Fixed Income

Bonds May Not Be Loved, But They Shouldn’t Be Forgotten

Posted by Roman Moravec, James Meisner, Vincent Kravec on Jan 10, 2018

Topic: Asset Allocation | Fixed Income | Investment Strategy

Most institutional portfolios have strategic allocations to core (investment grade) fixed income, and for good reasons. Core fixed income can serve as an anchor during times when risk assets such as equities and lower grade credit are under assault.

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Year-End Update and 2018 Outlook | Rational Resiliency

Posted by Catherine Keating on Dec 14, 2017

Topic: Asset Allocation | Equities | Fixed Income | Governance and Policy | Industry Knowledge | Investment Strategy

As we come to the end of 2017 and look forward to 2018, we are approaching the tenth year of the post-crisis recovery. With synchronized global growth for the first time in a decade, equity markets near all-time highs, and a year of strong double-digit portfolio returns, investors should be feeling exuberant. And yet we find the exuberance of most institutions with whom we work tempered by concerns about the future.

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Thoughts on the Role of Credit in Institutional Portfolios

Posted by James Meisner, Vincent Kravec on Jun 14, 2017

Topic: Asset Allocation | Fixed Income

While most institutional portfolios have allocations to investment grade corporate credit, as a strategic allocation high yield and emerging market credit (liquid credit) are sometimes overlooked. Yet these sectors can deliver attractive performance relative to other asset classes over long time periods with the potential for strong cash flow and diversification benefits as well.

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The Crowded Liquidity Trade

Posted by Ryan Driscoll, Jon Speare, Michael Strauss on Apr 10, 2017

Topic: Fixed Income | Investment Strategy | Operating Assets

Over the past few months, we have seen a massive shift of investor assets from prime to government money market funds in response to post-crisis regulatory amendments that have been years in the making. Surprisingly, the market reaction happened quickly and dramatically, even though the changes were widely known. In October 2016, SEC rule amendments were implemented to prevent the possibility of cash investments, specifically prime money market mutual funds, from “breaking the buck” and resulting in liquidity panics in the future.

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Taking Chips off the Table

Posted by Ryan Driscoll, Michael Strauss on Feb 22, 2017

Topic: Equities | Fixed Income | Market Commentary

The question we are often asked is…when should investors begin to take chips off the table? The S&P 500 Index has delivered a 16+ percentage point relative gain compared to the Bloomberg Barclays Aggregate Bond Index since the start of this fiscal year. Near term, we may see a return to a choppy market where stocks still best bonds but with a smaller differential.

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Private Credit Opportunities

Posted by James Meisner, Vincent Kravec on Feb 8, 2017

Topic: Asset Allocation | Fixed Income | Investment Strategy

Much has been made of the challenges endowment, foundation and nonprofit investors face in achieving a CPI+ five percent return target. One way to improve the probability of attaining this goal is to take advantage of the so-called “liquidity premium.”

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Active vs. passive: There is no debate

Posted by Mark J.P. Anson on Jan 31, 2017

Topic: Asset Allocation | Equities | Fixed Income | Investment Strategy | Risk Management

Like King Kong vs. Godzilla, the investment debate of active vs. passive continues. I really enjoyed those cheesy old movies from Japan that pitted the two big monsters of science fiction. But as I recall, there was never a clear winner: Sometimes King Kong won the battle, sometimes Godzilla.

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Where Did Our Operating Income Go?

Posted by Ryan Driscoll, Jon Speare, Michael Strauss on Sep 15, 2016

Topic: Fixed Income | Governance and Policy | Industry Knowledge | Operating Assets

Treasury managers face a new challenge to an old problem. Their institutions historically have relied on operating income to provide a necessary influx to operating budgets. Prior to 2008, risk free or minimal risk investments provided support for operations with returns that are currently unimaginable. The concept of a risk-free instrument yielding anything significantly above 0% in the future does not take into account the post crisis world of capital markets, specifically cash markets. So, the world of five percent cash returns is gone, and has little chance of re-emerging. This leaves a shortfall in how treasury managers balance budgets and fund capital initiatives going forward.

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Global Bonds – Not what they used to be

Posted by James Meisner, Vincent Kravec on Jul 28, 2016

Topic: Fixed Income

A constant topic of conversation in the financial media in recent years has been the degree to which central bank intervention across the globe has suppressed volatility in the markets and has caused global bond yields to fall to historically low levels. Some market veterans with a long-term perspective shake their heads in disbelief at current levels, warning others like a modern-day Cassandra, that bond investors will be in for a world of hurt once yields begin to rise.

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Xchange Webcast: Risk, Return and Volatility

Posted by Mark J.P. Anson on Mar 22, 2016

Topic: Asset Allocation | Equities | Fixed Income | Investment Strategy | Market Commentary | Risk Management

Xchange Webcast: Risk, Return and Volatility with Chief Investment Officer Mark Anson

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Global Economic & Investment Outlook:
2016 – A Year of Transition

Posted by Commonfund on Jan 4, 2016

Topic: Asset Allocation | Equities | Fixed Income | Hedge Funds | Market Commentary | Private Capital

Our 2016 Global Economic and Investment Outlook provides a detailed look at our expectations and portfolio positioning going forward.

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Much Ado About Nothing

Posted by Michael Strauss on Nov 4, 2015

Topic: Equities | Fixed Income | Market Commentary

Market pundits are obsessing over the timing of the Fed move on interest rates with increasing divergence on “when” but not “if”. The reality is that this timing doesn’t really matter – whether it be December, March or somewhere in between.

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Managing Operating Assets: Part II
Market Environment

Posted by Jon Speare on Aug 13, 2015

Topic: Fixed Income | Operating Assets

In our last article, we discussed the changing structure of liquidity products available to investors. Now, we will revisit the topic and take a look at events that could potentially impact the short-term investment markets over the next 12 to 18 months.

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Managing Operating Assets: Part I
Clarity in Liquidity

Posted by Jon Speare on Apr 5, 2015

Topic: Fixed Income | Operating Assets

Since the fallout of the 2008 Financial Crisis, Cash Investors have been waiting for a “new normal” environment, which would replace the recent period of zero yields and uncertain regulatory reforms. The past five years have proven to be an interim “healing” timeframe where monetary policy from the Federal Reserve and evolving sanctions from regulators focused on the improvement of financial institutions’ capital structures. The consequences for institutional investors were highly uncertain risk/return characteristics for cash and liquidity investments.

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Subscribe and Manage Your Frequency to Insights Blog

Posted by Commonfund on Jan 5, 2014

Topic: Asset Allocation | Equities | Fixed Income | Governance and Policy | Hedge Funds | Industry Knowledge | Market Commentary | Operating Assets | Outsourced Investing | People | Private Capital | Responsible Investing | Risk Management

Subscribe to the Insights Blog from Commonfund to stay informed with the latest information for nonprofit investors and the public sector.

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