Research

Investment Perspectives



February 2022

Downside Protection in Public Policy
Equity market volatility has returned to the top of investor concerns following the correction caused by the Covid-19 pandemic and the recent equity market drawdown in the midst of persistent inflation and tightening monetary policy. In normal market conditions, it can be difficult for investors to remain...

June 2021

Total Portfolio Benchmarking
Objectively measuring a diversified investment portfolio's performance seems like a straightforward endeavor, but it has become increasingly complicated over the years. The purpose of this paper is to assist asset owners and fiduciaries in the selection and interpretation of benchmarks used to measure total...

February 2021

Rebalancing Multi-Manager Equity Portfolios
Rebalancing a portfolio at the multi-asset level is a well understood and widely utilized tool by strategic long-term investors to keep the total portfolio close to chosen risk and return targets and intended levels of diversification. An appropriate rebalancing policy serves to narrow a portfolio's range...

June 2020

Distressed Debt Opportunity
Given the extent of the recent, pandemic-driven economic and market disruption and the highly levered state of most US corporate borrowers, we expect that a large and sustained distressed debt cycle is likely to emerge over the course of the next year. In past periods of economic stress, the inefficient...

April 2020

Credit Dislocation Opportunity
Concerns over the potential impact of the COVID-19 pandemic on a wide range of company and asset-oriented cash flows resulted in a sharp, technically driven sell-off across a wide range of credit assets in March of 2020. The forced outflows and lack of market buyers behind this sell-off has largely driven...

April 2020

TALF Credit Opportunity
The recent establishment of the second Term Asset-Backed Securities Loan Facility (TALF) presents credit investors with a range of new and potentially compelling opportunities through the Federal Reserve's provision of extremely low-cost financing for investments in a select group of high quality...

April 2020

What Lies Ahead
Much has been written about the effect of COVID-19 on investment markets and it is likely that there will be considerably more to come. Most of what has been written has focused on immediate and near-term impacts. We would like to turn our focus to potential long-term...

March 2020

Playing Defense Playing Offense
We realize that recent weeks have provided you with COVID-19 related commentary of all sorts, and of varying relevance. As committed co-fiduciaries, our goal is to partner with you to help your investment strategies align with your purpose, goals, and objectives. We hope you find this message focused, thoughtful, and relevant in providing perspective and insight during these uncertain...

March 2020

Strategic Thinking in Volatile Times
It is a difficult time for investors to remain committed to thinking strategically as market volatility, headlines, and the growing concern about COVID-19 dominate our daily lives. However, we would suggest that now is precisely the time for...

February 2020

Market Volatility
This week, February 24 – 28, has been one for the record books in many ways. The S&P 500 fell 11.5% in just five trading days. The global equity market followed suit with the MSCI ACWI ex US index dropping 9.0%. Bond yields declined globally with the US 10-year...

July 2019

What To Know About Your Inversion
Institutional investors are forever looking for clues in the behavior of the fixed income market that might predict the future course of the economy - particularly the probability, timing and potential severity of a recession. In this search, all aspects of the fixed income market are fair game: the level of interest...

April 2019

Factor Index Investing: Frequently Asked Questions
In a recent edition of Investment Perspectives, we discussed a framework to use when constructing an equity portfolio. Two strategy types addressed therein, active and passive management, are both well understood within the institutional investment space. However, a third strategy type labeled...

March 2019

Four Trends In Fixed Income
In most portfolios, a fixed income allocation is meant to provide stability, income, and liquidity to investors. However, fixed income markets are continually evolving, and that evolution may either increase or decrease their ability to deliver on those objectives over time. In many cases, this is a result of...

December 2018

Equity Market Drawdown
As of the January 3, 2019 market close, the S&P 500 Index declined by more than 14% from the market peak reached on September 20, 2018. The sell-off in equities has been global in scope with the MSCI EAFE Index and the MSCI Emerging Markets Index declining by nearly 13% and 8%, respectively, since the start of...

July 2018

Long Alpha & Shareholder Activism Strategies
As investment boards continue mulling over the "active vs. passive" management debate, additional options that sit just outside the traditional equities space are resonating with some institutions. For those wary of surrendering higher fees for strategies constrained by tracking error and index weights...

November 2017

Managing Investment Consultant Conflicts of Interest
Successful management of institutional investment portfolios requires unbiased advice from multiple individuals and third parties. Key advisors include investment board/committee members, investment staff, investment consultants, fund managers, and custodians. Despite a robust regulatory infrastructure...

April 2017

An Active/Passive Decision Framework
Few investment topics invite more debate than the issue of active versus passive management. Investors pursuing active management seek to outperform comparative indices by investing in funds that attempt to exploit market inefficiencies. Passive investors, on the other hand...

November 2016

Active Management Performance Cycles
One of the most fundamental decisions for institutional investors is the extent to which to use active managers as opposed to low-cost index funds. The primary argument for using active managers is their ability to provide investors with enhanced returns. However, realization of this benefit assumes...

July 2016

A Primer On Diversification For Institutional Investors
Diversification is a fundamental component of an institutional investment strategy; however, determining the optimal approach invites considerable debate. This debate has intensified recently due to the fact that, for an extended period of time, portfolios with a traditional 60/40 allocation to US equity and US fixed income have outperformed many portfolios that include a broader set of asset classes...

September 2015

Impact of Money Market Regulatory Reform
On July 23, 2014, the United States Securities and Exchange Commission (SEC) adopted amendments to rules governing U.S. money market funds. The amendments were designed to address unexpected distress experienced by money market funds during the global financial crisis of 2008 and 2009. During this period, one fund (the Reserve Primary Fund) became only the second money market fund in history to "break the buck"...

August 2015

Global Real Estate Market Newsletter
Welcome to the inaugural issue of the RVK Global Real Estate Market Newsletter. The intent of this letter is to efficiently and concisely communicate what's on our mind. This may include current opportunities and where we view attractive relative value, real estate strategies we find...

February 2015

Strategies to Control Defined Contribution Plan Fees
In 1974, the Employee Retirement Income Security Act (“ERISA”) was passed in order to establish a set of governing laws and regulations to protect the interests of participants in employee benefit plans. Since then, the responsibilities of defined contribution (DC) plan fiduciaries have continually evolved, and plan expenses in particular have become heavily scrutinized...

October 2014

Marketable Alternatives
Marketable alternative investments are generally used by investors to enhance portfolio diversification due to their tendency to exhibit low return correlations (and often low volatility) relative to traditional asset classes. Although the investment objectives, constraints, and risk tolerances of institutional investors vary substantially...

July 2014

Investing In Opportunistic Credit
The financial panic of 2008 and early 2009 sparked massive losses across virtually all asset classes. As is common during such periods, the crisis also created extraordinary buying opportunities—many of which involved traditional fixed income sectors. While the subsequent recovery...

May 2014

Framework for Evaluating Fixed Income Portfolio Structures
Nearly five years have passed since the end of the U.S. financial crisis. With the economy and capital markets appearing to stabilize over the past six months, the Federal Reserve has responded with a gradual reduction of its quantitative easing (QE) program, which is already leading...

April 2014

Best Practices for Investment Governance
Over the past several years, academics, investment professionals, and investment firms have produced numerous papers about investment governance best practices. Interest in this topic is fueled by the fact that past research suggests that effective governance may add as much as 100 to 300 basis points to investment returns.1 While existing research...