It has been hotly debated whether high-frequency trading helps or hinders institutions, but the current question is whether it should be regulated.

Hong Kong’s pension funds withstood the volatility of the global recession, but many are now demanding greater investment freedom.

The case for volatility as an asset class is gaining traction, as liquidity begins to return to the markets and managers turn to variance swaps.

Of all the asset classes, equities have suffered the most from the market downturn, yet over the past 12 months many UK funds have made a dramatic recovery. However, their future is far from certain.

Pension funds were riding the wave of funding success on the other side of the pond until the global financial crisis hit, and consequently have had to completely rethink their investment strategies for the future.

The high yield bond market is showing vital signs in the fourth quarter despite flatlining in 2008. Nat Mankelow investigates.

Nordic pension funds are turning to riskier fixed income asset classes to plug funding gaps left by the financial crisis. Gill Wadsworth investigates.

Paul Scanlon discusses the continued improvement of the high yield market following a devastating 2008.

Though bond recovery has rocketed so far this year, industry experts are playing performance down and predicting more muted growth. Lisa Coleman notes the key trends investors should look out for in the coming months.

Flow derivatives are catching the attention of large investors due to their liquidity. But what was once primarily a hedging tool is now becoming a much more attractive investment opportunity in its own right.

ETFs are making strong moves into Asia, with Taiwan, Singapore and China clamouring to access the world’s most liquid equity markets.

With the index fund market overloaded, competition is intense and providers have had to widen the search for new opportunities.

The effects of the financial downturn are still being felt by the transition management industry, but can it weather the storm to meet the constant demand from pension funds needing to make major changes?

The popularity of fiduciary management in the Netherlands has led many providers to believe the UK could also benefit from their third-party services. But handing over investment responsibility is a huge step for many schemes.

The technology sector goes way beyond its core and can overlap with several others, which broadens the opportunities available to fund managers. Computer software firms are currently a hot tip, while some remain wary of green tech.

Though commodities such as gold will always present a strong case to investors, pension funds’ long-term view can stifle any potential for short-term returns. However, looming inflation may well change some minds.

Pension funds are by their nature long-term, cautious investors, but since the market hit rock bottom in March, few have made any decisive moves back into equities and may lose out on significant returns as a result.

The economic downturn caused a massive drop in dividend expectations, but investors are now poised for a steep recovery.

Asian markets are in an excellent position to offer long-term investment security, with low levels of debt and strong signs of domestic growth.

Timberland investment is becoming more popular among European pension funds, but ethical concerns are high on the agenda as investment spreads into emerging markets.

Despite small signs of growth in the large cap equity arena, the majority of funds are still playing it safe, as volatility and unpredictable events could transform the fortunes of even the largest companies in the current economic environment.

Liability-driven investment strategies were the envy of many when the markets were at record lows in 2008. But the complexity of tailoring each individual structure, along with the recent rally in equities, has resulted in little take-up.

While quantitative funds are renowned for performing well over longer time horizons, the financial crisis has thrown the strategy off kilter and is undermining the results and appeal of such funds, says Richard Hemming.

The importance of risk management was highlighted all too starkly by the credit crisis of 2008, with fund managers introducing more robust qualitative processes to replace quantitative systems that have failed to perform.

The promise of steady returns in a volatile market will always hold investors’ interest, but can absolute returns continue to produce results while there is doubt lingering over whether managers have the right skills to deliver?

With the near-term performance of government bonds set to dip, high yield and emerging market debt should be a strategic allocation in every investor’s portfolio.

Despite a positive performance this year, China’s overseas investing funds have failed to capture institutional investors’ attention and new products have been put on hold until further notice.

As investors look to products with a low correlation to traditional asset classes, the ETF market is in a position to pick up record new business.

While investing in Japanese equities was not a consideration for most fund managers in recent years, the way it has come out of the crisis has inspired new hopes for the country.

The upcoming EU directive has enticed many disenfranchised, London-based hedge fund managers to up sticks and head to the Continent. By Martin Fagan.

Amid volatile market conditions, a number of Australian pension fund managers have put into action the idea of offence being the best defence by targeting emerging market equity investment, writes Richard Hemming. By Richard Hemming.

With the OECD predicting Japan’s debt to soar to 200 per cent of GDP by 2010, its Ministry of Finance is marketing government bonds to foreign investors to support its multi-billion yen fiscal package. Nat Mankelow investigates.

With its processes being put under the microscope, and a general aversion to risk prompting many investors to play it safe, active management is having a tricky time of it, but managers are keen to prove their worth. By Henry Smith.

Insurers are tentatively awaiting the outcome of the consultation on Solvency II and the possible changes to how liabilities are calculated. By Nat Mankelow.

Despite getting a scalding by the press in the aftermath of the global financial crisis, some European absolute return funds judged the climate perfectly. By Spencer Anderson.

Sovereign wealth funds are inextricably linked to oil, but recent fluctuations in the price per barrel has forced these funds to take a keen look towards diversification, while still holding fast with their most basic strategies. By Spencer Anderson.

Despite a more favourable investment landscape that offers asset managers bespoke, largely superior options, gauging performance against a fund’s peers is made all the more difficult for the glut of choices available. By Gill Wadsworth.

With inflows into global bond funds at their highest since the end of 2004, managers are seizing the day and making wilder plays on the corporate and government debt markets. By Nat Mankelow.

Some might associate insurance-linked securities with their poorly regarded relations that are backed by suspect mortgages, but these instruments could offer the investor the holy grail of diversification. By Martin Fagan.

Bonds have traditionally been relied on to provide a safe haven for investors when equities face the dangers of volatile markets, but the ups and downs of the past year have left a few bruises on even the main players’ funds. By Spencer Anderson.

Volatility trading on equities and commodities has seen an increase in recent months, but there are several instruments and vehicles included under this umbrella that are contributing to a product boom. By Ceri Jones.

Quant funds have experienced mixed success over the last year, and current volatile markets are raising questions about the structure of the models used, but while holding fast, managers in this sector say they are ready to evolve. By Spencer Anderson.

Sovereign wealth funds have been hit hard by the global downturn, but by refining their investment approach, outsourcing management roles and employing an active style, they could fare better in the future. By Richard Hemming.

With client strength growing, fees reducing rapidly and the size of the sector gradually shrinking, private equity is struggling to make ends meet. But at least senior managers now have time to take a well-earned holiday... By Richard Hemming.

Fund managers have been little more than gamblers since the downturn in 2008, but they are now taking a universally conservative stance to see if they can beat the odds and survive beyond the market’s next hand. By Spencer Anderson.

Credit has developed into an asset class in its own right over the last ten years, but when liquidity dried up, along came a new set of problems. By Nat Mankelow.

The really big deals that characterised the bull market may be a thing of the past but private equity firms that do not rely on debt are in a strong position. By Richard Hemming.

Up until September last year hedge funds were so popular with investors that some had to restrict entry, but a rush of redemptions since then has seen many go out of business. But what does the future hold for those that survive? By Henry Smith.

The debate over how best to allocate between active and passive investments has been at the heart of equity strategies over the past decade, driving such approaches as the core/satellite model and the rise of ETFs

Pension funds’ equity allocations have been falling for some time as they diversified into other asset classes, and this is a trend that looks set to continue. By Paul Trickett.

Discussions at the recent NAPF Investment Conference revealed how pension funds are using ETFs to gain equity exposure and highlighted the increased demands placed on global custodians following the collapse of Lehman Brothers. By Nat Mankelow.

In the post-Lehman world companies and funds are placing much more emphasis on hedging their foreign exchange exposure, but this has in turn become considerably more difficult and expensive. By Richard Hemming.

As one of the few vehicles to attract inflows in 2008, ETFs are having a good crisis, and although they are mainly used for investing in equities, investors are realising they can offer an efficient way into an expanding range of asset classes. By Henry Smith.

Investors are taking advantage of the diversification benefits that cash and bond ETFs bring, but equity remains the largest asset class.

The absence of credit hit the bond market hard over the past year, but those that have survived the turmoil with relatively small losses could be well placed to benefit from investors seeking low volatility in their investments. By Spencer Anderson.

Pfandbrief banks are losing out as government-guaranteed bonds are proving very attractive to investors. But the covered bond market is confident that there will always be an appetite for their products among those with a longer term outlook. By Nat Mankelow.

The crisis in the banking sector has led to calls for remuneration to be carried out in an intelligent and accountable manner, but issues such as climate change and forced labour should not be forgotten in these times of financial turmoil. By Henry Smith.

The financial crisis has proven asset allocation a challenge and confirmed investors’ need for diversification. Active management of structured investments can accomplish these two goals at the same time, say Emmanuel Naim and Fabrice Tenga.

Asia-ex Japan equity funds have suffered huge redemptions over the past 12 months, but the funds that fared the best followed conservative strategies that focused on high quality companies with less leverage. By Spencer Anderson.

The convertible bond market went through an existential crisis last autumn. Are they now one of the most compelling value plays in credit – or already a missed opportunity? By Martin Steward.

Three multi-strategy funds of funds and one equity market-neutral fund of funds which came through 2008 relatively unscathed offer some lessons for wealth-protection in stormy times. By Martin Steward.

Demand for complex products is falling as derivatives users look to rein in risk. But those strategies that are flexible and efficient enough to generate returns in a very difficult environment are also attracting attention. By Christine Senior.

The best-performing cautious balanced funds came through 2008 by putting safety first. Do they think it is time to start easing into some credit or equity exposure? By Martin Steward.

Foreign exchange investors are increasingly concerned with hedging currency risk rather than increasing their returns, with forward contracts and FX options two categories of derivatives being utilised during this period of increased volatility. By Rekha Menon.

Triple A liquidity funds got the fright of their lives when a US fund ‘broke the buck’ this year for the first time in history. However simpler portfolio construction and tougher risk management is seeing investors’ faith return. By Nat Mankelow.

The expanding role of the middle office, particularly in terms of risk management, is leading some money managers to consider outsourcing part, or all, of their responsibilities. By Nat Mankelow.

Investors looking to maintain exposure to equities but avoid the extremely high levels of volatility in the markets are making this a busy year for derivatives, from plain vanilla hedges through to more complex products. By Ceri Jones.

Hedge funds are struggling to attract investors and Asia-based funds are suffering more than most. Managers hope that avoiding riskier strategies and a reduction in fees can draw in an increasingly sophisticated client base. By Henry Smith.

Economic decoupling is real and emerging markets are likely to lead the world out of the downturn, say our top managers. But despite both being bottom-up and defensive, their responses to risk and opportunity have been quite different. By Martin Steward.

Algorithms have had to cope not only with abnormal volatility, but also abnormal volume, writes Richard Hills, head of electronic services at Société Générale Corporate & Investment Banking.

Thomas Kubr at Capital Dynamics says that investors who focus on building an appropriately diversified portfolio of private equity funds tailored to their risk appetite should not only ride out the financial crisis, but enjoy good returns relative to public markets. By Martin Steward.

Investing in commodities can bring diversification benefits over the long-term or be a means of making short-term returns. But it is a volatile asset class and understanding the state of the market is a vital pre-requisite. By Matthew Craig.

The market in active currency management remains relatively small although the number of mandates that include a currency play is rising. But is this trend set to continue in such a risk-averse climate? By Alison Ebbage.

Volatility trading is no longer the preserve of hedge funds as traditional investors look to exploit the huge spikes in the market. By Gerry O’Kane.

The wide spreads in the high yield bond market may have created a great opportunity for investors with a long-term outlook, but volatility in the asset class looks set to continue for some time yet. By Ceri Jones.

There is no doubt that technology is a volatile sector. But our top managers point out that corporate indebtedness is low and that it is possible to build surprisingly robust defensive portfolios. By Martin Steward.

After years in the doldrums, the once-dominant hedge fund strategy has been posting notable returns since the credit crisis. But do significant reversals in July and August raise questions about volatility and herding? By Martin Steward.

Institutional investors are aware of the economic growth taking place in the Gulf region and ETFs can provide an efficient way in. By Nat Mankelow.

With insurance companies failing to make substantial profits from their underwriting business, increasing returns from their investments has become vital. Firms are outsourcing assets as they seek expertise not available in-house. By Henry Smith.

Recoveries in UK banks, cyclicals, small-caps and leveraged businesses in the month since mid-July should not distract investors from the longer-term trends, say the managers of two very different UK large-cap strategies. By Martin Steward.

Sterling has become a core currency for central banks, with the fixed rate component of the sterling bond market attracting the big investors. By Nat Mankelow.

Liability-driven investing and the growth of defined contribution platforms have led pension funds into more complex asset classes that require a new approach to transition management. By Peter Guest.

As commodities have a low correlation to equities, long-term investors are attracted to their diversification benefits in volatile markets

Standfirsta. By Nat Mankelow.

Euro corporate bond managers face conflicting pressures from inflation and slowing economic growth. Two funds offering short duration and conservative credit exposure, or semi-passive exposure to a non-financials index, show the diverse toolkit with which allocators can approach the job. By Martin Steward.

Analysis of the value added by individual manager decisions can identify skill, writes Rick Di Mascio.

Solar and other alternative energy products are in great demand, and a new range of ETFs aim to benefit from their growth Standfirsta. By Nat Mankelow.

VaR, which is widely used across the industry, has come under sustained criticism in recent months as models broke down in volatile markets. But is there anything better for measuring risk?By Peter Guest.

Analysing historic infrastructure cash flows allows us to draw some important conclusions about the investment characteristics of this compelling asset class, says Jens Schmitt of JPMorgan Asset Management.

Understanding what went wrong in the past when valuing the risks associated with underlying assets is central to turning around the credit market’s fortunes. By Nat Mankelow

As asset managers watch for the bottom of the credit markets, asset allocators who have remained unexposed to ABS could pick up some long-term bargains from the wreckage. By Martin Steward.

As investment banks continue to downsize their equity research units, could the increasing use of independent sources of research widen coverage of unloved companies and regions? By Nat Mankelow.

The growth and urbanisation of the world’s population is drastically altering consumption trends in agricultural commodities, leading to a secular shift in pricing. A number of commodity and equity funds have now launched, looking to gain access to these rewards. By Peter Guest.

China’s sovereign wealth funds may offer lucrative mandates to global fund houses, but competition is fierce and it is important not to ignore the opportunities in the rest of the Asia-Pacific region. By Henry Smith.

Research from Ibbotson Associates suggests that hedge funds have a high correlation with equities, but do produce alpha with lower volatility. By Henry Smith.

Fund managers say that the fundamentals, technicals and macroeconomics are finally stacking up for Japan, and investors have responded. But views differ about where the big opportunities – and risks – might lie. By Martin Steward.

Diversification is a recurring theme for institutional investors as risk management looks set to be the dominant theme for the coming year. By Ceri jones.

Germany is a new and expanding market for inflation-linked bonds, with investors attracted by their diversification benefits, and is also seeing a number of private deals in covered bonds. By Nat Mankelow.

The LSE and NYSE/Euronext battle it out for access to Kazakhstan’s expanding capital market. By Nat Mankelow.

Is Spain fertile ground for hedge funds? The Spanish are traditionally more risk-averse than many other Europeans, and the timing of amended regulations which allow the launch of new products has been unfortunate. But some are hopeful.By Martin Steward.

Institutional asset managers adapting hedge-fund techniques to scalable, centralised investment processes are developing a new breed of product platform that offers a spectrum of risk-controlled equity exposures. By Martin Steward.

With over half of investors now using ETFs as asset allocation tools, the wide range of benefits they offer are becoming apparent. By Ceri Jones.

Western Asset’s ability to be extremely diversified sets it apart from other Euro High-Yield Bond managers and has allowed it to survive the credit crisis reasonably well, but all three of this month’s funds are positioned defensively amid fears that the market has yet to bottom out. By Martin Steward.