Services Tags: Investment Consulting

It’s Always Darkest Before the Dawn

Diversification has been said to be the only free lunch in investments. Since the inception of the Lehman/Barclays/Bloomberg Aggregate index,¹ there have been only 18 of 187 quarters (9.6% frequency) with negative returns in both the bond and equity markets, as measured by the Aggregate and S&P 500 indices, respectively. Comparable results are seen in the monthly data: Of 561 months, only 83 times did both the fixed income and equity markets deliver a negative total return (15.2% frequency). Over the last 45+ years, there has never been a calendar year that recorded negative returns in both indices, though that looks likely to change this year.

This newsletter analyzes 2022’s equity and bond market performance and the importance of diversification and discipline amid such negative momentum.

Read > It’s Always Darkest Before the Dawn

¹Actual data goes back to 1986; backfilled data back to 1976

 

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.

Picking up the Pieces: Assessing the Economic Impact of Hurricane Ian

The 2022 hurricane season is the latest headwind in a challenging year for investors. Last week, Hurricane Ian made landfall in Florida as a powerful Category 4 hurricane, unleashing heavy rains, high sustained winds, and extensive flooding along the coast. While the full extent of damages and the ultimate impact on the U.S. economy will not be known for several months, preliminary estimates indicate that Hurricane Ian will rank among the top 10 costliest storms in U.S. history. Current estimates of Hurricane Ian’s total cost — including damages and lost economic activity — range widely from $65 billion to as much as $120 billion. While several industries across the southeastern United States have been negatively impacted, Hurricane Ian’s overall impact on U.S. GDP is expected to be limited. Recent analysis by EY Parthenon, Ernst and Young’s global consulting arm, projects GDP to be reduced by 30 basis points in Q3 and 10 basis points in Q4 as a result of the hurricane. Natural disasters tend to have short-term economic consequences, with lost economic output recovered over time as federal assistance and insurance payouts allow communities to rebuild. Reconstruction efforts can also provide a temporary boost to GDP. As with other sources of uncertainty, Marquette encourages investors to maintain discipline and stick to long-term strategic allocations to best weather the market’s storms.

Print PDF> Picking up the Pieces: Assessing the Economic Impact of Hurricane Ian

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.

Amy Miller Named to Kayo’s 23 in ’23 Midwest Women in Endowments & Foundations List

Published today, Senior Research Analyst Amy Miller was named to Kayo Conference Series’ Top 23 in’23: Midwest Women in Endowments & Foundations list. “This 23 in ’23 report shines a light on endowment and foundation leaders who find investment opportunities to create financial returns that go towards an important mission. By stewarding capital for their institutions, these women create opportunities for many people, including many other women, to pursue their dreams.” For more information, visit the Kayo announcement page.

Amy has over 23 years of investment experience and currently is responsible for conducting due diligence on private equity products and managers, as well as developing macroeconomic and capital markets research. Her previous industry experience includes serving as private markets investment manager at Drexel University’s Endowment, working at various investment management firms in portfolio management and investor relations, providing operations management consulting to private equity-backed businesses, and in the public sector serving as an investment officer for a large municipal pension plan.

Livestream Videos: 2022 Investment Symposium

The presentations by our research team from Marquette’s 2022 Investment Symposium livestream on September 23rd are now available. Please feel free to reach out to any of the presenters should you have any questions.

View each talk in the player above — use the upper-right list icon to access a specific presentation.

 

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. Past performance is not indicative of future results. For full disclosure information, please refer to the end of each presentation. 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.

President Biden Appoints Kweku Obed to the Pension Benefit Guaranty Corporation Advisory Committee

Marquette Managing Director Kweku Obed, CFA, CAIA has been appointed by President Joseph R. Biden, Jr. to the Pension Benefit Guaranty Corporation (PBGC) Advisory Committee. PBGC is a federal agency created by the Employee Retirement Income Security Act of 1974 (ERISA) that protects retirement security and the retirement incomes of over 33 million American workers, retirees, and their families in private sector defined benefit pension plans.

The experience and expertise of the seven-member Advisory Committee will advise the agency on investment policy and other matters related to PBGC’s mission. In his role, Kweku will represent the interests of employers. “I am pleased to welcome the new members of the Advisory Committee,” said PBGC Director Gordon Hartogensis. “They will represent the interests of employers and the public and we look forward to working with them.”

Please visit the PBGC website for the full press release and additional information.

Halftime Market Outlook: A Mixed Bag

Last week, we hosted our “Halftime” Market Insights Webinar. As the host, my job was to introduce the analyst for each section and then summarize his or her comments before moving to the next speaker. After the fourth section, I found myself using the term “mixed bag” for the third time; it was at that moment that I knew I had my title for this letter!

Of course, “mixed bag” is an overused and unoriginal cliché to describe a perspective that features both positive and negative elements. If we focus solely on the first half of the year, it is hard to find much good news at all between negative economic growth, historically high inflation, and hefty losses in both the equity and bond markets. Even the good news is rooted in how bad things are…after all, how much longer can inflation stay above 9%? Could the equity market REALLY drop another 20% the second half of the year? Alas, our “mixed bag” descriptor admittedly relies on the assumption that conditions should improve at least somewhat for the remainder of the year, though likely not enough to reverse the damage inflicted during the first half. On an absolute and relative basis, growth and return figures should be better, but it is naïve to think that all of the bad news is behind us.

In this edition:

  • Inflation expectations
  • Consumer and business sentiment
  • The S&P 500’s worst six-month start to a year since 1970
  • Recession probability
  • The Agg’s worst start to a year ever
  • Bonds go back to being bonds

Read > Halftime Market Outlook: A Mixed Bag

 

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.

2022 Halftime Market Insights Video

This video is a recording of a live webinar held July 20th by Marquette’s research team, featuring in-depth analysis of the first half of 2022 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 and invited to future webinars.
For more information, questions, or feedback, please send us an email.

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.

________________________________________

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

Patrick McDowell Joins CFA Institute’s GIPS Standards for OCIO Working Group

Launching September 1st, CFA Institute has announced the creation of the GIPS Standards for OCIOs Working Group to provide input into the development of GIPS® standards guidance for OCIOs. Marquette’s Patrick McDowell, CPA, CAIA was selected to join the 15-member Working Group, which will be responsible for helping to identify the requirements within the GIPS® Standards for Firms that are challenging to apply to the OCIO business as well as developing a consultation paper.

Per CFA Institute, “Firms comply with the GIPS® standards to fulfill their ethical duty to fully disclose and fairly present performance, advance fair competitive practices within the industry, and respond to the demands of prospective clients and investors.” For more information about CFA Society, visit their website.

James Wesner Speaking at ALTSMIA 2022 12/12

On Monday, December 12th, James R. Wesner, CFA will be speaking at ALTSMIA, an education-focused alternative investment event developed by CFA Society Miami, CFA Society of South Florida, CAIA Association, Miami Finance Forum, and Markets Group in Miami, Florida.

Jamie will be moderating a panel entitled, “What is the Outlook on the US Real Estate Market Now,” with several industry professionals. Diversification in a U.S. real estate portfolio has been difficult in the midst of extreme uncertainty in the last two years. This panel will discuss short-term opportunities as well as who will have to wait until later in the post-COVID world for improved prospects; how a core real estate manager can access and maximize fundraising interaction, and how ESG and sustainable investing have become more accessible within the asset class. 

ALTSMIA is specifically designed to provide relevant, education-focused content for individuals who manage, advise, allocate to, or oversee alternative investments. With leading allocating and management firms, the agenda will include topics such as global asset allocation, risk management, private markets, real assets, alternative beta strategies, private equity, hedge funds, ESG, crypto, and more. For more information, please visit the event webpage.