Europe Escalates Its Response to the Coronavirus Outbreak
This week, the Bank of England and the European Central Bank both announced stimulus measures aimed at responding to the growing impact of COVID-19.
Investment Planning
Treasury Bond Yields Plunge to Historic Lows
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.
The Fed Eases as Virus Concerns Grow
The US Federal Reserve cut its policy rate by 50 basis points today, highlighting the serious challenges facing the global economy. Still, we don’t believe investors should cut risk. Very few have an informational edge regarding COVID-19’s market impact, and investors could be left underexposed when and if markets rebound.
Pandemic Risks and Reactions
Global equities sold off sharply this week as cases of COVID-19 spread rapidly outside of China (particularly in Korea, Italy, and the Middle East). While the spike in volatility has been abrupt, the current market sell-off is arguably a needed correction.
Will the “Phase One” Trade Deal Bring More Stable Relations Between the United States and China?
Yes, in the near term, but longer term we expect trade, tech, and possibly finances to decouple further.
Friend or Foe: Hedge Funds Versus Alternative Risk Premia (Euro Edition)
It has been a challenging time for hedge funds in recent years. Loose monetary policy has driven equity markets upwards and hurt short books. The growth of quantitatively traded funds has eroded some of the inefficiencies commonly exploited by hedge funds. This fact, coupled with the shift toward low-fee passive and alternative risk premia (ARP) products, has raised questions about the merits of hedge funds in investor portfolios. In this paper, we focus on comparing ARP versus hedge funds and investigate whether hedge funds and ARP funds are complementary or whether ARP funds are actually a viable replacement for hedge funds.
VantagePoint: Disruption, Demographics, and Decoupling
The start of a new year and a new decade is an opportune time to reflect on megatrends that will be consequential over the next ten years. In this edition of VantagePoint, we focus on three such trends and their investment implications: disruption, demographics, and decoupling.
What Risks and Opportunities Are You Focused on as We Enter 2020?
We see opportunities to deploy capital in some niche areas of the investment landscape and reshape (or at least re-evaluate) some areas of the portfolio.
Investment Publications Highlights: Fourth Quarter 2019
Fourth quarter’s edition summarizes articles on FX markets.
With Trend-Following Funds Down Sharply This Fall, Should Investors Fish or Cut Bait?
Fish, but only if investors can accept very lumpy returns. The SG Trend Index of ten large trend followers (e.g., Commodity Trading Advisors or managed futures strategies) fell more than 4% in both September and October and only matched cash’s return over the past five years.