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Pension Fund Leaders Have Opportunity to Engage With U.S. Census Bureau

Pension administrators and trustees having the ability to access and engage with the government and its data is a necessity. The U.S. Census Bureau is allowing you to do just that. 

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Going Concern Uncertainties and Severe Financial Stress Disclosure Task Force Formed

The Governmental Accounting Standards Board has formed a task force to assist with a project to address disclosure issues related to going concerns, uncertainties, and severe financial stress plan sponsors may be facing.

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There's a Government Statute for Using Video During Public Meetings

Texas public pension boards can use videoconferencing to hold public meetings. However, the state's open meetings law has a few limitations. 

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Public Outreach is Part of Life-saving Efforts of Texas' 29,500+ Firefighters

The National Fire Protection Association is celebrating its 100th anniversary of Fire Preventing Week this year.

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Texas Pension Review Board Meets Thursday, Oct. 6 in Austin; Remote Participation Available

The Texas Pension Review Board meets at 10 a.m. CT on Thursday, Oct. 6, 2022, in Austin at the Capitol Extension, Room E2.028, located at 1100 Congress Avenue

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Taking These Online Classes Will Make Your Fund More Data-Savvy

In striving to seek and secure the best investments and services for their membership, public retirement system administrators and staff often look for demographic and economic data to highlight in various reports. 

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Practical Decisions Require Research

There's a lot of research out there, especially regarding retirement, pensions, and investment management. And it seems everyone conducts and publishes it in some form - books, briefs, multi-page reports.

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Inflation Reduction Act is a Net Positive for Listed Infrastructure

The Inflation Reduction Act of 2022 (IRA) addresses three key areas: climate issues, corporate taxes, and healthcare.

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Recessions and Midstream Energy Infrastructure: Why Its Better Today Than Previous Years

 

The Federal Reserve (The Fed) is fighting decades-high inflation with aggressive monetary policy. Many market watchers now expect at least a mild recession in response. The S&P 500 Index's 17.3% loss and the NASDAQ's 25.5% loss year-to-date through 6/24/2022 would suggest equity investors share this concern (year to date, the Alerian MLP Index (AMZ), a midstream energy focused index, is up 9.2%). To understand how midstream might perform through such an environment, we thought a look at history could be helpful.

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ESG Portfolio Monitoring

For institutional investors, ESG-related initiatives are ultimately about managing risk. As noted by the Organization for Economic Co-operation and Development (OECD), a poor environmental record may make a firm vulnerable to legal or regulatory fines/sanctions; socially, the mistreatment of workers and dissatisfied employees may lead to higher absenteeism, lower productivity, and weaker client servicing/relationships; and weak corporate governance may incentivize and/or enable unethical behaviors related to pay, accounting irregularities, and even fraud.1 For all these reasons and more, identifying and addressing material ESG-related issues germane to a corporation is a quintessential exercise in risk management – for the management of that company, for investment managers thinking about holding that security in their investment portfolio, and for asset owners concerned whether the manager is acting in accordance with fund policies.

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Venture Capital’s Unique Ability to Navigate Volatile Markets

Venture capital (VC) has performed extremely well over the last 5, 10, and 15 years, beating the S&P 500 by more than 700 basis points on average.1 Across market cycles, we have witnessed certain vintages reward investors with truly outsize returns, and we feel confident that current conditions could lead to similarly high-returning vintages. As we enter a period that we believe will be defined by less capital raised, smaller fund sizes, slower investment pacing, fewer market participants, and lower valuations, perhaps the time to overweight is now.

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Convertible Investment Study

Convertibles securities' hybrid structure has historically made for a compelling asset class in virtually any market environment. An outright allocation to convertible securities has the potential to provide investors with the best of all worlds – favorable asymmetry of returns through participation in upside momentum along with an important measure of downside protection.

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CLO Equity Opportunities in Dislocations

The Creditflux CLO Hedge Fund Index, an index of CLO debt and equity tranche investment managers, ticked down notably in February (-2.2%) and more significantly in May (-6.0%). These were on the back of a 22-month string of positive returns that began in April 2020, after the initial brunt of the Covid-19 crisis.

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Consensus for 75bps Increase in November, higher Terminal Rate in Intermediate Future

About a half a year has passed since we last updated you with our take on the bond market. Since then, the Federal Reserve has tilted even more hawkishly with 75bp rate increases in their attempt to combat inflation. Unfortunately, they have not made much headway, as August CPI data registered a gain of 8.3% year-over-year, with Ex Food and Energy CPI at 6.3%, both ahead of economists’ and market expectations. These high numbers are not what Fed Governors or the markets were hoping to see as the immediate reaction from both bonds and stocks was a quick sell-off. Making matters even more difficult is the reality that the “sticky” components of inflation, such as rent, posted its largest monthly increase in this cycle since 1986. Inflation on services also touched a new high, as medical care and transportation services helped drive gains. If not for drops in gasoline and other commodities, the latest inflation report would have been even hotter. We believe another 75bps rate increase is all but certain when the Fed meets later in September. While consensus is growing for an additional 75bps in November and a higher terminal rate in our intermediate future, the question becomes whether or not this scenario is fully accounted for in current prices.

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Following a Strong 2021, 2022 Has Been a Tough Year For the Global Economy

Coming off a strong year for corporate earnings and economic growth in 2021, the global economy has been hit with myriad headwinds in 2022. The unfathomable sequence of events occurring in Ukraine is certainly top of mind. Beyond the horrific human tragedy, there has been a significant ripple effect on global commodity prices. This has added to already mounting inflationary pressures from ongoing supply chain problems and has led central banks around the world to expedite their rate hike plans in an attempt to get inflation under control. 

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ABS Market Has Grown in Size and Evolved in Sophistication

In its earlier stages, the asset-backed securities1 (ABS) market securitized a relatively narrow market segment focusing on consumer-centric financial assets and targeted a narrow group of investors. That is no longer the case. Over the past decade, ABS has evolved substantially, surpassing other financial products in its ability to provide an attractive and diverse universe of investment opportunities. Importantly, the evolution and growing sophistication of ABS allows skilled investment teams to tailor portfolios to a growing investor base with a broad range of investment goals.

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Why EM Debt Investors Shouldn't Fear the Fed

The speed and extent of further monetary tightening in the United States is uncertain, and as a result, there are concerns about the impact of rate hikes on future fixed-income returns. But we do not believe investors should be concerned, and this may even be a buying opportunity.

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Backdrop of Slower Growth Expected: Northern Trust Forecast

CHICAGO and LONDON, 7 September 2022Northern Trust’s Capital Market Assumptions (CMA) Report, a multi-asset class, five-year investment outlook updated annually, expects global private equity to lead five-year annualized returns at 9.6%. Global high yield and U.K. equities are expected to lead bond and stock returns, at 7.5% each.  Returns are expected to be within a global growth environment that slows to 2.6% annually.

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TEXPERS Hosts RFP List Making it Easy for Vendors to Find Proposals

TEXPERS has a section on its website where it publishes requests for proposals, those public documents that announce a project and invite proposals from service providers. 

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Leaders Aren't Born, They're Made

Administrators and trustees of public retirement systems must act in the best interests of their beneficiaries, exercise good faith in their duties, seek professional services, and supervise those to whom functions are assigned. To put it simply - you're a leader. 

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