Risk parity is an asset allocation strategy designed so each asset class contributes equally to overall portfolio risk (as measured by volatility). While risk parity offers potential advantages, its success hinges on key assumptions and a favorable environment for bonds. Like the traditional...

Over the years, Institute research has shown active managers, even the best-performing ones, suffered periods of weak returns relative to benchmarks and their peers. But underperformance, up to three years, had relatively little impact on the best-performing funds' ability to deliver success...

Unlike traditional bonds, Floating-rate bonds (FRB) do not have a fixed rate coupon. Instead, their rate fluctuates or floats based on the market plus a spread. As a result, FRBs tend to be less vulnerable to interest-rate fluctuations. Many believe FRBs can help preserve principal, while...

Americans are rapidly losing their pensions — replaced by savings plans disguised as retirement plans.Many sponsors view defined contribution (DC) plans as the best option for retaining some of the features of a pension plan without bearing all of the costs and risks of DB. This paper explores...

In the United States and in several other wealthy countries, the demographic and financial problems facing retirees are (finally) getting attention as the costs grow so large that they clearly will impact every member of society through tax hikes, cuts in services or both. Long-term solutions at...

During the last two decades of the twentieth century, the investing world saw declining dividend and bond yields, with prices generally moving higher for both equities and bonds over the period. In the early years of this century, investors seemed to belittle the importance of income as a...

At first glance, exchange-traded funds (ETFs) may seem like ideal investments. Benefits including low cost, flexibility and tax advantages make them viable choices for many investors and have helped assets in ETFs grow substantially in the past 10 years. While some ETFs could be suitable...

In previous versions of our Value vs. Glamour study we have explored the historical performance of stocks based on their fundamental characteristics and quantified a value premium. Results have shown that over the long term, unpopular “value” stocks, those that are associated with companies...

InvestorLit is a subscription service providing reviews of institutional investment literature. The reviews cover a wide range of investment topics and are published online. Bruce Grantier, founder of InvestorLit, is a member of the Brandes Institute Advisory Board. Members of the InvestorLit...

In a lively roundtable debate, members of the Brandes Institute Advisory Board (BIAB) and guest speaker Brad Case discussed the pros and cons of private equity and whether the investment class is a viable alternative.While some Board members shared their successes, Case cited challenges in the...