VantagePoint: Third Quarter 2017

This quarter’s edition covers the very overvalued US equity market, reviewing what late cycle looks like in the US and casting a critical eye at the consensus view of an overly concentrated market. Also discussed are the better prospects for ex US markets and the importance of remaining diversified.

Is Deregulation the Death Knell of Direct Lending? Reviewing the Evidence

Some market participants have feared the worst for direct lending from a potential repeal of The Dodd-Frank Wall Street Reform and Consumer Protection Act. In this brief, we review the data and show that changes in banks’ lending behavior cannot clearly be traced to the passage of Dodd-Frank or its implementation.

Can College and University Endowments Do More?

Recent policy proposals assume endowments can do more to reduce the reliance on student revenue, and thus the cost of a college education. These proposals aim to shift more endowment wealth to current student beneficiaries. Our analysis shows that while well intentioned, these proposals will affect endowment and organizational stability and intergenerational equity. While endowments may be able to do more to support the enterprise and thus lower the cost of attendance, considering the implications of current policy proposals is critical, as is examining other strategies that could address current pricing concerns.

Considerations for ESG Policy Development

Though the US government is no longer supporting the Paris Climate Agreement, many endowments, foundations, and other US institutions remain committed to aligning their investment policies with the goals of the international accord. Together with the Intentional Endowments Network, Cambridge Associates has outlined considerations for incorporating environmental, social, and governance factors into the development of […]

Over the Long Term, Diversification Still Wins

Since 2009, US equities have outperformed every major asset class by a considerable margin, returning 14.5% a year on average. And, over the same period, a simple 70% US equity/30% bond portfolio* returned 11.4% per year, on average. These kinds of results can tempt even the savviest investors into abandoning their long-term discipline and chasing […]

CA Answers: Playing the Long Game—Should the US Treasury Issue Ultra-Long Bonds?

Answers to our clients’ questions about market action and the market environment in a few paragraphs every two weeks. Yes. Issuance of ultra-long Treasury bonds (greater than 30 years to maturity, including potentially 40-, 50-, and 100-year maturities) would benefit multiple constituents. Ultra-long Treasuries would extend the investable Treasury curve for pension plans and life […]