Topic Tags: Asset Allocation

Senior Secured Loans Position Paper

A comprehensive overview of the senior secured loans asset class, including history, return profile, risk analysis, valuation, and how to invest.

Senior secured loans have become increasingly attractive to institutional investors over time because of their floating rate coupon. Prior to 2008 they further appealed to investors because of their perceived low volatility. Though the volatility profile has evolved, senior secured loans are still an attractive asset class for many institutional investors. This paper offers a comprehensive view of the asset class, including history, return profile, risk analysis, and how to invest in senior secured loans.

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2011 Market Preview

2011 Market Preview

Overall, 2010 was a positive year for investors, as capital markets continued their upward swing and economic growth showed further signs of progress.

Most major stock indices (U.S. and non-U.S.) posted double-digit positive returns in 2010, with small caps generally outperforming large caps. The bond market benefited from another fall in interest rates, therefore delivering positive returns to all of the major indices, with sectors such as high yield and senior secured loans again recording the largest gains. Alternative asset classes had more of a mixed 2010: hedge funds disappointed, while real estate and private equity began to show signs of life. On the economic front, GDP growth continued its positive trend, while inflation remained low. Despite these facts, many questions still remain. Will the stock market experience a correction in 2011? What should we expect from alternative asset classes? Is inflation a threat to the economy? Will the unemployment rate improve?

In the following articles, we will take a closer look at each asset class, examining the major news items from 2010, as well as critical issues for 2011. Each article contains insightful analysis and key themes to monitor over the coming year, themes which will underlie the actual performance of the asset classes covered. Articles are offered for the following asset classes: fixed income, U.S. equities, non-U.S. equities, hedge funds, real estate, infrastructure, and private equity. As a launching point, we take a broad view of the economy and examine some crucial macroeconomic topics as they pertain to the U.S. economy.

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Hedge Fund Position Paper

The first of a two part series, this paper provides an overview of the hedge fund asset class as well as recommendations and allocation guidance.

This paper is meant to provide an overview of the hedge fund asset class, an analysis of the qualitative and quantitative factors that should be used to asses hedge funds and determine their appropriate use in a portfolio, and lay-out and justify Marquette Associates’ position on the use of hedge funds in client portfolios. Recommendations as well as guidance towards making an allocation to the asset class are also included.

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Investing in an Inflationary Environment

Given the amount of fiscal and monetary stimulus enacted to revive the United States economy, many investors are concerned about inflation emerging as a credible threat to their portfolios, as inflation can reduce the real rate of return. While high inflation is not foreseeable in the near future, it is prudent to understand how to preserve a portfolio’s real rate of return during times of rising prices. Several asset classes can protect against higher than expected inflation, with varying degrees of statistical proof. The following paper examines the potential asset classes suitable for periods of high inflation, both on a qualitative and quantitative basis.

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