Highlighting the differing views on the commodities supercycle, this commentary focuses on the historical context of commodities’ supply and demand factors, specifically their effect on investments; examines energy equity valuations; and provides our advice on building or adding to positions in real assets.
While current yields and spreads over government bonds make euro-denominated investment-grade credit a potentially viable option, investors should also recognize that this market may be less attractive than others, such as the US$-denominated corporate sector, which offers higher absolute yields and presents fewer uncertainties.
The current environment provides institutional investors a unique opportunity to bring their alternative asset fund manager relationships into better alignment and this paper presents our perspective on what terms we consider to be reasonable for non-marketable alternative asset strategies and hedge fund strategies.
The macroeconomic outlook remains extremely challenging as the long overdue global rebalancing begins; investors need to make sure they are prepared for what may be a prolonged period of volatility and the possibility of new lows in asset markets.
While recent declines have undoubtedly restored some value to REIT prices, we still believe a cautious stance is warranted due to the deteriorating economic environment and the sector’s huge refinancing needs.
While hedge fund managers did a better job of preserving capital than traditional asset managers in 2008, it was a disappointing year for hedge funds. Despite this, we strongly believe that the current shakeout in the industry is a net positive for long-term hedge fund investors, although significant near-term challenges for managers remain. In the…
Short-term borrowing spreads, corporate issuance, and implied volatility have improved, but remain at stressed levels.
The year 2009 will reveal whether Asia’s growth over the past few years reflected real structural changes rather than debt-fueled U.S. consumption.
While the macroeconomic outlook for Japan is not encouraging, Japanese equities have gone the furthest in pricing in a dismal 2009. Given the market’s depressed valuations, it may not take much to spark a rally, especially if the global economy begins to stabilize.
Investors should move toward benchmark weights in U.K. and European equities based upon good valuations, but the near-term outlook remains problematic given poor economic conditions and earnings that have not yet corrected from cyclical highs.