With underlying assets that provide essential services, infrastructure debt can play a key role in institutional investor portfolios. In this research note, we review how infrastructure debt has evolved, discuss its investment qualities, and highlight a few thoughts for those considering an allocation.
Worries over the health of US credit markets have risen in recent months, with numerous reports highlighting the growing vulnerability of indebted companies (and thus investors) to rising rates and a potential turn in the economic cycle. This paper provides our updated thoughts across US credit markets, as well as some tactical tilts investors could employ to help navigate a few of these headwinds.
Yes, but investors should be selective in allocating to credit markets at this point in the cycle, and understand that the overvaluation of many credit assets could make attractive returns hard to come by.
The recovery rate on senior loans looks poised to fall in the next cyclical downturn, as weaker structures and terms impact the market. In this research note, we highlight our concerns and consider how the cocktail of unitranche loans, inflated cash flow assumptions, and weak terms could threaten recoveries in the next cyclical downturn.
This chart book presents representative long-only and hedge fund manager performance for second quarter 2018. The median US Small-Cap Growth manager posted the highest median return for both second quarter 2018 (8.7%) and the one-year period ending June 30, 2018 (25.4%). The median Emerging and Frontier Markets Equity manager posted the lowest median return for second quarter 2018, returning -8.6%, and the median Emerging Markets Debt manager suffered the worst performance for the one-year period ending June 30, 2018 (-1.6%).
Equity markets and commodity-related assets outperformed other asset classes, while monetary policy expectations continued to negatively impact bond markets during the fiscal year ending June 30, 2018. This brief chart book looks at returns and other market metrics for fiscal year 2018.
Yes. Since fixed income derivatives are more capital efficient and flexible than physical bonds, they can play a key role in liability hedging for many corporate and other single-employer pension plans.
Not in the United States. As short rates have increased and the yield curve has flattened, US T-bills offer more appeal than they have in some time.
When assessing performance at the aggregate private portfolio and sub-component level, investors should take the long view. In this publication, we review how long funds take to settle into their ultimate quartile ranking and highlight our framework for benchmarking a portfolio of private investments.
This chart book presents representative long-only and hedge fund manager performance for first quarter 2018. The median Global ex US Bonds manager posted the highest median return for first quarter 2018, returning 3.5%. Global ex US Small-Cap Equity managers posted the best returns for the one-year period ending March 31, 2018, with a median return of 26.4%. The median US REITs manager posted the lowest median return for both first quarter 2018 (-6.5%) and for the one-year period ending March 31, 2018 (-1.1%).