There are 34 results for 'Capital markets'

Non-U.S. Bias Rewarded Plans in 2017

Endowments/foundations (+3.8%) performed best last quarter, followed by public plans (+3.7%), Taft-Hartley plans (+3.6%), and corporate plans (+3.5%). For all funds, the return was +3.7%, according to Callan’s database. Plans with assets below $100 million performed best by fund size, ...

Last Year Was Unusual, not Last Week

By Mark Andersen and Jay KloepferThe S&P 500 entered correction territory last week, plunging more than 10 percent in five trading days after volatility exploded on Feb. 2. Investors betting on continuing low volatility saw big losses, and markets around...

Sentiment Restored. Is It Time to Worry?

The U.S. economy closed out 2017 with decent momentum, recording a solid 2.6% gain in GDP in the fourth quarter after growth above 3% in each of the prior two quarters. Investor sentiment felt disconnected as the year unfolded; the...

Global Fixed Income Results in the 4th Quarter

In the U.S., longer-term bonds topped short-term and intermediate-maturity bonds. Investment-grade corporate debt was the best-performing fixed income sector. Returns were mostly flat in developed markets; emerging market debt delivered more muted returns than in earlier quarters.(Estimated reading time: 3...

Equity Markets in Sync Around the World

A strong quarter closed out a strong year for markets around the world, powered by synchronized global economic growth, a new tax law in the U.S., and low interest rates and inflation. Emerging markets outpaced developed markets for the fourth...

A Q&A on Our Capital Market Projections

Callan recently published our 2018 Capital Market Projections, detailing our expectations for return, volatility, and correlation for broad asset classes. These projections represent our best thinking regarding a longer-term outlook and are critical for strategic planning as our investor clients...

Treasuries for the Long Run

In the current low-return environment, institutional investors have pursued high-return objectives by increasing their exposure to equity and equity-like investments. However, with uncertain profit growth, high equity valuations, and fresh memories of the Global Financial Crisis (GFC), they are also...

Analyzing the Impact of the New Tax Law

The federal tax law overhaul signed by President Trump at the end of last year, totaling more than 800 pages, marked the first comprehensive change to the U.S. corporate and personal tax systems since 1986.(Estimated reading time: 2 min 2...

Active or Passive? Callan Data Can Help

The debate over active vs. passive management is endless, and it spans many different asset classes and investment styles. And for an issue that seems to involve cold, hard math, the discussion can get subjective and even passionate.(Estimated reading time:...

Tax Reform and the Muni Bond Market

The House passed its tax reform bill and the Senate is slated to vote on its version as early as this week. Importantly, both versions preserve the tax exemption of municipal bonds. There are common features as well as differences...

Managing Risk While Hunting for Returns

Low interest rates and low return expectations continued to drive strategic allocation discussions for fund sponsors. Many felt compelled to take on market risk to reach return targets. Sponsors are now examining if there is anything they can do to...

Why So Sad?

The disconnect sharpened in the third quarter of 2017 between the state of the underlying economy, which is pretty good, and sentiment, which is not so good, teetering on downright gloomy.(Estimated reading time: 3 min 34 sec)Geopolitical upheaval across the...

Healthy Risk Appetite Drove Global Fixed Income Yields

Global fixed income markets generally performed well in the third quarter. Moderate growth and inflation kept long-term rates low and range bound in the U.S. Rates were also low outside the U.S., but dollar weakness boosted returns.(Estimated reading time: 1...

Up, Up, Up, and Away for Global Equities

With volatility extremely low and the global economy humming along, equity markets around the world continued their steady march upward in the third quarter, part of what has been dubbed the “everything rally” as bonds and commodities have also done...

Perspectives on the Global Economy

The recent Annual Meetings of the International Monetary Fund and World Bank Group, which I attended along with thousands of global fixed income investors, policymakers from governments issuing debt, economists, and other market participants, offered a wealth of...

Happy Anniversary, Black Monday

The U.S. stock market reached a new high today, with the Dow cresting 23, 163 while the S&P 500 hit 2, 562. Thirty years ago today, on October 19, 1987, the U.S. stock market shook the global financial system to...

Uncertainty—Beyond the Next Eclipse

On August 21, 2017, a total solar eclipse swept across America. This rare celestial event involved no uncertainty, so everyone was prepared for it. In ancient times, though, civilizations that could not understand the true nature of eclipses reacted in...

What We’re Seeing From Manager Searches

Callan recently examined the trends we have seen in manager searches since 2012. Here are the highlights of our findings:(Estimated reading time: 3 min 15 sec) Non-U.S. and global equity searches are increasing while U.S. equity searches are declining Low...

Why Is Inflation So Low?

We are now eight years into the economic recovery in the U.S., arguably the latter stages of a mature expansion and at a point where inflationary pressures typically begin to build. Yet price and wage inflation remain stubbornly subdued.(Estimated reading...

Many Funds Risk Up for Returns

Fund sponsors are beginning to come to grips with lower capital market return expectations. Pension funds are reducing actuarial return assumptions, and endowments and foundations are discussing and making adjustments to spending rules. Some funds are addressing this issue by...

Hunt for Yield Drove Bonds in 2nd Quarter

In the United States, fixed income investors continued to hunt for yield in this low-interest rate environment, while non-U.S. bonds benefited from a weaker U.S. dollar. Emerging market bonds also benefited from both the hunt for yield and the dollar's...

Equities Up Around the World in 2nd Quarter

Spurred in part by recovery in Europe, non-U.S. equity markets outperformed U.S. stocks, and emerging markets topped developed markets. The Russell 3000 rose 3.0%, while the MSCI ACWI ex USA Index climbed 5.8%.U.S. Stocks: Shocks, but No SlowingDespite an increase...

Over-Inflated? PCE vs. CPI

Because of its extraordinary response to the Global Financial Crisis, investors scrutinize the actions of the Federal Open Market Committee (FOMC) more than ever. Since 2000, the Fed’s preferred measure to set its 2% target rate for inflation has been...

The Politics of Investing

While it can be risky to directly correlate political developments with market movements, a look at some aspects of the current political landscape merits investor consideration. In this blog post I will discuss the various policies under consideration by the...

First Quarter GDP: Hitch in Our Git-Along?

For the fourth year in a row, reported GDP growth disappointed in the first quarter, coming in at just 0.7%, down from a 2.1% rate in the fourth quarter and the weakest rate in three years.(Estimated reading time: 3 min...

U.S. Fixed Income: Up, Up, and Away

During the first quarter, the U.S. bond market generated positive returns across the board due in part to strong economic data and upbeat investors. U.S. fourth quarter GDP grew at an annualized rate of 2.1%, consumer spending rose 3.5%, and...

Non-U.S. Fixed Income: Separation Anxiety

Sovereign debt performed well in the first quarter amid political uncertainty about the future of the European Union (EU). Emerging market debt outperformed developed market debt for the third straight quarter as the JPM GBI-EM Global Diversified Index advanced 6.50%...

Non-U.S. Equity: Profits Trump Populism

A flurry of political skirmishes and uneven growth in Asia failed to deter non-U.S. equity investors, and the “risk-on” theme of last year continued into 2017. The weak U.S. dollar also bolstered overseas returns for U.S. investors.(Estimated reading time: 2...

U.S. Equity: Steady as She Goes

Despite concerns over the Trump administration’s ability to follow through on promises of lower taxes and decreased regulation, the market accelerated higher in the first quarter.(Estimated reading time: 2 min 27 sec)The S&P 500 Index hit a peak (2, 396) in March...

Sanguine Sentiment Fuels Risk-on Rally in Q1 2017

The risk-on theme persisted through the first quarter as improving economic data trumped elevated geopolitical uncertainty, both in the U.S. and abroad. Economies in the U.S. and Europe continued to gain traction and the U.S. entered its 93rd month of...

In Context: Market Volatility

Yesterday, equity market volatility touched off a host of headlines and commentary. Here, we present a longer-term context around market volatility.Estimated reading time: 2 min, 19 secMarket volatility can be measured in a number of ways. We address three in...

(No) News at 11:00 – Fed Raises Interest Rates

Yesterday, the Federal Reserve raised short-term interest rates in the U.S. by 25 basis points, or one-quarter of a percent. Fed Chair Janet Yellen said, “the simple message is that the economy is doing well.”Estimated reading time: 3 min 18...

Capital Market Projections 2017

Each year, Callan develops long-term capital market projections, detailing expected return, standard deviation, and correlations for major asset classes. These projections are the cornerstone for strategic planning.(Estimated reading time for this post: 1 min 45 sec)From co-authors James Van Heuit and John...

Periodic Table of Investment Returns

One glance at the crazy quilt of colors in the Periodic Table of Investment Returns suggests the challenge investors face in picking an investment class “winner” year-by-year and illustrates the benefit to diversification.