Research Publications Archive

Annual Review of Endowments: Fiscal Year 2022

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In fiscal year 2022, endowments faced a challenging market environment one year after they had seen the best investment returns in decades. Our annual report based on a survey administered to our endowment clients summarizes returns, asset allocation, and other investment-related data for 316 institutions for the fiscal year ended June 30, 2022. We also review peer data on topics such as investment policy, portfolio manager structures, spending, and investment office staffing and governance.

Climate Tech’s Evolution: The Maturation to a Competitive, Returns-Focused Thematic Investment Sector

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Climate tech has gained popularity among investors in recent years, but those familiar with the space recognize it as an evolution from clean tech solutions developed in the 2000s. In this paper, we explore the development of this growing investment theme, look at its evolution into a financially compelling investment opportunity, and discuss how investors can best take advantage of this opportunity.

ASEAN Equities: Surprising to the Upside

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Southeast Asia, also known as ASEAN (The Association of Southeast Asian Nations), was a relative safe haven for investors in 2022. In this paper, we analyse the factors that have supported ASEAN equities, including the country/sector composition of the ASEAN market, the earnings outlook for the region, and the currency basket. We also show that the ASEAN market looks different today versus 2013, when the region experienced headwinds due to elevated valuations coupled with a collapse in commodity prices and the Federal Reserve’s tapering cycle.

Review of Market Performance: Calendar Year 2022

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Calendar year 2022 witnessed multi-decade record inflation and central banks responded with rapidly tightening monetary policy. Rising rates saw the correlation between bonds and equities turn positive, contributing to large declines across most asset classes. Funds flows diverted away from growth and momentum strategies, and yield curves flattened with the ten-year/two-year yield curve becoming inverted in most developed markets, signaling economic uncertainty ahead.

Is January’s US Small-Cap Equity Performance Sustainable?

Yes, we expect US small-cap equities will outperform US large-cap equities this year. Our view is based on the belief that the large valuation spread that exists will likely narrow and that large company earnings are likely more at risk of missing expectations than small company earnings.

College and University Investment Pool Returns: Fiscal Year 2022

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Just one year after the best investment returns endowments had seen in decades, fiscal year 2022 brought about the most challenging market environment since the Global Financial Crisis of the late 2000s. Our annual survey-based report of 158 US colleges and universities includes commentary and analysis of investment performance, asset allocation, and related trends. We also review peer data on topics such as investment policy, portfolio manager structures, spending, and investment office staffing and governance.

From Policy to Implementation: A Net Zero Playbook for Investors

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While climate awareness is essential for all investors, others seek to be more ambitious by adopting a net zero goal for their portfolios. This paper explains the rationale for doing so and outlines an approach for target setting and implementation. A net zero policy focuses on decarbonizing the real economy. Investors have two powerful levers to do this: (1) stewardship and engagement; and (2) climate solution investments.