Browse All

ADV Blog Insights

ACG Insights: Treasury Market Dilemma with Deficits

By ACG, resources, April 5, 2024

Rising annual fiscal deficits and Treasury issuance have created concerns with their response to debt growth and a transitioning investors.

Read More

ACG Insights: Equity Index Concentration

By ACG, resources, January 8, 2024

S&P 500 index concentration has reached a new all‐time high (Exhibit 1). This has led investors, especially those who use passive vehicles, to evaluate the potential implications. There are approaches to alter exposure, but they may be costly, challenging, or not make sense from a long‐term perspective. Investors need to understand the concentrated exposures they are assuming when allocating to broad market indices.

Read More

ACG Insights: Small Cap Comeback?

By ACG, resources, December 1, 2023

A few Large Capitalization stocks have dominated portfolio performance for years, leaving other areas of the market at attractive valuation levels. Small Caps, despite recent underperformance relative to Large Caps, have a history of prolonged periods of outperformance. Both absolute and relative valuations in Small Cap are historically attractive. The negative impact of higher interest rates and possible recession may already be baked into Small Cap prices, which tend to outperform coming out of recessions.

Read More

ACG Insights: All the REIT Moves

By ACG, resources, September 26, 2023

Similar to Tom Cruise’s character in All the Right Moves, Real Estate Investment Trusts (REITs) are looking for an opportunity to escape their past and transition into a brighter future. The post-COVID environment has acted as a cloud over the future of real estate investing due primarily to decreased demand for office space that looks unlikely to meaningfully improve, and more difficult financing conditions due to a rapid rise in interest rates from near-zero.

Read More

ACG Insights: Artificial Intelligence – Fad or Panacea?

By ACG, resources, July 15, 2023

Artificial intelligence (AI) as a discipline dates back to the 1950’s and encompasses a variety of technologies, predominantly merging computer science with extensive datasets to facilitate complex problem‐solving. The long‐term goal and subject of numerous science fiction portrayals has been the development of artificial “general” intelligence where a machine would have an intelligence equaled to humans, i.e., a self‐aware consciousness that can solve problems, learn, and plan for the future.

Read More

ACG Insights: Debt Ceiling Drama

By ACG, resources, May 17, 2023

Despite dozens of negotiated increases or suspensions of the U.S. debt limit over the past several decades, concern about the current debt ceiling is increasing. Cash available for the Treasury to pay obligations is falling which makes a technical default on some payments feel possible, although still low probability, in the absence of a deal. Historically, markets have shrugged off debt limit fears as short-term noise.

Read More

ACG Insights: Ground Control to Major Powell

By ACG, resources, March 1, 2023

After a difficult year in financial markets, there was plenty of pessimism to usher in the new year. Indicative of this negative outlook, the probability of an impending recession hit a new high according to the Fed’s Survey of Professional Forecasters. But what does a recession mean for the economy and financial markets?

Read More

ACG Insights: 2023 Capital Market Assumptions

By ACG, resources, February 8, 2023

The market reset from peak levels in early 2022 has meaningfully increased forward return assumptions as firms publish 2023 Capital Market Assumptions. One of the most important inputs when projecting forward returns is an assumption of the current risk-free rate of return. Much of the increase in 10-year return expectations can be attributed to a higher risk-free rate as fixed income yields have increased significantly from last year...

Read More

ACG Insights: Wrestling Bears

By ACG, resources, June 2, 2022

Markets thus far in 2022 have dealt with selling pressure that to many investors feels like a shift from the upward momentum experienced over the last several years and post-COVID (Exhibit 1) | Equity market declines have felt atypical because by some measures they really have been rare | The S&P 500 is currently in one of its longest weekly losing streaks in decades (Exhibit 2) | In percentage terms, the current drawdown is relatively common. The question going forward is if the sell-off turns into a prolonged downturn similar to 2000-2002 or 2008-2009 (Exhibit 3).

Read More

ACG Insights: Implications of Higher Rates

By ACG, resources, May 7, 2022

Interest rates have trended lower for several decades, however recent events have spurred a shift towards a more hawkish Federal Reserve, and possibly a rising rate environment | Currently faced with the historically tricky position of curbing inflationary pressures while simultaneously avoiding economic recession, the Federal Reserve will be watched closely by market participants over the coming weeks and months | The effects rising interest rates could have on asset prices will be a top-of-mind question for investors going forward as markets grapple with a shifting monetary policy regime

Read More