There’s new rumblings about an inverting yield curve ahead. Is it time to panic? Time to stick our heads in the sand? Or time to think sensibly?
With the global economy moving into its late-cycle stages, we think it’s a good time to bolster portfolio inflation protection by embracing several recently unloved investments—including natural resources and commodities.
US small-cap stocks have delivered strong returns in recent years. But value stocks have lagged the broader market. A closer look at what’s driving returns reveals some risks that deserve attention.
Private equity funds continue to attract interest, despite rising deal valuations and high levels of leverage. We think there’s a way to get many of the benefits of private equity in public markets—without forfeiting liquidity.
Fears of new threats to emerging markets have cooled stock returns after two years of hot performance. But the concerns may be overstated. The long-term risk profile of emerging markets is continuing to improve.
Volatility in yields got you down? Fearful of more rising rates ahead? Worried your bond portfolio will sink into the red? We have strategies that will help keep you dry, even if the waves get high.
Bond investors are worried about rising rates in today’s environment. Many are protecting themselves by moving to cash or other very short investments. But is their “safe” choice putting them at risk?
Turkey’s currency crisis has spooked emerging-market (EM) investors, especially amid growing concern about the strengthening US dollar. We think countries and companies in the developing world are actually much more resilient to a stronger dollar than in the past.
China’s markets are opening to the world—but be aware of the potential for unintended consequences. As more money flows into domestic Chinese stocks from abroad, more money is also flowing out of China, which may trigger volatility in regional markets.
High-yield investors bracing for a downturn in 2018 can relax. By some metrics, high-yield companies have rarely looked better. The way we see it, investors who do their homework can still profit in this environment.
Technology stocks are widely seen as powerful return drivers—with a lot of volatility attached. But surprisingly, shares of many companies that enable the technology revolution can provide solid returns and even downside protection.
US stocks have boomed for nine years, supported by one of the longest economic expansions in the postwar period. Can this growth be sustained? Much depends on how the challenges of environmental and social sustainability are addressed.
There are a lot of suggestions these days about where to get extra income, but less discussion about the cost attached to it. A diversified multi-asset approach can help—and provide additional growth potential. But how it’s designed matters.
While Italy’s bond yields have risen, investors have so far reacted relatively calmly to the rising probability of a populist Italian government. Based on the fundamentals, the potential downside scenario looms larger than markets seem willing to consider.
US companies reported stellar first-quarter profits this year. But some investors suspect that earnings growth has plateaued. Our research suggests that slowing earnings growth means nothing for stock prices.
Investors often say they’re worried about having too much high-yield bond exposure so late in the credit cycle. But many are still chasing returns in equities and other assets with even higher risk. We’ve got a better idea.
On May 14, new MSRB regulations will require the disclosure of the often dramatic markups that retail investors are subject to when buying individual municipal bonds. Will this accelerate the shift into active municipal bond management?
With volatility rising, many equity investors are thinking proactively about downside protection. But traditional safe havens may not do the job. Defensive equity positions can be found today in surprising places—like the energy sector.
As concerns about inflation spread, it’s time to gauge how different types of stocks will respond. Smaller companies in niche markets may be better positioned to cope with rising prices—especially in consolidating industries.
The US Federal Reserve decided against an official short-term rate hike at this week’s meeting—hardly a surprise. But US Treasury yields continue to climb in 2018, and not all the explanations are good news.
How do you blow a No. 2 draft pick? For the New York Giants, it was a combination of bad math and overconfidence. But at least Big Blue can take comfort in having plenty of company: investors, particularly high-yield bond investors, are prone to similar mistakes.
A Wall Street Journal blog on Wednesday warned that the emerging-market trade is under threat. But we think investors shouldn’t be swayed by short-term market moves. History shows that EM equity performance cycles typically unfold over several years.
It’s been a rocky start to 2018 for equity markets globally—volatility has returned with a bang and February saw the first 10% market correction in a while. So, why are active managers smiling?
Rising rates are adding new risks to equity markets. Stocks of companies that are saddled with debt have underperformed recently. And leverage is especially high in sectors widely seen as safe havens.
Investing 101 tells us that rising interest rates are bad for a bond portfolio. But if you’ve got a long investment horizon, that isn’t necessarily so. We think investors should be more concerned about the end of the credit cycle than rising rates.
Should municipal bond investors be thinking about inflation protection? Without a doubt. But some inflation strategies are better than others. Choosing the right one could make all the difference.
Global equities posted their first quarterly decline in two years during a volatile first quarter. Growing concerns about rising rates, trade wars and regulation in the technology sector will require a new mindset for investors.
The active/passive debate has been raging for years, and both approaches have merit. But there’s more to the story than meets the eye. Investors who commit too much to passive—and not enough to active—could face mounting risks.
Worried about rising rates? Don’t take your money out of the municipal market and put it in cash. That could cost you.
Economic trends clearly point toward higher inflation and interest rates ahead, which will likely make capital markets more volatile. Based on recent headlines, politics seems likely to add fuel to this fire.
President Trump’s plans for tariffs on about $60 billion of Chinese imports have rattled equity markets. Investors should begin to study which types of industries, countries and companies could win or lose if an all-out trade war erupts.
Rising US interest rates could pose a challenge for target-date funds (TDFs) that concentrate on “core” US fixed-income exposure. Diversifying across a broad range of bond markets and strategies can create a cushion in a rising-rate environment.
There’s not much suspense around this week’s Fed meeting: the fed funds target rate is almost certain to rise by 25 basis points. We think it’s more important not to overlook this cycle’s endgame.
What should bond investors do when rates are rising and the credit cycle is ending? Perhaps not what you would expect. But getting this right can be critical for the health of your fixed-income allocation.
China is rapidly becoming a trendsetter in many digitally driven industries. This is turning conventional research methodology on its head. Investors should look to China to discover where technology and retail markets around the world are headed.
Passive equity strategies have seen massive inflows over the last decade, in part owing to active management’s struggles. But a closer look at the story within the story suggests that leaving active out of the equation could be leaving money on the table.
It’s human nature to want to protect your portfolio when the market takes a sharp turn. But too often, bond investors make the wrong choices when interest rates rise and credit cycles end. This can have disastrous consequences for returns.
The US corporate credit cycle is nearing its end, and the cycle in parts of Europe isn’t far behind. This can create treacherous conditions for unprepared investors. The first line of defense, in our view, is knowing what to expect.
There’s a curious anomaly in the US stock market. Shares of highly profitable companies have risen more slowly than their earnings growth has in recent years. This is an important signpost for investors in today’s complex market conditions.
Target-date funds played a big part in helping defined contribution (DC) plan participants stay invested through February’s market turmoil. And history does repeat: in the severe 2008–09 financial crisis, these funds kept many participants positioned to take part in a lengthy bull market.
Following a strong 2017, emerging-market debt (EMD) held its own in January despite a sharp rise in US interest rates. That’s no accident. Economic fundamentals have improved dramatically, leaving EMD well positioned to withstand future turbulence.
Worried about rising defaults? There are good reasons not to be. Not only do high defaults not translate into poor high-yield returns, but we don’t expect a slew of defaults in 2018.
US inflationary pressures are developing that could be destructive. Investors need to seek protection quickly. But how? For municipal investors, some inflation strategies fall short, leaving portfolios at risk.
Bond investors get anxious when rates rise suddenly, as Treasury yields have recently. But if your investment horizon is longer than a few months, rising rates are nothing to be afraid of.
Finding high-quality companies is an essential component of many equity strategies. But with revolutionary forces sweeping through key industries, what really defines quality stocks? Investors must think proactively about how to identify quality in a changing world.
Think emerging-market debt might as well be managed passively? Think again.
Market volatility has spiked recently, driven largely by growing concerns about rising inflation and interest rates. We think the volatility is exaggerated, but we’re not surprised inflation is rising—and rates along with it.
Congress may finally be inching toward an overhaul of the US housing finance system. That’s good. But getting reform right is more important than getting it done. To us, that means ensuring the government retains a clearly defined role in the mortgage market.
Global equity markets are still hurting from last week’s sell-off. Yet the renewed volatility could mark a return to reality after an unusually long period of steady gains and may even foster a healthier investing environment over time.
