Building and Maintaining a Desired Exposure to Private Markets
This paper describes and simulates a simple commitment pacing plan that is generic, flexible and can be tailored to meet many situations.
US Stock–Bond Correlation: What Are the Macroeconomic Drivers?
For the last 20y, the correlation between stock and bond returns has been negative, enabling CIOs to increase stock allocations, with bonds acting as a hedge, while still satisfying a given risk budget. However, stock-bond correlation is not immutable. The correlation was persistently positive from the late-1960s until the late-1990s, after having been negative in the 15y before that (Figure 1). A shift to positive stock-bond correlation affects the tradeoff between portfolio expected return and risk, likely altering a CIO’s asset allocation decision. What could lead to such a shift in stock-bond correlation?
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