The Dow Jones US Select Real Estate Securities Index tracks companies that are both equity owners and operators of real estate in the US. Adding exposure to private credit, which has benefited from enhanced structures between issuers and borrowers.Normalizing global equity exposure to strategic targets as non-USD equity outperformance has further room to go.Maximizing after-tax income with taxable fixed income on the short end and tax-exempt municipals on the long end.In this edition of the Market Know-How, we consider how investors may navigate market asymmetry with emphasis on:
Accordingly, managing risk over returns is as important as ever. Recessionary downside risk, combined with recent financial system stability concerns, remains significant, while additional upside corresponding to a sustained recovery is limited.
While the debate between hard landing and soft landing may be somewhat balanced, market implications are not. Today, as central banks in resilient economies approach their respective terminal rates, loosening financial conditions and resurging growth may mean the job is not yet complete. In the initial stages of rate hikes in 2022, policy was decisive, with the primary goal of tightening financial conditions. In our view, macro conditions and capital markets are at a critical juncture. Consequently, the evolution of the growth-inflation mix and commensurate monetary policy responses remain our prevailing risk in 2023. Resilient growth may potentially invite additional rate hikes and threaten to elongate the economic adjustment that began last year. Recent data trends have strengthened the global “soft landing” narrative, though good news remains a double-edged sword. The start to 2023 has benefitted from the reduction in acute European energy risk and from strong economic momentum in China’s reopening.
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