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This New Rule To Identify Recessions Could Give Investors An Edge JANUARY 09, 2020

With the first jobs release of 2020 being published tomorrow, investors will be paying more attention than usual. Last October, Claudia Sahm, a former Federal Reserve economist, developed a new, and remarkably simple, measure of recession risk based on the unemployment rate.

Oil Geopolitical Risk Is Declining, Despite U.S.-Iran Tensions JANUARY 23, 2020

The recent Middle East confrontations between the U.S. and Iran has done little to permanently push up the price of oil. Oil prices spiked on the days when there were acts of aggression, but quickly retraced as the other side contained its response. Was this moderation in oil volatility the result of adept diplomacy, or is it a more structural reduction in geopolitical risk?

The Coronavirus Threat To Supply Chains Is A Big Risk FEBRUARY 10, 2020

Superbugs that resist treatment and spread rapidly like Coronavirus always catch the headlines. The market impact of most viruses tends to be intense, but it soon fades. However, this round is different, and investors could be underestimating the longer-term impact of this latest health emergency on global supply chains.

Shrinking U.S. Public Market Is Boosting Corporate Profits FEBRUARY 25, 2020

With another uneventful earnings season coming to a close, the long stretch of near-record corporate profit margins is making investors nervous that a correction is brewing. That anxiety seems overdone. There is mounting evidence that large U.S. companies are more resilient than ever.

The Fed Can’t Resuscitate Markets Alone MARCH 12, 2020

Last week, the Federal Reserve System (Fed) surprised markets with an emergency 50 basis point (bps) cut. While this policy-easing will do little to stall the Coronavirus, it can support financial conditions and bolster liquidity by making it easier for consumers and small businesses to avoid a cash crunch.

To Avoid A Depression, Stimulus For Small Businesses Is Critical APRIL 02, 2020

The full effect of social distancing won’t be reflected in tomorrow’s tally of March’s U.S. non-farm payroll numbers, but it will signify the start of a historic period of unemployment. Jobless claims – which provide a real-time measurement – have already skyrocketed, and millions more could lose their jobs as COVID-19 continues to stifle activity. As reported, many of those impacted work for small businesses or are self-employed.

If COVID-19 Is Like Past Pandemics, We Could Face Decades Of Economic Fallout APRIL 23, 2020

The global COVID-19 pandemic is unequivocally a black swan: a rare, but devastating event. Economists often draw parallels to wars and natural disasters to model the outcomes of pandemics, but while the analogy is apt in terms of human suffering, the economic aftermaths are different.

Job Numbers Show America Faces A Slow Return To Work MAY 08, 2020

The global economy is entering what may be the deepest recession since the 1930’s. Today’s non-farm payroll numbers underline the scale of the financial crisis the U.S. is now facing. The 14.7% unemployment rate is undoubtedly higher as the report cuts off in mid-April while new jobless claims persist.

The Covid-19 Crisis Will Change Investing, Here’s What To Expect JUNE 15, 2020

As the world starts to re-open, most economists agree that a V-shaped recovery looks unlikely. There won’t be a return to “normal” for a while. However, the investment themes that will drive performance over the next decade are already emerging. Investors who are quick to adapt to the post-crisis landscape should have a market edge.

Stimulus Checks Are Not Helping The U.S. Economy, Here’s What Can. JULY 09, 2020

As unemployment spiked this spring, the U.S. government put its faith in the $500 billion of loans to small businesses from the Paycheck Protection Program (PPP). Yet this huge wave of stimulus did little to secure jobs, according to preliminary results from a study by economist Raj Chetty and his team at Harvard.

Q2 2020: Investment grade private credit update AUGUST 05, 2020

While the outlook for the pandemic remains unclear, demand has been strong as investors remain attracted to the incremental yield and structural protections offered by investment grade private credit.

A Biden Presidency Could Recharge The Stock Market AUGUST 10, 2020

President Donald Trump’s chances of keeping his job were a lot higher before a global health crisis reached the U.S. With COVID-19 battering the economy, public sentiment is rapidly shifting towards Democrat and Former Vice President Joe Biden – a pragmatic moderate who now holds a double-digit lead in national polls.

Don't Underestimate The Rise In U.S. - China Tech Tensions SEPTEMBER 16, 2020

The U.S. and China relationship remains tense. The global devastation of Covid-19 provided a flashpoint for recriminations as countries quarrel about who should have done more. Geopolitical risks rise further as Americans go to the polls in November and China’s President, Xi Jinping, aims to sustain nationalism as the economy recovers from the pandemic.

The Fed’s Final Farewell To Tight Inflation Control SEPTEMBER 25, 2020

In the press conference following today’s FOMC meeting led by Federal Reserve Chair, Jerome Powell, the shift in policy is an admission that there was more labor market slack than models or policy makers imagined over the last several years.

Pension risk management in turbulent markets OCTOBER 29, 2020

Examining market swings before COVID-19, during the peak of market panic and today, reveals how certain portfolio allocations and different asset classes performed during this period of volatility and the implications for defined benefit plan sponsors.

Invest Like A University Endowment During A Crisis NOVEMBER 03, 2020

Recent research based on investment performance from 1906 through to 2008 makes a compelling case that investors could learn a lot from U.S. university endowments.

Reinvesting legacy book yield maturities in a low rate environment? Start with trading liquidity JANUARY 25, 2021

Book yield has continued to erode for many P&C insurers. They are desperately looking for new capital efficient investment strategies to help alleviate future income concerns against the backdrop of a “lower for longer” environment.

Bitcoin Is Still Maturing As An Institutional Asset FEBRUARY 09, 2021

Bitcoin emerged from the scars of the 2008 financial crisis as distrust in governments and central banks inspired the digital currency to thrive outside the establishment. Unlike traditional currencies backed by sovereign credit and taxing authority, Bitcoin has no equivalent support. This push for monetary independence found early adopters in those that wanted to transact anonymously. Then with time, it captured broader investor interest. Yesterday, Tesla announced that it has bought $1.5 billion of bitcoin, which it plans to accept as payment.

We Are Approaching The ‘Age Of Digitization’ Super Cycle FEBRUARY 26, 2021

Economic history shows a remarkable pattern of broad themes that play out over decades. Each subsequent shift to a new phase is usually accelerated by innovation or a geopolitical shock. These transitions usually have fundamental impacts on growth, inflation and asset prices.

Investment grade private credit recap and outlook MARCH 11, 2021

Investment grade private credit continues to be seen as an attractive asset class. Year-in and year-out, throughout business cycles, and even pandemics. It can be a great diversifier in a portfolio, can demonstrate solid relative value and can benefit from covenants and structural protections.

Inflation Fears Will Settle, But Only If Growth Continues MARCH 18, 2021

If there is one fear that seems to constantly haunt investors, it is that latent inflation flares up and flattens markets. Most central banks in developed economies look to target a 2% inflation rate and have, over the last several decades, succeeded in anchoring investor expectations.

Managing long duration credit across market cycles APRIL 06, 2021

As we look forward to an uncertain route out of the pandemic, we believe that long duration credit portfolios that marry strong credit research with efficient, nimble active management can help investors outperform their benchmarks across market cycles. 

Are We About To Enter A Commodity Supercycle? APRIL 13, 2021

The most prominent commodity index, the S&P GSCI, is up over 86% since last March. While most markets have roared back since the depths of the COVID-19 market scare, commodities have been a frontrunner in the recovery. Talk of a commodity supercycle is already heating up, but investors should be careful not to overreact to recent data. Some commodities are notorious for fleeting booms and busts and typically need fundamental shifts in demand or supply to elevate prices for an extended period.

Investing sustainably in a post-Covid-19 world APRIL 27, 2021

Learn how Randy Brown, Head of Insurance Asset Management at SLC Management and Chief Investment Officer at Sun Life, is thinking about the crises of today when incorporating ESG factors into investment portfolios.

Q1 2021: Investment grade private credit update MAY 07, 2021

Learn how the asset class performed in Q1, the outlook for Q2 and the three reasons why investment grade private credit can be more liquid than you might have assumed.

ESG investing for insurance portfolios MAY 18, 2021

Successfully integrating ESG factors throughout a portfolio is even more critical as insurers and investors seek to sustainably achieve their risk-adjusted return and income objectives in today’s persistent low-rate environment.

Gaining exposure to private fixed income MAY 27, 2021

Investment grade private credit has been a major investment theme for U.S. insurers of all types. The asset class can offer additional yield, diversification and risk charges similar to that of a public corporate bond.

How To Invest Like A Legend JUNE 02, 2021

In the league of elite investors, few can rival the late David Swensen, former head of the Yale Endowment. As Chief Investment Officer of this multi-billion dollar fund, he delivered top performance over multiple decades, and his investing style influenced an entire industry. Swensen’s innovative and rigorous approach to asset allocation and expanding its range was revered, with others rushing to replicate it. This approach became known as the “Yale Model”, and revolutionized endowment investing.

Regulatory update: Proposed Real Estate Risk-Based Capital charge changes JUNE 24, 2021

Learn how the proposed changes to Risk-Based Capital charges are good news for life company real estate allocations.

Synthetic equity: maintain equity exposure while freeing up portfolio cash JUNE 29, 2021

Synthetic equity is the replacement of a cash equity exposure (such as ETFs) with equity futures contracts. By using this strategy, an investor frees up cash that can be better used to meet strategic mandates.

Cash equitization: liquidity with flexibility JUNE 29, 2021

Institutional investors may carry cash in their portfolios for a variety of reasons, but often it is for liquidity. A cash equitization overlay program can provide liquidity without cash drag on a portfolio’s performance. This program replicates the macro market exposure of the policy portfolio, aiming to improve portfolio return and reduce tracking error over the long term.

Can The U.S. Compete For Chip Dominance? JULY 22, 2021

Microchips are the workhorses of the digital economy. Though they spend most of their time hidden under the hood of devices, supply disruptions get noticed quickly. Right now, the car industry is scaling back production as it waits for chip manufacturers to restock. Production of smartphones, gaming equipment, and home appliances are also feeling the pinch as chip manufacturers struggle to meet demand.  

Q2 2021: Investment grade private credit update AUGUST 10, 2021

Learn how the asset class performed in Q2, the outlook for Q3 and from where the yield advantage in investment grade private credit is derived.

Synthetic inflation-linked corporate bond AUGUST 20, 2021

Institutions with inflation-linked liabilities can choose to manage that risk in a variety of ways. Assets like equities and real estate tend to implicitly offset inflation risk over time, while inflation-linked bonds can provide a more direct exposure to realized changes in the Consumer Price Index (CPI).

Finding a path to diversity in the asset management industry AUGUST 25, 2021

Candy Shaw, Senior Managing Director, Deputy Chief Investment Officer at SLC Management, discusses diversity, equity and inclusion challenges in the asset management industry and what can be done to make meaningful progress.

Retiring Boomers Could Drive An Inflation Shift SEPTEMBER 20, 2021

Inflation tends to top the list of economic risks that investors obsess most about. After all, runaway inflation has devastated some economies over the centuries. Corralling inflation and keeping expectations well-anchored have been key mandates for most central banks for decades. However, inflation expectations are not uniform across age groups.

Multi-employer plan relief with some strings attached OCTOBER 21, 2021

The Special Financial Assistance (SFA) program aims to top-up underfunded multi-employer plans and nudge them towards a liability driven investment approach. Given the significant impact of these funds, as well as the restrictions attached, plan sponsors may want to revisit asset allocation decisions at a total plan level to ensure an efficient approach. 

Q3 2021: Investment grade private credit update NOVEMBER 03, 2021

Learn how the asset class performed in Q3, the outlook for Q4 and the three reasons why intermediate duration private credit is an overlooked opportunity.

Central Bank Digital Coins Could Disrupt Banking Systems, Raise Privacy Concerns DECEMBER 15, 2021

With the proliferation of cryptocurrencies, governments are grappling with the challenge of regulating these new currencies. And in concert, central banks are struggling with the inevitability that cash in circulation continues its decline as electronic payments surge. To maintain relevance, central banks feel pressure to offer their own digital coin.

Inflation: 2022’s biggest threat to insurance investment portfolios? FEBRUARY 08, 2022

After spending most of 2021 wondering if inflation would be transitory or persistent, consensus thinking as we begin 2022 is that it is here to stay. With insurers likely to feel the pain on both sides of their balance sheets if inflation remains elevated, it’s no surprise that this topic is top of mind for insurance investment staff as they assess how to position their portfolios in preparation of this growing threat. 

Q4 2021 investment grade private credit market update FEBRUARY 17, 2022

Learn how the asset class performed in Q4 2021, the outlook for Q1 2022 and how issuance and new buyers were key trends in 2021, and our thoughts on the market in 2022.

NAIC Redux – Ratings Scrutiny on Private Credit MARCH 10, 2022

Recent proposals from the Securities Valuation Office (SVO) aim to bring additional scrutiny to the ratings of private credit securities. While implementation of any new regulation is still someway off, we don’t believe the proposals will end up impacting traditional private placements. 

Views from the CIO MARCH 23, 2022

Randy Brown, Chief Investment Officer at Sun Life & Head of Insurance Asset Management at SLC Management, provides his thoughts on how the Russia/Ukraine conflict is impacting our global macro views.

2022 BentallGreenOak Perspective report APRIL 13, 2022

BentallGreenOak discusses the decline of the pandemic and resultant economic expansion; digitization and technological disruption;  demographics, labor, and housing affordability; and how all these forces are driving and disrupting the real estate space.

Evaluating private credit opportunities in today's market APRIL 12, 2022

In the midst of economic transition, investors continue to seek out private credit for its attractive risk-return profile, consistent yield premium to public fixed income markets, and low default rates. What does this period of change and volatility mean for a private credit manager? And what should investors be on the lookout for when evaluating private credit opportunities in today’s market?

Q1 2022: Investment grade private credit update MAY 12, 2022

The first quarter of 2022 saw extreme volatility in public fixed income markets. However, amidst this surging volatility, private credit market issuance has remained steady due to the unique supply/demand dynamics of the market. 

The Impact of Rising Rates – LDI Client Update JUNE 30, 2022

Rates have been driven higher as inflation and inflation fears have spooked investors. The rate rise has led to improved funded status across most corporate DB plans and our conversations with clients have been focused primarily on two things to do with their hedging portfolio: de-risk and diversify.

Worth a look at munis AUGUST 02, 2022

As recession is front of mind for investors across the globe, we believe now is the time for bond buyers to reconsider municipals.

Exploring the LDI grey areas AUGUST 03, 2022

In the last few years as more plans have matured and moved down their glidepaths, we have seen a surge of interest in asset classes that fall in the grey areas between the growth and hedging buckets. These asset classes can come with higher return expectations, additional diversification benefits and varying degrees of liability hedging attributes.

Private Credit Insights August 2022 AUGUST 29, 2022

In this extraordinary time of market transition, private credit appears uniquely positioned to remain resilient and capitalize on compelling investment opportunities and higher returns generated by volatility and dislocations in the public markets.

Investing in an inflationary environment SEPTEMBER 08, 2022

A combination of high inflation, aggressive monetary policies and a possible recession may have left investors with questions on how to best adjust their investment strategy. SLC Management explores how different asset classes have performed in such inflationary conditions and provide insights into the current environment.

Regulatory Update - Schedule D Part 1 (Bonds) SEPTEMBER 16, 2022

The National Association of Insurance Commissioners (NAIC) recently held its Summer National Meeting and provided updates regarding proposals related to insurance company investments.

2022 Corporate Responsibility Summary AUGUST 12, 2022

BentallGreenOak recently released its 2022 Corporate Responsibility Summary, which highlights the organizations’ approach to ESG, diversity, equity and inclusion, as well as philanthropy.

Regulatory Update - Collateralized Loan Obligations OCTOBER 19, 2022

A key area of interest at the NAIC's Summer National meeting was the potential changes in regulatory treatment of collateralized loan obligations (CLOs) held on insurance company balance sheets. The details regarding the recommendation will not be available until later this year, but a few key themes have emerged.

Don’t fear the (rates) reaper MAY 18, 2022

Learn more about three rising rates considerations for fixed income investors.

The case for real estate MAY 13, 2022

The search for yield and diversification has made real estate an increasingly popular alternative asset class for insurers.

2022 Mid-year Global Investment Outlook AUGUST 18, 2022

We are pleased to present our first-ever mid-year investment outlook for 2022. This report includes our macroeconomic views for the rest of the year, as well as our expectations for public and private fixed income, real estate, infrastructure, insurance asset management, and retirement plan solutions.

Q2 2022: Investment grade private credit update AUGUST 25, 2022

In Q2, while volatility was high and other markets closed, the investment grade private credit (IGPC) market continued to execute transactions in the face of a myriad of headwinds. Dissecting this year’s issuance, we are seeing some interesting trends, including a shift in terms and industry participation. 

Crescent Capital Markets Q3 2022 Update NOVEMBER 10, 2022

The third quarter of 2022 was a continuation of the challenges seen all year as the U.S. Fed continued to combat inflation with significant rate increases, the ongoing conflict in Ukraine and deteriorating global growth prospects.

Q3 2022 Investment Grade Private Credit Update OCTOBER 26, 2022

Issuance in Q3 was weaker amid the rise in interest rates and market volatility. However, we are also seeing interesting opportunities emerge among sound European and U.K. issuers looking outside their regional public bond markets. And as October action winds up in the world of professional sports, we are reminded of the select robust private credit opportunities in this market.

Multi-Asset Credit Strategy: October 2022 Update NOVEMBER 18, 2022

Treasury and credit markets continued to be highly volatile in October thanks to a combination of inflation, aggressive central bank actions and recession concerns. These conditions, however, meant continued opportunities for the Multi-Asset Credit strategy group.

Investing into the rate-hiking cycle NOVEMBER 25, 2022

Today’s environment of rising interest rates has injected considerable uncertainty into fixed income allocations for institutional portfolios. This may lead to suboptimal portfolio positionings, such as effectively remaining on the sidelines with significant allocations to cash and/or low-yielding securities, or otherwise not investing effectively against the backdrop of rising rates.

Multi-Asset Credit Strategy: November 2022 Update DECEMBER 16, 2022

Treasury and credit markets continue to be highly volatile, with inflation, aggressive central bank action and recession fears dominating headlines. However, we continue to take advantage of market volatility though security selection and relative value trading.

Multi-Asset Credit Strategy: December 2022 Update JANUARY 18, 2023

2022 marks a historically poor year for Treasury and credit markets, dominated by aggressive tightening by the U.S. Federal Reserve in efforts to moderate inflation.

Q4 2022: Investment Grade Private Credit update FEBRUARY 06, 2023

Issuance in Q4 was an improvement from the previous quarter, but lagged year on year. In total, 2022 is expected to be either the second or third largest issuance year on record, albeit behind a record-setting 2021. The issuance pipeline in 2023 could be more uncertain due to rising rates and recession concerns, although volumes could be aided by postponed deals from 2022 transpiring in the new year. Amid increased interest in private credit, we offer insights into the specialized operational nature of these investments. 

2023 Global Investment Outlook JANUARY 31, 2023

We are pleased to present SLC Management’s investment outlook for 2023. This report reflects the diverse viewpoints of our investment teams and solutions providers, with analyses of public and private fixed income, real estate, infrastructure, insurance asset management and retirement plans.