Yield vs. Risk and How Females Pursue Leadership Roles

Christine Tessier
CFA, CAIA

Deputy Chief Investment Officer
Foresters Financial

Christine Tessier, Deputy Chief Investment Officer, Foresters Financial, contributes to the oversight of the company’s general account and pension assets. Building on a successful career in institutional investing industry, Christine shares her suggestions to aspiring female leaders and her views on yield vs. risk in today’s environment.

Institutional Connect: Under the current low interest and rising inflation environment, Institutional investors are reassessing their allocations in fixed income and pursuing yields from other strategies. How should investors balance yield and higher risks?

Christine: The issue of yield vs. risk is a complex topic, as there are many different risks to consider. To add value to a portfolio, investors have been forced to move away from conventional sources of return with comfortable or known risks towards less conventional sources of returns where risks are less clearly understood or quantified. To contribute returns, investors today must consider: increasing spread/credit risk, increasing the complexity or structuring of investments, decreasing liquidity, increasing concentration, and/or display a willingness to invest in unconventional or unique areas. All this change has occurred amidst growing regulatory restrictions and requirements. In an effort to balance yield or returns vs. these risks, it is important to prioritize your organization’s objectives and level of comfort with these competing ideas. Finally, measurement of these risks is an important and challenging part of the on-going monitoring process, both at the individual asset class level and at the total portfolio level.

Institutional Connect: What mindset should aspiring female leaders embrace when they pursue leadership roles in the institutional investing industry?

Christine: To be successful in any pursuit, and especially in a role of leadership, it is critical to feel and truly believe that anything is possible.

It is easy for us to be blind to the limitations we put on ourselves. Self-accountability and the willingness to introspect and be vulnerable to critical feedback has been an important part of my development. Seeking strong mentors and champions has been another important component of success. The key defining characteristics I’ve observed from the mentors that have shaped my thinking center around faith – faith in people, faith in continuous opportunity, faith in a person’s own ability to tackle new challenges. Finally, as we leaders become successful, it is our collective responsibility to pay forward the opportunities we have received, take the time to help others who need support, as others have helped us. Not always easy, but it all centers around being the change we want to see in the world, as Gandhi so aptly put it.

Christine Tessier spoke at Portfolio Innovation and Resilience Forum 2021