Worse Than Marxism?

The investment community was bombarded last week with a paper arguing that passive investing is “worse than Marxism.”  That any putatively-serious observer can compare an investment strategy, even one he doesn’t like, with a political ideology responsible for the deaths of millions boggles the imagination, but maybe I’m just too sensitive.  The paper’s argument seems Read more […]

A simple model of aggregate dividend growth

Dividends are getting more and more into the spotlight as overall corporate earnings growth continues to face many challenges in a low inflation and relatively slowly growing world.  And, a U.S. Treasury 10-year note yield of sub-2% certainly adds interest to the dividends that can be earned from S&P 500® companies.  And, dividends may also Read more […]

Japanese Market Participants Accessing U.S. Treasuries (Part 2)

Japanese market participants looking to access U.S. Treasury bonds or any other international bond market may need to be aware of fixed income risk and currency volatility.  Depending on their investment view, Japanese market participants may choose to hedge currency risk or remain unhedged. Either way, market participants may be exposed to additional returns or Read more […]

Japanese Market Participants Accessing U.S. Treasuries (Part 1)

Since the negative interest rate policy was announced by the Bank of Japan, the yield of the S&P Japan Sovereign Bond Index has tightened 33 bps to -0.07%, as of Aug. 23, 2016.  As the quantitative and qualitative easing program continues, some Japanese market participants seek investments that diversify their portfolios.  U.S. treasury bonds have Read more […]

Lessons From Canada’s Top Pension Managers

Summary Many studies have documented the fact that market participants in many regions, including Canada, invest more in the companies from their home country than would be warranted by their country’s share of global markets.  Three of Canada’s largest and most sophisticated pension funds have cut Canadian exposure in their equity allocations.  Yet private Canadian Read more […]

Oil’s Price Rise Boosts All Equity Sectors, But One

The S&P GSCI Crude Oil Total Return is up 15.2%, its biggest six day gain, ending Aug. 18, 2016, since the six day gain of 16.1%, ending on Apr. 13, 2016.  As both the IMF (International Monetary Fund) and IEA (International Energy Agency) consider the oil price as a major input to global GDP estimates, and the IMF states the Read more […]

The VIX is Low, But Should You Fasten Your Seatbelt?

VIX has spent the whole of August below 14, and remains – at time of writing – close to its lowest levels in two years.  But the present calm may be dependent on a short-term seasonal effect; and we are approaching the traditional period where it ends. August is traditionally a quiet month for U.S. Read more […]

The CBLO Rate: Its Movements, Effects, and Future

In my blog “Introducing the CBLO Rate,” we discussed what the collateralized borrowing and lending obligations (CBLO) rate is and how the S&P BSE Liquid Rate Index would be useful for market participants.  In this post, let’s discuss the history of the CBLO rate and nature of CBLO rate movement. The repo rate is the Read more […]

Performance Trends in the U.K. Gilt and Corporate Bond Markets

On Aug. 4, 2016, the Bank of England cut its benchmark rate by 25 bps to a low of 0.25%.  This move, coupled with its announcement of a GBP 70 billion expansion of quantitative easing, with GBP 10 billion committed for the purchase of investment-grade corporate bonds, is furthering the positive performance of these asset Read more […]

Introducing the CBLO Rate

Bankers and corporate treasury managers may be facing the challenge of parking excess cash for a short period, maybe overnight, to earn some income or interest without compromising the security of the funds.  Similarly, there are many banks and corporates that need cash in the short term at the lowest possible rate.  While there are Read more […]