China is set to overtake the US as the world’s largest economy in less than a decade, but its currency, the renminbi, still accounts for just a tiny fraction of global trade settlement. While there’s a long way to go before it’s viable as a global reserve currency, we think that the renminbi will challenge the US dollar’s dominance in the Asia-Pacific region sooner than many expect. (more…)
Several key indicators have bolstered our confidence in the outlook for equities, as my colleague Kevin Simms explained in an article first published on Institutional Investor.com. (more…)
One of the greatest challenges facing money managers in the aftermath of 2008 has been how to balance the fear of loss against the need to take risk in order to generate positive real returns. Striking the right balance between them will, I believe, be the key to investment success in 2012. (more…)
This spring and early summer will be a busy time for US defined contribution plan sponsors and providers, but to a good end: greater clarity on services and fees.
The prospect of currency gains has long been a key attraction for investors seeking exposure to Chinese assets. But this week, The People’s Bank of China said China’s currency, the renminbi, was now close to its “equilibrium value.” We think the currency’s appreciation is far from over, as my colleague Anthony Chan explains below.
The financial crisis of the last four years has damaged the financial conditions of cities and states—and municipal bond insurers. In our view, this has increased the value of research and undermined individual investors’ classic approach to municipal bonds: laddering. My colleague Guy Davidson explains why, below and in the Reuters muniland blog. (more…)
With interest rates at historic lows and the number of risk-free assets in the world shrinking, sovereign bonds are becoming an increasingly risky and complex asset class. In this environment, tethering portfolios to benchmark bond indices is fraught with problems.
Risk-taking is an important component of an economic recovery, as it unlocks spending and investment power that is pent up during a downturn. But two and a half years since the US recession ended, individual investors are still playing it safe. (more…)
Mexican equities have far outperformed Chinese equities over the past 20 years, although China’s economy has left Mexico’s in the dust. Why? China managed its currency tightly, Mexico did not. For more on the relationship between GDP growth and equities—and the investment implications—see my colleague Morgan Harting’s guest post on FT.com.
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High-yield exchange-traded funds (ETFs) have been growing like gangbusters in recent months, despite continued weak performance relative to the indices that they track. While these instruments make sense for investors who make rapid, tactical trades into and out of the asset class, we think they’re a poor choice for those seeking to gain long-term exposure to high-yield bonds. Below, my colleagues Ashish Shah and Gershon Distenfeld explain why. (more…)