Amid Rising Risks, Should Investors Maintain Credit Allocations?

Yes, but investors should be selective in allocating to credit markets at this point in the cycle, and understand that the overvaluation of many credit assets could make attractive returns hard to come by.

August 2018

Are Emerging Markets Equities Vulnerable to a Rising US Dollar?

Solid fundamentals in most countries should limit the damage. The largest markets are not particularly exposed to the risk of a classic balance-of-payments crisis (like the ones occurring today in a handful of smaller markets, including Turkey and Argentina).

July 2018

VantagePoint: Third Quarter 2018

Climbing the wall of worries is getting tougher. There is room for markets to progress, but caution is required at this stage in the cycle. Markets must overcome four main forces: monetary policy tightening, US dollar strength, a China growth slowdown, and trade friction.

July 2018

Should Investors Boost Their Exposure to US Small Caps, in Light of Recent Economic Policy and Geopolitical Developments?

We don’t believe so. US small caps have benefited from cyclical tailwinds this year, including strengthening US growth and their more domestic orientation (helpful as the dollar strengthens and trade frictions increase), with small-cap earnings estimated to grow twice as fast as large-cap earnings in 2018.

July 2018

Will the Addition of Chinese A-shares to MSCI’s Global Indexes Trigger an A-Share Rally?

No, MSCI index inclusion will not trigger a bull market in Chinese A-shares.* Given the very modest initial weights and the lack of clarity on future increases, we doubt that index-driven flows will drive share prices meaningfully higher.

June 2018

Trade Finance: An Expanding Opportunity for Institutional Investors

While trade finance is among the oldest forms of institutionalized credit, it has only recently become an accessible market for most institutional investors. Providing high liquidity, good return premiums over cash, and a predictable risk profile, it can play a valuable role in portfolio strategy. However, as a fairly new option for most investors, its […]

May 2018

Is Cash Still Trash?

Not in the United States. As short rates have increased and the yield curve has flattened, US T-bills offer more appeal than they have in some time (and short-dated Treasuries even more so).

May 2018

VantagePoint: Second Quarter 2018

Advice in Brief The global economy and capital markets are constantly evolving. From the industrial revolution in the 1700s, to information technology in the last 45 years, waves of innovation have had profound implications for society, the global economy, and investors. At the same time, debt cycles, demographics, and productivity trends all have a slow-moving, […]

April 2018