Services Tags: Investment Consulting

3Q 2024 Market Insights

This video is a recording of a live webinar held October 23 by Marquette’s research team analyzing the third quarter of 2024 across the economy and various asset classes and themes we’ll be monitoring over the remainder of the year.

Our quarterly 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 assets, and private markets, with commentary by our research analysts and directors.

Sign up for research alerts to be invited to future webinars and notified when we publish new videos.

If you have any questions, please send our team an email.

Marquette Speaking at 2025 Midwest Institutional Forum 4/9–10

On April 9–10, Greg Leonberger, FSA, EA, MAAA, FCA, Jessica Noviskis, CFA, Frank Valle, CFA, CAIA, James Torgerson, and Evan Frazier, CFA, CAIA will be speaking at the 11th Annual Midwest Institutional Forum hosted by Markets Group in Chicago.

On Wednesday, Jessica will be joining the opening panel discussion, “Navigating Markets in 2025: Investment Strategies and Macroeconomic Outlook,” described as follows: The financial landscapes continue to evolve in an era marked by unprecedented global events. Investors are faced with the imperative challenge to construct resilient portfolios in the face of economic shifts and market volatility. This panel will shed light on the current macroeconomic landscape, providing insights into global economic trends and their potential impact on various asset classes. From equities and fixed income to alternative investments, our experts will share their perspectives on where opportunities lie and the potential pitfalls to avoid in the pursuit of optimal asset allocation.

Greg will be joining a panel later in the morning entitled “Portfolio Construction – Finding the Best Opportunities in 2025,” described as follows: Many are calling this a new investment era with opportunities for investors that have never been seen before. Market movements, fiscal challenges, the denominator effect, and revised globalization have all created unique opportunities for investors who go well beyond the traditional 60/40 portfolio construct. Join our panel of experts as they aim to answer several key questions, including:

  • What will a “diversified” portfolio look like in 2025? And what will it look like over the next 5-10 years?
  • How are investors approaching portfolio construction and allocation decisions in the current landscape?
  • Where do they see opportunities across asset classes and sectors, and how is this impacting their decision-making with new and existing managers?

That afternoon, Frank will be conducting an interview, “Opportunities in Public Credit: A Systematic Approach to High Yield,” described as follows: Systematic fixed income strategies have entered the mainstream, having seen their assets more than double over the last year. They are poised to grow further as innovative trading techniques and abundance of structured data provide opportunities to lower transaction costs and generate diversified alpha streams in less liquid asset classes such as high yield. As fixed income is entering a potential golden age given historically high yields, we will discuss how a systematic approach to credit and innovation in credit portfolio trading can help with generating trading efficiencies and targeting differentiated alpha drivers in high yield.

James will also be conducting an interview: “Insurance-Linked Securities – Continued Growth of a Fundamentally Uncorrelated Asset Class.” This fireside chat will focus on the increased interest in insurance-linked securities as a key allocation for diversified portfolios. Specific discussion topics will include an overview of the role of insurance-linked investments in an institutional portfolio, how allocators have been evaluating opportunities of late and the latest developments & growth of the asset class. For allocators newer to the asset class, the session should provide key highlights to use in internal investment strategy meetings and/or consultant-client reviews as well as provide the latest talking points important to reintroducing an opportunity in the space or to evaluating an existing investment.

On Thursday, Evan will be moderating a panel entitled, “Effectively Investing Through Private Markets; Diversification & Returns.” As investors search for additional sources of revenue and methods for portfolio diversification in the volatile and changing environment, private markets stand out as an area of opportunities. The panel brings together leading alternatives investors and allocators to share the role private equity, private debt, venture capital and more play in their portfolios and what they look for in managers to meet their objectives in these asset classes. Panelists will address risks and opportunities across capital structures, expected returns and the operational requirements for managing the unique complexities in private markets.

The Midwest Institutional Forum brings together institutional investors, consultants, and industry experts from across the Midwest. For more information, please visit the event website.

Marquette Views on Concentration Risk in 2025 Featured on FundFire

Published February 11, Director of Research and Partner Greg Leonberger, FSA, EA, MAAA, FCA was interviewed for FundFire’s “Consultants Point Investors to Active Managers amid Volatility” article (subscription required).

Greg discussed the risks of overconcentration in large-cap tech stocks like the Magnificent Seven and how increased market breadth creates opportunity for active managers in the article.

For more Marquette coverage of these topics, reference our Market Preview letter, “New Year, New President…Same Outlook?” and newsletter, “What Does Elevated Index Concentration Mean for Active U.S. Equity Managers?”

Marquette Views on 2025 Traditional Investments Outlook Featured on Nonprofit News

Published January 9, Director of Research and Partner Greg Leonberger, FSA, EA, MAAA, FCA was interviewed for Nonprofit News’ Special Report 2025: Traditional Investments Outlook (subscription required).

Greg discussed the outlook for both U.S. equities — including expectations for inflation, economic growth, and the impact of the new administration — and fixed income — including Marquette’s customized approach to portfolio construction, particularly as the rate environment has changed in recent years — in the article.

For more coverage of expectations for the year ahead, Marquette’s 2025 Market Preview webinar will be hosted on January 16 with in-depth analysis by our research team and Greg’s Quarterly Letter from the Director of Research will be published the following week.

Marquette Speaking at Titan Investors 2025 Chicago Institutional Active Exchange 3/26

On Wednesday, April 26, Greg Leonberger, FSA, EA, MAAA, FCA and Frank Valle, CFA, CAIA will be speaking at Titan Investors’ Chicago Institutional Active Exchange.

Greg will be moderating the Asset Allocation Panel – Institutional Portfolio Construction in a Dynamic Market Environment and Frank will be moderating the Economic Outlook Panel – Megatrends in a Transforming World & Investing for Resiliency at the event, which will bring together leading institutional asset allocators from the region for a full day of educational panels and roundtable discussions.

Titan Investors is a boutique consulting firm that connects asset allocators and investment managers to share ideas, build relationships, and drive business in a focused environment. For more information, visit their website.

Are You Ready for Some Fixed Income?

As the leaves change to autumn and the authors cheer on their Fighting Leathernecks, fall is the perfect time for investors to reassess their fixed income portfolios. Fixed income is a hybrid security that offers both offensive and defensive properties. Much like a good football team, a fixed income portfolio needs to combine a strong offense with a solid defense.

Some strategies provide more offensive characteristics while others are more defensive. Portfolios with too much offense act like the Greatest Show on Turf. They do well when the economy is strong, but falter in down markets. Conversely, a fixed income portfolio that is overly reliant on defensive strategies will do well in a risk-off environment but will struggle in a strong economy like the Super Bowl Shufflin’ ’85 Bears.

While those were great teams, they were not a dynasty that stood up to the test of time. To build an all-weather fixed income portfolio that will perform in multiple market environments, an investor needs to balance offense and defense.
Fixed income has three primary objectives: income, diversification, and liquidity. Income, or yield, is what an investor is paid for loaning money to another entity. Fixed income helps to diversify portfolios primarily through duration. When risk assets are selling off, interest rates are generally falling. Duration is what drives fixed income prices higher in such scenarios. Finally, fixed income assets can be a source of liquidity. The weight of these qualities is dependent on if the strategy is more offensive- or defensive-minded.

This white paper outlines offensive and defensive fixed income characteristics and strategies and considerations for investors when building a “gameplan” for their fixed income allocation.

Keep Your Eye on the Ball

When it comes to baseball, successful hitters have little trouble hitting the ball when they know what pitch is coming. But when pitchers can vary the speed as well as the spin and curve of the ball, hitting becomes exponentially more difficult. An effective curveball can make even the most accomplished hitter look feeble.

As we look at the second half of 2024, we are reminding our clients to “keep their eye on the ball.” Indeed, the first half of the year has been pretty “hittable” as far as returns are concerned, with the majority of asset classes positive through June 30. However, curveballs such as Fed policy, equity index concentration, exchange rates, and a capricious election could quickly flip the script and send investors back to the dugout shaking their heads.

With that said, here is our scouting report for the second half of the year, organized by asset class. We share not only “down the middle” themes but also the curveballs that could flummox performance. A well-prepared investor is no different than a well-prepared baseball player: Insight and realistic expectations provide the foundation for a successful season!

2024 Halftime Market Insights

This video is a recording of a live webinar held July 23 by Marquette’s research team analyzing the first half of 2024 across the economy and various asset classes and themes we’ll be monitoring over the remainder of the year.

Our quarterly 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 assets, and private markets, with commentary by our research analysts and directors.

Sign up for research alerts to be invited to future webinars and notified when we publish new videos.

If you have any questions, please send our team an email.

What Does Elevated Index Concentration Mean for Active U.S. Equity Managers?

Indexing has risen in popularity over the last decade, particularly for U.S. equity investors. The fees are lower and indexing is perceived as less risky, with investors primarily seeking beta exposure to the market. However, these indices have evolved against an ever-changing economic and financial market backdrop. As a result, several unintended structural issues have emerged, particularly related to concentration risk. Understanding this evolution and how it could alter the overall exposures within a broader portfolio is critical, as these indices are not static. Notably, the composition of some indices alongside the increase in passive capital has created headwinds for active managers and helps to explain recent performance challenges.

This newsletter examines the progression of passive management, how and why U.S. equity index concentration has increased in recent years, and the effects and risks investors need be aware of across the market capitalization spectrum.