Active Management

Recent market volatility and the conflict in Iran have understandably pushed many emerging market investors to the sidelines. But periods of uncertainty have historically offered attractive entry points into emerging market debt (EMD), particularly when underlying fundamentals are improving and asset flows are likely to increase.

California continues to demonstrate fiscal resilience, supported by strong liquidity balances and the absence of projected cash‑flow borrowing through FY 2026–27. However, Medicaid cost pressures, a progressive tax structure highly sensitive to equity market swings, and constitutional spending constraints remain key differentiators between California and other large states.

A tidal wave of conversions has siphoned an unprecedented amount of capital out of mutual funds and into the ETF wrapper. Last year’s record 60 mutual-fund-to-ETF conversions in 2025 across 31 firms pushed total converted assets past $260 billion, and the past five years have now seen a grand total of 203 conversions.

It’s the first word that comes to mind to describe Q1 2026 U.S. company earnings. S&P 500 earnings growth is looking set to reach 28% year over year (yoy), more than double the consensus estimate of 12% at the start of the reporting season.

US growth stocks underperformed in early 2026 amid AI disruption fears and an unresolved conflict in the Middle East. But these stresses could create favorable conditions for selective, diversified investors to unlock long-term growth potential in a rotating market.

Goldman Sachs Asset Management (GSAM) made a big announcement this week, touting $100 billion in total ETF AUM. The milestone comes following the firm’s recent acquisition of Innovator ETFs adding several notable funds to the firm’s overall roster.

Chris Galipeau discusses high-conviction insights that go beyond media headlines.

Private credit is more inherently complex than the traditional bond market. In comparison, private credit information comes at a deficit. That’s because private credit loans are essentially bespoke agreements between a lender and a private borrower.

Despite the move lower late last week, U.S. Treasury yields are still holding well above recent lows and close to highs not seen in more than a year. By contrast, risk assets are firmly bid: U.S. equities have been routinely touching new historical highs, and credit spreads over Treasuries remain tight.

Despite these higher costs, a projected 45 million Americans are expected to travel at least 50 miles from home this weekend, setting a new record. Close to 40 million will drive while some 3.7 million will fly.

This piece examines the distinction between volatility and drawdown risk in portfolio construction, and why managing routine market fluctuations may not address the drivers of long-term wealth outcomes. The article is attached as a Word document, and the related chart is included as a separate image file.

On May 26, 1896, Charles Dow calculated a simple arithmetic average of 12 industrial stocks and arrived at a closing value of 40.94. Now, exactly 130 years later, that same benchmark has crossed the historic 50,000 threshold.

New AdvizorPro data shows RIAs broadened their ETF lineups in Q1 2026, leaning into real assets, active managers, and defense strategies.

Last Friday closed with the 10-year Treasury yield at 4.60%, a one-year high, and the doom commentary about rising interest rates was waiting before the bell even rang. Hyperinflation. Bond market breakdown. Paradigm shift. A 1981 fair-value retest.

Private markets (private equity, private credit and real estate) have historically delivered an “illiquidity premium”. Institutions and family offices have recognized this illiquidity premium and have historically allocated significant capital to capture it.

In this video, Chuck Carnevale explains why he believes a diversified dividend-growth stock portfolio can be a better long-term strategy for retirees than the traditional 60/40 stock-and-bond allocation. Using a real-world portfolio he created in August 2021, Chuck demonstrates how an all-equity income portfolio can provide both rising income and capital appreciation while helping investors stay ahead of inflation.

After a slowdown earlier in the year, stronger April and May data support the view that weakness in January and February, followed by a rebound in March, was largely weather-related rather than the start of a broader deterioration in housing demand.

In this second quarter update, Western Asset believes global fixed-income markets face a more complex backdrop as geopolitics, rapid AI adoption and private credit scrutiny intersect.

Chasing performance by deviating from a benchmark has long been the hallmark of active managers. But it may be time for a rethink. Our research suggests that investors allocating to core equities should consider refreshing the criteria they use to identify portfolio managers that can consistently beat their benchmarks.

By moving beyond benchmark constraints, active portfolios can access off-the-run bonds, specific securitized tranches, and maturity buckets with superior risk-reward profiles. They also have the flexibility to adjust positioning throughout the market cycle — reallocating across sectors, ratings, and issuers as conditions evolve to capture opportunities and mitigate drawdowns.

I still don’t think the Fed is close to a rate hike, but for the upcoming June FOMC meeting, a shift in the language of the policy statement from an easing bias to one of a ‘balanced’ outlook seems to be the most likely scenario. However, the fed funds futures market has now fully priced in a rate hike for March 2027, a remarkable shift from its pre-war status of discounting almost three rate cuts for the same timeframe.

Industry discussions on Janus Henderson’s ETF lineup are typically centered around its fixed income funds given the firm’s history in this asset class. However, the issuer also has equity ETFs that are garnering attention, which include a fund that’s close to crossing the $1 billion assets under management (AUM) threshold: the Janus Henderson Small-Mid Cap Growth Alpha ETF (JSMD).

Some institutional investors who had grown accustomed to outperforming the broader private equity composites are finding they have not done so consistently in recent years. Their diagnoses of the problem often center on specific decisions or biases they made in their recent manager selection, whereas a likely culprit is a falloff in the persistence of outperformance among private equity managers.

Recently, Matthew Bartolini, global head of research strategists at State Street Investment Management, sat down with VettaFi to discuss where inflation stands, opportunities within portfolio construction, and much more.

Global bond yields are reaching frightening levels due to the continued war in Iran and the effective closure of the Strait of Hormuz. Continued high oil prices and the threat of reverberating inflation are causing investors to demand higher yields on government bonds.

Sustainable investing in fixed income has come of age. Against a backdrop of heightened geopolitical tensions, persistent economic and trade uncertainty, sustainable fixed income continued to demonstrate its appeal in 2025.

Emerging markets (EM) are using low-cost renewables to cut fuel imports, stabilize power costs and improve energy security—positioning EM as the growth engine of the energy transition. Countries and companies that leverage their dominance in critical minerals and green technology could pull ahead, creating dispersion in potential outcomes for investors.

With mega tech AI capital expenditure projected to cross a staggering $660 billion to $750 billion, according to estimates from firms like Goldman Sachs, CreditSights and Bloomberg, saying the stakes are high for Nvidia and the AI ecosystem is an understatement. It’s no wonder we can focus on little else this week.

While most institutional investors recognize that private equity and public equity share similar economic risks, they often seem to ignore how their aggregate equity portfolio is affected by their substantial allocation to private equity.

In the past year, new models from industry leaders have continued to boost AI’s capabilities. According to various capabilities tests, Anthropic’s Mythos model has leapfrogged other AI models – including in the ability to thwart or support cyberattacks.

Right now, AAI’s two highest 10-year expected return forecasts are for large-cap value equity strategies outside the United States—Emerging Markets RAFI and Dev ex US Large RAFI. AAI’s expected return model anticipates valuations for equity strategies to mean revert and therefore tends to elevate out-of-favor regions and styles, predicting higher future returns for recently underperforming equity indices.

Institutional investors have spent years hearing about the promise of artificial intelligence. That phase is giving way to a more practical question: not whether AI can create more scale, but whether that scale can be governed, validated, and translated into better fiduciary decisions. For OCIO providers, AI without discipline is not an advantage.

The exchange-traded fund marketplace continues to expand. Now with more than $20 trillion in assets under management ($14 trillion in the U.S., growing at an 18% five-year annualized clip), 2026’s volatility and emerging investment themes have taken the universe to new heights.

The rapid deployment of artificial intelligence (AI) is evident; 99% of CEOs say their companies are investing in the technology. Apparently, AI is also quick at garnering assets. Launched less than three months ago, the Pictet AI Enhanced US Equity ETF (PQUS) is already approaching the $100 million mark in assets under management (AUM).

Chris Galipeau discusses high-conviction insights that go beyond media headlines.

Emerging market debt is compelling as a medium‑term structural allocation, particularly for investors seeking to diversify away from concentrated U.S. exposures.

Tax-equivalent yields on high-quality munis are hitting 7% to 9%. Discover how WisdomTree ETFs, WTMU and WTMY, exploit the steep yield curve.

I’ve long been a student of game theory, the branch of mathematics that studies how rational actors make decisions when their outcomes depend on what everyone else does. It’s a helpful framework for understanding markets and geopolitics, and right now, there’s no better place to apply it than Taiwan.

The artificial intelligence (AI) evolution moves at breakneck speed. While generative AI is still a significant part of the underlying investment thesis, physical AI is rapidly accruing momentum.

As Kevin Warsh takes over as Federal Reserve chair with his own goals, he may face challenges even beyond rate policy, from inflation to independence to a bulbous balance sheet.

In our Q2 Equity Market Outlook, we identified healthcare as one area where artificial intelligence (AI) is having tangible benefits and presenting investors with new expressions of the AI investment theme. While healthcare may glean some luster from an AI halo, the investment case is also one of counterbalance to the AI juggernaut.

With tensions simmering in the Middle East and the global economy feeling the pinch of high energy prices, high-yield bonds might not be on every investor’s radar. In our view, they should be.

David Mann, our Head of Global Exchange-Traded Funds (ETFs) Product and Capital Markets, explains how meatloaf—the dish, not the singer—serves as a perfect example of how his ETF thinking has evolved over the past decade.

ClearBridge Investments: The ongoing energy crisis is pushing global oil inventories, including many critical product inventories, toward all-time lows, and it may be time to position portfolios given the potential for supply shortages to emerge.

AI is surely the zeitgeist at industry conferences across sectors right now. Emerging technology, increased efficiency, and scalability are all talking points. But so too are headcount reductions, reduced tech-sector free cash flow, and growing worries about a 1990s-like bubble.

What were the key takeaways from last month’s numbers? Our corporate bond specialists look back at the market’s performance and provide incisive commentary to help you make sense of what drove the market—and what may be on the horizon for fixed income investors.

Investing in emerging markets (EM) used to be synonymous with getting exposure to China. It’s an ideal notion, given that it’s the second largest economy and thus commands a heavy weight in standard EM benchmarks. Challenging that narrative today is a changing geopolitical landscape, which continues as U.S. president Donald Trump visits China in a high-stakes meeting between the two economic superpowers.

High-growth technology stocks still dominate the investment landscape, fueled by the promise of AI. But recent signs of a broadening market are revealing that more industries beyond just tech are positioned to benefit. We think large-cap value stocks are well-poised for this shift, especially since AI can be both a disruptive and driving force in today’s dynamic market.

Stock markets have been hitting all-time highs and credit spreads remain low, yet higher interest rates and mounting floating-rate debt are straining lower-rated borrowers. This tension is surfacing first in leveraged loans as “quiet defaults” become more common — opening up a dynamic set of opportunities for investors specialized in stressed and distressed assets.

The most attractive conversion opportunities appear when income temporarily drops. Early retirement before Social Security and RMDs begin is the classic window. Sabbaticals, business transition years, the gap after a company sale, years with unusually low K-1 or bonus income. These are all potential openings.

Semiconductors and software have largely overshadowed the electrification ETF trade. Paul Baiocchi, head of fund sales and strategy at SS&C ALPS Advisors, says most investors are missing the sectors that actually power the AI buildout.

April delivered a constructive backdrop for preferred securities, with the ICE BofA Fixed-Rate Preferred Securities Index rebounding 2.23% and bringing YTD returns back into positive territory at 0.8%.

Royce Investment Partners: Co-CIO Francis Gannon looks at how recent performance may be subtly announcing a turning point in market leadership.

Typically, an investor’s traditional bond portfolio begins with a cornerstone, or core holding of some sort. From either a strategic or tactical perspective, a core fixed income position provides the investor with some ballast to help anchor any other strategies that may be included.

The logic of balanced investing is straightforward: equities drive long-term growth, bonds provide income and ballast when stocks fall, and the combination delivers a smoother ride than either asset alone. For decades, the 60/40 portfolio has been the default framework for good reason – it has worked, often brilliantly, across multiple market cycles.

With inflation persistent and rising due to soaring energy prices, it’s not surprising that advisors and fixed income investors are revisiting Treasury Inflation-Protected Securities (TIPS). In fact, data indicate that inflation-linked bonds have been among the most popular fixed income destinations, dating back to 2022.

Fears of hotter-than-expected inflation were realized today. Consumer Price Index (CPI) data revealed that headline CPI rose 0.6% month-over-month in April. This pushed the year-over-year figure to 3.8%, which constitutes the highest reading since May 2023. To beat the CPI heat, three distinct natural resource ETFs offer varying ways to hedge against higher inflation.

Access to private equity, private credit, private infrastructure, and private real estate assets can potentially improve long-term investment outcomes for participants.

Get ready each week with high-conviction insights that go beyond media headlines.

Wendy Li spent 20 years working with large endowments and foundations before founding Ivy Invest. In the latest Alternative Allocations, she discusses how institutions approach illiquid investments, the importance of manager selection, and where she sees opportunities in today's private markets.