The most effective investment strategy will acknowledge the uncertainty associated with future cash flows, but avoid being overly conservative so as not to impair future cash flow generation.
Because the US economy has entered the late stage of the economic cycle, investors should consider the prospect of a bear market recession, even though one does not seem imminent.
Elevated equity market valuations and potentially rising bond yields suggest the return environment for traditional risk assets could be difficult. Faced with this challenge, institutional investors are seeking alternative sources of return. Alternative risk premia (ARP) strategies – which harvest well-established risk premia and market anomalies across asset classes – may fit the bill. ARP…
Third quarter’s edition summarizes five articles on portfolio risk. The first article highlights the trade-offs among diversification, active risk, and excess return in active equity allocations; the second analyzes asset class correlations during tail events; the third highlights how the current state of trading liquidity could exaggerate the next downturn; the fourth argues that hedge funds do protect investors during market shocks; and the fifth reviews how commodity long/short indexes improve a traditional portfolio’s risk-adjusted return.
In this report, we briefly highlight five key post-GFC developments and discuss how investors might adapt their portfolios to these changes.
While the focus on making contributions prior to the mid-September tax deadline is important for corporate defined benefit plan sponsors, it should be the first step in establishing a dynamic contribution roadmap. Especially given potentially mounting contribution requirements ahead, plan sponsors should take this opportunity to view their contribution policy as one available lever—along with asset returns, liability hedges, and benefit management—in navigating the pension plan to a strong financial position.
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,…