Insights

Highlights from the week of November 25 – December 1, 2022

In our view, valuations appear reasonable and private equity remains a compelling way for insurers to gain exposure to alternatives.

Market-to-book ratios are at historical lows for many stable value portfolios, but this rate-driven move isn’t cause for concern. These products are designed to ensure a stable return and income in volatile rate environments while replenishing market-to-book ratios over time.

Our long-term return expectations for capital markets serve as key inputs into our strategic asset allocation process for multi-asset portfolios and provide context for shorter-term forecasting.

Eyes remain firmly on the Federal Reserve, which has engineered a landscape of materially higher real and nominal rates.

The gilt crisis that brought down a UK prime minister also pummeled pension schemes and dialed up the heat on liability-driven investing. But LDI can still provide many benefits to pension plans – and US corporate plans may be particularly well positioned.

Look under the hood of sizzling headline inflation, and you’ll see it starting to cool.

Securitized credit provides diverse, structured and customizable access to U.S.-centric risk that seems best positioned to weather any economic uncertainty on the horizon.

The repercussions of US midterm elections will be felt over the coming months and years, not days. The key is how the results are transmitted to the economy, chiefly through monetary and fiscal policy.  

In 3Q22, US CLO tranches exhibited mixed returns with the investment grade (IG) part of the stack faring better than the mezzanine (mezz) part.