Elevated equity market valuations and potentially rising bond yields suggest the return environment for traditional risk assets could be difficult. Faced with this challenge, institutional investors are seeking alternative sources of return. Alternative risk premia strategies—which harvest well-established risk premia and market anomalies across asset classes—may fit the bill.
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 cover a variety of spending topics, including spending rule types, the endowment’s support of operations, and effective spending rates.
Yes, maintaining a well-hedged pension plan is prudent risk management.
Equity market downturns are chaotic environments that are rarely short-lived—the best advice is to be prepared.
Investors that have inflexible spending needs and large allocations to illiquid assets should plan how they will tackle the next downturn’s liquidity challenges.
As investors prepare for the next equity market downturn, they should take a closer look at the benefits and limits of diversification.
Bear markets often trigger emotional responses that can sometimes lead investors to act contrary to their long-term objectives; as such they need simple strategies to help overcome their worst instincts.
Investors should review existing policies regarding portfolio rebalancing and tactical asset allocation and ensure they have a strategy to play offense during the next downturn.
Investors will improve their chances of successfully navigating the next equity downturn—whenever it occurs—by formulating a plan and securing buy-in from relevant stakeholders.
Are frontier markets corrupt, politically driven, and dangerously speculative? Or, are they budding blossoms destined to deliver strong returns? This publication aims to help investors to decide whether and how to integrate FM equities into portfolios, assess underappreciated FM risks, and discuss implementation considerations.