FEG’s RESEARCH & INSIGHTS

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Posted by FEG on December 13, 2018
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November 2018 Research Review

A potential thematic shift rounded out the month of November, as Fed Chairman Jerome Powell’s remarks on interest rates during a speech to The Economic Club of New York represented a "dovish" reversal from previous hawkish sentiment in early-October. What could have sparked this unexpected dovish reversal?
Posted by FEG on December 10, 2018
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FEG Insight: Brexit A Certainty of Uncertainty

Blog Feature Image (Brexit)-01 In 2016 the British took to the polls, and in a close vote, elected to leave the European Union. More than two years later, the exit is looming, and the full breadth and scope of Brexit’s consequences are still unclear.
Posted by FEG on November 15, 2018
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October 2018 Research Review

In the third quarter, the U.S. economy enjoyed broad-based improvement across many key economic data points, the strength of which has helped apply upward pressure to interest rates, inflation levels, and near-term sentiment for tighter monetary policy. The strengthening domestic economy has coincided with growing weakness abroad, likely increasing market dispersion and thus potentially improving the investment opportunity landscape.
Posted by FEG on October 11, 2018
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Third Quarter 2018 Research Review

In the third quarter, the U.S. economy enjoyed broad-based improvement across many key economic data points, the strength of which has helped apply upward pressure to interest rates, inflation levels, and near-term sentiment for tighter monetary policy. The strengthening domestic economy has coincided with growing weakness abroad, likely increasing market dispersion and thus potentially improving the investment opportunity landscape.
Posted by FEG on September 17, 2018
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August 2018 Research Review

After briefly dipping into deflationary territory in 2015, U.S. inflation rates have since accelerated, with some measures reflecting the most robust inflationary backdrop since the economy was in the early recovery stages of the deflationary grips of the Global Financial Crisis (GFC).
Posted by FEG on August 31, 2018
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FEG Insight: Micro on Macro

In the face of recent performance challenges, many investors are left questioning the ongoing merits of a global macro allocation. Nearly a decade of unprecedented, global monetary easing has driven interest rates and volatility lower–providing limited trading opportunities for macro managers. As market conditions begin to show signs of change, this may create fertile trading ground for macro strategies.
Posted by FEG on August 21, 2018
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July 2018 Research Review

U.S. gross domestic product (GDP) increased 4.1% in the second quarter, the strongest quarterly growth rate since late-2014. With year-over-year growth near 3%, the anticipated positive effects of recently-introduced fiscal stimulus appear to be taking root, leading many to speculate whether the momentum can persist. In July, most risk sectors witnessed positive returns, with notably strong performance generated across domestic equities and more modest returns emanating from international equity markets.
Posted by FEG on July 18, 2018
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Second Quarter 2018 Research Review

The slope of the U.S. Treasury yield curve, often used as recessionary early warning signal, flattened to a new cycle low to round out the second quarter. Key drivers behind this dynamic include the potential full maturity of the economic expansion, continued Fed tightening, and fears of a trade war-induced global growth slowdown. In the second quarter, domestic equities—particularly small cap—generated solid returns while international developed and emerging market equities lost traction.
Posted by FEG on June 25, 2018
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Private Investing and the J-Curve

One could take several months, or even years, to become completely comfortable with a swing change in golf, and completing the construction of a private equity program can take even longer. This is a true test of patience and commitment. For investors that are new to private strategies, here is a brief summary of the headwinds the strategy produces in the first few years of development.
Posted by FEG on June 15, 2018
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May 2018 Research Review

As domestic economic fundamentals continued to strengthen in May, improving U.S. conditions appear to be diverging from the euro zone and Japan. Equity market returns corroborated recent fundamental disparities, while a flight-to-quality environment led to solid returns across the higher quality spectrum of the fixed income market. Energy infrastructure assets also continued to post strong performance following April’s impressive gain.
Posted by FEG on May 14, 2018
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April 2018 Research Review

February served as a reminder to investors that what goes up must come down. The spike in U.S. Treasury rates, as well as the early-February short squeeze in levered short-volatility strategies pressured markets despite ongoing indications that underlying economic fundamentals remain relatively healthy.
Posted by FEG on April 13, 2018
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First Quarter 2018 Research Review

Trade war fears, rising U.S. Treasury rates, and a disorderly unwinding of levered short-volatility equity positions helped drive an increase in market volatility in the first quarter. While most major equity indices experienced a strong start to the year, by late-January, that positive momentum began to fade.
Posted by FEG on March 13, 2018
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February 2018 Research Review

February served as a reminder to investors that what goes up must come down. The spike in U.S. Treasury rates, as well as the early-February short squeeze in levered short-volatility strategies pressured markets despite ongoing indications that underlying economic fundamentals remain relatively healthy.
Posted by FEG on February 16, 2018
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January 2018 Research Review

The start of the year witnessed a continuation of many of the dominant economic themes from 2017, including firming fundamentals, a flattening Treasury yield curve, ongoing labor market improvement, a weakening U.S. dollar, and increasing inflation expectations. Across the major asset categories, risk in general was rewarded during the month as global equities pushed higher, with impressive returns abroad and in domestic markets.
Posted by FEG on January 18, 2018
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Fourth Quarter 2017 Research Review

The U.S. labor market shed 33,000 jobs last month, the first contraction in seven years, but the headline hid some positive news. Across the major asset categories, global equities witnessed strong returns during the third quarter, with significantly stronger performance in international markets, while below investment grade credit posted another solid quarter of gains. In real assets, despite a solid rebound in energy prices, master limited partnerships declined modestly.
Posted by FEG on December 20, 2017
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November 2017 Research Review

The U.S. labor market shed 33,000 jobs last month, the first contraction in seven years, but the headline hid some positive news. Across the major asset categories, global equities witnessed strong returns during the third quarter, with significantly stronger performance in international markets, while below investment grade credit posted another solid quarter of gains. In real assets, despite a solid rebound in energy prices, master limited partnerships declined modestly.
Posted by FEG on November 16, 2017
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October 2017 Research Review

The U.S. labor market shed 33,000 jobs last month, the first contraction in seven years, but the headline hid some positive news. Across the major asset categories, global equities witnessed strong returns during the third quarter, with significantly stronger performance in international markets, while below investment grade credit posted another solid quarter of gains. In real assets, despite a solid rebound in energy prices, master limited partnerships declined modestly.