Investment Planning

Playing Defense in a Low-Rate Environment

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Investors have predominantly relied on developed markets sovereign bonds for defense in balanced portfolios, but low rates have diminished their diversification characteristics. We find that a diversified basket of “defensive” assets has provided comparable diversification characteristics to developed markets sovereign bonds historically. While this basket may not solve all challenges associated with today’s low-rate environment, we view it as better equipped than developed markets sovereign bonds to defend balanced portfolios during future periods of equity market stress.

Portfolio Construction: A Blueprint for Private Families

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When Cambridge Associates began working with private investors and families 40 years ago, we applied the same investment philosophy and many of the same investment principles that have underpinned our approach to managing investment portfolios for some of the world’s leading institutional investors. Key tenets, such as a long-term time horizon, an explicit bias toward…

Outlook 2021: A Year of Healing

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As 2020 comes to a close, we expect some key investment drivers to persist into next year. While our views speak to many different challenges confronting investors, including the poor bond yields on offer, the fate of US-China relations, and where to find growth, they are rooted in the belief that 2021 will be a year of healing for the global economy.

Research Digest: Inflation

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Inflation has moved steadily lower and become more stable globally over the past four to five decades, with average year-over-year G7 headline consumer price inflation down from 8.3% in the 1970s to just 1.5% in the 2010s. A wide range of factors have been linked to the low-inflation environment, including: globalization, demographics, technological change, declining…

VantagePoint: Investment Opportunities Six Months Into the Pandemic

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Economic, market, and healthcare circumstances have been extraordinary over the last six months. However, attractive opportunities exist. We see appeal in tech and tech-enabled businesses but remain cautious on elevated pricing. There’s enough value in relatively cheap segments of public equities to justify taking measured, diversified overweights. We are broadly cautious on credit, but see pockets of opportunity in some segments less supported by central bank activity. Finally, the importance of investing in social equity and diversity has been brought into sharp relief by this crisis.