Markets have been jittery as the US presidential election approaches. The macro backdrop is shifting, with slowing economic growth and ebbing inflation meaning a cycle of monetary easing beckons. At the same time, elevated valuations for a variety of assets are causing investors to reconsider narratives around themes, such as AI investment, and consider asset […]
September 2024
When investors doubt prevailing narratives, volatility tends to increase, with pricey and leveraged markets most at risk. This was the setting in July and early August as cracks formed in the narratives around artificial intelligence (AI) growth and an economic soft landing. The loss in faith amid high valuations amplified the decline as the Japanese […]
September 2024
No, Federal Reserve rate cuts alone are unlikely to trigger sustained outperformance for Chinese equities. While the start of Fed rate cuts may help support the RMB and allow the People’s Bank of China (PBOC) to modestly ease monetary policy, it is unlikely to reaccelerate China’s economy and ease current deflationary pressures, both of which […]
August 2024
Yes. Emerging markets (EM) equities provide a fitting reminder that relative performance among asset classes varies over time, suggesting that investors maintain well-diversified portfolios to weather shifts in performance cycles. Neither the widespread underperformance of EM equities since the Global Financial Crisis (GFC)—nor a sustained period of EM outperformance—are without precedent. We are neutral on […]
August 2024
In 2023, US private equity (PE) performed better than venture capital (VC), but returns for both asset classes trailed those of the public markets, which rebounded strongly from a tough 2022. For calendar year 2023, the Cambridge Associates LLC US Private Equity Index® returned 9.3% and the Cambridge Associates LLC US Venture Capital Index® returned […]
August 2024
No, not right now. We continue to believe investors should: (1) keep equity allocations aligned with broad policy targets; (2) maintain modest overweights in less expensive areas within equities, such as developed markets value and small caps; and (3) maintain a modest overweight in long US Treasury securities within bond portfolios. The potential for continued […]
August 2024
In the years following the Global Financial Crisis (GFC), the appeal of hedge funds among institutional investors has diminished. This shift has been driven by legitimate concerns about high fees, a lack of transparency, and illiquidity. Yet, against this backdrop, hedge funds today offer a strategic opportunity for investors willing to navigate their complexities, with […]
July 2024
Yes. Inflation-linked bonds, particularly US Treasury Inflation-Protected Securities (TIPS), have become an attractive investment option, given elevated real yields and their unique diversifying characteristics. These bonds not only serve as a viable hedge against inflation but also enhance portfolio resilience in a variety of economic environments. These positive attributes make inflation-linked bonds a valuable component […]
July 2024