Portfolio Protection: Challenges with Equity Put Options

We advise extreme caution in using derivatives to protect portfolios from sharp equity drawdowns. We recommend that investors look to asset allocation to defend against equity risk before buying puts. For those investors who must pursue a tail-risk hedge, we provide a list of potential pitfalls and solutions, in the form of a case study.

May 2021

US Inflation Spikes, as Expected

Today, the US Bureau of Labor Statistics released its monthly inflation report for April, which highlighted that prices paid by urban consumers for a basket of goods and services increased by 4.2% relative to the same month last year.

May 2021

Rising Rates and the Implications for Fixed Income

In this paper, we analyze the drivers behind the recent rise in yields and compare the current bond sell-off to major bond sell-offs of the past to assess whether the rise in yields can continue and the implications for fixed income.

May 2021

Will the Global Equity Rotation from Growth Stocks to Cyclicals Persist?

Yes, we expect it will. We anticipate global inflation expectations will remain stable or increase modestly amid rising economic growth, which would allow the equity market rotation into cyclicals to continue.

May 2021

VantagePoint: Reflation, Inflation, or More of the Same?

In this edition of VantagePoint, we review the drivers of inflation globally and conclude that widespread inflation concerns are likely overdone. For investors concerned about the risks of inflation, we refresh our analysis on the complex relationship between asset classes and inflation and dig deeper into the implications of higher inflation on equities.

April 2021

Does 2021 Look Like a Good Year for Active Equity Managers?

Active equity managers tend to perform better when the average stock within a market capitalization–weighted index outperforms the index itself.

April 2021

Is It Now Growth at Any Price?

In private investing, it appears that way, but a deeper look suggests there could be a method to the valuation madness.

March 2021

Brexit Update

The historic milestone reached when the white smoke emerged from Brussels and London on 24 December 2020 represents the end of the beginning in the establishment of the new relationship between the UK and EU, rather than an end in itself. Nonetheless, with the lingering threat of a tumultuous no-deal exit now removed, the headwind that this represented to the performance of UK assets has now subsided.

February 2021