Are Private Equity Blowouts Good for Stock Investors?
There’s growing evidence that private equity markets are beginning to overheat after several high-profile IPO flops. Investors in stocks should pay attention because private funding troubles are also a very public market affair.
Four Signals that Could Point to a Bigger Value Rebound
US value stocks staged a strong recovery in September after an extended period of underperformance. While value slipped again in early October, we’re monitoring four signals that might indicate whether we’re on the cusp of a bigger value rebound.
Muni Investors: Listen to the Market
The market is moving very quickly. I can’t say that there’s one aspect that we’re looking at, but one thing I will tell you that I do believe is that we’re a Tweet away from—fill in the blank. It’s just the world that we’re living in at this point.
Five Lessons Packaged Target-Date Solutions Can Learn from Customization
As defined contribution (DC) plan sponsors know, the US Department of Labor recommends considering both packaged and custom target-date strategies when choosing a solution. As we see it, packaged solutions can learn a few things from fully customized target-date solutions, which are generally used by large and megasize plan sponsors.
Illiquid Investments: Getting the Formula Right
Alternative investments have the potential to enhance portfolio returns and reduce risk, but it isn’t easy to determine which alternative works best—and how much of it to own. To get accurate answers, it’s necessary to look beyond traditional asset-allocation approaches.
Will Municipal Bonds Continue to Deliver?
Despite the municipal market’s strong year-to-date rally, an aging US expansion and low yields continue to top municipal investors’ concerns as we enter the home stretch of 2019. When conditions are evolving and visibility is limited, active and flexible strategies can help balance risk and reward.
Global Equities: Keeping Balance in a Wobbly World
Global stocks advanced in the third quarter, but investor sentiment wobbled amid puzzling signals on macroeconomic growth and monetary policy. Political uncertainty and a cloudier outlook point to more volatility, which should compel investors to intensify their focus on stock fundamentals.
Is The Brexit End Game Finally In Sight?
As the People’s Republic of China (PRC) celebrates its 70th anniversary, manufacturing data shows that factories in the world’s second largest economy improved marginally in September, despite the impact of the ongoing U.S.-China trade war.
How to Invest in Technology As Regulators Defang Giants
US state attorneys general recently stepped up their scrutiny of big tech’s business practices. With corporate mammoths likely to be in the crosshairs of regulators for some time, equity investors should consider looking beyond the titans for opportunities in the sector.
Choosing Better Investing Ingredients for a Turn in the Cycle
What sources of market returns can withstand late-cycle uncertainty? By identifying the right ingredients, we think investors can create an allocation with the potential to overcome new challenges and perform well over the long term.
Out of Balance? Growth vs. Yield in US Stock Valuations
In today’s highly uncertain market environment, investors in US stocks are paying a premium for companies with high-dividend yields. But how much is too much—especially if interest rates stop declining? Stocks with resilient high-growth profiles deserve a closer look.
To Hedge or Not to Hedge? With Currency, It’s a Vital Question
With global markets growing more volatile, we’re often asked what we think are the most underappreciated risks that investors face today. One in particular stands out: currency risk—especially for non-US dollar–based investors.
Selecting Insurers for Lifetime Income: Help Is on the Way
When it comes to implementing a secure lifetime income solution for a defined contribution (DC) plan, sponsors may balk at the task of evaluating insurers and different types of retirement income options. But fiduciary help is already available, with additional services and innovations on the way.
Income Investing When (Trade) Tensions Run High
Trade tensions—and the volatility they bring—are forcing investors to think about new ways to generate low-volatility income. A mortgage income strategy that balances high-quality securities with historically high-returning ones can help.
Washington Helps Retirement Plan Quest for Secure Income
Washington legislators have crafted some substantive support for defined contribution (DC) plans to offer secure income solutions for participants. The Secure Act, currently under Senate review, may be a key component in clearing away some hurdles that have previously made DC plan sponsors hesitant to incorporate lifetime income solutions.
Does Your Target-Date Glide Path Suit Your Workforce?
Plan sponsors evaluating packaged and custom target-date solutions should take a close look at the demographics of their plan participants and how they stack up against those of a “typical” plan. It’s critical information when making a glide-path decision.
Three Ways to Manage Fixed-Income Liquidity Risk
Liquidity risk grabbed headlines this summer on the heels of several high-profile fund implosions. The hunt is now on to find ways to manage market liquidity risk and to protect portfolios against liquidity crunches. We’ve pinpointed three essential practices.
Why EM Corporate Debt Deserves a Place in Your Portfolio
Investors recognize that emerging markets are at the core of the global economy and belong in a fixed-income allocation. Still, many investors are underexposed to emerging-market corporate bonds. We think that’s a mistake.
Investors Can Hold US Companies Accountable to Roundtable Pledges
Leading US CEOs recently pledged to redefine the role of the corporation in society. But will they make good on their promises? Responsible investors need a clear way to evaluate whether a company is really making progress by doing good for both society and investors.
Are Distressed Small Banks Putting China’s Banking System at Risk?
It’s been 20 years since a Chinese bank failed. But recent bailouts of three regional lenders have raised concerns about systemic problems in China’s financial sector. While risks have grown for China’s smaller banks, we believe that the Chinese banking system remains robust.
The Investor’s Survival Guide to a Long Life
Rejoice—people around the world are living longer! But pause the festivities—that means they need more retirement money. To ensure they don’t run out of cash, savers need to adjust their investment strategies as their needs change, both before and after retiring.
Why Today’s Inverted Yield Curve Isn't Necessarily a Recession Warning
The most closely watched part of the US yield curve inverted this week for this first time since 2007, suggesting that a recession may be around the corner. We’re not convinced that’s true.
Are European Energy Companies Sustainable Investments?
Oil and gas producers are often seen as vulnerable to global efforts aimed at curbing climate change. But some European energy groups might become part of the solution to climate change rather than part of the problem.
Does Sustainable Investing Constrain a Portfolio?
Sustainable investing is often misunderstood. Many investors think a sustainable agenda limits a portfolio to a narrow piece of the market. In fact, plenty of stocks can help investors create social benefits while generating strong returns—if you know how to find them.
China’s Currency Weakness: Not as Bad as it Seems—Yet
China’s currency depreciated this week, with the exchange rate rising to more than 7.0 renminbi per US dollar, unnerving investors worldwide. Here’s the good news: we don’t think the decline is as worrisome as it may seem.
Is a New Front About to Open in the US-China Trade War?
Financial markets are focused on the ongoing trade war between the US and China—which goods and services are in play and what measures are being taken or threatened in each case. But the trade conflict could spill over into currency markets—and that’s a risk that bears watching.
Midyear Municipal Outlook: Stay Flexible Late in the Cycle
Municipal bonds have had a good run since the beginning of the year, but there’s still room for additional positive performance in 2019. That’s particularly true for investors who choose active strategies with the flexibility to move money around the bond market as conditions evolve.
Rising Risk of No-Deal Brexit
With the pound sliding to two-year lows, currency markets are signalling a higher probability of a no-deal Brexit. But the fallout from no deal would hurt the rest of Europe, too, and add to downward pressure on euro-area bond yields.
Postcard from Japan
When people talk about Japan, they often do so in the context of ‘lost decades’ and warnings of limited growth opportunities. Nearly one-third of the population is over age 65, inflation is stubbornly low and predictions for future economic growth are not encouraging.
Will Easy Monetary Policy Keep the Global Economy Afloat?
Global markets have taken heart from a truce in the trade war and signs of yet more monetary-policy stimulus. Easy money may well give a short-term lift to asset prices, but longer-term prospects look more challenging, especially for Europe.
US Corporate Cash Is Down: Should Investors Worry?
The recent decline in US corporate cash hasn’t raised a lot of eyebrows, but it has caused one of our equity-quality indicators to flash a warning. Since equity quality is one of the signals with a strong track record of predicting market sell-offs, should investors be worried?
Finding Growth in a Low-Growth World
When macroeconomic growth slows, investors get edgy. But the economy isn’t the only thing that drives revenue and earnings growth for companies. Some industries are poised to expand at a rapid clip even if GDP growth is subdued or decelerating.
Will Dovish Fed Policy Fuel US Stocks?
Equity markets recovered in June as the US Federal Reserve turned decidedly dovish, coming in line with most central banks around the world. But after posting strong gains, to end the quarter close to a record high, how much more steam do US stocks have left?
Global Equities: Searching for Symptoms of Three Mounting Risks
Global equities advanced in the second quarter, but the path was rocky. Incoming earnings reports will provide important clues about how companies are coping with mounting challenges—from trade wars to global growth—and how investors should position.
The ESG Edge to Concentrated Equity Investing
There are many ways to apply responsible investing principles to portfolios. But some investing approaches may be more conducive to creating a portfolio with strong environmental, social and governance (ESG) qualities than others. Concentrated equities are a case in point.
What’s the Long-Term Oil Outlook? Watch How the Majors Invest
What’s the long-term outlook for oil in a world shifting to renewable energy? Oil majors publicly say supply-and-demand dynamics will support the market. But their investment choices suggest that they’re preparing for a much weaker oil price in the distant future.
Combining Big Data and a Human Touch for Equity Insights
Figuring out how to use big data is the next frontier for the asset-management industry. Equity investors must have the right culture—and ask the right questions—to successfully integrate data science into research and investment processes.
Postcard from… West Africa
When I landed in the brand-new airport in Nigeria’s capital of Abuja I was taken by the modern and cavernous nature of its terminal, a reflection of the country’s future ambitions. One of Africa’s best airports, in Accra, Ghana, also boasts a new terminal.
Following UN Goals to Sustainable Equity Themes
The United Nations Sustainable Development Goals (UN SDGs) offer a good guide for investing in companies making a positive impact on society. But where do you begin? Start by drilling deeply into the SDGs themselves to identify investible themes.
Fed Looking for an Ounce of Prevention with Rate Cuts
The Fed left its benchmark rate unchanged this week, but also signaled a very high probability of cuts later this year. Historically, rate cuts have been a sign of trouble—typically made in response to slower growth and rising unemployment. But this time around, growth data aren’t showing much weakness. What’s the story?
Funding the Future: Putting Purpose in Your Bonds
Creating a sustainable fixed-income portfolio isn’t just about avoiding harm–it’s about doing good. The UN’s Sustainable Development Goals provide a road map for selecting companies that offer products and services that help the environment and create a more equitable, just world.