Climbing the wall of worries is getting tougher. There is room for markets to progress, but caution is required at this stage in the cycle. Markets must overcome four main forces: monetary policy tightening, US dollar strength, a China growth slowdown, and trade friction.
This publication, based on our biennial Investment Office Organization and Governance survey of small, medium, and large endowments and foundations, offers a snapshot of responses in three key areas: investment office staffing, oversight costs, and governance.
Second quarter’s edition summarizes five article on trade policy. The first article finds that protectionism has failed as a US policy across various time periods; the second analyzes commonly held misconceptions about trade deficits; the third argues that although the risk of a trade war has increased in recent months, it remains low; the fourth examines the difficulties in relocating supply chains across countries and regions; and the fifth quantifies the potential impacts of a US withdrawal from NAFTA.
Advice in Brief The global economy and capital markets are constantly evolving. From the industrial revolution in the 1700s, to information technology in the last 45 years, waves of innovation have had profound implications for society, the global economy, and investors. At the same time, debt cycles, demographics, and productivity trends all have a slow-moving,…
Investors with thoughtfully diversified portfolios, which incorporate sufficient liquidity, should stay the course amid today’s trade tensions.
For many pension plans, investment strategy is often structured with a liability-hedging portfolio and a growth portfolio, with the weight and composition of each determined by a strategic asset allocation or a de-risking glidepath. Within this overall structure, the construction and calibration of the liability-hedging portfolio is integral to effective pension asset management. This report focuses exclusively on the liability-hedging portfolio, delineating key considerations and best practices for single-employer defined benefit plans including those sponsored by corporations, health care institutions, non-profit organizations, and certain partnerships.
As the economic cycle progresses, the next recession draws inexorably closer, bringing with it the next downturn in the credit cycle. Recognizing this, institutional investors are increasingly considering allocations to distressed debt managers. While lumping all distressed managers into one group is tempting, different managers have meaningfully different approaches and investors’ traditional way of thinking about distressed debt managers makes timing paramount. In this paper, we offer a new way to think about distressed investing that combines three complementary sub-strategies and encourages investors to allocate across the credit cycle.
The start of the year is a good time for planning and reviewing your investment strategy. In this edition of VantagePoint, we facilitate that effort by setting the record straight on some commonly held investment myths.
The new US tax bill creates little pressure for immediate action by individual investors, even though we expect the legislation to be quite impactful.
Investors should expect more of the same in 2018, as many of the factors that drove risk assets higher this year remain in force. Still, 2017’s returns will be difficult to top for many asset classes, and investors should keep a wary eye out for unexpected inflation and geopolitical risks.