As the COVID-19 outbreak has escalated in the United States, sponsors of single employer–defined benefit pension plans have experienced a roller coaster ride. Avoiding, or at least cushioning, another wild ride requires a well-designed hedging strategy that accounts for credit spreads. We provide context for this rapidly evolving spread environment and potential responses.
Global risk assets suffered major drawdowns comparable to the global financial crisis in first quarter.
As we write in March 2020, COVID-19 is spreading across much of the world, undercutting economic activity. While we are unsure of how this situation will unfold, we have long believed that the best way to guard against future uncertainty is to have a well-constructed portfolio. One key component in that is understanding the relationship between asset prices and inflation.
In this edition of VantagePoint, we review the circumstances that have abruptly ended the bull market and evaluate the market implications of COVID-19. With that context, we discuss the case for rebalancing and evaluate some early opportunities.
On Sunday, the Federal Reserve Bank announced a host of emergency measures intended to improve bond market liquidity and reduce borrowing costs, which come in response to rising signs of dislocation across Treasury, municipal, and corporate bond markets.
Yields on ten-year Treasuries dropped below 50 basis points (bps) today for the first time in history as COVID-19 fears spread. While we cannot rule out a recession, given the uncertainties associated with the virus and its impact on economic activity, we believe today’s low yields are less about long-term growth forecasts and more about expectations of further Federal Reserve easing, risk aversion, and liquidity preferences.
Global risk assets suffered significant drawdowns in February as concerns over COVID-19’s impact on global economic activity grew.
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 gradual abatement of geopolitical risks, and a renewed accommodative stance from global central banks, led to a strong rebound in risk sentiment in 2019. Equities led the way higher, while interest rate cuts ensured fixed income markets participated in what was a robust year for asset classes across the board. This chart book explores global asset returns and the factors influencing performance last year.
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.