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.
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.
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.
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Yes, because rising concentration reflects rising valuations for the largest stocks, which are likely to serve as a headwind to index returns. Further, the growing market share of these companies increases the potential for rising regulatory oversight.
Investors have predominantly relied on developed markets sovereign bonds for defense in balanced portfolios, but low rates have diminished their diversification characteristics.
Private investors and wealthy families face distinct portfolio management complexities. Our latest paper details how we build and manage portfolios to meet each private client’s long-term goals.
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.
Healthcare systems appear to have navigated the most severe financial impact of the pandemic. We believe the present time provides an opportunity to reset investment strategy and recalibrate portfolios as necessary.
The virtual Private Investments Summit features a series of sessions where Cambridge Associates and industry thought leaders examine approaches to harnessing the long-term nature of private investments for program benefits while maintaining a consistent path through an ever evolving and volatile market environment. To view the session replays, visit the website link below.