This chart book presents representative marketable and hedge fund manager performance for first quarter 2015. The median Global ex US Small-Cap Equity manager posted the highest return (5.9%) for the quarter; the median manager in this asset class returned -1.6% for the one-year period ending March 31, 2015. The median US REIT manager posted the highest…
Many factors contributed to the global financial crisis, but an excessively high level of indebtedness built up over many years was a crucial one. Although the crisis first blew up in the US housing and mortgage markets, the receding tide of liquidity revealed many other exposed debtors, especially within the Eurozone. In the aftermath of…
We continue to find high-yield bonds uncompelling; select opportunities in high-yield energy credit may offer attractive alpha Solid credit fundamentals and 6%+ yields in a low-return environment have lured some investors back to high-yield bonds, but current coupons will serve to cap future returns and offer little protection in the (somewhat unlikely) event the credit…
Talks between Greece and its Eurozone creditors to extend its bailout may again break down and thus trigger more volatility for local assets, but the potential for contagion to other asset markets is contained for several reasons. All involved parties have strong incentives to eventually reach an agreement. Even if they can’t, the fact that…
We maintain our neutral positioning for municipal bonds Though yields have moved below the 2% level that we previously viewed as a threshold for underweighting munis, other factors have changed the equation. Treasury yields have plunged as well, and ten-year Treasuries currently yield less than ten-year munis. Muni issuance remains quiescent, with new issuance at…
This chart book presents representative marketable and hedge fund manager performance for fourth quarter and calendar year 2014. US Real Estate Investment Trust (REIT) managers posted the largest median returns for the fourth quarter (14.2%) and the one-year period ending December 31, 2014 (31.2%).
In many ways, 2014 was a tale of two halves as returns reversed in the second half. Renewed US dollar strength and falling commodity prices were key contributors to the reversal. This brief chart book looks at returns and other market metrics for 2014.
To herd investors into junk bonds and equities was no trouble at all—ZIRP and QE and a little rhetorical encouragement did the trick. To manage a comprehensive exit from those overvalued positions will prove a tougher undertaking. —James Grant, Grant’s Interest Rate Observer, August 8, 2014 For another example, please see our June 2, 2014,…
Most emerging markets debt assets are not priced to achieve investors’ objectives Over the last decade EM currencies have appreciated significantly against the US dollar in real terms and seem unlikely to generate attractive returns going forward given limited carry. Local currency EM sovereign bonds have attractive nominal yields, but real yields, which drive returns,…
Given that credit creation is the raison d’être of modern central bankers, the fact that European bank lending remains anemic despite a plethora of new measures from the European Central Bank (ECB) seems to us substantial cause for concern. The ECB’s pronouncements and alphabet soup of new programs have been remarkably effective at bringing down…