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Middle-market Stocks Can Help Portfolios Cope With Volatility

Equity markets were jolted in January amid growing concerns about macroeconomic threats. For investors seeking more stable equity allocations, stocks “in the middle,” with high-quality features and reasonable valuations, can help portfolios cope with volatility.

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Increasingly, investors are concerned about sustainability, social responsibility, and corporate governance issues

It is becoming increasingly apparent that Environmental, Social, and Governance (ESG) considerations are at the forefront of Investors’ minds. ESG and sustainability considerations are becoming a focus throughout all stages of the investment process. Considering the current events and how ESG factors are shaping the ways we live, in October, world leaders met at the United Nations Climate Change Conference in Glasgow, Scotland, to address the issue at hand. Numerous Investment Managers and hundreds of Investors have made the pledge to commit to net zero carbon. CBRE highlighted key trends influencing Investor strategies in 2021 and beyond, many with ESG considerations taking the lead. A recent study by the Harvard Business Review concluded a third of all professionally managed assets, roughly $30 trillion, are now subject to ESG criteria across the globe.[1] While the list of sustainable initiative efforts grows exponentially, Diversity, Equity, and Inclusion (DEI) initiatives are also moving to the fore in our industry.

We would like to thank Sarah Welton, Business Growth Director, at Longevity Partners and Zoe Hughes, Chief Executive Officer of NAREIM for their contributions to this article, given their extensive knowledge and expertise in the ESG space.

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Investment Safari: Growth, Inflation, Interest Rates, Valuations, and Style Are The Top Game

Blog post banner. Man looks through binoculars on African safari. Title reads: A closer look at the big five.

In the world of safaris, “the big five” are highly prized among sightseers and photographers: the lion, leopard, black rhinoceros, elephant, and buffalo. But in investing, the big five could more aptly refer to the connected categories of growth, inflation, interest rates, valuations, and style.

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In Economics, Hyperinflation is Problematic, and a Root Cause of Economic Uncertainty

True hyperinflation, marked by unfettered price increases and severe currency devaluation generally occurs during times of turmoil or war. This is a rare occurrence in developed countries. Regardless, growing inflation rates are an important dynamic to observe, and investors can smooth the yield curve by employing alternative investment strategies.

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Rising Inflation: What is the Impact on Real Estate Investments in Your Portfolio?

As inflation continues to increase, many things from grocery store items to alternative investment portfolio values will be affected. Here’s what you should be mindful of in the months ahead.

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Capitalizing on Global Listed Infrastructure Investments

The Global Listed Infrastructure (GLI) universe continues to emerge as an investment strategy for investors seeking inflation-sensitive assets with the potential to deliver equity-like returns. Alongside other real assets such as midstream MLPs, Commodities, and REITs, for example, GLI can provide additional diversification to institutional portfolios. With roughly 80 available GLI products in the universe, investors can select from a variety of approaches. The first GLI strategies were incepted in the mid-to-late 2000s and are pre-dated by unlisted infrastructure investment strategies that invested in privately-held companies and assets. Today, investors who seek the benefits of the infrastructure asset class without the liquidity constraints of the unlisted space may find an appropriate solution in GLI.

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The Forecast for Fixed Income Returns – Better Than You Might Expect

We have reached a pivotal point in both the economic and monetary policy cycle, and uncertainty for fixed income is high. The key questions on every fixed income investor’s mind are 1) where are rates going, 2) what do returns look like, and 3) what approach is best?

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U.S. Single Family Housing Market Appears Poised to Benefit from Generational Demand Surge

The demand for single-family housing in the U.S. should be exceptionally strong over the next decade due to a combination of demographic forces and lagging underinvestment in residential stock. Hines Research estimates that the market will require 17 million single-family housing starts from 2021–30. This would represent a dramatic escalation of home construction relative to any decade of the past fifty years and a generational opportunity for residential lot development.

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Banks are Finally off the Naughty List

Hark! Is that Jolly Old Saint Nick, climbing quickly to altitude in the winter night sky?

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Addressing the Environmental Challenge in the Maritime Industry

The maritime industry is a massive and critical component of the global supply chain, responsible for transporting approximately 90% of global goods and commodities,[1] as well as producing clean electricity and low-carbon food. Due to its size, the industry is responsible for approximately 3% of global CO2 emissions,[2] as well as other pollutants.

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Bitcoin's Evolution as an Inflation Hedge and Currency

2021 was an impressive year for crypto as the market, led by Bitcoin, expanded to a market cap of roughly $3 trillion, up from $800 billion at the start of the year. Bitcoin itself was able to maintain a market capitalization of over $1 trillion for several months and stands at approximately $1.1 trillion at the time of writing. While its price action throughout the year was well documented by the media, its adoption as an inflation hedge and as a currency were overlooked.

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Understanding Return Forecasts for Public DB Plans

Public defined benefit (DB) plans face intensifying pressure as modest expectations for future investment returns continue to fall short of actuarial discount rates. Post-pandemic market conditions have magnified the challenge as investment consultants continue to lower their capital markets assumptions in the face of low interest rates and rising equity market valuations, which both point to leaner future returns.

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A Framework for Mapping Modern Slavery Risk in Investment Portfolios

More than 40 million people worldwide are estimated to be victims of various forms of modern slavery, including forced labor, debt bondage and human trafficking. Forced labor alone is estimated to generate profits of US$150 billion a year for the criminals behind it.

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Sports and Healthcare Investing Have a Lot in Common

Sports and healthcare investing may not seem to have much in common—until you consider the role that defense can play in both.

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Global Economy Seems to Have Finished 2021 With a Solid Momentum

While we believe the pace of economic growth will gradually decelerate over the course of the year, we expect it will remain above-trend. Driving this solid economic activity will be three distinct forces – the consumer, inventories, and business investment.

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Survey Figures Offer Pension Managers Insight Into Holiday Economy

 

Each holiday season, the U.S. Census Bureau releases its economic rundown of holiday economic retail figures. As trustees and administrators of public employee retirement systems, keeping up with the financial market is essential. Pension funds in the U.S. hold trillions of dollars in assets and are critical economic institutions in their quests to make up for some of the loss of income for retired state and local government workers such as police and firefighters.  

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THE 'EM-ification' of DM’s

At a high level, it’s fair to say that economic and other fundamentals in developed markets (DMs) have become increasingly fragile over the past decade-plus. During that period, severe stress episodes like the global financial crisis (GFC) and the COVID-19 pandemic have spotlighted and, in some cases, accelerated this weakening of fundamentals in some countries.

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International Equities – Where Value Goes to Hide

As U.S. equities outperformed over the last decade, helped by superior earnings growth and innovation, relative valuations of international stocks have fallen steadily. In fact, the valuation differential between U.S. and international equities is at its widest since the 2008 financial crisis. With improved operating margins, beneficial structural trends, the likely capex revival, and fiscal spending, are international stocks positioned to outperform? We believe so.

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Three Keys to the Tech Growth Opportunity

In a world of scarcer growth and rising competition, the future belongs to companies that understand the transformative power of technology and successfully integrate it within their core business models. This was demonstrated and accelerated by the COVID-19 lockdowns of 2020. The outperformance of technology and technology-related companies is a powerful reminder that tech opportunity is no longer confined to hardware, software, and the internet giants. What’s more, the tech-driven growth is far from over. There’s a wide frontier ahead for new market leaders to emerge. Amid rapid technology change and adoption, our research points to three catalysts for earnings and revenue growth in the United States and globally:

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Defined Contribution Recordkeeper Consolidation Continues

Empower Retirement recently announced an agreement to acquire Prudential’s retirement plan recordkeeping business. The acquisition promises to capitalize on both firms’ experience and expertise to the benefit of retirement plan participants and plan sponsors. This announcement follows Empower’s earlier acquisitions of MassMutual’s and Fifth-Third Bank’s recordkeeping businesses and has become representative of the retirement plan recordkeeping industry over the last two decades.

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