High-Yield Bonds: Still Not Compelling
We remain negative on high-yield bonds and only slightly more positive on leveraged loans, preferring other credit assets and strategies to help diversify portfolios.
Research Publications Archive
Can College and University Endowments Do More?
Recent policy proposals assume endowments can do more to reduce their reliance on student revenue, and thus the cost of a college education. Our analysis shows that while well intentioned, these proposals will affect endowment and organizational stability and intergenerational equity.
Thought Mortality Was Dead? Considerations for Pensions Given the IRS’s Delay in Implementing RP-2014
The IRS’s somewhat unexpected decision to delay implementation of the RP-2014 mortality tables has impacted at least three separate aspects of pension plan strategy: calculating minimum contribution requirements; determining variable-rate PBGC premiums; and valuing lump-sum distributions to be paid out to terminated vested participants. This brief discusses what has changed and provides general considerations for all sponsors to weigh in the near term.
Should Investors Buy Downside Protection to Hedge Against an Equity Market Drop?
We don’t think so. Investors with diversified portfolios already have some cushion if equities sell off, and trying to time the market by buying derivatives or substantially reducing equity exposure is rife with behavioral risks.
A Stronger Union: Addressing the Unique Investment Challenges of Multiemployer Defined Benefit Plans
Adaptive and sophisticated strategies are necessary to serve the unique features, constraints, and needs of multiemployer plans. In this note, we explore some of the key challenges that many multiemployer plans face, discuss how to invest in light of these challenges, and provide thoughts on governance and the overall role of the investment advisor in the multiemployer context.
Digging In: Assessing the Private Infrastructure Opportunity Today
New private infrastructure fund investors can find value in carefully evaluated managers and strategies, but they should ratchet down return expectations relative to years past.
Maintaining Strategic Direction through Peaks and Valleys
An extended bull market can tempt even the savviest investors into abandoning their long-term discipline. Resisting the impulse to switch horses in the middle of the race is hard, but necessary—the most important trait of successful investors is their ability to maintain discipline in sticking to a long-term strategy during good times and bad. Diversified portfolios—structured to earn returns comparable to their rate of spending at tolerable levels of risk—have benefitted long-term investors and grown their purchasing power for decades, and we have no reason to expect a different outcome when today’s bull market inevitably corrects.
Does US Corporate Tax Reform Endanger Private Debt Strategies?
No. If the interest expense deduction is eliminated, debt issuance may drop slightly, but the demand for senior and mezzanine debt will be little changed, and the risk/reward proposition is still attractive for investors.
High Growth and High Expectations: Can Returns for Indian Assets Keep Up?
India’s robust growth and aggressive reform agenda offer opportunities to those investors who are careful not to overpay for assets.
Comparative Asset Allocation and Total Return: UK Foundations and Endowments
Our biannual report summarizes asset allocation and total investment performance for 29 of Cambridge Associates’ UK foundation and endowment clients.