Market Matters: June 30, 2023
Performance was mixed in second quarter as several crosscurrents painted an uncertain outlook.
Credit/Fixed Income
Don’t Count Out Government Bonds Just Yet
For investors that typically rely on high-quality government bonds as a counterbalance in equity-heavy portfolios, poor recent performance, higher cash yields, and uncertainty about inflation are difficult hurdles to overcome. However, they are not a reason to underweight government bonds. The outlook for government bonds is more constructive, and we expect them to outperform cash over the next one to three years.
Private Credit: Opportunities Abound
The current macroeconomic and market environment creates an attractive opportunity for credit opportunity managers. We believe managers with flexible capital, strong sourcing efforts, and structuring skills will find ample investment opportunities and will deliver strong returns in the coming years.
Market Matters: May 31, 2023
Risk assets generally declined in May, with real assets posting the lowest returns across broad categories.
Decades of Data: Emerging Markets 1987–2022
The 2022 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.
The Business Cycle’s Impact on Asset Performance
Asset performance is highly sensitive to the global business cycle. In this chart book, we highlight the significant shifts in performance distributions across the global business cycle for major asset classes, including equity regions, styles, sectors as well as for fixed income, real asset and currencies. Ultimately, understanding the distributions of asset performance across business cycle stages and considering where the global economy is headed are key inputs in a rigorous investment decision-making framework.
US Manager Universe Statistics: First Quarter 2023
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.
Decades of Data: Europe ex UK 1900–2022
The 2022 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.
Market Matters: April 30, 2023
Risk assets generally advanced in April.
VantagePoint: Banking Crisis Implications for Asset Allocation
We entered 2023 with a view that a recession in some economies, namely the United States and much of Europe, was likely this year, and the recent banking sector stresses reinforce our confidence in this view. Investors should be disciplined in maintaining policy targets broadly, remembering the role allocations to stocks, bonds, and cash play in portfolios.