Ethereum's Merge Is a Transformational Event, but Don't Expect Digital Assets Prices to Come Out of Their Slump

A major Ethereum blockchain software upgrade was successfully completed earlier today, marking a landmark event for the digital assets industry. The upgrade, known as the “merge,” changes how transactions are verified on Ethereum’s blockchain and dramatically improves its energy efficiency. While this is welcome news, we doubt this means the rout in digital assets prices […]

September 2022

Do Renewed COVID-19 Lockdowns in China Change the Outlook for Chinese Equities?

No. Despite the recent spate of lockdowns in China, we still anticipate some form of easing of the current zero-COVID policy and increased support for the economy following the Party Congress in October. This will ultimately drive a rebound in the Chinese economy and allow Chinese equities to outperform global equities. While the timing and […]

September 2022

Does the Inflation Reduction Act Increase the Attractiveness of Clean Energy Investments?

Yes. The Inflation Reduction Act (IRA) will generate significant benefits for companies involved in clean energy. The bill is anticipated to provide almost $370 billion over the next decade to a variety of industries, including utilities, transportation, and manufacturers of products such as batteries and solar components. The ten-year life of these tax credits provides […]

August 2022

The Growing Importance of Asia Equity Long/Short

Equity long/short investing is one of the most widely adopted strategies by hedge fund managers in Asia. Its importance has increased over time, and we believe that this strategy can play a key role within a global hedge fund portfolio. There have been several positive developments in recent years that build the case for investors […]

August 2022

Do Municipal Bonds Still Have a Role to Play in Taxable Portfolios?

Yes. Munis still have value on an after-tax basis over the long term, and their near-term outlook has improved following the rise in yields and spreads during this year’s sell-off. Still, the economic and policy backdrop remains challenging. Thus, we believe it is reasonable for most taxable investors to hold a reduced portion of their […]

August 2022

Should Investors Start Adding High-Yield Bonds and Loans to Portfolios Given the Recent Sell-Off?

No, as the risk/reward remains uncompelling and spreads may widen further if a recession ensues. However, the sell-off has enhanced our enthusiasm for collateralized loan obligation (CLO) debt, which offers attractive pricing, solid fundamentals, and lower interest rate sensitivity than most other credit investments. Prices for most credit assets have declined in 2022, as have […]

July 2022

VantagePoint: Have US Equities Hit Bottom?

US equities have entered official bear market territory with a more than 20% price decline. Some markets have seen sharper drops with speculative tech stocks (e.g., the Ark Innovation ETF) falling more than 75% from early 2021 peaks and many crypto assets seeing similar declines. Given the uncertain economic and profit environment, have markets bottomed […]

July 2022

Should Investors Underweight Emerging Markets Equities Today?

No. Emerging markets (EM) equities face a challenging macroeconomic environment, but many of the same issues are also plaguing their developed markets (DM) peers. We think EM allocations outside of China should be in line with policy, given that the risk of a widespread EM debt crisis is low, valuations relative to DM peers are […]

June 2022