History does not repeat, but it rhymes, as Mark Twain observed. As such, we are struck by the eerie and dangerous parallels between today’s markets and the markets back in 1999. Back then, Value investing and Value managers were under the gun for having underperformed their Growth brethren for too long.
Not too long ago, investors, consultants, and advisors in the asset management field struggled with the role of Multi-Asset Class (MAC) strategies. They were perceived as misfits, given their cross-asset mandate and their dynamic nature. Today, however, they are utilized and embraced in all sorts of different settings.
Imagine an asset class with a decently positive expected rate of return, little to no equity beta, and little to no interest rate duration. A unicorn? We think not.
Passive “doing-by-not-doing” is no way to run a bond portfolio today.
Can target date plans be better? That’s the question many defined contribution plan sponsors are asking and a new paper from GMO’s Peter Chiappinelli and Ram Thirukkonda argues yes, they can.
Many asset allocation strategies that focus on value have had disappointing returns lately, with their managers having some explaining to do. However, the S&P 500 Index has some explaining to do as well.