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.
Real assets deserve a spot in investors’ portfolios, but the role they play can vary. With more than 30 years of experience in real assets investing, we have the expertise to thoroughly evaluate the role of real assets within each client portfolio and determine the appropriate holdings based on each client’s distinct goals and risk tolerances.
Recognizing that manager selection is paramount to the success of a real assets program, we employ a holistic approach when evaluating strategies and investing our clients’ real assets portfolios. Our real assets investment team scours the universe of opportunities across public and private real estate, infrastructure, and natural resources to build strategic real assets programs that target above-market returns over the long term.
This paper discusses recent trends in US commercial real estate fundamentals and looks ahead to what might be in store for the remainder of 2021. Overall, we are reluctant to sound overly bullish about the broad asset class, as the outlook for some sectors is unclear. Still, for investors looking to immediately deploy capital, we highlight two categories of opportunities.
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March 23, 2020— As we write in March 2020, COVID-19 is spreading across much of the world, undercutting economic activity. While how this situation will unfold is not entirely clear, we have long believed that the best way to guard against future uncertainty is to have a well-constructed portfolio. One key component in that is understanding the relationship between asset prices and inflation.
During the past decade, nonprofit healthcare providers have undergone a wave of accelerating consolidation. When systems combine, the new entity created will have new financial health metrics. A fresh review of how a transaction will impact the newly combined long-term investment pool (LTIP) is crucial. This paper examines key variables to assess and specific examples of how a LTIP might restructure post-merger.
As 2020 comes to a close, we expect some key investment drivers to persist into next year. While our views speak to many different challenges confronting investors, including the poor bond yields on offer, the fate of US-China relations, and where to find growth, they are rooted in the belief that 2021 will be a year of healing for the global economy.
While colleges and universities have faced several financial fissures due to the disruptions of COVID-19, their endowments have been a source of financial stability. Four key financial indicators tell this story: operating margins were compressed, tuition discounts grew, institutions borrowed more debt, and endowment spending was consistent. In this note, we review these financial pressures and the endowment implications that emerged in Cambridge Associates’ second annual Endowment Radar Study of private college and university finances.
Investors are facing a challenging period for earning what they spend and achieving adequate portfolio diversification. With most DM sovereign bond yields near or below zero, expected returns for bonds are at all-time lows and diversification qualities are constrained. In this edition of VantagePoint, we evaluate defense and diversification options to identify a modern approach to diversification in this low-yield era.
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.