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…
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…
This chart book presents representative marketable and hedge fund manager performance for fourth quarter and calendar year 2014. US Real Estate Investment Trust (REIT) managers posted the largest median returns for the fourth quarter (14.2%) and the one-year period ending December 31, 2014 (31.2%).
During the first half of 2014, US private equity and venture capital funds performed well, with both outpacing public markets. Over the first six months of the year, private equity has slightly outperformed venture capital.
This chart book presents representative marketable and hedge fund manager performance for third quarter 2014. This quarter US Core Bond, US Bond, and Cash Management managers posted the highest median returns, while Pan-European Equity managers posted the lowest median returns.
Profit margins are regarded by many as one of the most reliably mean-reverting time series in finance. In a global economy, high margin businesses should, in theory, attract competition that will gradually erode the ability of those companies to sustain significantly higher margins. Following the global financial crisis, US corporate profit margins expanded to new…
Valuations are high, volatility near all-time lows, and policy rates on the rise; investors, meanwhile, are the most optimistic since 1987. On top of all that, the geopolitical picture is arguably more unsettled than at any point since the late 1970s. So who in their right mind would buy equities? With the standard caveat that…
The launch of the new Treasury floating rate notes has been a successful venture The initial auction for Treasury FRNs saw aggressive participation, with a high bid-to-cover ratio. The ratio came down slightly in subsequent auctions. Quarterly issuance has so far exceeded early predictions, and these securities have already assumed an important place in the…
Yes, but prepare to average back in as soon as rates approach fair value, and consider moving out to the longer end of the curve. We recommend maintaining neutral allocations to risky assets, but are placing a greater emphasis on diversification given we are at a more advanced stage of the economic and market cycle…
In 2013, US private equity and venture capital turned in their best annual performance since 2006 and 1999, respectively. Strong returns from the large sectors, particularly financial services in the private equity benchmark and information technology (IT) in venture, contributed most to the indexes’ results. In the five years between 2009 and 2013, private equity…