In a World of Member Switching, Early Release Schemes & Climate Calamities: As defined contribution (DC) plans have grown and have increasingly become the primary retirement savings vehicle, asset allocators are increasingly interested in incorporating illiquid private assets in these
Summary Q4 2021 Developments Informing Our Long-Term (10-Year) Forecasts: U.S. economic growth accelerated in the fourth quarter at an estimated annualized rate of 6.9%, taking growth for the full year to 5.5%, the strongest reading since 1984. That strong rate
Summary Q3 2021 Developments Informing Our Long-Term (10-Year) Forecasts: A robust global recovery from the pandemic-induced downturn continued in the third quarter despite speed bumps from the COVID-19 Delta variant spreading around the world. The U.S. economy grew 6.6% in
The COVID-19 pandemic has affected Florida agriculture — primarily vegetable growers who were major sellers to the food service industry. The pandemic caused many of the producers that were selling to food service companies to market their crops to grocery
Environmental changes throughout the remainder of the 21st century will undoubtedly influence economic trends. Both physical and transition climate change risks have potential consequences for long-term investors. However, precise estimates of these risks are not available. To assess the top-down,
One of the most tangible effects of climate change is already well underway – the surge in extreme weather. If there was a VIX for weather, it would be near all-time highs – and trending higher still. Exhibit 2 illustrates this greater weather volatility in …
The Future in Focus Pivoting from uncertainty to opportunity. The past 12 months have tested the world in ways that were hard to imagine last January. What started as a solid year for equities was turned upside down as the
Quarterly Outlook January 2021 The start of 2021 and the promise of broad vaccine distribution brings a sigh of relief to many. Yet, the long-term investment ramifications of the pandemic will continue to unfold over the coming years as governments
Institutional Investing in Agriculture – More than $100b AUM in Agriculture1 with $33b in Farmland(2) – Amount raised in agricultural funds doubled …
The Federal Reserve today announced an important change in its framework for conducting monetary policy in order to achieve its “statutory mandate from the Congress of promoting maximum employment, stable prices, and moderate long-term interest rates.” One of the main
Introduction Sustainable investing is under increased scrutiny, as a series of proposed and upcoming regulations start to take effect. The EU Action Plan: Financing Sustainable Growth now requires investment firms doing business in the EU to implement mandated Environmental, Social
While the coronavirus has dealt a painful blow to many of the emerging-market economies, we see the challenges arising from this episode as only one of several sets of factors likely to determine EM vulnerability and performance over the medium
Second Quarter 2020 The precipitous and devastating impact of the COVID-19 pandemic has left no doubt that global economies have entered an unprecedented recession. Investors are now left to ponder what’s next and to contemplate how deep the contraction might
What’s in your real asset portfolio? In prior research we highlighted the diversity of real assets in terms of their sensitivities to the equity and bond markets and to macroeconomic factors such as growth and inflation. We now extend our
How you just might find what you want and what you need As the defined contribution (DC) industry recognizes the need to shift its focus from accumulation to more holistic strategies designed to provide lifetime income, the challenge of portfolio
Global Outlook The outbreak of COVID-19 has quickly translated into a severe shock for the global economy and real estate markets. Near-term indicators of performance have turned sharply downward, and the situation is fast-moving. At the same time, some lessons
New Business Realities and the Implications for Investors The coronavirus pandemic has led to humanitarian, societal, business and economic crises unprecedented in their global breadth and speed – leaving governments, healthcare systems, communities, companies and families overwhelmed. Over a third
We believe the shape of a global recovery will largely depend on two non-economic factors—the future trajectory of the virus and the psychology of consumers in terms of when they might feel safe to resume near-normal activity. We place a
An LP must make many choices when investing in private markets: How to invest uncalled capital? How many funds to invest in each vintage? How to pace commitments? Is there a class of funds where skill matters more than others?
1st Quarter 2020 SIRG’s Active Management Review provides an overview of active positioning and the drivers of performance for UCITS fund universes to provide perspective on how individual fund managers compare to peer averages
The breadth of the economic shutdowns to contain the spread of the coronavirus will affect nearly every sector across the global corporate universe—some positively, but most negatively. Therefore, credit selection will be paramount to generating positive alpha going forward. Thorough,
Balancing Performance and Liquidity Investors have been increasing their allocations to private assets seeking higher returns and better portfolio diversification. However, as this allocation increases, the liquidity characteristics of their portfolios change. To address this issue we create a framework
Trending… The Fed Quickly Surpasses Its Financial Crisis Efforts By Nathan Sheets, PhD, Chief Economist and Head of Global Macroeconomic Research Over the past week or so, the Federal Reserve has rolled out an extraordinary phalanx of measures. It has
In the span of less than three months, the novel coronavirus has shuttered much of the global economy, bringing an 11-year economic expansion to an abrupt end. As our Chief Economist explains in the following pages, broad uncertainty remains regarding
All investments involve risk, including the possible loss of capital. There is no guarantee that any particular asset allocation will meet your investment objectives. The findings shown herein are derived from statistical models. Reasonable people may disagree about the appropriate
The expansion of the U.S. economy following the global financial crisis has been slower than those after previous post-war recessions. Since 2010, growth has averaged around 2.3%, compared with over 3.0% in previous expansions. But if the current business cycle
Institutional Advisory & Solutions We find that gold has not performed particularly well compared to other assets. However, there is a place for gold-related assets in institutional portfolios separate from commodities and energy equities. The role for gold lies in
QMA’s Global Multi-Asset Solutions Group Global growth in 2019 was the weakest in a decade, weighed down by an escalation of the US-China trade war, which hit manufacturing and export sectors hard. Consumer sectors, propped up by strong labor markets
Thoughts from our Chief Investment Strategist A common reaction to a year of strong fixed income returns in a late-cycle environment is that the perceived lack of value and the potential risks may soon bring a shift in sentiment that
Weekly view from the desk Although some regarded last week’s U.S. non-farm payroll report as disappointing, we regarded it as a solid indicator of what the U.S. economy needs to maintain its trend-like growth. Last year’s monthly payroll average of
The pace of global growth has slowed significantly during the past two years. After peaking at over 4% in 2017, it has softened to just above 3% at present, well below its two-decade average of nearly 3.7%.1 A number of
We believe global growth will remain moderate in 2020 (coming in around 3.25% for the year, essentially maintaining the current rate of annualized growth in 2019), thereby mitigating the imbalances and vulnerabilities (e.g., increasing inflation, sharp increases in commodity prices)
The modern firm is one of society’s most powerful inventions, with more than 50% of economic transactions taking place internally within firms rather than through market mechanisms. The decisions made by firms are major drivers of value creation and destruction
As was widely expected, the Fed cut its target range for the Fed funds rate another 25 bp to 1.50%-1.75% at its meeting on October 29- 30, 2019, citing the global backdrop and below-target inflation as reasons for the easing.
While China's growth prospects are often cast in the outlook for the trade war, some longer-term trends may provide a more appropriate gauge of China's growth going forward. Indeed, the question of debt sustainability may again come to the fore
How do you view the ESG landscape? ESG (environmental, social, governance) investing has evolved considerably over the last two decades, from simple stock-exclusion strategies to more specialized thematic, engagement and impact-oriented solutions. Despite this strategic evolution, we believe that ESG
We have relatively cautious expectations for this week’s U.S./China trade negotiations. A potential truce or de-escalation in the trade war is a “good news” card for President Trump, and he could wait for additional political developments over the next six
We have been through an extraordinary period of value factor underperformance over the last 18 months. The only comparable periods over the last 30 years are the Tech Bubble and the GFC. Historically, we would expect a very sharp reversal
Weekly view from the desk As we continue assessing global oil market conditions, key factors we’re monitoring include the restoration of the Saudi Aramco facilities’ capacity vs. actual production, the likelihood that a geopolitical risk premium remains embedded in crude
Fixed income markets contain a high proportion of investors whose goal of identifying the most attractive relative value is subverted by jurisdictional or self-imposed rules, regulations, and constraints, or is superseded by other non-economic objectives, such as accounting conventions. The
The European Central Bank (ECB) delivered a broad-based easing package in its policy meeting on Thursday. The package included a wide array of measures, most notably a cut in the key policy rate deeper into negative territory and a resumption
What is the role of real assets in institutional portfolios? To answer, we first identify the major real asset classes, both public and private, review their salient features, and measure their performance since 1996. We focus on estimating real asset
While record highs on the major equity indices make for good headlines, the year-to-date returns posted by several fixed income sectors are impressive in their own right. Fueled by the second quarter’s collapse in developed market rates, long U.S. corporates
While we’ll monitor Chairman Powell’s speech at the Jackson Hole symposium—“Challenges for Monetary Policy”— for its balance and potential dovishness, we’ll also monitor comments from other FOMC voters who may not yet share a similar view, i.e. Esther George and
As Federal Reserve officials have been signaling in recent weeks, the Fed cut its target Fed funds rate by 25 bps to a target range of 2.0%-2.25% at the policy meeting that ended on July 31, marking its first interest
Quarterly Outlook Fixed Income Overview PGIM Fixed Income Third Quarter 2019 Outlook Page | 2 While record highs on the major equity indices make for good headlines, the year-to-date returns posted by several fixed income sectors are impressive in
While we expect the ECB to formally adopt an easing bias at its policy meeting later this week, we believe a 5-10 bps cut to the central bank’s deposit rate—along with revisions to its macro forecasts—won’t occur before September. And
Global outlook In This Report The prospect of a downturn almost appears to have been factored in as an inevitability due to the length of the current real estate cycle, and sentiment is under pressure from weaker news on global
Although the Fed remained on hold at its June 2019 meeting, its statement was about as dovish as could be expected given that FOMC participants appear fairly evenly divided on the need for rate cuts going forward. The split in
