Hunt for Yield Drove Bonds in 2nd Quarter
In the United States, fixed income investors continued to hunt for yield in this low-interest rate environment, while non-U.S. bonds benefited from a weaker U.S. dollar. Emerging market bonds also benefited from both the hunt for yield and the dollar’s decline. Corporate bonds performed best in the second quarter on strong demand. Investors continued their […]
Equities Up Around the World in 2nd Quarter
Spurred in part by recovery in Europe, non-U.S. equity markets outperformed U.S. stocks, and emerging markets topped developed markets. The Russell 3000 rose 3.0%, while the MSCI ACWI ex USA Index climbed 5.8%. U.S. Stocks: Shocks, but No Slowing Despite an increase in interest rates and turbulent events in the news, including disruptions within the […]
First Quarter GDP: Hitch in Our Git-Along?
1st Qtr Analysis 1st Qtr Data For the fourth year in a row, reported GDP growth disappointed in the first quarter, coming in at just 0.7%, down from a 2.1% rate in the fourth quarter and the weakest rate in three years. This paltry gain for the U.S. economy was concentrated in consumer spending on […]
The Hedge Fund Edge: Still Sharp or Too Dull?
View PDF Why should investors bother with hedge funds? The original proposition behind them was their promise of differentiated performance: better risk-adjusted returns with a lower correlation to traditional capital markets. However, recent history suggests that the current generation of hedge funds lacks the edge of its predecessors. Do hedge funds still have an inherent […]
U.S. Fixed Income: Up, Up, and Away
View PDF During the first quarter, the U.S. bond market generated positive returns across the board due in part to strong economic data and upbeat investors. U.S. fourth quarter GDP grew at an annualized rate of 2.1%, consumer spending rose 3.5%, and the unemployment rate fell to 4.7%. High yield bonds performed best; the Bloomberg […]
Non-U.S. Fixed Income: Separation Anxiety
View PDF Sovereign debt performed well in the first quarter amid political uncertainty about the future of the European Union (EU). Emerging market debt outperformed developed market debt for the third straight quarter as the JPM GBI-EM Global Diversified Index advanced 6.50% versus the Bloomberg Barclays Global Aggregate ex-US Index’s 2.48% gain. Returns were bolstered […]
2017 National Conference: On Challenges for Institutional Investors
Callan’s 37th annual National Conference drew a range of high-profile speakers. This final post recaps their views on the array of challenges institutional investors face; previous ones appear here, here, and here. Ben Inker of GMO (at right in photo) and Cliff Asness of AQR discussed how to create a portfolio—given a “clean sheet of […]
Non-U.S. Equity: Profits Trump Populism
View PDF A flurry of political skirmishes and uneven growth in Asia failed to deter non-U.S. equity investors, and the “risk-on” theme of last year continued into 2017. The weak U.S. dollar also bolstered overseas returns for U.S. investors. The MSCI ACWI ex USA Index jumped 7.86% during the quarter. All of its sectors were […]
U.S. Equity: Steady as She Goes
View PDF Despite concerns over the Trump administration’s ability to follow through on promises of lower taxes and decreased regulation, the market accelerated higher in the first quarter. The S&P 500 Index hit a peak (2,396) in March and notched a 6.07% gain over the full three-month period. But the quarter was marked by reversals […]
In Context: Global Small Cap Equity
In small cap investing (U.S., international, emerging market, and global small cap) there are exploitable inefficiencies that are less available in large cap. Read on to learn more about some of the opportunities and challenges in this space. Earnings revisions: In the large cap space, companies are typically covered by many sell-side analysts that are […]