Services Tags: Asset Allocation

2022 Investment Symposium

Friday, September 23, 2022
8:00 AM – 2:00 PM

Marquette clients – We hope you’ll join us at our annual Investment Symposium! This year’s event will be held in person in Chicago and virtually via livestream.

We’re excited to welcome Dr. Jean Twenge for our morning keynote analyzing generational differences with a focus on marketing trends among Gen Z. Marquette’s research team will then take the stage, featuring an In Context Conversation covering 2022 and beyond and three flash talks discussing timely investment topics. Rounding out the day, Ted Seides will join Nat Kellogg, Marquette’s President and Director of Manager Search, for a conversation spanning Ted’s experience, expertise, and insights from nearly three decades in the industry as our main presentation.

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AGENDA

All times in Central Time

8:00am REGISTRATION OPEN
Livestream will begin at 8:30
Breakfast served until 10:00

8:45 WELCOME REMARKS by Brian Wrubel, CEO

9:00 MORNING KEYNOTE by Dr. Jean Twenge
Professor of Psychology at San Diego State University and author of iGen: Why Today’s Super-Connected Kids Are Growing Up Less Rebellious, More Tolerant, Less Happy—and Completely Unprepared for Adulthood

10:00 Break

10:15 IN CONTEXT CONVERSATION
An Investor’s Roadmap for 2022 and Beyond
Greg Leonberger, Jessica Noviskis, David Hernandez, Evan Frazier, and Frank Valle

10:45 Break

11:00 RESEARCH FLASH TALKS
Fixed Income Alternatives: Delivering Returns in an Uncertain Environment
Brett Graffy and Chad Sheaffer

Pricing Power: The Relationship Between Inflation and ESG
Linsey Schoemehl Payne and Ibrahim Rashid

2022 Crypto Crash: Boom or Bust?
Greg Leonberger and Nic Solecki

12:00pm Lunch Break

12:45 TED SEIDES in conversation with Nat Kellogg, President, Director of Manager Search
Host of Capital Allocators Podcast; best-selling author; asset management thought leader; Founder and Former Co-CIO of Protege Partners

2:00 ADJOURN

 

VENUE DETAILS

The Union League Club
65 W. Jackson Blvd.
Chicago, IL 60604
(312) 427-7800

Can Bond Investors Outsmart the Market?

While it is generally accepted that successfully and consistently timing the equity market is a loser’s bet, the same sentiment is not heard as often in the bond market. However, timing interest rates is just as difficult as equity markets and can lead to the same patterns of underperformance over multiple market cycles. Nonetheless, the recent rate volatility may be a temptation to shorten duration in anticipation of further rate rises. The following analysis examines why this strategy could be difficult to execute successfully, and why we recommend that clients stay the course and remain invested in line with their investment policies.

Read > Can Bond Investors Outsmart the Market?

 

The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.

Flirting With a Bear Market: How Did We Get Here, and What Comes Next?

Quite simply, this has been the worst start to a year since the 1930s:

  • One of only 19 quarters since 1976 when both bonds and stocks posted negative returns;
  • One of only six of those quarters when bonds have underperformed stocks;
  • The worst four-month return for the S&P 500 since 1939.

2022 to date has featured a myriad of macroeconomic factors coming to a head: inflation at its highest level since the 1980s, the Federal Reserve responding with aggressive rate hikes, and increasing concerns about the health of the consumer leading to a possible recession. An evolving pandemic, a war in Eastern Europe, and draconian lockdown policies in the world’s second-largest economy and largest manufacturing hub have further added to the problem and complicated the solution. With these macro headwinds and uncertainties driving markets year-to-date, Marquette’s fixed income, U.S. equities, and non-U.S. equities teams discuss the impacts on their asset classes and weigh in on the outlook from here.

Read > Flirting With a Bear Market: How Did We Get Here and What Comes Next?

 

The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.

Low Volatility: Factor or Fad?

The beginning of 2022 represented a change of pace for equity investors, as increased geopolitical and macroeconomic uncertainty drove the S&P 500 to its first negative quarter in two years. In light of recent performance trends and the potential for continued asset price fluctuation, market participants may be interested in assessing the viability of strategies with lower risk profiles that still offer the potential for long-term gains similar to those of the S&P 500. One such strategy is low volatility equity investing. Though it has fallen somewhat out of favor in recent years, low volatility is a generally accepted risk premia factor (akin to value, size, quality, etc.), meaning investors can theoretically expect to earn excess returns by allocating to lower volatility equities over the long run. This newsletter seeks to understand the rationale and evidence for this premium, explain recent performance of low volatility stocks, and examine the prospects of the style going forward.

Read > Low Volatility: Factor or Fad?

 

The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.

In Context Video: Is the 60/40 Portfolio Dead Forever?

In this video, the authors of our recent white paper discuss the 60/40 model portfolio — a long-time approach to portfolio construction that generally consists of a 60% allocation to equities and a 40% allocation to fixed income. From the decades of success the 60/40 portfolio has experienced (and why) to skepticism about its future viability in light of the current low interest rate and expensive equity market environment and how organizations may still be able to meet their return targets, we seek to answer if the 60/40 portfolio’s efficiency is a thing of the past.

Marquette’s In Context series brings our latest research to your screen, with discussion led by the authors behind Marquette’s papers and newsletters. From current events and trends to portfolio strategy and the broader economic landscape, we explore the questions investors are asking with consideration and the context you need to know.

Sign up for research alerts to be notified when we publish new videos here.
For more information, questions, or feedback, please send us an email.

 

The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs. Marquette is an independent investment adviser registered under the Investment Advisers Act of 1940, as amended. Registration does not imply a certain level of skill or training. More information about Marquette including our investment strategies, fees, and objectives can be found in our ADV Part 2, which is available upon request.

Is the 60/40 Portfolio Dead Forever?

Model portfolios — or those which adhere to a specific set of guidelines surrounding asset allocation and rebalancing — are often utilized by investors because of their rules-based nature, which eliminates the need for constant monitoring. One such model is the “60/40 portfolio,” which consists of a 60% allocation to diversified equities and a 40% allocation to a broad basket of fixed income securities. Due to the imperfect correlation between stock and bond returns, the 60/40 model has enjoyed decades of success at both providing its users with strong absolute returns and suitable protection during market drawdowns. Additionally, there is an intuitive attraction of the 60/40 portfolio due to its relative simplicity of holding just stocks and bonds as its underlying investments. That said, skepticism abounds regarding the model’s viability going forward in light of the current interest rate environment and low forecasted equity returns, particularly for those investors like endowments and foundations with specified spending requirements.

The aim of this paper is to assess the effectiveness of the 60/40 model going forward and provide guidance to investors whose spending targets require an expected return that is consistent with the historical performance of 60/40 portfolios, which has typically hovered around 8%.

Read > Is the 60/40 Portfolio Dead Forever?

 

The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.

Q3 2021 Market Insights Video

This video features an in-depth analysis of the third quarter’s performance by Marquette’s research team, reviewing general themes from the quarter and risks and opportunities to monitor through the end of the year. Our Market Insights series examines the primary asset classes we cover for clients including the U.S. economy, fixed income, U.S. and non-U.S. equities, hedge funds, real estate, infrastructure, private equity, and private credit, with presentations by our research analysts and directors.

Sign up for research alerts to be notified when we publish new videos here.
For more information, questions, or feedback, please send us an email.

Q1 2021 Market Insights Video

This video features an in-depth analysis of the first quarter’s performance by Marquette’s research analysts and directors, reviewing general themes from the quarter and risks and opportunities to monitor in the coming months.

Our Market Insights series examines the primary asset classes we cover for clients including the U.S. economy, fixed income, U.S. and non-U.S. equities, hedge funds, real estate, infrastructure, private equity, and private credit, with presentations by our research analysts and directors.

Sign up for research alerts to be notified when we publish new videos here.
For more information, questions, or feedback, please send us an email.

Hedging Rising Inflation and Interest Rates

Rising inflation and interest rates have not been real issues for investors for several years, but both have remained popular topics of concern. While inflation does not appear to be an immediate risk given still depressed GDP and elevated unemployment, the size of the latest proposed $1.9 trillion COVID relief package has many thinking about future implications. Stimulus did not lead to inflation following the Global Financial Crisis, but there are a number of reasons, beyond the sheer size of this effort, that we could see greater inflationary pressures this time: more pent-up consumer demand, well-capitalized banks and healthy consumer balance sheets, de-globalization, and higher operational costs associated with the virus. And while the Federal Reserve has committed to maintaining its ultra-accommodative monetary policy until long-term inflation hits 2% (with shorter-term inflation allowed to rise moderately above 2% for some time), unless the Fed changes its stance on negative rates, rates can only go in one direction from here: up.

Like all things market-related, we do not recommend trying to time inflation or interest rates. In this newsletter, we analyze equity long/short hedge funds as an option for investors to potentially optimize their portfolio for this dynamic environment.

Read > Hedging Rising Inflation and Interest Rates

 

The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.

Marquette Speaking at Institutional Investor Redefining Fixed Income Forum 10/23

On Friday, October 23rd, Marquette will be speaking at Institutional Investor’s 6th annual Redefining Fixed Income Forum, “Opportunities & Risks: When Rates & Inflation are Low and Nothing Looks Cheap,” being held virtually. Ben Mohr will be providing introductory remarks, organizing discussion groups, and moderating two panels.

The first panel is entitled, “Re-thinking Asset Allocation in an Ultra-Low Yield Environment.” This panel will cover the implications of low yields for market participants and the bifurcation of performance expectations across fixed income sectors. In addition, the panel will survey the opportunities and risks in the securitized sector and a flexible credit approach. Lastly, the panel will discuss an alternative approach to traditional discretionary fixed income management.

The second panel is entitled, “The Risks and Opportunities in Broad vs. Niche Fixed Income Asset Classes.” This panel will explore the key risks and opportunities across broad fixed income asset classes like core bonds, bank loans, high yield bonds, and emerging markets debt versus those from niche fixed income asset classes such as CLOs, insurance-linked securities, and infrastructure debt with the backdrop of the gradual recovery from the COVID crisis and the looming U.S. presidential election. An emphasis will be placed on how allocators are currently thinking about exposures between these broad vs. niche fixed income asset classes.

For more information, please visit the Institutional Investor event page.