Exchange-Traded Funds – Versatility at Price
A primer on exchange-traded funds (ETFs), including a comparison of the costs and benefits of ETFs and index funds in terms of trading costs, fees, tracking error, and capital gains.
Research Publications Archive
Ursa Minor or Ursa Major
With world markets mired in a severe synchronised slowdown, the long-term outlook for U.K. and continental European equities remains uncertain. While capital markets may take short-term comfort in further interest rate cuts by the European Central Bank and the Bank of England, extra liquidity and lower borrowing costs may not be enough to encourage nervous…
Hedge Funds – Bangs and Whimpers
This short paper examines the bubble environment caused by billions of dollars flowing into hedge funds in 2001 and suggests possible sources of value added. Particular emphasis is given to the convertible arbitrage, merger arbitrage, distressed, and long/short equity subcategories.
The U.S. Dollar
The U.S. dollar’s recent decline against other major currencies has led to speculation that this long dollar bull market may be over. A secular decline or sharp drop in the U.S. dollar is not inevitable, but it cannot be ruled out.
The Euro
The recent rally has led to speculation that the euro may be embarking on a prolonged bull market and the outlook for the euro/U.S. dollar exchange rate clearly hinges on the relative strength of the U.S. and euro-zone economies, and the outlook for relative capital demand in particular.
Devaluing the Yen
The failure of conventional fiscal stimulus, the growing evidence of widespread deflation, and the impending crisis posed by mounting government debt all indicate that the authorities must attempt to reflate the economy by any means possible, including currency depreciation. However, the efficacy of yen depreciation is far from certain, as its impact on consumer prices…
Indexing to S&P 500–Risky?
Despite the dramatic fall in equity prices since March 2000, today’s S&P 500 still carries a great deal of intrinsic risk relative to its past.
Fixed Income Investing for Endowments and Foundations – Policy and Practice
A discussion of the role of bonds in policy portfolios and issues related to the implementation of a fixed income allocation, including sector allocation, duration targets, active versus passive management, and selection of an appropriate benchmark. Exhibits cover data on returns for various bond sectors, correlations with other asset classes, and Treasury yield curve shifts…
Consumer Spending Sustainability
While most economic indicators are clearly heading south, U.K. consumers continue to hit the shops, showing no signs of retrenchment. Rising financial wealth and steady growth in real disposable income have helped sustain strong consumption growth over the last few years, but the fall in equity value, moderating real income growth, and the threat of…
If Argentina Defaults: Assessing Contagion in Emerging Markets
Argentina may have dodged the bullet with its recent debt swap, but pressures will continue to build. Because emerging markets are notoriously volatile and unpredictable, risk-averse investors should tread cautiously in this asset class for the time being.