Mon - Fri 8:00am-4:45pm (216) 771-3450
Mon - Fri 8:00am-4:45pm (216) 771-3450

Category

Economic and Market Commentary

Driven by federal budget increases, workloads related to government programs continue to increase.

Over the last two years, the record amount of federal spending related to covid relief and stimulating the economy has been a primary news topic. Historical context in the amount of that spending, both implemented and proposed, can provide additional context of the workload ahead for federal, state, and local governments. Data from the Congressional...
Read More

Led by energy prices, the Consumer Price Index accelerated in October.

The monthly rate of headline inflation increased +0.9% in October, led by rising energy prices. It was the fastest month-over-month acceleration in the Consumer Price Index (CPI) since June 2008. The percent change from a year ago moved up +6.2%. The last time CPI accelerated this quickly on a year-over-year basis was October 1990 at...
Read More

Corporate bond new issuance is often one of the most efficient and cheapest ways for a company to raise capital.

When companies refinance debt, they tend to extend the maturities as well. Through October 4th, there has been more than $1.2 trillion of corporate bonds issued year-to-date, which appears to be ahead of the pace seen in 2019, prior to the pandemic. Source: Wells Fargo. In addition to refinancing existing debt, companies come to the...
Read More

Fueled by global supply chain shortages, contractors traded product certainty over pricing, fueling higher non-residential construction prices in the fourth quarter and well into 2022.

Despite early recognition as an essential industry or perhaps because of it, contractors have not been immune to the supply chain shortages that have affected large segments of the global economy. Commodities such as steel, copper, plywood, and other raw materials have been in short supply for months due to labor shortages in the manufacturing...
Read More

Regulations, designed to protect small investors, have shown to limit small investor security choices.

Much has been written about the evolution of financial markets over time.  The flexibility of the system, diverse geographic access to markets, and the variety of investment options all contribute positively to investor choice.  This provides small investors with many tools to effectively manage their portfolios to reach investment objectives.  With all the progress made...
Read More

Despite large differences in the risk and return profiles of publicly traded REITs and private real estate funds, the risk-adjusted returns of these two real estate investment types tend to follow each other more closely, most notably during recessions.

Although both publicly traded REITs and private real estate funds follow the same investment thesis (invest in real estate by pooling investor capital), both fund types have historically provided different risk and return profiles to investors. To examine these differences, we will use the FTSE Nareit All REITs index (FNAR) as a proxy for publicly...
Read More

In order to navigate this lower yield and longer duration landscape, especially in a rising interest rate environment when principal preservation is paramount, having as many tools in the toolbox as possible is beneficial. One of the tools to potentially improve the risk/reward profile of a portfolio is having the ability to utilize an expanded opportunity set of securities that reside outside of traditional fixed income benchmarks.

The current risk/reward profile in the bond market is skewed more toward risk than reward.  Since yields are historically low at a time when durations are historically high, benchmark tethered fixed income investors and passive fixed income indexers are being compensated less for taking on more interest rate risk.  This diverging trend of yield versus...
Read More

Return dispersion is at an all time high in the real estate industry. The main factor driving this trend, alongside a variety of themes, is E-commerce.

Before the pandemic, the NCREIF Property Index, a real estate index that tracks the unlevered gross returns of over $742B in real estate properties throughout the United States, posted average annual returns of 8.28%(1) from 2015 to 2019.  At the height of the pandemic (March 2020), returns fell to less than 2% for the first...
Read More

It is time to embrace the potential for higher interest rates and put the “Income” back into Fixed Income.

Traditionally, investors have been able to count on bonds as a primary source of income.  However, with interest rates beginning 2021 near historic lows and spreads near the tighter end of their range, the set-up for fixed income coming into this year was not particularly attractive.  From a macro perspective, we were forecasting an improving...
Read More

Boyd Watterson Asset Management’s approach to navigating the broad and slightly complicated path to a successful and effective ESG strategy.

ESG – Information Overload to Strategic Clarity In his May 12, 2021 article in Forbes Magazine, Halsey Schreier says “while widely recognized, Environmental, Social and Governance (ESG) is an umbrella term that often means different things to different people.” A simple google search will reveal massive amounts of ESG information with different implications for various...
Read More
1 2 3 4 5