US PE/VC Benchmark Commentary: Fourth Quarter 2014
Funds in the Cambridge Associates LLC benchmark indexes for US private equity and venture capital earned double-digit returns in 2014, but neither index performed as well as it did in 2013.
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Revisiting Active US Equity Management: A Cyclical Story
We are not unconditional advocates for or against active management; investors have different circumstances. However, while there are many logical rationales for favoring index over active investing, the recent performance struggle of the average active manager is not among them.
When Should Investors Become More Enthusiastic About US Small-Cap Stocks?
Investors should become more enthusiastic about US small-cap stocks when valuations become more compelling. Small-cap valuations today are unusually rich. Our preferred composite P/E ratio indicates the Russell 2000® trades at 33.7 times normalized earnings, about 60% above fair value and in the top 2% of all historical occurrences. Short-term metrics are little more compelling;…
How to Be Bullish
We are on record advising clients to underweight US equities, as they are overvalued both in absolute terms and particularly relative to non-US markets. That said, we believe strongly in the value of constantly looking for where we could be wrong; thus, we have lately been exploring analyses that make the case for a bullish…
US Manager Universe Statistics: First Quarter 2015
This chart book presents representative marketable and hedge fund manager performance for first quarter 2015. The median Global ex US Small-Cap Equity manager posted the highest return (5.9%) for the quarter; the median manager in this asset class returned -1.6% for the one-year period ending March 31, 2015. The median US REIT manager posted the highest…
Comparative Asset Allocation: Private Clients
Our biannual report summarizes asset allocation for 85 of Cambridge Associates’ US-based private clients.
US High-Yield Bonds: Our Interest Remains Limited
We continue to find high-yield bonds uncompelling; select opportunities in high-yield energy credit may offer attractive alpha Solid credit fundamentals and 6%+ yields in a low-return environment have lured some investors back to high-yield bonds, but current coupons will serve to cap future returns and offer little protection in the (somewhat unlikely) event the credit…
US PE/VC Benchmark Commentary: Third Quarter 2014
Overview US private equity and venture capital funds produced modest returns during third quarter 2014, though both outpaced the S&P 500 and Russell 2000® indexes, as indicated by the Cambridge Associates LLC benchmark indexes of the two alternative asset classes. Over the first nine months of the year, venture capital slightly outperformed private equity and…
Municipal Bonds: Incredibly Low Yields, But Few Attractive Alternatives
We maintain our neutral positioning for municipal bonds Though yields have moved below the 2% level that we previously viewed as a threshold for underweighting munis, other factors have changed the equation. Treasury yields have plunged as well, and ten-year Treasuries currently yield less than ten-year munis. Muni issuance remains quiescent, with new issuance at…
Is the Stronger Dollar Impacting US Companies’ Earnings?
A number of companies have blamed the strengthening dollar for disappointing fourth quarter and 2015 earnings guidance. With about 65% of S&P 500 companies having reported, headlines that around 75% of firms are beating expectations obscure the reality of forecasts that have steadily been marked lower. Growth for the quarter (year-over-year) is expected to be…