August’s publication summarizes three articles addressing concerns of taxable investors. The first examines the importance of tax management by considering how asset allocation for Yale University might change if it were taxable, the second highlights six trends impacting multi-family office professionals, and the third argues for wealth managers to use lessons learned in pension fund management to better manage client risk.
July’s publication summarizes three articles addressing risk factor investing. The first argues for the inclusion of a diversified factor strategy in a portfolio, the second outlines a broad framework aimed at identifying appropriate factors, and the third calls for higher statistical hurdles to test newly discovered factors.
Conviction in Equity Investing Mike Sebastian and Sudhakar Attaluri, The Journal of Portfolio Management, Summer 2014 Active management helps improve market efficiency through the identification of mispriced securities, but often the benefits do not accrue to individual investors. To maximize returns after fees, the authors argue that investors should either allocate to high conviction managers—measured…
Market Valuations at the Start of US Rate-Hike Cycles Charles Himmelberg et al., Goldman Sachs, April 26, 2015 The Federal Reserve’s expected decision to hike rates later this year has prompted questions about the impact on the market, particularly given the prolonged period rates have effectively been held at zero. In a recent article, Goldman…
Quicksilver Markets Ted Berg, Office of Financial Research, March 2015 Earlier this year, US equity investors celebrated the current bull market’s sixth anniversary and the tripling of prices that accompanied the uptrend. These heady gains have left equity prices high by historical standards. In a recent article, the US Treasury Department’s research arm notes that…
European Economics: Core of the Matter Christel Aranda-Hassel, Mirco Bulega, Neville Hill, Sonali Punhani, and Giovanni Zanni, Credit Suisse, February 27, 2015 European inflation has consistently disappointed since mid-2013. Credit Suisse believes the Eurozone is not experiencing deflation given the decline in prices is not broad-based, inflation expectations are picking up, and the European Central Bank…
Fasten Your Greek Belts Christel Aranda-Hassel et al., Credit Suisse, February 2, 2015 The rise of Syriza in Greece has turned the market’s attention once again to the possibility of the country leaving the Eurozone. The European economics team at Credit Suisse contends that it is in the best interest of both Greece and Europe…
The Economics of Oil: Crude Hope and Complicated Reality Stephen King, HSBC, December 5, 2014 The plunge in oil prices over the past few months has been dramatic but is by no means unprecedented. While the global economy might benefit from lower prices as it has in prior declines, other factors present today suggest the…
Why Currency-Hedge Foreign Developed Equities? Jeremy Schwartz and Christopher Gannatti, The Journal of Investing, Fall 2014 Currency hedging is not as costly as many investors think, and interest rate differentials between the US and developed economies may actually lead to income-generating currency hedged investment strategies. With the potential for a US dollar secular rally on…
No Fear of Commitment: The Role of High-Conviction Active Management Laurence B. Siegel and Matthew H. Scanlan, The Journal of Investing, Fall 2014 When constructing a portfolio of managers, investors should consider including high-conviction, or concentrated, managers. Including high-conviction managers can generate alpha and help to achieve a high information ratio at the portfolio level….