Risk assets enjoyed mostly positive returns in fiscal year 2023. Equities rebounded as fears over the severity of a possible recession moderated. Emerging markets equities lagged developed markets as the pace of reopening in China disappointed. Bond performance improved as credit assets posted positive returns but developed markets sovereign bonds struggled. Real assets suffered due to higher interest rates and slowing demand.
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 year started with a strong risk-on rally as declines in inflation prints in the United States and Europe fueled the narrative for “soft landing”—suggesting the economy could avoid a crash, while inflation continued to soften. However, the buoyant sentiments abruptly gave way to great uncertainty when Silicon Valley Bank’s stock plummeted in early March.
In this edition of Asia Insights, we highlight areas in public equities, private investments, real assets, and hedge funds where we continue to find opportunities, despite the current environment of higher rates and market uncertainty.
This publication presents manager performance for 36 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.
Calendar year 2022 witnessed multi-decade record inflation and central banks responded with rapidly tightening monetary policy. Rising rates saw the correlation between bonds and equities turn positive, contributing to large declines across most asset classes. Funds flows diverted away from growth and momentum strategies, and yield curves flattened with the ten-year/two-year yield curve becoming inverted in most developed markets, signaling economic uncertainty ahead.
Capital markets remained volatile during fourth quarter 2022. Risk assets appreciated significantly during October and November before giving back some of the gains in December. Three consecutive quarters of positive returns and outperforming most other strategies came to an end for macro hedge funds during the quarter.
We expect macro hedge funds to perform well, given our expectations that market volatilities will remain elevated and our view that inflation risks are skewed to exceeding expectations. We expect long/short managers will benefit from positive short rebates.
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 American Rescue Plan Act of 2021 included substantial relief funds for the most troubled US multiemployer pension plans through its Special Financial Assistance (SFA) program. This paper looks at how multiemployer plans have a unique opportunity to improve their solvency through 2051 and beyond by optimizing how they invest both SFA relief funds and their existing plan assets.