MSCI is restructuring its global equity indexes to more accurately reflect trading opportunities in each market. These changes will improve the investability and liquidity of each index, as well as provide greater predictability and transparency to their methodology. However, with an estimated $2.3 trillion benchmarked against MSCI EAFE, the change will also increase turnover and…
This report examines the nature of high-yield bond returns, the role of high-yield bonds in a diversified portfolio, and the implementation of an allocation. Exhibits include data on issuance, default and transition rates, and spreads relative to treasury bonds. Also included are performance data on representative high-yield managers and descriptions of benchmarks.
The euro-zone economy has undoubtedly caught some sort of bug, and investors are struggling to diagnose whether this is just a cold or a more serious case of the flu. On the one hand, business sentiment and industrial production have dropped sharply, but on the other hand consumer sentiment and spending have held up relatively…
A look at major U.S. equity indexes returns over one-, two-, and five-year periods to put the ongoing decline in perspective.
A quick survey of representative global equity managers indicates that they have moved to an overweight position in U.K. equities, and are now underweight Europe ex U.K.
Despite faint stirrings of reform in Japan, the macro environment remains inhospitable for equity investors, appealing only to dyed-in-the-wool contrarians. Two developments seem inevitable: rising inflation and a weaker yen.
This short paper addresses a range of investment planning topics including deflation hedging, valuation models, and consolidation in the investment management industry.
NAFTA tied Canadian and Mexican markets to the U.S. Business cycles and integration have converged. Correlations of returns are increasing as Mexico and Canada shift from natural resources and energy to developed financial sectors and information technology. This convergence puts both economies at risk when faced with a stalling American economy. Trade spurred growth and…
Several recent studies challenge the validity and pervasiveness of the wealth effect. One report complains about flaws in the methodology behind the calculation of personal savings, while others suggest that the propensity to consume may have moved to a permanent and higher level, which would be less vulnerable to stock market weakness. These arguments hold…
After a decade of meager returns, U.K. small-cap equities have enjoyed a reversal of fortune in the past two years, rewarding investors that have tolerated the higher risks and lower liquidity associated with this sector. Although relatively attractive on a valuation basis, U.K. small-caps remain very much a cyclical play, vulnerable—as always—to any significant deterioration…