Services Tags: Investment Consulting

An Investor’s Holiday Wish List

Hopefully not another year of coal
In the spirit of holiday fun — and an effort to put 2022 investment returns behind us — we have put together our investor wish list for 2023. We have broken the wish list into two categories: the “must-haves,” which carry the most weight and are most observable, and the “stocking stuffers,” which may not be headline grabbers but are nonetheless impactful across economies and markets. Predictably, the “must-have” items focus on a reversal of the major trends that drove the markets this year; we “must have” a better outlook across at least some of these topics. The “stocking stuffers” category is a variety of topics that either directly impact the major trends from 2022 or are more targeted with their impact on specific asset classes. And while we recognize this is not an exhaustive list, we feel strongly that if these wishes come true we can all feel better about market returns in 2023.

This year’s must-haves:

  • Lower inflation
  • Less aggressive Fed policy leads to fewer interest rate hikes in 2023
  • Avoid a deep recession
  • Resolution of geopolitical conflicts

And stocking stuffers:

  • Broad-based earnings in the U.S. stock market
  • A weaker U.S. dollar
  • Credit defaults start to flatline
  • Slowdowns in hiring and wage growth
  • Favorable news out of China
  • History repeats itself

Read > An Investor’s Holiday Wish List

 

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.

International Equities: Waitin’ on a Sunny Day

In recent years, international stocks have underperformed their domestic counterparts by a significant margin. Specifically, the MSCI ACWI ex-US index has compounded annual returns at just 3.3% over the last decade through the end of October, compared to an annualized return of 12.8% for the S&P 500 index. This current stretch marks the longest period of relative outperformance on a trailing 5-year basis for either index since the early 2000s.

This newsletter examines a host of factors that have contributed to this pattern of performance, including differences in composition between U.S. and international equity indices, currency movements, and geopolitics and analyzes the diversification benefits of international equity allocations within portfolios despite performance challenges.

Read > International Equities: Waitin’ on a Sunny Day

 

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.

Emerging Markets: Why Your Active Manager May Be Underperforming

2022 has been a challenging year for investors as both bonds and equities have produced substantial losses. This unusual environment is the product of a kaleidoscope of macro headwinds that have unfolded throughout the year. Against this backdrop, active emerging markets equity managers have generally failed to protect to the downside, with the average manager underperforming the index year to date through September.

There are several potential reasons why active managers have struggled in 2022. The Russian invasion of Ukraine in February caught most market participants off guard and resulted in substantial losses. China’s underperformance relative to the broader index has also served as a headwind for many investors. China is the largest exposure in the MSCI EM Index at 31% and has been challenging for managers to navigate this year given the country’s Zero-COVID Policy, property sector struggles, and negative investor sentiment amid geopolitical tensions. And lastly, the factor environment has dramatically shifted this year, with both Growth and Quality underperforming the broad benchmark. This newsletter further explores the impact that the underperformance of Quality has had on active manager returns this year.

Read > Emerging Markets: Why Your Active Manager May Be Underperforming

 

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 2022 Market Insights Video

This video is a recording of a live webinar held October 27th by Marquette’s research team, featuring in-depth analysis of the third quarter 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 invited to future webinars and notified when we publish new videos.
For more information, questions, or feedback, please send us an email.

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.

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.

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

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.