No, we do not believe that is generally the case. While the recent wild ride of a few companies’ share prices was novel in that it was coordinated by retail investors on the social media platform Reddit, the short coverings that contributed to the price spikes were all too familiar to long-time investors.
February 2021
Yes, because rising concentration reflects rising valuations for the largest stocks, which are likely to serve as a headwind to index returns. Further, the growing market share of these companies increases the potential for rising regulatory oversight.
February 2021
Investors have predominantly relied on developed markets sovereign bonds for defense in balanced portfolios, but low rates have diminished their diversification characteristics.
January 2021
Investors are facing a challenging period for earning what they spend and achieving adequate portfolio diversification. With most DM sovereign bond yields near or below zero, expected returns for bonds are at all-time lows and diversification qualities are constrained. In this edition of VantagePoint, we evaluate defense and diversification options to identify a modern approach to diversification in this low-yield era.
January 2021
As Joe Biden is inaugurated as the 46th president of the United States, and his party holds a majority—albeit slim—in Congress, we believe his key policy initiatives will provide a supportive backdrop for risk assets in 2021.
January 2021
As 2020 comes to a close, we expect some key investment drivers to persist into next year. While our views speak to many different challenges confronting investors, including the poor bond yields on offer, the fate of US-China relations, and where to find growth, they are rooted in the belief that 2021 will be a year of healing for the global economy.
December 2020
Interest in China’s onshore bond market has been rising steadily since the market was thrown open to foreign investors. Yet foreign holdings remain relatively low. We think the market warrants further attention from global investors, given Chinese bonds continue to offer higher yields and lower correlations than those found in other major bond markets, with the potential to bring portfolio diversification benefits.
November 2020
As many had expected, the US presidential election turned into more of a process than an event. Whatever the outcome, history has shown that markets are fairly agnostic to which political party holds power in the United States.
November 2020