Is the US Dollar Dead?
We are not ready to pronounce the strong dollar cycle dead, but do admit the US dollar is in critical condition. Investors should remain partially unhedged or prepared to ride out a period of currency volatility.
Research Publications Archive
Funding Development for Public Universities
Investing in revenue development and fundraising while simultaneously pursuing goals for asset growth is a balancing act. This paper outlines the various funding mechanisms public universities can use to pay for development efforts, and the implications they have on the investment portfolio and enterprise as a whole.
When Secondaries Should Come First
Investors seeking to gain initial exposure to private investments should actively consider secondaries, rather than funds-of-funds, as the very first step to constructing a long-term private equity portfolio.
Will the Nascent Shift in Equity Market Leadership from US to Non-US Equities Persist?
Extreme relative valuations suggest that over the long term, US equities should underperform from a starting point of today and that even in a downturn, relative underperformance of non-US equities would be mitigated by their more attractive starting valuations.
Review of Market Performance: Fiscal Year 2017
Equity markets outperformed other asset classes, while monetary policy expectations continued to negatively impact bond markets during the fiscal year ending June 30, 2017. This brief chart book looks at returns and other market metrics for fiscal year 2017.
Spending Policy Practices: 2017
Setting an appropriate spending policy is an important part of effective endowment management, as an institution’s spending policy serves 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. This year’s report draws on a supplemental study Cambridge Associates conducted in March 2017 to dive deeper into the topics of spending policy implementation and factors that may lead to policy changes.
Is the Recent Trend of Active Equity Manager Underperformance Due to “Smart Beta” Investments?
No. Both the asset level of the alternative beta universe and the trading volume associated with smart beta exchange-traded funds (ETFs) are still much too small to meaningfully impact most active managers.
Japanese Equities: Short-Term Promise Jeopardized by Longer-Term Risks
We remain neutral on Japanese stocks despite attractive valuations and near-term earnings potential in view of daunting intermediate-term macro challenges.
Considerations for ESG Policy Development
Though the US government is no longer supporting the Paris Climate Agreement, many endowments, foundations, and other US institutions remain committed to aligning their investment policies with the goals of the international accord. Together with the Intentional Endowments Network, Cambridge Associates has outlined considerations for incorporating environmental, social, and governance factors into the development of investment policy statements, as well as a blueprint for incorporating language around the Paris accord into an institution’s IPS. Articulating Purpose, Priorities, and Principles in a well-designed investment policy can help interested institutions effectively incorporate environmental concerns into their investment portfolios.
Tracing the Rise of Direct Lending: The Importance of Rates and Loan Structure
If passing the Dodd-Frank Wall Street Reform Act in July 2010 did not spawn direct lending, what did? In this analysis we explore the genesis of the recent direct lending phenomenon to identify risks to the strategy and what investors should watch going forward.