Over 100 participants and BNP Paribas clients across US Asset Managers, Pensions, RIAs and Insurance Companies gathered at the Headquarters in New York City to benefit from the insights and views of seasoned practitioners and QIS experts.
In line with this year’s theme ‘Navigating turbulence’, the panels and presentations focused on the importance of risk management and constant adaptability.
Institutional clients and BNP Paribas partners shed light on the current opportunities and challenges of QIS in times of uncertainties and sustained inflation. Below we summarize some of the key takeaways.
Unprecedented macro-economic challenges
It is an increasingly difficult time for investors to generate solid risk-adjusted returns in highly uncertain and dynamic markets.
Speakers discussed that inflation is expected to be structurally higher although the Fed might be rethinking the appropriate course of action in the inflation models, but is not likely to change their 2% target in the future and rather change their time horizon.
Nascent signs suggest that the rates hike is loosening on the Fed’s side concluding a record-fast tightening cycle. A looming recession potentially triggered by the Fed’s actions may break inflation.
The change in the global economic order, notably through the concept of deglobalization and the associated reshoring and nearshoring of production lines, is likely to improve economic resilience.
QIS: a modular and adaptive toolbox to navigate turbulences and hedge tail risks
There is increased cautiousness on the investors’ side, with risk management and liquidity being top priorities for 2023, alongside diversification.
Panels at the Forum discussed how innovative QIS remain a relevant tool to source alpha on the market as they offer liquidity, transparency, return, and adaptability and can provide seamless interactions through digital client platforms and top-notch research.
Speakers suggested that portfolio construction as we know it has to adapt to new volatility and correlation regimes. They pointed to a risk-based approach combining quantitative and qualitative assessments, and the importance to contextualize performance and challenge the reliability of back-tests when used in the investment decision process.
BNP Paribas as a trusted partner with best-in-class structuring and research capabilities in the QIS space
The Forum highlighted key themes and trends in the market for the rest of the year and beyond. With that in mind, BNP Paribas is focused on providing a targeted and innovative approach to clients including timely, topical strategies to pool and allocate across various investment strategies depending on macro scenarios.
“BNP Paribas’ annual Quant Forum is a great platform to exchange ideas in the QIS space and discuss innovation with our clients from all around the world. Staying abreast fast-paced market conditions is crucial to help our clients navigate uncertainty”, Steve Nawrocki, Head of Equities Trading, Americas, BNP Paribas.
BNP Paribas Annual Quant Forum 2023
This material is for informational purposes only and is not intended to be a complete and full description of the products of BNP Paribas and its affiliates or the risks they involve. Additional information is available upon request. Neither the information nor any opinion contained in this material constitutes a recommendation, solicitation or offer by BNP Paribas or its affiliates to buy or sell any security, futures contract, options contract, derivative instrument, financial instrument, or service, nor shall it be deemed to provide investment, tax, legal, accounting or other advice. All opinions, information, and estimates in this material constitute BNP Paribas’ or its affiliates’ judgment as of the date of this material. This material is only intended to generate discussions regarding particular instruments and financing and/or investments opportunities and is subject to change, or may be discontinued, without notice. This material should neither be regarded as comprehensive nor sufficient for making financing and/or investment decisions, nor should it be used in place of professional advice. You should consult your own advisors about any products or services described herein in order to evaluate the merits, suitability, and financial, legal, regulatory, accounting and tax issues raised by any investment and should not rely on BNP Paribas or its affiliates for this. Information contained herein is derived from sources generally believed to be reliable, but no warranty is made that such information is accurate, complete or fair and should not be relied on as such. The offer and sale of securities to institutional investors may only be made through the U.S. registered broker dealer and futures commission merchant entity, BNP Paribas Securities Corp.