As China’s leaders scramble to contain the COVID-19 epidemic, the global community braces for impact to China’s people, equity and bond markets, and economy.
Investors who want bigger returns from their high-yield strategies should consider a global approach.
As China steps up efforts to achieve technological independence, there may be a silver lining for some global companies in the sector.
Merger arbitrage can create highly attractive returns. But there’s a big problem: hedge-fund managers typically take 30%–50% in fees. We advocate a smarter way to approach merger arbitrage investing, with much lower fees.
The Wall Street Journal criticized ESG portfolios earlier this month for being dominated by big technology stocks. But we think technology stocks are integral to a responsible investing agenda when chosen as part of a well-defined process targeting companies that foster environmental, social and governance (ESG) improvements.
Growing fears about the coronavirus have hit Chinese stocks. While markets will remain unstable until China gets the outbreak under control, equity investors should revisit lessons from previous epidemics and consider the potential longer-term effects of the current crisis.
Late in 2019, Chile, Colombia and Peru saw an uptick in political turmoil that was unusual, given that they’re perceived as politically stable countries with “market-friendly” policies. With several key elections on tap in 2020, we’re watching closely for potential risk flare-ups.
One way for high-yield investors to gauge how their bonds may fare down the road has been with this simple, accessible and historically accurate tool.
At long last, the UK has left the European Union (EU). But now tough and unpredictable negotiations lie ahead. In our view, the probability that they end in a negative short-term economic outcome is greater than 50%.
US healthcare is always a political hot potato, and volatility is expected to rise as the November elections approach. But investors can find good opportunities in the sector in companies with strong long-term business drivers that are relatively immune to political noise.
ESG investors, take note: a controversial new bond format that links a company’s sustainability goals to its bottom line could be a game changer.
With US equities trading at relatively high valuations, earnings growth will be essential for investors to generate returns in 2020. That’s a tall order in today’s environment. Finding standout companies with sustainable growth potential will be especially important.
Late-cycle markets can unnerve high-income investors. But we see ways to generate a healthy level of income while potentially decreasing overall portfolio volatility.
As we enter a period of lower growth globally, investors have given higher valuations to companies that can achieve consistent growth. This seems logical, but are we in danger of overpaying?
The outlook for the muni market is favorable for 2020, but investors should be prepared for twists and turns. Staying flexible can help keep investors on track.
A virus is spreading across China, causing disruption, severe illness and even death. In addition to the tragic human cost of an epidemic, widespread disease can cause significant macroeconomic damage. We estimate the potential impact of the Wuhan coronavirus on China’s GDP growth.
The last decade produced great performance across most asset classes. But in the 2020s, we expect investment market returns will be lower and risk harder to manage. Looking forward, a disciplined multi-asset approach will be especially valuable to identify opportunities and help mitigate setbacks.
In a low-yield, late-cycle environment, the right mix of credit securities and government bonds can help fixed-income investors boost income and tame volatility.
Even as global stocks climbed in 2019, market volatility persisted. By some measures, lower-volatility stocks now look quite expensive. But in fact, high-quality stocks that can help protect portfolios can be found at reasonable prices, if you know where to look.
The US and China formally signed a phase-one trade deal Wednesday after several months of negotiations. We see the deal as a near-term positive for markets—but it also leaves the thorniest issues between the two countries unresolved.
So as we stand today, the opportunity in value stocks is quite significant. The spread between value and growth stocks is as wide as it’s been at any point in the last almost 20 years.
With bond yields near record lows, can fixed-income markets generate solid returns in 2020 without forcing investors to take too much risk? From a fraught geopolitical landscape to a global slowdown, we assess today’s biggest challenges—and opportunities.
Global stock markets rallied in 2019, defying political and macroeconomic uncertainty. Will investors be as fortunate in 2020? Since many risks remain, maintaining style diversity and finding investing themes that are detached from volatility drivers will be important ingredients for equity allocations.
With the likely passage of the SECURE Act within the new government appropriations bill, annuities will gain safe harbor protections. This—and presumed cost concerns—has been a sticking point making some plan sponsors hesitate to offer a lifetime income solution in their defined contribution plans.
The US Fed held rates steady in December and plans to continue that stance through 2020. But a lot can happen to change the Fed’s mind—after all, it entered 2019 expecting to hike rates and ended up with three cuts. What does 2020 have in store?
Now that the US and China have agreed to begin easing trade tensions, the fog over China’s markets is starting to lift. Investors should consider Chinese equity opportunities that have been overlooked because of tariff fears.
After a decisive victory in the UK’s general election, Prime Minister Boris Johnson has a strong mandate to “get Brexit done.” But the eventual shape of his Brexit deal is still far from clear.
Environmentally minded investors, take note: a controversial new bond format that links a company’s sustainability goals to its bottom line could be a game changer in building a more sustainable future.
Investors continue to question whether US equity valuations are too high, particularly for growth companies and versus other global markets. But standard valuation metrics don’t tell the whole story. Understanding the cost of capital can provide essential insight on valuing stocks.
After a series of disappointing initial public offerings (IPOs), private and public equity investors are becoming more discerning about earnings. And for good reason. Profitable companies outperform by a wide margin over time, even among high-growth companies, which often post losses early in their lifecycles.
Many investors are somewhat skittish about illiquid alternatives because they’re worried about tying up their money for a long time in an investment that they can’t trade or exchange easily. However, illiquidity may actually work to investors’ advantage.
As big tech and media companies face growing concern about the power of their businesses, more questions about environmental, social and governance (ESG) issues are likely to be raised. Social and governance issues deserve greater attention amid increasing regulatory scrutiny of industry giants.
Black Friday is around the corner. Will US shoppers head to the mall? Or are malls out of fashion for good? The debate about the retail apocalypse is playing out in a single bond index.
European stocks have outperformed US equity markets in recent months, after several years of underperformance. Is this the start of a longer trend? It’s too soon to say, but some unfolding developments could signal a reversal of fortune for a long-unloved asset class.
The Fed has signaled it is unlikely to cut interest rates again in December, but we expect further rate cuts next year. We believe the Fed has not yet done enough to protect the economy against headwinds. While we don’t forecast a US recession, we think additional monetary policy easing will be needed to stabilize growth.
It’s easy to overlook government bonds today with yields so low. But their interest-rate sensitivity, or duration, can provide vital protection when riskier assets such as stocks and credit struggle.
Today, ESG issues may be more prominent in investors’ minds and approaches, but quality investors have been asking these questions for some time.
Investors are increasingly asking whether the macroeconomic growth cycle still exists, and, if so, where are we in it? The answers to these important questions have real implications for the way equity investors should think about their portfolios.
There’s growing evidence that private equity markets are beginning to overheat after several high-profile IPO flops. Investors in stocks should pay attention because private funding troubles are also a very public market affair.
It’s easy to get spooked in late-cycle markets. But we think there’s a way to de-risk your portfolio and still generate a decent level of income—no magic spells necessary.
US value stocks staged a strong recovery in September after an extended period of underperformance. While value slipped again in early October, we’re monitoring four signals that might indicate whether we’re on the cusp of a bigger value rebound.
The market is moving very quickly. I can’t say that there’s one aspect that we’re looking at, but one thing I will tell you that I do believe is that we’re a Tweet away from—fill in the blank. It’s just the world that we’re living in at this point.
As defined contribution (DC) plan sponsors know, the US Department of Labor recommends considering both packaged and custom target-date strategies when choosing a solution. As we see it, packaged solutions can learn a few things from fully customized target-date solutions, which are generally used by large and megasize plan sponsors.
Alternative investments have the potential to enhance portfolio returns and reduce risk, but it isn’t easy to determine which alternative works best—and how much of it to own. To get accurate answers, it’s necessary to look beyond traditional asset-allocation approaches.
As economic cycles enter their later stages, investors sometimes find that they’re taking too much risk to generate income. There’s a strategy that can help—and we think now is the time to use it.
Despite the municipal market’s strong year-to-date rally, an aging US expansion and low yields continue to top municipal investors’ concerns as we enter the home stretch of 2019. When conditions are evolving and visibility is limited, active and flexible strategies can help balance risk and reward.
Global stocks advanced in the third quarter, but investor sentiment wobbled amid puzzling signals on macroeconomic growth and monetary policy. Political uncertainty and a cloudier outlook point to more volatility, which should compel investors to intensify their focus on stock fundamentals.
As the People’s Republic of China (PRC) celebrates its 70th anniversary, manufacturing data shows that factories in the world’s second largest economy improved marginally in September, despite the impact of the ongoing U.S.-China trade war.
