Comparing asset managers’ five-year capital market assumptions published in late 2019 and early 2020 with the newly updated versions being circulated today is an eye-opening exercise that underscores the staggering economic impact of the coronavirus pandemic.
While the S&P 500 has recovered all its losses from the first quarter plunge, the comeback hasn’t been equal across all sectors. What comes next is anyone's guess.
The economy is always evolving, says Federal Reserve Chair Jerome Powell, and so the nation’s monetary and fiscal strategies for achieving its goals must evolve as well.
However, the movement from equities to fixed income continues, according to the Alight Solutions 401(k) Index.
They warn that there could be a market pullback when second-quarter earnings start being reported and that the coronavirus’ legacy could be $1 trillion in business activity never returning.
While trading during the month favored fixed-income funds, with the positive stock market movements, average asset allocation in equities increased from 67.1% in September to 67.3% in October.
The third quarter marked the seventh consecutive quarter that 401(k) participants have moved their money from equities into fixed income, according to Alight.
Experts suggest the uncertain U.S.-China trade situation has weighed heavily on business investment, resulting in weaker manufacturing activity worldwide.
Nearly 90% of the days in the quarter saw net trading activity favor fixed income, according to the Alight Solutions 401(k) Index.
On 89% of the trading days, 401(k) participants moved the majority of their money into fixed income, according to the Alight Solutions 401(k) Index
Despite slowing global growth, disparate inflation rates, and continued normalization of U.S. monetary policy, economists with Vanguard and J.P. Morgan Asset Management believe that a near-term recession will be avoided.
Preliminary data shared by Alight Solutions shows the firm’s 401(k) trading index spiked on Monday October 29; investors making moves shunned growth assets and paid premium prices for fixed income.
Vanguard’s chief economist warns that rising rates may sting in the short term, but book value losses should be offset by higher future returns—rewarding those with perspective and strategic patience.
Broadly speaking, Northern Trust’s Capital Market Assumptions Working Group expects continued global economic growth, controlled inflation and accommodative monetary policy.
Sixty-four percent of participants in their 20s own a TDF.
According to Boston Consulting Group, among asset management products, passives were far and away the fastest growing category in 2017, with a record 25% increase in AUM over an already very sizable base.
Greg Hahn, founder and chief investment officer at Winthrop Capital Management, offers some timely analysis on the flattening of the yield curve and navigating a rising interest rate environment.