Research Publications Archive

Benefits of Global Diversification

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Investors are now grappling with the impact of the COVID-19 pandemic, which has sent global equities into bear market territory as the threat of a severe recession weighs on the global economy. These are challenging, uncertain times for equity markets. As investors work to ensure their portfolios will be robust through this downturn and are positioned for the eventual rebound, we offer a review of the critical benefits of global equity diversification and examine considerations related to home bias, rebalancing strategies, and currency impacts.

Credit Spreads Take Pensions for a Wild Ride

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As the COVID-19 outbreak has escalated in the United States, sponsors of single employer–defined benefit pension plans have experienced a roller coaster ride. Avoiding, or at least cushioning, another wild ride requires a well-designed hedging strategy that accounts for credit spreads. We provide context for this rapidly evolving spread environment and potential responses.

Liability Hedging in Response to Pandemic Crisis

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The notion that interest rates are dynamic in nature and notoriously difficult to predict has been demonstrated in spades by the uptick in market volatility during the COVID-19 pandemic. The economic impact from the virus has been swift, creating a dichotomy between “risk-free” Treasury interest rates and corporate spreads. In this paper, we outline how hedging programs may need to re-align their strategies given the current circumstances while continuing to lean on the basics.

Navigating Healthcare System Investments Through the Coronavirus Crisis

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The novel coronavirus (COVID-19) pandemic has inflicted significant duress upon the operational and financial situations of nonprofit healthcare systems. An immediate response was necessary to escalate staffing, spending, and resources to provide emergency treatment to those affected by this highly contagious outbreak.

The Complex Relationship Between Inflation and Asset Prices

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As we write in March 2020, COVID-19 is spreading across much of the world, undercutting economic activity. While we are unsure of how this situation will unfold, we have long believed that the best way to guard against future uncertainty is to have a well-constructed portfolio. One key component in that is understanding the relationship between asset prices and inflation.

Global ex US Equity Manager Performance

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In 2019, 63% of active global ex US managers outperformed the MSCI EAFE Index gross of fees, with the median manager outperforming by 183 basis points. This is a companion piece to the US and Global chart books already published.