The issue of funding an increasing pension liability is a lingering concern for many trustees and state officials. As employee contribution rates continue to increase, discount rates are declining, and municipal contributions are under pressure due to competing priorities, many plans struggle to properly manage and continue to provide benefits to employees.

Much ink has been spilled, much breath expended, and many hands have been wrung over the last decade on the lack of diversity in corporate boardrooms. That chorus only intensified over the last year as protests over racial inequity poured out into the streets of cities across the country.

Recent economic reports have prompted fears that prices in the U.S. are about to take off. Concerns that pandemic-related supply bottlenecks, combined with increased consumer demand due to unprecedented fiscal and monetary stimulus, would lead to an undesirable jump in inflation seem to be, at least preliminarily, materializing. While increasing costs have been widespread, the greatest opportunity for sustained price increases lies in the labor market and the possibility of a wage-price spiral.

• In this report we examine the impact of low rates on banks and what can they do about it. We also plan to follow up this publication with examining impact of low rates on insurance and asset management.

"Back to the Future" is the theme of the Texas Association of Public Employee Retirement Systems' 2021 Summer Educational Forum, set for Aug. 29-31 in San Antonio, Texas. 

• Although institutional investors’ allocation to publicly traded investment grade (IG) bonds is essential for liquidity and stability, yields today are historically low. The typical corporate pension fund, for example, with a fixed income allocation of close to 50%¹ and long-term performance goals averaging 6.5%,¹ faces a wide return gap to be filled.²

Although the Fed looks likely to tighten policy sooner than previously expected, the 2013 “taper tantrum” should be avoided. But tapering will still have a variety of implications for emerging markets.

Emerging markets offer attractive investment opportunities, supported by favorable economic fundamentals and a rapidly expanding middle class. But classic consumption patterns appear to be evolving, and this could have implications for emerging markets investors.

With European bank valuations at a 33-year low, let's examine why this may be this best time to invest with the right strategy.

The impact of COVID-19, which surfaced in the U.S. over a year ago, continues to shape the global economic backdrop. As a result, many investors have started to reassess their traditional allocations to better align with the opportunity set going forward.  For many credit investors, downside protection, capturing incremental yield premium and the threat of rising rates have become top of mind. To meet these goals, many have turned to the private credit asset class, specifically middle-market direct lending, which, in addition to offering these characteristics, has continued to benefit from on-going secular trends.  

We recently worked with a client as it was evaluating a passive investment in large cap U.S. equity. After a discussion about the two most common indices used to represent the large cap U.S. equity market and what would be most appropriate for this investor, a committee member made a very interesting observation: