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It is a common understanding that when investing in international assets, there are two sources of risk, first, the volatility that comes from the underlying asset itself (typically equities or bonds) and second, the volatility of the currency in which the international asset is denominated versus the base currency of the portfolio.Institutional in...

Geopolitics aside, economic data outside the United States displayed modest improvement based on ‘flash’ purchasing manager surveys for Europe and Japan, which pointed to stronger activity, Quantitative easing (QE) by the European Central Bank (ECB) and Bank of Japan (BoJ) have supported both economies, although recent signs of soft inf...

The real estate industry is going through an unprecedented phase of institutionalization as it formalizes processes, outsources noncore activities and takes proactive steps to managing increased regulatory oversight. This trends report for the coming New Year provides some surprising changes in the real estate private equity market. Some of t...

While diversification remains the cornerstone of modern portfolio theory, many diversifying investments followed the direction of the equity markets when they collapsed during the recent financial crisis. This led many investors to suspect that their asset allocation frameworks needed refining. An analysis suggests these investors may be right.

While both exchange-traded funds and index separately managed accounts offer the comparatively low fees and superior pretax returns common to nearly all forms of indexing, the authors say that only SMAs can deliver sizeable return benefits to the taxable accounts of wealthy investors.

Thanks to dedicated financial infrastructure and full research coverage, local currency debt is now a plausible and enticing asset class. Fundamentals continue to improve even after being tested by the 2008-2009 financial crisis, while supporting technical factors such as increased liquidity and a broader investor base also have increased its attra...

We recently have taken an increasing interest in housing and housing-related investment opportunities. While we cannot state with certainty when the recovery will come, we see a road towards redemption and investment opportunities while the market gradually improves.

Municipal securities continue to provide yields in excess of Treasuries, despite their tax-favored status. For tax-exempt accounts, we continue to see opportunities in corporate debt, both investment grade and the highest quality non-investment grade, as well as in select international sovereign debt issues.

Multiple constraints limit the use of leverage, the nature of the assets that can be leveraged and the acceptable levels of total portfolio and asset-specific risks. These constraints can make leverage efficient for only a narrow set of portfolios. Leverage is also subject to concerns such as unanticipated capital calls and illiquidity spirals.

We recommend a baseline allocation in our asset allocations in terms of stocks versus bonds and cash, but we also recommend the following tactical allocations: leveraged loans within the bond allocation, dividend-focused stocks within the U.S. large-cap stock allocation, and an allocation of 55% value and 45% growth within U.S. large-cap equities.

Master limited partnerships offer daily liquidity, simplified tax reporting, and in some cases, the transformation of unrelated business taxable income to other income. This paper examines not only the benefits but also the implications and costs of master limited partnerships to help individuals make informed investment decisions.

Investors must be aware of the liquidity risk inherent in each asset class, establish a methodology to monitor and measure the liquidity risk premium of each asset class, and factor that into decisions about the appropriate mix of liquid and illiquid investments needed to serve their particular situation.

If inflation is going to rise globally, it will most likely surface first in emerging market countries. But this also reflects why emerging markets are so attractive in the first place – their growth outlook is more robust and output gaps (where they exist) are closing much more rapidly than in the developed world.

Fears of supply disruptions, regime change and further declines in the U.S. dollar are helping to drive oil prices higher. Yet, there seems to be sufficient capacity to offset supply shortfalls. Looking forward, fossil fuels and renewable alternatives both need to be developed to help secure our energy independence.

The recent recession has certainly had a major impact on the financial condition of most municipalities. While we believe this may lead to an increase in defaults over the next few years, we do not anticipate widespread defaults or major losses at the bondholder level. Any defaults that do occur will likely be well telegraphed and identifiable thro...