Investing in New Realities: Commodities, Disruptive Megatrends, and State Capitalism


The sixth annual CFA Institute Middle East Investment Conference will challenge participants to re-consider new investing realities by engaging with the latest thinking on global economics, geopolitics, demographics, frontier markets, innovative investment techniques and disruptive industry trends. Not only will policymakers, industry experts, and key market participants discuss issues relevant to professional investors in the region, but delegates at the event will also hear Nouriel Roubini, Amlan Roy, and Philippa Malmgren in special sessions discussing geopolitics and demographics.

In advance of the conference, we have prepared a reading list from previous CFA Institute events. These insights from renowned academics and influential practitioners offer a preview of the on-site discussions that will identify new opportunities open to MENA investors who are willing to investigate, evaluate, and seize them.

Despite, or perhaps because of, the recent collapse in oil prices, commodities remain an important part of an asset manager’s portfolio. Russell Read, CFA, contends that regarding  commodities as an asset class represents a significant new opportunity for many investors.

For Chris Pitts, the Future of Wealth Management depends on navigating six disruptive megatrends: emerging markets, competition for natural resources, state-directed capitalism, demographic change, social and behavioral change, and technological change. Jerome Booth in Emerging Markets in an Upside-Down World ties together investor misunderstandings and prejudices about emerging markets and developed markets. Finally, and well worth considering are the views of Noel Archard, CFA, on utilizing ETFs in active management and Kristin J. Ceva, CFA, on investing in emerging market debt.

Of the US economy, consider Amir Sufi’s viewpoint that the past several years have actually been a period of secular stagnation, masked by easy access to credit which distorted economic reality: “The bottom line is that the US economy is struggling,” says Sufi. Yet another gloomy viewpoint was recently voiced by Ann Pettifor. “Flawed economic theories can severely distort investment priorities and fail in the analysis and prediction of crises,” says Pettifor. “The people and organizations the world depends on for sound economic advice do not seem to be providing that advice”.

  • Commodities and Their Roles for MENA Investors by Russell Read, CFA. Commodities investing and trading has thrived since essentially the dawn of civilization. But the investment role of commodities in a portfolio has evolved substantially in recent decades. Commodities strategies can play a major and multidimensional role in a diversified portfolio of stocks, bonds, and private market investments by repositioning risks, providing meaningful diversification, and adding value.
  • The Future of Wealth Management by Chris Pitts. Wealth management firms need to prepare for six strategic megatrends: emerging markets, competition for natural resources, state-directed capitalism, demographic change, social and behavioral change, and technological change. These long-term megatrends are changing the shape of the asset management industry, even as firms are struggling with shorter-term themes of fiscal pressure and political and regulatory change.
  • Emerging Markets in an Upside-Down World by Jerome Booth. Investment in emerging markets is all about prejudice. Investors are particularly confused about the concepts of risk and uncertainty with regard to emerging markets. But what is happening in the United States cannot be fully understood without an understanding of international monetary economics. We need to bring global macroeconomics and a more entrepreneurial approach back into asset allocation.
  • Opportunities in Emerging Market Debt by Kristin J. Ceva, CFA. Emerging market debt as an asset class has grown significantly over the past two decades. Relative to developed markets, higher growth rates, favorable trends in debt sustainability and fiscal dynamics, and supportive valuation and technicals provide a compelling investment thesis for the asset class. But there are risks, with the two major risks being the emerging markets’ electoral cycles and a sustained rise in US Treasury rates.
  • Utilizing ETFs in Active Equity Strategies by Noel C. Archard, CFA. The reasons investors use exchange-traded funds (ETFs), rather than other alternative instruments, as part of their active equity strategies are increasing. In North America and Europe, ETFs are becoming popular in managed portfolios and for portfolio cash management. Institutional inertia is being replaced by an appreciation of the low-cost opportunities of using ETFs.
  • House of Debt by Amir Sufi. Many claim that the anemic economic recovery since the Great Recession is because of the severity of the downturn, but others believe that the US economy has been in a period of secular stagnation for several years, masked by easy access to credit that has distorted economic reality. Various causes of the stagnation include the substitution of capital for labor, the increased productivity of capital, reduced capital expenditures relative to market capitalization, and most importantly, greater income inequality. A potential consequence of the income inequality is that the wealthy do not spend as large a proportion of their income, which puts stress on financial stability and economic growth.
  • Central Banking, State Capitalism, and the Future of the Monetary System by Ann Pettifor. The role of commercial and central banks in the process of providing credit may seem to be clearly understood by economists, bankers, and policymakers. But there are common misunderstandings about money creation, equilibrium, public money, central banks, and interest rates. The outlook for the global monetary system is not overly optimistic in the absence of overcoming these misunderstandings and altering the philosophies of bankers.

You can join us in Kuwait to re-consider new investing realities.

To keep up with information from this event, consider subscribing to the Middle East Investment Conference blog.

Please note that the content of this site should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute.

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