Research Papers
Research & Analysis: Hot Off the Press!
We are not so bold as to attempt to settle the active vs. passive debate. However, we hope our observations will help you determine where active and passive management is appropriate for your portfolio.
Hedge Funds have gone from risky, speculative, fringe investments to mainstream, must-have portfolio mainstays for many "accredited" or "qualified" investors. While we believe that a modest allocation may be appropriate for some clients, we have concerns about their broader use. For example, some “specialist” consulting firms have built their entire practice by recommending large allocations to these vehicles, sometimes 25 - 35% of total assets! In this article, we discuss why this is dangerous.
In December of 2005, we authored a paper titled, “ REIT Valuations Relative to Other Asset Classes”. At that time, we concluded that REIT valuations were approaching the high side of normal, but advised our clients to stay the course and maintain their existing strategic allocations. However, since 2005, we believe the REIT market has skyrocketed to the stratosphere and are advising our clients to take heed.
Recent regulatory and legislative developments have been catalysts for many defined benefit pension plan sponsors to re-examine their asset allocation policies within an asset-liability framework. This paper summarizes a sensible approach to liability-driven investing.
U.S. investors have an opportunity to participate in the growth of global real estate securities in the coming decade. Driving much of the growth is the adoption of REIT – like structures throughout the world. This paper addresses the shift of privately held real estate to the public markets and discusses how U.S. investors could position the asset class within diversified portfolios.
MLPs are energy infrastructure businesses organized as master limited partnerships. MLPs have historically offered attractive total returns with low correlation to other asset classes. This paper discusses the opportunities offered by MLPs and their potential diversification benefits within a diversified portfolio.
As the old adage goes, “The best way to make money is to not lose it!” This paper examines how diversification not only reduces risk, but can be an important tool for increasing a portfolio’s expected long-term return. We dub this diversification tailwind “The Low Volatility Dividend.”
As alpha in the traditional long-only world proves increasingly elusive, many investors are reexamining their traditional investment paradigms. This paper illustrates one possible portable alpha structure.
The AICPA has issued new guidelines for auditing alternative investments. This summary examines the potential issues for institutional investors.
Link to Alternative Investments - Audit Considerations by the AICPA
Our summary of the Pension Protect Act.
The DOL guidance on default funds has important fiduciary consequences for defined contribution plan sponsors.
Asset Allocation: Key Determinant of Risk and Return.
Research & Analysis: General Archives
Research & Analysis: 401(k) Archives
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