Risk Contributions of Equity/Bond Asset Allocation Portfolios

In a prior post, we reviewed the risk and returns of portfolios with different equity and fixed income combinations. We saw that while equities outperformed fixed income during the period studied, fixed income had a higher risk-adjusted return ratio (annualized return divided by annualized risk). Due to the low return correlation between the two asset Read more […]

Getting Smarter About Saving for College: Part 2

The stunning statistics on rising college tuition shown in Getting Smarter About Saving For College: Part 1 have led to a need for better ways to save for college.  To meet this demand, S&P Dow Jones Indices launched a new index based on research showing how tuition inflation is dependent on general inflation (linked bonds), Read more […]

Getting Smarter About Saving For College: Part 1

Did you know there is now about $620 billion more of student loan debt than total U.S. credit card debt? Here are some more astounding statistics highlighted in our new paper: The average student loan debt for 2017 graduates was $39,400, up 6% from the prior year. About 44 million borrowers owe a total of $1.48 trillion in Read more […]

Asset Class Correlations Affect Portfolio Volatility and Return

In recent years, the term “risk parity” has become a catch-all phrase to describe strategies that attempt to allocate based on risk. The launch of the S&P Risk Parity Indices last week is a testament to the proliferation and the popularity of the style. As we noted in a prior blog, there is a lack Read more […]

Benchmarking Risk Parity Strategies

Since the launch of the first risk parity fund—Bridgewater’s All Weather fund—in 1996, many investment firms have begun offering risk parity funds to their clients. Risk parity funds became especially popular in the aftermath of the 2008 global financial crisis, when many investors witnessed the failure by traditional U.S. dollar-based asset allocation to provide downside Read more […]

A Glance at the Performance of Emerging ASEAN Markets

In our previous blog, The Growth of Emerging ASEAN, we discussed why market participants are showing increased interest in this region. In this post, let’s take a deeper look at how the emerging ASEAN equity markets—consisting of Indonesia, Malaysia, Philippines, Thailand, and Vietnam—performed historically. The emerging ASEAN equity markets collectively outperformed the Brazil, Russia, India, Read more […]

Growth Is Still Hot Only In Small Caps

In July, the total return of the S&P SmallCap 600 Growth was 3.75%, which was 1.15% higher than the total return of 2.60% generated by the S&P SmallCap 600 Value.  This is interesting since typically growth does not outperform value in small caps when value outperforms growth in large and mid caps.  (In July, the total Read more […]

The Importance of Sector Diversification in a Yield-Focused Strategy – Part II

In our previous blog (The Importance of Sector Diversification in a Yield-Focused Strategy – Part I), we highlighted that sector biases in an unconstrained yield strategy could detract from portfolio returns. In this blog, we will show that addressing the sector concentration issue can improve risk-adjusted returns. We constructed three sector-diversified portfolios—the dividend yield portfolio, Read more […]

Proactive Fiscal Policy to Be More Proactive: Takeaways From China’s State Council Executive Meeting on July 23, 2018

On July 23, 2018, China’s state council executive meeting hosted by Premier Li Keqiang announced that fiscal and monetary policy will be further fine-tuned to boost domestic demand. The meeting reiterated that China will strike a balance between “easing and tightening” and keep liquidity “reasonable and sufficient.” It was also stressed that China will not Read more […]

Why is the GICS Telecommunications Sector Becoming the Communication Services Sector?

With the number of telecom companies shrinking, it is clear that communications is much bigger than telecom – Communication Services includes any content delivered on networks.  The old Telecommunications Sector was vanishing because it was missing new and popular ways people communicate now. GICS – the Global Industry Classification Standard – is widely used to Read more […]