VantagePoint is a new quarterly publication from our Chief Investment Strategist summarizing C|A’s total portfolio advice. Advice in Brief Review portfolios to prepare for the prospect of continued tapering and ultimate tightening of monetary policy. Income-oriented assets that benefited the most from quantitative easing are likely to be hurt the worst as monetary policy normalizes,…
EM equity valuations are the key driver of returns over the long term. The benefit from valuation mean reversion should be substantial, as EM equities trade at a 35% discount to DM equities and a 45% discount to U.S. equities, compared to our assumed fair value discount of 10%. We expect EM equities to remain…
Looking ahead to 2014 we are focused on several key themes, among them the evolution of global monetary policy, the likelihood of European equities exceeding diminished expectations, and the headwinds, risks, and opportunities associated with emerging markets equities.
While simple 100% U.S. equity and stock/bond portfolios have outperformed highly diversified portfolios recently, highly diversified portfolios have delivered consistently superior returns over decades.
The most recent step in the evolution of portfolio construction practices has been a shift from an asset allocation-centered process to a more comprehensive risk allocation-based process. In this paper, published February 2013, we share our views on why asset allocation has developed into risk allocation and provide an introduction to the Risk Allocation Framework.
Many institutions are reviewing their fixed income exposure in light of concerns over the prospects for rising interest rates. While shortening duration to protect portfolios against higher rates ahead seems intuitively appealing, experience indicates it is ill-founded.
In April 2009 a group of U.S. colleges and universities, museums and libraries, independent schools, and other institutions were invited to participate in a brief survey on spending policy as an update to a similar survey that was conducted in 2008. The survey asked about the policies in place, as well changes that were being…
The financial and economic crisis continues to create a broad and deep range of investment opportunities, many of which remain attractively valued, even after taking the recent rally into account. Given the risk that cheap assets will end up worthless, we emphasize the importance of careful manager selection across the board. Further, we caution that…
In March 2009 a group of U.S. colleges and universities were invited to participate in a brief survey on spending policy as an update to a similar survey that was conducted in 2008. The survey asked about the policies in place, as well changes that were being implemented or were under consideration for future implementation….
During prolonged bear markets, investors naturally focus on how best to allocate portfolio assets to ensure they are not wholly exposed to the full brunt of declining equity prices. However, as the economy deteriorates and the financial sector in particular suffers declining revenue and job losses, investors should also consider whether they have increased exposure…