Services Tags: Investment Consulting

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.

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What Are the Ramifications of a Debt Ceiling Breach?

With an agreement finally showing promise to resolve the U.S. government’s potential and impending debt ceiling breach, investors are assessing how this development might affect underlying portfolios. The debt ceiling is the maximum level that the U.S. government is permitted to borrow. This threshold was set by Congress over 100 years ago to make sure government borrowing does not reach excessive levels. Historically, every time the ceiling has been close to being breached, Congress has legislated a higher debt limit. However, the current situation is especially concerning given how close to the deadline we are and how contentious this issue is in Congress right now.

This newsletter examines the key issues of the debt ceiling, important dates both past and present, and the potential impact of a breach.

Read > What Are the Ramifications of a Debt Ceiling Breach?

 

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.

China: Evergrande and Another Move Down

In August we released our newsletter China: From Leader to Laggard, in which we reviewed how China transformed from a top-performing country to a bottom-performing country between 2020 and 2021. We noted that increased regulation was a key reason for this change as new government policies have spooked investors. We highlighted that China has gone through these periods of regulatory change in the past and opined that the market would continue to be jittery over the next six to twelve months before recalibrating to the new environment.

Since then, Chinese equities have continued to fall as global investors focused their attention on Evergrande Group (Evergrande), a Chinese property developer. In this newsletter, we provide a synopsis of the Evergrande story and discuss the market risks.

Read > China: Evergrande and Another Move Down

 

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.

Build Back Better Act: Proposed Tax Changes by the House Ways & Means Committee Legislative Update

The House Ways and Means Committee released 881 pages of a proposed bill that would make changes to the tax code impacting income, estate, and gift taxes on September 14th, 2021. The bill will most likely see some changes to reach a majority vote in the Senate, but even with some revisions to the current proposal, major tax reform is expected in 2022. In this legislative update, we provide a summary of potential tax code changes based on the most recently available information.

Read > Build Back Better Act: Proposed Tax Changes by the House Ways and Means Committee Legislative Update

 

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.

IIDC Commitment to Firm Diversity Data Reporting

The Institutional Investing Diversity Cooperative (IIDC), of which Marquette is a founding member, announced yesterday that its 24 members will begin reporting individual firm diversity statistics using the same definitions and standards the IIDC set for traditional asset managers. The objective of this effort is to help institutional asset owners understand the diversity practices and demographics across the critical vendors in their investment program.

Marquette is committed to advancing diversity within our company and in our industry. We are proud to stand with our fellow IIDC members in fulfilling the mission of the group through this important initiative.

For more information, read the full release on the IIDC website here.

China: From Leader to Laggard

In 2020, China was a top performer in the global equity market, returning 29.5%. In 2021, however, Chinese equities have struggled thus far compared to many of their peers. While several of the world’s major equity markets have generated double-digit returns year-to-date, China has lost 12.3% with the majority of those losses occurring in the last several weeks.

In this newsletter, we review reasons why China has transitioned from leader to laggard — with a focus on recent regulatory actions by the Chinese government — and discuss future prospects from here.

Read > China: From Leader to Laggard

 

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.

Glenn Ross Named 2021 Knowledge Broker by CIO Magazine

Announced last week, Partner Glenn E. Ross has been named to Chief Investment Officer’s 10th annual list of the world’s most influential investment consultants and advisers as a 2021 Knowledge Broker. CIO assembled their 2021 list by surveying a group of respected chief investment officers, asking who they would recommend to their peers for reliably on-target suggestions, particularly considering COVID-19 and the past year of unusual market activity. For more information, read their announcement here.

Glenn has 40 years of experience in investing and consulting and is the co-author of How to Select Investment Managers & Evaluate Performance: A Guide for Pension Funds, Endowments, Foundations, and Trusts, published by Wiley & Sons, in 2007. An owner of the firm, Glenn joined the company in 2013 through the merger with Archstone Portfolio Solutions, which he co-founded in 2006. He serves as the primary investment consultant on several of the firm’s relationships.

2021 Halftime Market Insights Video

This video features an in-depth analysis of the first half of 2021, reviewing general themes from the second quarter and risks and opportunities to monitor in the coming months.

Our Market Insights video 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.

Mike Piotrowski Speaking at 2022 IPPFA MidAmerican Pension Conference 9/29

On Wednesday, September 29th, Mike Piotrowski, CAIA will be speaking at the 2022 IPPFA MidAmerican Pension Conference, being held as a hybrid virtual and onsite event in Oak Brook, Illinois.

Mike will be joining the Consolidation Update Panel with several individuals representing the Illinois Police Officers’ Pension Investment Fund and the Illinois Firefighters’ Pension Investment Fund. The IPPFA MidAmerican Pension Conference is dedicated to providing quality education for pension fund trustees. For more information, please visit the event webpage.