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Will Artificial Intelligence Continue to Propel the Market Forward?

Yes, we believe it will. Excitement around artificial intelligence (AI) and its related technological advancements has been a key market driver since early 2023. Investors are rightly enthusiastic about the potential for AI to support labor productivity and growth. We share this enthusiasm, while acknowledging the uncertainty in quantifying these benefits. Despite AI’s long-run promise, […]

June 2024

European Central Bank Cuts Interest Rates by 0.25%

On June 6, the European Central Bank (ECB) cut its main interest rates by 0.25%, becoming the first major developed markets (DM) central bank to cut rates. This follows recent decisions by central banks in Canada, Sweden, and Switzerland to reduce their policy rates, and it marks a change in the interest rate cycle that […]

June 2024

Will the Yen Continue to Support Japanese Equities?

No. The Japanese yen has been on a weakening trend for several years. For most of that time, it has been a lynchpin of Japanese equity outperformance in local currency terms. We believe there is limited further downside for the yen, which, while removing a headwind for USD returns, also removes the main pillar of […]

May 2024

VantagePoint: Building Resilient Public Equity Portfolios

While there has been much debate around whether active managers can outperform passive indexes overall, a more relevant question is whether investors should pursue active management in public, long-only equities at all. Despite the challenges, we believe active management, especially in less efficient markets, can be worthwhile if investors: 1) employ a rigorous manager research […]

May 2024

Are US Small Caps Poised to Outperform?

Yes. We believe higher-quality US small-cap companies trade at a significant discount to large-cap peers, and their balance sheets have held up better than headlines suggest. Recent earnings for small-cap companies have disappointed, but we see this as more driven by sector and cyclical effects that should ease over the next 12 to 18 months […]

May 2024

Private Credit Markets Are Growing in Size and Opportunity

For many investors, 2024 started where last year left off. Hopes of an economic soft landing are growing, inflation is slowly receding, and last year’s winners (e.g., mega-cap growth stocks) continue to rip higher. Credit markets have seen more muted gains after a gangbuster fourth quarter 2023, but strong demand and rising confidence mean issuance […]

April 2024

Should Investors Consider Allocating to US Commercial Real Estate Debt?

Yes. A record of roughly $925 billion of US commercial real estate (CRE) debt is maturing in 2024 and refinancing needs in future years are also significant. Some of these loans will be extended, but most will need to be refinanced; simultaneously, many traditional lenders are pulling back. The resulting rise in spreads, combined with […]

April 2024

Have Public Market Returns Permanently Eclipsed Private Market Returns?

No, while the public market’s outperformance may seem like a total eclipse, this one, like all eclipses, will be temporary. At present, short-term private equity returns do not compare favorably to those of public benchmarks. For the nine months ended September 30, 2023, global private equity and global venture capital underperformed the MSCI ACWI on […]

April 2024

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