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  • Amplified: What does 2019 have in store for investors?
    Eoin Murray
    Trade tensions, Brexit, the #MeToo movement and climate change have dominated news flow in 2018. But with the festive season almost upon us, attention has turned to 2019 – and the investment opportunities it may offer. In this episode of Amplified, Eoin Murray, Head of Investment, reflects on what has been a tumultuous 12 months and scours the investment floor to speak with some of our experts about what is on the horizon in the New Year. Eoin is joined by:
  • November 19, 2018
    Macroeconomics & Risk
    Future directions: three ways the world could turn
    Eoin Murray
    Trump, tariffs, trade wars, terrorism and tech: a decade on from peak global financial crisis, this is where we are today. The more important question for investors, however, is where to next.
  • How tech and female tenacity could shake pp US politics (and the investment industry, too)
    Lewis Grant
  • They Walk Among Us – The Extended Cycle Of Zombie Firms
    Eoin Murray
  • October 26, 2018
    How Is ESG Integrated Across All Asset Classes?
    Eoin Murray
  • The missing link: why ESG should be in investors’ risk DNA
    Eoin Murray
    Risk morphs, and investment strategies must evolve in response. We have expanded our set of analytical metrics to include environmental, social and governance concerns to gain an even broader view of the changing environment – and to learn what adaptations we must make next. As experienced investors know, risk takes on many forms. Over the course of many decades investment professionals have categorised several varieties of these distinct market animals. In probabilistic exercises, they have pinned down their essential characteristics like butterflies in display cases. While museum-quality historical examples serve a useful purpose for market observers and participants, identifying risks in the wild requires a more sophisticated set of tools. We have met this challenge with our ever-evolving five-factor analysis matrix, which aims to capture the often-subtle signs of incipient risk from multiple observation platforms. Our five core vantage points – covering volatility, correlation, stretch, liquidity and event risks – have been regularly supplied with new viewing tools to improve the quality of data collection and analysis.
  • October 9, 2018
    Fixed Income
    Amplified: Credit Spectrum Q3 2018
    Eoin Murray
    In this podcast, Eoin Murray, Head of Investment, and Andrey Kuznetsov, Portfolio Manager in the Hermes Credit team, discuss the impressive growth of credit markets beyond the US and the compelling opportunities this presents for investors seeking greater diversification.
  • September 28, 2018
    Fixed Income Stewardship
    Amplified: We can all get along
    Eoin Murray
    In this podcast, Eoin Murray, Head of Investment, is joined by Mitch Reznick, Co-Head of Credit and Head of Credit Research and Hans-Christoph Hirt, Head of Hermes EOS and Stewardship Services to discuss the first instalment in a two-part paper we have recently published titled ‘we can all get along’.
  • September 19, 2018
    Macroeconomics & Risk
    The worst four words in investing- It’s different this time
    Eoin Murray
    In his latest note, Eoin Murray, Head of Investment at Hermes Investment Management, discusses the four words he dreads more than anything. There are plenty of words people in investment use to convince themselves – or others – that things are going to be OK. “This trade can’t fail”, “the market is rational”, “equities always go up”, are prime examples. But for me, the worst is: “This time it’s different.” Why? It invariably isn’t. The latest use of this maxim is by people unconcerned about the possibility of the yield curve inverting. The yield curve tracks short and long-term interest rates that fuel the traditional banking model. Short-term rates are usually lower, so it is cheaper for banks to take deposits, and the longer-term rates are higher, so they can issue loans and take a turn on the difference. Any disruption to this system sees the model break down. An inversion of the yield curve occurs when short-term interest rates are higher than long-term ones – it has been a reliable predictor of recessions. Of course there are many different ways of measuring the steepness of the yield curve, or the term spread. A recent paper by the Federal Reserve Bank of San Francisco suggests that it doesn’t actually matter whether we use 30-year minus 3-month, 10-year minus 2-year, or even attempt to include expectations:
  • September 3, 2018
    Macroeconomics & Risk
    Hermes: Journeying through ongoing uncertainty
    Eoin Murray
    “There are as many worlds as there are kinds of days, and as an opal changes its colours and its fire to match the nature of a day, so do I.” In 1960, Nobel Prize-winning US author John Steinbeck set out on a road journey around his home country to see what he could see; to note any changes in the vast nation he hadn’t observed up close for decades. Aged 58 and in ill-health, Steinbeck was nonetheless willing to confront the reality of a rapidly-changing US from the driver’s seat of a jerry-built house truck and only a ‘middle-aged poodle’ called Charley for company. While his best-selling recount of the trip was tinged with nostalgia and tips for poodle maintenance, the writer didn’t let the past blot out a clear-eyed view of the present. “A journey is a person in itself; no two are alike,” Steinbeck wrote. Investors would do well to bear this advice in mind as they venture through the second half of 2018. In the latest Hermes Market Risk Insights report, Journeying through a changing risk environment, Eoin Murray, Head of Investment at Hermes Investment Management, explores the six key risks investors must navigate through during the latter part of the year.
  • Infographic: Market Risk Insights, Q3 2018
    Eoin Murray
    Risk is amorphous, creating investment opportunities and threats to capital at each stage of the cycle. In response, investors must watch for familiar patterns and new disruptions amid streams of financial indicators. Models based on statistical history can serve as useful, if inexact, guides to the future. But we need to use all the tools at hand, going beyond number crunching to consider geopolitical tensions and sustainability concerns, to separate meaningful signals from the noise. We recommend tracking the following six indicators to recognise risk in its current form – and identify where opportunities lie.
  • A “Quantmare” on Wall Street 2: Apocalypse Tomorrow
    Eoin Murray
    Eoin Murray, Head of Investment at Hermes Investment Management, discusses the recent ‘quantmare’ which took place in June: Ever had a recurring nightmare? Markets are having one right now. In August 2007, a small subsection of the global markets was hit by a violent sell off that preceded the financial collapse the following year. Those who lived through this episode still bear the scars. Market neutral strategies, which formed the liquid element of many multi-strategy hedge funds that were holding piles of illiquid credit, became the go-to element for fire sale in their portfolios – the easiest stuff to liquidate was equity factor exposure (today’s systematic beta). As they did so, all factors started moving against these market neutral funds – including the one I was running at the time. The biggest fund to be hit was Goldman Sachs' Global Alpha. It had around $12bn in assets and was several times leveraged and prompted Goldman’s chief financial officer David Viniar’s famous quote: “We were seeing things that were 25-standard deviation moves, several days in a row” (sic!). The fund closed in 2011, with a mere $1.6bn left.