Editorial 4Q2018

Dear colleagues,

I’m a bond guy, a contrarian by nature.

It should come as no surprise then that we have decided to begin printing hard copies of the Insurance AUM Journal, just when every other publication is cutting out print and going 100% digital. The truth is, that I prefer a paper magazine or newspaper, and we figured you might, too.

If you would like a print subscription, please mail us at editor@insuranceaum.com.

Speaking of bond, the yield curve is getting considerable attention. At the time of this writing, the 2s-5s inverted, making headlines. Those of us who have seen a few yield curve inversions perk up our ears when things like this begin to occur. Thoughts creep in such as, “What would an inverted curve do to the equity markets, and does it spell the end of a decade-old bull market?” That’s also on the mind of Jack Nelson, this month’s Interview. Jack is one of the most highly-regarded insurance investment professionals in the industry. See page 3 to read his views.

This issue also includes the summary results of a comprehensive survey of insurance investment professionals compiled by Aberdeen Standard. No doubt that maintaining investment income is at the top of their list of concerns. See page 6 for their entire report.

ESG has been in the news more than ever before, driving our cover pic selection. ESG stands for Environmental, Social and corporate Governance, which refers to the three central factors in measuring the sustainability and ethical impact of an investment. Wellington provides a very good piece that we are privileged to include in this edition, which includes their views on why climate leadership may come from our industry.

Technology is changing all of our lives at a rapid pace, and the investment markets are no different. There is plenty of evidence that the bond market will be one of most impacted segments by technology shifts. On page 10, you’ll find AllianceBernstein’s interesting view of this.

And finally, we felt it important to discuss the relative value between the public and private bond markets. While Jack Nelson shares his views on this in his interview, PIMCO provides a broader perspective of the private markets including fund flows and their thoughts on relative value.

We hope you like our selections of articles this quarter. Our designer, Robinn, allows me two great joys each issue; one – I get to pick the cover pic, and two – I get to pick The Ending Chuckle cartoon. With the Holiday season and all that comes with it fast-approaching, I felt this cartoon was most timely. Thank you for your continued support – we appreciate all of you very much.

Have a very Happy Holidays – We look forward to seeing you next quarter!

Stew