In our 2018 outlook, we review the prospects for several asset classes—developed and emerging markets equities, credit, real assets, sovereign bonds, and currencies—and share the advice of our chief investment strategist.
In this Edition: Are index providers now governance watchdogs?; After two years in the regulatory hot seat, prime funds’ assets fall and yields rise; Fintech companies moving from the shadows to the spotlight; Private funds fee and expense disclosure—still can’t disclose enough?
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.
In this Edition: Investment advisors and regulators step up focus on cybersecurity; A bit of paperwork helps advisors avoid inadvertent custody of client assets; Fiduciary Rule’s future starting to come into better focus; Puerto Rican bond holders may face long wait as island works through Title III proceedings; Merger & acquisition activity slows despite anticipated soft regulatory touch.
India’s robust growth and aggressive reform agenda offer opportunities to those investors who are careful not to overpay for assets.
Our February edition is traditionally a look at the year ahead, and with a new US administration looking to roll back many of the regulations passed in recent years, there’s plenty to cover. We discuss several areas to watch including banks, tax reform, mutual funds, hedge funds, and private equity. In this edition we also cover recent developments that may create more challenges for active managers—the US Department of Labor’s Fiduciary Rule and a spate of lawsuits against 401(k) and 403(b) plan sponsors.
While worries about tax reform and pension underfunding dog municipal bonds today, their relative appeal and fair value absolute valuations keep them a solid option for high-bracket taxable investors.
Change is in the air and the prospect for a bit of sunshine to break through the overhang of slow growth and lower-for-longer yields is palpable. Of course, the sun doesn’t shine forever, and overall our views are little changed. The things we have been worried about for some time—high valuations for certain risk assets, record-low interest rates, slow economic growth—have not gone away. The surest call to make for 2017 is that higher growth expectations will be paired with the distinct possibility of negative outcomes, putting a premium on diversification and liquidity management.
Please see Sean McLaughlin, “Long Muni Bonds: Unloved, Orphaned, and Perhaps Safer Than You Think,” Cambridge Associates US Market Commentary, March 2011. Some muni bondholders in 2011 were terrified by a sky-is-falling prediction when Meredith Whitney, who made her name with a prescient call on bank shares during the lead up to the financial crisis,…
In this Edition: Mutual fund liquidity back in the spotlight; New rules and regulations under consideration by several regulatory bodies; Regulators use FCPA to follow the money; Debt financing rules sharpen.