The Fed Cuts Aggressively, but Remains Cautious About Future Cuts
The Federal Reserve has reduced the target range for the federal funds rate by 50 basis points (bps) to 4.75%–5.00%, the first reduction in over four years.
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Would US Private Capital Flows into Climate Solutions Remain Strong in a Second Trump Administration?
Yes, we believe that private investment in climate solutions would continue apace in a second Trump administration, given strong demand for clean energy, supportive and resilient US government policies, and robust investment opportunities that will continue to be attractive to many investors.
US Election Anxiety: Keeping Calm Amid Political Uncertainty
Markets have been jittery as the US presidential election approaches. The macro backdrop is shifting, with slowing economic growth and ebbing inflation meaning a cycle of monetary easing beckons. At the same time, elevated valuations for a variety of assets are causing investors to reconsider narratives around themes, such as AI investment, and consider asset allocation tweaks. Investors should resist positioning portfolios for any one political outcome and remember that increased market volatility around elections is common. In the following report, we discuss our views on five common election-related narratives in the marketplace today.
VantagePoint: As the Narratives Turn
In this edition of VantagePoint, we find that consumers, corporations, and the banking sector remain in good shape, and while US/global economic growth is likely to slow in the second half of 2024 relative to the first, we expect it will remain positive. Although market concentration risk is elevated, given its focus on highly profitable AI-related tech stocks, we would seek to be measured about diversifying such risks.
US Manager Universe Statistics: Second Quarter 2024
This publication presents manager performance for 37 asset classes and substrategies, showing the median, mean, and key percentiles of return. Relevant indexes for each asset class are also included to provide market context.
Should Investors Alter Portfolios Considering the Equity Market Rout?
No, not right now. We continue to believe investors should: (1) keep equity allocations aligned with broad policy targets; (2) maintain modest overweights in less expensive areas within equities, such as developed markets value and small caps; and (3) maintain a modest overweight in long US Treasury securities within bond portfolios.
Review of Market Performance: Fiscal Year 2024
Most risk assets enjoyed strong returns in fiscal year ended June 2024. Developed markets equities led on better-than-expected economic data and the anticipation that central banks would begin easing monetary policies.
US PE/VC Benchmark Commentary: Calendar Year 2023
In 2023, US private equity performed better than venture capital, but returns for both asset classes trailed those of the public markets, which rebounded strongly from a tough 2022.
US Manager Universe Statistics: First Quarter 2024
This publication presents manager performance for 37 asset classes and substrategies, showing the median, mean, and key percentiles of return. Relevant indexes for each asset class are also included to provide market context.
VantagePoint: Building Resilient Public Equity Portfolios
Building outperforming portfolios in long-only equities is hard work but worth the effort. Engaging in deep research to identify firms with a repeatable competitive edge and strong organization that can stand the test of time is far more relevant than analyzing short-term performance. Selecting the right managers is only the first step. Constructing portfolios requires careful consideration of manager and market dynamics to adjust for shifting factor exposures and avoid unintended bets for which investors are unlikely to be compensated.