How Bond ETFs Make Trading Easier and Cheaper
Bond ETFs have attracted new investors who previously never owned bonds or bond funds. Bond ETFs have made it easier for more people and institutions to start investing in bonds.
Private Infrastructure as an Asset Class
This paper provides an introductory overview of infrastructure investing, exploring its characteristics, benefits, challenges, and potential role in a diversified portfolio.
What is Trend Following? A Painful Journey to Smarter Investing
Trend following, at its core, is a strategy where investors buy an asset when it's going up and sell when it’s going down. But unlike panic-driven investors who sell at the worst possible moment, trend followers adhere to a rules-based approach in an attempt to remove emotion from the equation.
Understanding the Stock–Bond Correlation
With over nearly 150 years of data, the study finds that when inflation and interest rates rise, stocks and bonds tend to move together, reducing diversification benefits. This has critical implications for portfolio construction and risk management.
Valuations Reflect U.S. Exceptionalism
US exceptionalism provided the same explanation for the outperformance of US stocks in the 1990s. However, that regime changed. From 2000-2007, while the S&P 500 Index returned just 1.9% per annum (underperforming riskless one-month Treasury bills by 1.3% per annum), the MSCI EAFE Index returned 5.6% per annum, and the MSCI Emerging Markets Index returned 15.3% per annum.
A New Metric for Private Equity Risk Adjusted Returns
This study improves how private equity (PE) fund performance is evaluated, which is crucial for investors making allocation decisions.
Listing Domicile Driving Valuations
The listing domicile explained about 50% of the valuation gap. In other words, US-listed stocks are substantially more expensive than internationally listed stocks for no reason other than the place of listing.
The Ability to NAV Time Interval Funds
NAV timing investors could potentially create trading strategies which would systematically transfer wealth from buy-and-hold investors to themselves.
A Navy SEAL says Making Better Decisions is SIMPLE.
The following guest piece outlines the SIMPLE framework (SIMPLE) for making better decisions. SIMPLE was developed by a Navy SEAL with combat and business experience. An application of the SIMPLE framework, applied to financial advisors, is at the end of the piece.
Local IPOs and Household Stock Market Participation
This paper seeks to address three pivotal questions that explore the broader economic and social impacts of IPO activity, particularly its role in influencing stock market participation through localized attention and wealth effects.
Is There A Bubble In Private Credit?
While the media headlines are preaching doom, the fundamentals are telling a very different story—credit spreads have widened, and EBITDA multiples are the lowest they have been in a decade. The bottom line is that for investors able to accept its limited liquidity, private, senior, secured and sponsored by private equity direct lending continues to be a compelling component of a diversified portfolio deliver what has always attracted investors: high current income, resilience through market cycles, and a disciplined approach to risk management. We are far from a bubble.
Is It Time to Ditch International Stocks?
Since 2010, the S&P 500 has beaten the International Developed market in all but three years. This led the U.S. market to outperform International Developed by an astounding 8.14% compounded per year. Wowza! Talk about pain if you’re a global investor.
DIY Trend-Following Allocations: February 2025
International equity moving from full hedge to no hedge. Commodities moving from full hedge to partial hedge. Real estate moving from partial hedge to no hedge. Intermediate bonds moving from full hedge to partial hedge.
Nine Lessons the Market Taught in 2024
In 2024 investors were provided with nine lessons. Many of them are repeats from prior years. Unfortunately, too many investors fail to learn them—they keep making the same errors.
The Impact of Impact Investing
Divestment, a commonly used strategy, involves withdrawing support from companies that contribute to these issues, with the intention of creating positive societal change. Despite its appeal, the connection between divestment actions and their actual impact on society remains unclear.
Growth Predictions, Growth Surprises, and Equity Returns
What matters is not the expectation of future growth, but the deviation between projected growth and realized growth, which, by definition is a surprise, and, thus, is not forecastable.
Artificial Intelligence and the Risks of Harking (Hypothesizing After-the-Fact)
Because AI systems can produce hundreds of seemingly coherent theoretical explanations for mined empirical results, investors need to establish high hurdles before allocating to anomaly-based strategies.
Training Machine Learning Models For Return Prediction
This paper investigates how modeling choices impact MLM outcomes such as cross-sectional return predictability.
Private Credit: Upper Versus Lower Middle Market Lending
Given the similar net returns that UMM and LMM loans have delivered, allocators should consider diversifying across borrower size cohorts. Since LLM loans are somewhat riskier, careful due diligence should be performed in terms of a lender’s credit loss history, fees/expenses, and use of leverage.
Global Factor Performance: January 2025
The following factor performance modules have been updated on our Index website.[ref]free access for financial professionals[/ref] Factor Performance Factor Premiums Factor Data Downloads