We advise extreme caution in using derivatives to protect portfolios from sharp equity drawdowns. We recommend that investors look to asset allocation to defend against equity risk before buying puts. For those investors who must pursue a tail-risk hedge, we provide a list of potential pitfalls and solutions, in the form of a case study.
Yes, we expect it will. We anticipate global inflation expectations will remain stable or increase modestly amid rising economic growth, which would allow the equity market rotation into cyclicals to continue.
The risk rally continued in April with broad-based gains across most asset classes.
This publication presents manager performance for 37 asset classes and substrategies, showing the median, mean, and key percentiles of return. Relevant indexes for each asset class are also included to provide market context.
The 2020 Emerging Markets edition of our annual report on the history of financial markets provides context for the range of returns investors can expect from equities, bonds, and cash; reveals the importance of various components of equity returns; examines the evidence for equity mean reversion; and reviews the relationship between initial valuations and subsequent returns for equities and bonds. It also analyzes the historic economic declines and sharp asset price movements that resulted from the COVID-19 pandemic in 2020.
Yes, active equity managers tend to perform better when the average stock within a market capitalization–weighted index outperforms the index itself.
In 2020, 55% of active global managers underperformed the MSCI World Index (gross of fees), with the median manager underperforming by 150 basis points. This chart book is our annual summary of the absolute and relative performance of managers that report to our database.
Slightly more than half of active emerging markets equity managers underperformed the MSCI Emerging Markets Index (gross of fees) in 2020—the fourth time the median manager has underperformed the benchmark out of the last five years. This chart book is our annual summary of the absolute and relative performance of managers that report to our database.
Global equity markets advanced in first quarter, as developed markets equities topped emerging markets peers.
The 2020 Europe ex UK edition of our annual report on the history of financial markets provides context for the range of returns investors can expect from equities, bonds, and cash; reveals the importance of various components of equity returns; examines the evidence for equity mean reversion; and reviews the relationship between initial valuations and subsequent returns for equities and bonds. It also analyzes the historic economic declines and sharp asset price movements that resulted from the COVID-19 pandemic in 2020.