Inflation Concerns Prompt ECB to End Era of Negative Rates
The European Central Bank raised its policy rates by 50 basis points, including its deposit rate, which is now 0%, to address high inflation levels in the bloc.
Research Publications Archive
Spending Policies and Practices: Fiscal Year 2021
Annual distributions from the endowment are a source of supplemental operating revenue for most endowed institutions. An institution’s endowment spending policy provides a basis for the calculation of the annual distribution, serving as a bridge that links the long-term investment portfolio and the enterprise. The data and analysis in this report review the various spending rule types used among our endowed clients. Also included are analyses on the endowment’s support of operations and effective spending rate.
Healthcare System Investments: Play Defense Before Offense
The COVID-19 pandemic financially shocked healthcare system enterprises and investment portfolios, but those shocks were short lived and the recovery was swift. However, challenges still exist as revenue and expense pressures weigh upon healthcare margins in 2022, and many elements of delivering healthcare have changed the way hospitals plan and prepare for the future. To implement a successful long-term investment program, the investment playbook may call for building a solid defense before playing offense in the implementation of a long-term investment strategy.
Should Investors Underweight Emerging Markets Equities Today?
No. Emerging markets equities face a challenging macroeconomic environment, but many of the same issues are also plaguing their developed markets peers.
Foundation Annual Flash Statistics: Calendar Year 2021
The Foundation Annual Flash Statistics Report provides a first look at the results of our 2021 Foundation Annual Investment Pool Returns survey. Included in the analysis are a summary of investment pool returns, asset allocation, and returns after spending for 111 foundations. Additionally, the report provides detailed data by institution on asset allocation. Look for our full annual analysis in the upcoming Foundation Annual Investment Pool Returns report.
Fed Tightens by 0.75% and Projects Softer Economy
The Federal Reserve announced that it was raising the target range for the Fed funds rate by 75 basis points to 1.50%–1.75% and made wholesale changes to its summary of economic projections.
Small-Cap Stocks Present Large Opportunity
US small-cap stocks have underperformed large-cap peers in recent years, opening a significant valuation discount that seems hard to justify based on relative earnings strength or balance sheet health. The sector exposure of small-cap stocks may make them better positioned for the current environment of rising interest rates and high commodity prices. While small caps should always be a part of investors’ tool kits, now is an especially opportune time to add exposure, given historically low valuations.
Are Global Corporate Earnings Expectations Too Lofty?
Yes, we think corporate earnings expectations are likely too high. This is because earnings are well above the long-term trend, and we expect inflation and higher policy rates will put downward pressure on profits margins.
Emerging Markets Equity Manager Performance: 2021
On a median basis, active managers declined but held up better than the MSCI Emerging Markets Index. This chart book is our annual summary of the absolute and relative performance of managers that report to our database.
Global Equity Manager Performance: 2021
The vast majority of active managers underperformed the index in 2021—the worst year for active global equities managers we have on record. This chart book is our annual summary of the absolute and relative performance of managers that report to our database.