Portfolio Management

  1. As equity drivers shift, allocations will need to change

    trueThe stock market's rise from the depths of the financial crisis has been nothing short of spectacular. Those returns, however, are largely owed to the actions of central banks.

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  1. Risk parity still can offer rewards to careful investors

    trueAfter tremendous growth over more than a decade of strong returns, risk-parity strategies recently have been struggling. Has the market run-up exposed a fatal flaw? We don't think so.

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  2. Alternative strategies for investors to position their portfolios in a rising rates environment

    trueFixed-income markets might be experiencing the calm before the storm. Rather than allowing complacency to creep in, following the normalization of markets after the significant sell-off in the second quarter of 2013, thoughtful investors should at least be thinking of how best to protect themselves ...

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  3. Upping the ante on implementation of derisking process

    trueMany ERISA pension plans are now implementing specific formulas called “glidepaths” to automatically shift funds to fixed income from growth assets as the plan's funded status increases. The goal, of course, is to reduce funded status risk — i.e., to decrease the chance plan sponsors will face ...

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  4. Emerging markets reward discipline, demand action

    trueHere we are again. Poor recent performance from emerging markets equities, and the entire asset class is under review. We heard the negativity in early 2009, just prior to that year's 78% jump. We heard it at the end of 2011, just before 2012 saw emerging markets outpace the developed world en ...

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  5. A case for high yield in a rising rate environment

    trueLast year, the fixed-income markets saw considerable volatility as participants debated whether quantitative easing was about to end — this was answered in December as the Fed began its tapering program. At the time of writing, U.S. growth dynamics remain favorable and with greater visibility on ...

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  6. Fundamentals set to take on new investing importance

    trueWith the recent announcement of Fed tapering due to start in January and the expectation of tighter U.S. dollar policy as normalization of growth gets underway, the investment landscape is likely to be transforming.

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  7. Choosing among derisking strategies is no easy task

    trueAlthough the full details of last year's landmark pension buyout deals remain largely undisclosed, one fact is abundantly clear — many plan sponsors of all shapes and sizes are eager to decide for themselves whether annuitization is the right solution for managing pension risk.

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  8. The case for emerging markets revisited

    trueSince the beginning of May, global fixed-income markets have sold off aggressively. The 10-year Treasury yields have increased almost 100 basis points, triggered by concerns that an improving U.S. economy would cause the Fed to gradually raise interest rates. The immediate consequence of this shift ...

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  9. High-yield bonds and bank loans in today's environment

    trueMany institutional investors view their high-yield bond and leveraged loan allocations separately. We believe this is a sub-optimal practice. In separating these asset classes, the investor bears the responsibility to identify and evaluate what may be subtle risk/reward changes in each class and ...

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  10. Tracking the phenomenal growth of the ETF market

    trueOver the past 15 years, the number of institutional investors that reported using exchange-traded funds or exchange-traded products increased 2,086%, rising to 3,367 institutions located in 50 countries in 2012, from 154 in 14 countries in 1997.

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  11. International small cap a missed opportunity

    trueU.S. consultants and their clients increasingly have moved to embrace global mandates in their search for diversification and return in their equity portfolio. Many of these investors already have built and maintained a sizable position in international equities.

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  12. Multifactor tilts are best bet for performance boost

    trueInvestors have successfully employed style factor tilts for more than 40 years to improve on passive capitalization-weighted equity portfolios. Empirical studies of popular style tilts like value, small size and momentum repeatedly have been shown to outperform benchmarks across most global ...

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  13. Risk parity in a rising-rates regime

    trueRising interest rates are causing anxiety about risk-parity strategies that may carry leveraged bond positions.

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