For the five years ending in 2013, U.S. public equity markets returned between 16% and 23% annually. In one of the strongest ever periods for equity markets, investors' portfolios benefitted from core equity investments while allocations to anything else became a drag on performance and an opportunity cost for portfolios. Alternativ...
This article addresses the nature and causes of low volatility, what developments might upset market equilibrium, what history tells us about this phenomenon, and how investors might prepare for periods of greater fluctuation in asset values.
With broad equity markets performing exceptionally well over the last five years, there has been much debate over the benefits of active versus passive investment strategies. As strong proponents of fundamental investing, we have long believed that well-executed, actively managed strategies outperform passive index-based approaches over full market...
With bonds providing so little yield in today's market, should life insurance be viewed as an investment? Whether or not you view insurance as an "asset class," permanent life insurance is definitely an asset, and it can help investors achieve their long-term financial goals. Thoughtful coordination of insurance and invest...
We believe recent volatility in high yield bonds is largely the result of fund flows – not fundamentals or widespread credit concerns. It is an example of inefficiency in the high yield market, as technicals are important for the short-term but fundamentals matter in the end.
Rising rates can spook bond investors, since rates and bond values are inversely related. As a result, investors sometimes sell following a sharp price decline, hoping to reinvest as the market recovers, effectively “selling low.”
Unlike corporations, municipalities are perpetual entities that cannot be liquidated through bankruptcy. Thus, Chapter 9 of the Bankruptcy Code is dedicated to the unique circumstances of municipalities. This report explains the key components of Chapter 9, identifies entities eligible to file, reviews state actions to deter future filings by local...
In prior rising rate environments, various parts of the municipal yield curve reacted differently based on economic conditions and the pace and scale of Fed activity. An analysis of historical changes in monetary policy shows that in the past three rising rate environments, a hypothetical investor who stayed the course through the tightening ...
The process to execute and close deals continues to challenge investors flush with cash. The trend in deal volume over the last several quarters brings this to light. Nevertheless, the M&A community continues to churn with activity as buyers and sellers try to create mutually beneficial outcomes. Whether you are a buyer or seller, the featured ...
Despite continued geopolitical instability and the media’s newfound focus on jihadist terror, equities rallied during the month on optimism that monetary policies among major central banks will continue to be quite supportive. U.S. corporate earnings for the second quarter of 2014 also came in stronger than expected, with the S&P 500 earn...
The fixed income environment is changing, and as a result we believe opportunistic fixed income strategies with the flexibility to go anywhere are better suited to today’s market realities than traditional, duration-heavy core holdings. But because these strategies come in different shapes and sizes, we think it is important for investors to ...
The tightening of regulations around the world is prompting banks to offload a variety of financial assets onto the capital markets. Investors are aware of this opportunity. However, we think that many hold misconceptions about it because of the opaque nature of the disintermediation process, and the unfamiliar and heterogeneous nature of the asset...
The UK has delivered a remarkable cyclical upswing over the past year; with GDP growing at an average pace of over 3% annualised growth for 5 quarters in a row. This has been the result of extraordinary policy support both on the monetary side (low base rate policy and quantitative easing) and fiscal policy (smaller fiscal drag, Help to Buy scheme)...
Investment advisers often contract with subadvisers to obtain special investment expertise and sometimes outsource important operations or compliance-related functions to service providers. Outsourcing often provides cost-effective solutions but comes with its own compliance obligations, notably initial and on-going due diligence.
Employee Stock Ownership Plans, or ESOPs, have been used as succession planning tools for family-owned businesses for 40 years. Ownership succession planning is critically important in a family-owned business. There are many issues to review in succession planning and an ESOP should always be considered. An ESOP may be the ideal solution for the co...