This year’s returns have been driven more by what has not gone wrong than what has gone right. Slowing economic growth and lackluster earnings have not shifted investors’ focus from dovish central banks and a slight easing of geopolitical risks. It is an open question whether investors will remain so sanguine in 2020. Our Outlook 2020 highlights ten themes for the coming year, with a focus on key macro questions, emerging opportunities, and risks.
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As sponsors of US single-employer defined benefit plans know all too well, interest rates have experienced dramatic swings in recent years. While many plan sponsors have adapted to this environment by strategically hedging their liability interest rate risk, many are still questioning the efficacy of doing so — especially when interest rates appear to be low. Yet, failing to hedge long-duration liabilities with long-duration assets is a risky endeavor that exposes the plan sponsor to significant downside risk.
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A universal approach to portfolio construction can help schemes achieve required return targets whilst adding additional upside from alpha generation; reduce risk through true diversification; and generate sufficient income to comfortably meet both planned and unplanned cashflow needs.
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As economic growth slows, manufacturing contracts, and major central banks start to ease monetary policy anew, investors need to consider what policy options the world has left in the event this slowdown becomes a recession. In this edition of VantagePoint, we look to the 1930s for some answers, while realizing that intervening changes to the global financial system rule out an exact repeat of that period.
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Elevated equity market valuations and potentially rising bond yields suggest the return environment for traditional risk assets could be difficult. Faced with this challenge, institutional…
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Thoughtful decisions during chaotic environments are what separate the top-performing investors from everyone else. In this series, we review five important topics that should inform any plan to manage portfolios through equity market downturns.
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Equity market downturns are chaotic environments that are rarely short-lived—the best advice is to be prepared.
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Investors that have inflexible spending needs and large allocations to illiquid assets should plan how they will tackle the next downturn’s liquidity challenges.

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As investors prepare for the next equity market downturn, they should take a closer look at the benefits and limits of diversification.

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