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The Actuary The magazine of the Institute & Faculty of Actuaries

New indices from Watson Wyatt

Watson Wyatt is planning to launch a series of innovative indices to cover the macroeconomic factors that it claims are influencing the development of global equity markets.

Watson Wyatt said the indices would cover energy, public policy, geopolitics, and sentiment about the global markets. It said it would enable it to better gauge changes and associated risks in the long term. The firm said these areas were the most likely to be the key influences on the performance of global equities in the next ten years, and so understanding them is critical for success. It added that they would be likely to cause greater correlation among equity markets worldwide supporting the case for wider diversification into alternative asset classes.

‘As the world moves at some pace towards a greater global state, we think it is more important than before to seriously consider macro issues, so as to improve, among other things, asset model assumptions, portfolio construction, and global equity benchmarks. The improvements are both about managing risk and also exploiting investment opportunities’, said Roger Urwin, global head of investment consulting at the firm.