable Dr Philippa Malmgren. A leading consultant on the global political and policy environment and the influence on financial markets and the global economy, she regularly visits with leading policy-makers among the offices of heads of government, the boards of central banks and elected and appointed officials among the G7 countries....

Credit failure season is upon us. Most recently, subprime mortgages, Bridgecorp and Basis Capital have been the stars of the show. Before them, it was Westpoint. Like cockroaches, you can be sure that for every one that rears it's head, there are dozens more lurking just out of sight. The critical issue is not whether advisers avoid credit failure, but how they manage it...

It would have been hard to pick a better time to bring together 500 of Australia's leading portfolio construction professionals. Conference came hard on the heels of the 30 June deadline for post-tax super contributions of up to $1 million and then, during conference week, the US subprime meltdown shaved 6% off global equities...

Our panel of investment specialists presents and debates their long-term forecasts for equity markets, listed property and hedge funds...

Our visiting fellow, Bob Veres, summarises the most important things he's taken from the two-day PortfolioConstruction Conference 2007 program, and the follow up he'd be doing if he was a Practitioner delegate...

India remains a mystery to many Westerners, even as it is poised to become the world's third largest economy within a generation. Anand offers his insiders view on India's economic history, and perspectives on its reemergence as an economic superpower...

Why bonds? This session explores major structural changes in fixed interest markets and how these relate to contemporary portfolio construction issues...

This session examines the current state of play in the Australian securities market. We look at the prospects for total returns from property securities in the future...

There is a global trend towards concentrated portfolios. This session explores whether concentrated portfolios are appropriate for client portfolios...

As markets have developed, there are increasing opportunities for global investment in infrastructure, via the listed markets. This session explores the opportunities for investors in global infrastructure in today's market...

In this session, Dr Sethi overviews the development of India from an IT outsourcing destination to its emergence as the world's R&D and design hub – the ultimate "rent-a-brain" supermart...

Operating leases over transport assets are one of the best kept secrets in the alternative asset space...

This session explodes 10 myths, or common misconceptions, regarding the construction of international equity portfolios...

This session addresses addresses a specialist investment approach looking to profit from one of the mega trends affecting global equity markets – global agribusiness...

This session explains how companies that have a sustainable competitive edge, having created this by owning or operating assets that are difficult to replicate, can deliver superior returns over time...

This session discusses how investors can potentially achieve more consistent and higher long-term returns by investing in more - not less - stocks...

This session examines the emergence of new tools that allow managers to take advantage of new segments of the fixed income market and shows how managers with the right skills are equipped to uncover the dynamic opportunities of this once staid asset class...

The ability for global and Aussie markets to bounce back following prolonged periods of relatively poor returns is testimony to one of the most enduring, fundamental characteristics of bond returns – that is, bonds are naturally mean reverting assets...

The meltdown of Basis Capital has highlighted the need for much greater clarity of communication from research houses – particularly when it comes to describing product risk. With the benefit of hindsight, it is fun to look back and see what the research houses were saying about the risk of the Basis Capital Yield fund before the event. We see nothing on the two pieces of information that really matter...

Many planners still use long term historical returns to estimate future market returns on the basis that, if the historical period is long enough, everything smoothes out. This is pure bunk. In order to demonstrate this as conclusively as possible, we illustrate the impact of using 20 year historical returns as forecasts for the subsequent decade across six major equity markets over the past 107 years...

In the next few weeks, the publishing industry will have given us two books that, paired together, blow the doors off of conventional market theory. Both acknowledge that if you want to study and understand the markets, instead of examining the movements of stock prices, you have to shift your attention to the people who are actually making the trades...

You learn a vast amount in a week. Here are my key takeouts from Day 1...

Near the end of each decade, a bubble seems to emerge in financial markets...

A large number of high conviction or "concentrated" equity funds have been released in recent years, all promising higher returns than traditional funds by focusing on the strongest stock selection ideas of a manager. This paper examines the evolution of high conviction funds, looking at why they have been developed, their risk/return characteristics and the broader implications for portfolio management...

Short of time? For each Journal issue, we highlight papers we feel you shouldn't miss - this is one. It investigates whether resources is a bubble ready to burst or whether they still represent an attractive investment proposition, and how best to incorporate resources into a portfolio...

This paper discusses balancing liquidity, income, valuation, risk and diversification objectives in building property portfolios. It examines the key questions currently confronting Australian investors – How should investors gain exposure to offshore assets? Which markets provide appropriate income levels? How can direct property be included in a portfolio without sacrificing liquidity? What are the current valuation conditions in markets? – and demonstrates the characteristics of an optimal property portfolio.

Hybrids have delivered uncorrelated high returns combined with low volatility over the past five years. This paper explores why, despite some changes in the return equation, their reduced risk and still healthy returns make hybrids one of the most compelling income sub-sectors....

In a small, concentrated market like Australian equities, fund capacity is an important consideration for investors. This paper discusses why the most important factor in determining capacity is an Australian equity manager's style and the best representation of style is actual performance and trading history...

Short of time? This is one Journal paper you shouldn't miss. It examines why and how India should be a key component of investors’ exposure to emerging markets, arguing that investors should not limit themselves to just one leg of the BRIC/emerging markets story...

A market-weighted approach has been the traditional way of constructing international equity portfolios – often because this is the type of benchmark index against which fund managers are measured. But is this the best approach? Building market cap-weighted portfolios is not the mantra of all active, large cap equity managers. This paper examines an alternative construct for an international equities portfolio that encapsulates potentially greater investment returns and a better way of assessing portfolio performance.

Global economic growth in Asia has produced unprecedented demand for commodities – and opportunity for investors. This paper examines the benefits of investing in commodities and discusses how an active approach to commodity investing may mitigate downside risk, and create alpha opportunities that are unavailable to passive commodity index investors.

Chinese authorities have embarked on Gugai, the Mandarin word for share reform. This paper explains how the Chinese authorities are addressing inefficiencies in the country's share markets and the much-criticised banking system, as well as seeking relieve some of the social tensions and environmental pollution arising out of China's fast economic growth.

The search for global alpha should include developing economies on several levels. Recently, the role of emerging markets in the global food chain for the manufacturing and distribution of products and services has significantly increased. Investors monitoring this shift can find valuable information that could potentially drive stock prices of companies in different parts of the chain. This information may not be visible when viewed discretely from an individual country or even continent standpoint and provides global investors with a distinct advantage.

This paper examines traditional approaches to buying international equities, highlighting some of the problems with capitalisation-weighted benchmarks, and suggesting that replicating a global index may no longer be the optimal solution for those investors with longer-term investment horizons. It looks at some of the new strategies available to capture beta and illustrates how diversification can be used to manage risk for investors in a less constrained portfolio.

Traditionally, investors have gained exposure to listed property via the Australian listed property trust market. However, the changing Australian property investment environment, combined with greater investment in global property assets, has resulted in the emergence of global property securities as a credible investment choice. Where and how does global listed property fit in a diversified portfolio?

Over each of the past five years, the returns on a diversified international bond portfolio fully hedged back into Australian dollars have well exceeded the return realised on a typical Australian bond portfolio. As a result, many fixed interest clients are looking to increase allocations to international bonds. This paper examines some of the reasons why international bond portfolios have outperformed their Australian counterparts and asks whether this is likely to continue.

Short of time? Here's another Journal paper you shouldn't miss. It examines key infrastructure investment considerations, the risks of investing in infrastructure, valuations, and infrastructure's place and role in a targeted return portfolio...

The global equity benchmark excludes many opportunities as the industrial advantage shifts to the so-called emerging economies. This paper challenges the conventional belief that history is the best guide to determine the optimal composition of the international equities component of a portfolio. It examines why it makes sense to structure an investment portfolio that emphasises global themes and relationships, as opposed to geographic regions. It looks at how a thematic approach to investing identifies the major secular, cyclical and structural influences on the world’s stock markets, and how consistency, risk control and diversification are managed.

Has the role of traditional fixed interest managers changed? This paper explores why it remains critical to have fixed interest in portfolios, both as a tool to lock in income and also as a defensive play. It asks "How do fixed interest managers keep pace with investor demand for greater returns, in a world where spreads are tight even in what are considered more risky securities?" Finally, it argues that with the prospect of rising inflation, declining GDP and a new Fed Chairman throwing uncertainty into the mix, perhaps locking in CPI + 4% isn’t a bad thing!