Must All Good Things Come to an End?

As the U.S. enters its 121st month of expansion, and valuations are lofty in most markets, the timing of a recession remain forefront on investors’ minds

Analyzing Russell’s 2019 Index Reconstitution

Index provider FTSE Russell recently completed the annual reconstitution of its Russell indices, which among other changes redefined the breakpoints between its large, mid, and small cap indices. These changes took effect at the close of trading on June 28. To better help institutional investors make sense of the process, I have highlighted some of […]

Resilience in the Face of Uncertainty

View PDF Investor confidence has shifted wildly over the past six months. Anxiety, panic, and gloom pushed equity markets down around the globe through the last three months of 2018, culminating in one of the worst Decembers in decades. The pessimism derailed global interest rate policy. The central banks in the euro zone had yet […]

Big Bounce for All Asset Classes

Equity Markets U.S. equity markets had no problem erasing the pain of the fourth quarter as the S&P 500 rose 13.7% with double-digit gains across capitalization and style spectrums. On a relative basis, growth outperformed value (Russell 1000 Growth: +16.1% vs. Russell 1000 Value: +11.9%), small cap outperformed large cap (Russell 2000: +14.6% vs. Russell […]

What Correction?

With the S&P 500 suffering its worst December since 1931, and the equity market falling by nearly 20% at one point during the month, suffice it to say that 2018 ended with a thud rather than a bang. However, just as we saw a snap-back from the drawdown in early 2018 (for different reasons), the […]

How We Developed Our 2019-2028 Capital Market Projections

View PDF Callan develops long-term capital market projections at the start of each year, detailing our expectations for return, volatility, and correlation for broad asset classes. These projections represent our best thinking regarding a longer-term outlook and are critical for strategic planning as our investor clients set investment expectations over five-year, ten-year, and longer time […]

Analyzing the Impact of Saudi Exposure in Key Indices

Two major index providers plan to add Saudi Arabian stocks to their indices this year, and Vanguard will add exposure to Saudi Arabia to some of its mutual funds. There will be relatively little immediate impact, but in this post we highlight some of the characteristics of the Saudi market to help institutional investors better […]

The Rise of BBBs: To Worry or Not to Worry?

Over the last year or so, the growth of BBB-rated debt as a percentage of the overall investment-grade corporate bond market has sparked significant debate among investors. The key issue: the implications to the fixed income market should bonds at the lowest rung of the investment-grade ladder be downgraded. Background: There are two distinct sections of […]

The Outlook From Fixed Income Managers

View the Outlook Callan conducts a quarterly survey of select fixed income managers to gauge their sentiments about the current market environment and solicit their near-term outlook (6-9 months) on key issues such as Federal Reserve rate hikes, inflation, and other factors that affect bond portfolios. In our most recent survey, for the first quarter […]

Risky Business Update: Challenges Remain for Today’s Investors

A Callan analysis found that investors in 2015 needed to take on three times as much risk as they did 20 years before to earn the same expected return. We recently updated our analysis and found that investors in 2019 needed to take on almost six times as much risk as they did 30 years ago