What the Coronavirus Inspired Market Turmoil Means for Asset Allocation
We find that spikes of risk aversion typically fail to sustain long-term outperformance on the part of Treasuries. Therefore, we believe the potential for a recovery in equities ought not to be ignored. With that said, underlying cracks remain, which could point to new market leadership.
Flow of Funds Data Indicate Underwhelming Sentiment Towards Equities
Sentiment based on flow of funds analysis suggests that stocks are poised to continue to surprise to the upside over the medium term.
CLO Risk to Create Ripple Effect in Bond Market
We are concerned that intrinsic volatility in the riskiest corporate debt tranches (packaged together as collateralized loan obligations, or CLOs) could have a ripple effect on the real economy given the importance of leveraged loans as a source of corporate funding.
The Merits of Foreign Exposure in Global Equities
Sub-sectors of equity markets in advanced economies suggest that foreign exposure is actually a blessing and not a curse, even in the current pervasive reign of trade wars.