Insights

As we approach the halfway point of the year, all eyes remain on Federal Reserve policy and the severity of an economic slowdown.

Plan sponsors often find the target date fund (TDF) selection process understandably daunting. Evaluating TDFs is a multi-faceted process that requires a deep dive into the four components of TDF design — glide path design, asset allocation, selecting underlying managers, and portfolio construction.

It is critical for plan fiduciaries to understand the differences in target date design in order to select the fund that best matches the needs and characteristics of their plan and its participants.

With the rise in fixed income yields, high-quality markets such as U.S. IG corporate bonds may offer attractive income along with potential diversification benefits from low correlations to other risk assets and enhanced downside protection.

Experienced active managers can capitalize on opportunities that fall outside their benchmarks and can manage unwanted concentrations. This has historically resulted in relatively high success rates in generating alpha.

We believe the risk of a technical default remains extremely low, but the consequences would be swift and painful, likely compelling elected officials to find common ground for a resolution.

Another regional bank falls, but the markets are seeing the forest from the trees as challenges appear contained.

An unexpected shock in the banking sector has stress-tested the economy and policymakers. Both initially passed. But the impact on lending and credit conditions remains unclear and increases the likelihood of a mistake by the Fed going forward.

Moving away from an abnormal regime of crisis-era stimulus won’t be a smooth process. But the volatility should be easier to stomach knowing that the destination is likely to be a healthier, more balanced economy.

The emergence of new investment vehicles has opened the private equity market to a wider range of investors.