No, as the risk/reward remains uncompelling and spreads may widen further if a recession ensues. However, the sell-off has enhanced our enthusiasm for collateralized loan obligation (CLO) debt, which offers attractive pricing, solid fundamentals, and lower interest rate sensitivity than most other credit investments. Prices for most credit assets have declined in 2022, as have […]
July 2022
US equities have entered official bear market territory with a more than 20% price decline. Some markets have seen sharper drops with speculative tech stocks (e.g., the Ark Innovation ETF) falling more than 75% from early 2021 peaks and many crypto assets seeing similar declines. Given the uncertain economic and profit environment, have markets bottomed […]
July 2022
The COVID-19 pandemic financially shocked healthcare system enterprises and investment portfolios, but those shocks were short lived and the recovery was swift. In fact, by the time 2021 ended, many hospitals were in a stronger financial position after the positive impact of stimulus funding, stabilizing operational results, and substantial investment gains. But challenges still exist. […]
July 2022
No. Emerging markets (EM) equities face a challenging macroeconomic environment, but many of the same issues are also plaguing their developed markets (DM) peers. We think EM allocations outside of China should be in line with policy, given that the risk of a widespread EM debt crisis is low, valuations relative to DM peers are […]
June 2022
The Federal Reserve announced that it was raising the target range for the Fed funds rate by 75 basis points (bps) to 1.50%–1.75%. An apparent briefing to the financial press last week meant that this course of action was fully priced in by the rates market beforehand, despite just 50 bps being priced as recently […]
June 2022
US small-cap stocks have underperformed large-cap peers in recent years, opening a significant valuation discount that seems hard to justify based on relative earnings strength or balance sheet health. Looking ahead, the sector exposure of small-cap stocks may make them better positioned for the current environment of rising interest rates and high commodity prices. While […]
June 2022
Portfolio management for families of significant wealth is distinctly different than for institutions, or those with traditional wealth management needs. For these families, the wealth typically exists in a much more complex ecosystem—among real estate investments, operating companies, or multiple generations, by way of example. These factors should have a meaningful impact on investment strategy, […]
June 2022
Yes, we think corporate earnings expectations are likely too high. This is because earnings are well above the long-term trend, and we expect inflation and higher policy rates will put downward pressure on profits margins. After growing by more than 50% in 2021, global corporate earnings are significantly higher than the long-term trend. However, nominal […]
June 2022