Last Week at a Glance
Global equities climbed higher last week amid weak PMI data and inflation reports that supported expectations of continued…
The Endowment Oversight Flash Statistics Report offers an initial glimpse into survey findings from 143 endowment and foundation participants.
The Cambridge Associates 2025 Outlook features our investment outlook for 2025, separated into eight key investment themes.
We expect global equities to outperform bonds, as near trend economic growth should support continued corporate earnings growth and healthy risk appetite. Stock/bond correlations should be lower than the 2023–24 peak levels, even as protectionist US policy may drive global economic uncertainty higher.
We expect most major central banks to continue cutting policy rates, which should allow bonds to outperform cash. With breakeven inflation rates likely to be range bound, returns of inflation-linked and nominal bonds should be similar.
We expect developed markets value and small-cap equities to outperform, given our economic views and their steep valuation discounts. Regionally, we believe US equity performance will not match the level set in 2024, allowing European, Japanese, and emerging markets equities to perform more in line with broader developed markets. Within emerging markets, strong Indian equity gains should moderate, while we doubt Chinese equities will collapse. At the same time, we expect long/short equity strategies will perform better than typical.
We expect private investment performance to improve, as the impact from overinvestment in 2021–22 recedes. The asset class’s long-term performance should continue to attract individual investors and managers are creating pathways for them to more easily access opportunities. While M&A and IPO exit opportunities may improve, we believe the importance of continuation vehicles as an exit path will grow. In Asia, we expect Japanese buyout and Chinese venture capital transaction activity to increase.
We expect California Carbon Allowances (CCAs) to recover from 2024 losses as clarity on supply reductions emerges. Meanwhile, impact private investment flows will favor strategies with faster distributions and commercial validation. Additionally, headwinds for private diverse manager allocations should ease, but the overhang of emerging funds may lead to consolidation or shutdowns, challenging managers.
We expect liquid credit returns to decline due to low credit spreads and anticipated Fed easing. Direct lending returns should moderate but continue to outperform their liquid counterparts. Meanwhile, insurance-linked securities will continue to benefit from strong demand, and increased transaction volumes should support both specialty finance and credit opportunities managers. In emerging markets, currencies should become a tailwind for local bonds.
We expect public infrastructure equities to perform similarly to developed market equities in 2025, propelled by supportive regulations for energy transition and strong demand for power infrastructure to fuel AI. While we believe US REITs should underperform US equities, US private real estate funds raised in 2025 should generate above-average returns, benefiting from distressed deals and solid fundamentals.
We expect the US dollar rally will ultimately cool, with early strength giving way to modest weakening. Meanwhile, gold returns are likely to moderate in 2025 after a surge in 2024. Emerging markets’ use of stablecoins should support positive crypto returns, driving blockchain innovations and investment opportunities.
Highlights our latest portfolio advice and reviews notable data for over 50 asset classes/sub-strategies, with key charts and views from our asset class specialists. Read a short introduction →
Monthly review of market action with the key charts for the month and a snapshot of index performance in major currencies
CA’s house view and advice, written by our Chief Investment Strategist, Celia Dallas
Summarizes asset allocation and total investment performance for over 400 of Cambridge Associates’ endowment and foundation clients
Insights from the leaders of our hedge fund research on what drove performance in the quarter
Presents quarterly representative long-only and hedge fund manager performance.
Benchmark Commentary
Analysis of the performance shown in our private investment benchmarks