Articles
This report is intended to assess how artificial intelligence (“AI”)is reshaping the software investment landscape and its implications on private equity
and venture capital portfolios with general exposure to software and technology. This commentary reflects Canterbury’ssynthesis of PitchBook
research and perspectives…
Asset Class Reports
U.S. equity markets reached record highs with continued investment in artificial intelligence and technology, despite stretched valuations and lingering uncertainty. Large-cap equities, represented by the S&P 500, rose 8.1%, driven once again by the “Magnificent 7,” which gained 17.0%. Mid-cap equities also performed f…
Asset Class Reports
In the first quarter of 2025, U.S. equity markets experienced broadly negative returns, mainly driven by economic uncertainty impacting investor sentiment. Large-cap equities, represented by the S&P 500, declined by -4.3% in the quarter, largely fueled by a sell-off in the "Magnificent 7" stocks which posted a loss of…
White Papers
The U.S. dollar reigns supreme in the global financial system. It's the currency in which central banks hold most of their reserves, it facilitates countless transactions across borders daily, and it's the standard by which the value of other currencies is often measured. This "dollar dominance" is the result of a long…
Asset Class Reports
In the fourth quarter of 2024, U.S. equity performance remained positive and concentrated, particularly in large caps with the cap weighted indices outperforming their equal weighted counterparts. The performance was largely driven by two factors: the election’s positive impact on investor sentiment and the “Magnificen…
Asset Class Reports
In the third quarter, U.S. equity performance was more broadly distributed than in previous quarters, with the equal-weighted S&P 500 (9.6%) and Russell 3000 indices (10.4%) outperforming their market-cap weighted counterparts (5.9% and 6.2%, respectively). The Federal Reserve’s decision to cut rates spurred a risk-on…
White Papers
Bitcoin (“BTC”) has recently captured significant interest from investors and capital allocators as it has matured from its humble beginnings post the Great Financial Crisis. In less than 16 years, bitcoin’s market capitalization has grown from zero to over $1 trillion. With the SEC’s approval of bitcoin ETFs in Januar…
Asset Class Reports
In the second quarter of 2024, large cap U.S. equities continued their upward trajectory with performance being more concentrated than in the previous quarter, as measured by the divergence between the equal weighted and cap weighted indices. The gains were primarily led by the technology sector with the majority comin…
Outsourced CIO
Some suggest that news about inflation and higher prices might be somewhat exaggerated. Certainly, minimum wages have increased considerably, but so has the cost of essentials such as food, rent, insurance, and many non-durable goods. Homeowners took advantage of long-term, low-financing options in the initial stages o…
Outsourced CIO
The price of risk assets continued to grind higher during the first quarter amidst positive economic data. Strong GDP growth and moderating inflation have created a "goldilocks" set of conditions that have boosted consumer confidence and spending on goods and services. Capital markets have continued their upward trend…
Asset Class Reports
In the first quarter, despite strong economic data and signals from the Federal Reserve that previously anticipated rate cuts would likely be postponed, U.S. equities continued to rally. Performance was wider in breadth than in previous quarters, with 2 of the “Magnificent 7” stocks suffering notably poor performance,…
Outsourced CIO
The consistent decline in inflation reading and Jerome Powell's recent indication that the Federal Reserve may consider cutting rates in 2024 have led to an increased sentiment that the economic slowdown anticipated in the U.S. in 2024 may be a "soft landing" rather than a true economic recession.
Asset Class Reports
In the fourth quarter, U.S. equities rallied on expectations that the Federal Reserve would begin cutting rates in early 2024 following weak economic data coming out of both the US and international markets. Rate-sensitive sectors like technology, consumer discretionary, and real estate did well, while energy dipped in…
Asset Class Reports
In the third quarter, U.S. equities saw their first quarterly decline since the Q3 of 2022. The energy sector propped up market-wide performance, in large part due to elevated oil prices created by supply-constricting efforts from Saudi Arabia and Russia. Utilities, real estate, and consumer staples all posted material…
Outsourced CIO
The steadfast stance taken by the U.S. Federal Reserve to fight the post-pandemic inflation surge continues to be a significant driver of market volatility. Eighteen months after the first federal funds increase in March 2022, the U.S. Treasury yield curve has shifted meaningfully along all maturities. The inverted yie…
Outsourced CIO
“…there’s a “common factor” that has driven price increases higher. It’s the pandemic, and it’s everything about the pandemic: The closing of the economy, the reopening of the economy, the fiscal support, the monetary support. All the things that happened went into high inflation. And I think we’ve come to expect that…
Asset Class Reports
In the second quarter, the U.S. equity market continued its strong performance with technology stocks leading the way once again. International developed equities and emerging markets (EM) equities also rose in the quarter despite rising interest rates and continued inflation concerns. Amid elevated inflation, the Fede…
Outsourced CIO
At Canterbury, clients often ask us to provide our outlook for the markets over upcoming quarters. We have learned over the years, that the future, in the short or long run, is rarely the present extrapolated. The last three years alone would have proved us wrong repeatedly. In January 2020, there was great optimism f…
Asset Class Reports
In the first quarter, the U.S. equity market had a strong start, with technology stocks driving much of the market’s gains. In the second half, concerns around several large banks caused market declines. However, U.S. stocks managed to recover some of its losses towards the end of the quarter. International developed e…
Asset Class Reports
Despite the challenging year, the U.S. equity markets made gains in the quarter, with much of the progress made in November. Improved GDP revisions, strong corporate earnings, and potential signs that elevated inflation could be cooling benefitted the markets. European equities and emerging markets (EM) equities also r…
Asset Class Reports
The U.S. equity markets fell in the quarter following a short-lived market rally in July. Recession fears, persistent inflation pressures, and Federal Reserve monetary policy tightening weighed heavy on markets, continuing the downward trend that started in the first half of the year. European equities and emerging mar…
Asset Class Reports
U.S. equity markets fell significantly in the quarter. Recession fears and an accelerated Federal Reserve interest rate hike trajectory weighed heavy on markets, leading to the weakest first half performance of the S&P 500 in decades. European equities and emerging markets (EM) equities also fell in the quarter, althou…
Asset Class Reports
U.S. equities fell in the first two months of the quarter before rebounding slightly in March. Fed tightening, inflation expectations, and the Russia/Ukraine war weighed on the equity markets. The negative quarter marks the first quarterly decline since the beginning of the pandemic in early 2020. European equities and…
Asset Class Reports
U.S. equities rose in the quarter despite a weak November due to the fear over rising cases of the Omicron variant. By year-end, the worries subsided as the economy and corporate earnings remained stable. European equities were positive in the quarter whereas emerging markets (EM) equities lost value. China was the wor…
Asset Class Reports
U.S. stock markets hit new all-time highs in the third quarter even as market volatility picked up in the final weeks of September. Corporate commentary turned cautious and profit warnings cited supply chain constraints and margin compression from multiple industries. European equities significantly outperformed emergi…
Asset Class Reports
U.S. stock markets delivered positive returns in the quarter, supported by the rebound of growth stocks, strong first quarter earnings, and the prospect of a bipartisan deal to increase infrastructure spending. European equities outperformed emerging markets (EM) equities in the quarter. Europe benefitted from the reop…
Asset Class Reports
U.S. stock markets ended the quarter in positive territory supported by an optimistic economic growth outlook and continued vaccine progress. European equities slightly outperformed emerging market (EM) equities in the quarter. Unlike in the U.S. and other Asian countries, slow vaccination progress in Europe is delayin…
Asset Class Reports
U.S. stock markets ended the year at another all-time high, benefiting from a rebound in economic growth and earnings. Emerging markets (EM) equities outperformed European equities for the quarter and year. U.S. core bonds ended the year with positive returns given the Fed’s commitment to QE. Investment grade (IG) and…
Asset Class Reports
U.S. stocks rallied early in the quarter, benefitting from stronger than expected employment numbers, corporate earnings, and monetary support from central banks. Emerging markets (EM) equities doubled the returns of European equities, which lagged the rest of the world. U.S. interest rates stayed range-bound across th…
Asset Class Reports
Global equities experienced the fastest 30% drawdown in history in the first quarter of 2020. The second quarter witnessed the largest 50-day advance in market history. International and emerging market (EM) countries experienced market rebounds, supported by global monetary and fiscal stimulus. U.S. interest rates wer…
Asset Class Reports
Industries across the U.S. were forced to reduce capacity or close due to social distancing policies carried out to reduce the spread of the coronavirus. Both international and emerging market (EM) countries continue to face challenges. Core bonds performed well as the Fed cut interest rates to zero and implemented agg…
Asset Class Reports
U.S. equities rose in the fourth quarter, reaching all-time highs. International equities moved higher, boosted by improved U.S.-China trade relations, a Brexit-related election in the U.K. that increased the likelihood of a negotiated withdrawal from the European Union, and a weaker U.S. dollar. U.S. interest rates mo…
Asset Class Reports
Shares in U.S. equity markets fell in early August then edged higher into mid-September to end the quarter in positive territory. International equities advanced in the quarter in their local currencies, but fell slightly for U.S. investors, given the strong dollar headwind. As the Fed cut interest rates in July and Se…
White Papers
Canada’s diverse economy provides investment opportunities in both public and private equity. For an investor, diversification, low fees, and the use of skilled active managers can lead to improved and less volatile performance.
Asset Class Reports
Shares in U.S. equity markets gained in Q2, despite declines in May due to increased concerns over the U.S.-China trade war. By the end of the quarter however, markets were supported by increasingly accommodative central banks and trade progress following the G20 Summit as both leaders agreed to get back to the negotia…
Asset Class Reports
Equity markets rose quickly at the start of the first quarter and dropped to a more cautious pace in March, rebounding from a weak end to 2018 as concerns over the China-U.S. trade dispute eased and central banks grew more accommodating. International equities recovered well in the first quarter and were also supported…
Outsourced CIO
Every quarter, Canterbury's Outsourced CIO committee shares their observations of the market that impact the management of our discretionary portfolios in the Canterbury OCIO Review.
Risk assets rose sharply in the first quarter of 2019, in spite of slowing economic growth. A more accommodative monetary stance by cent…
Asset Class Reports
2018 was a year of record highs and sharp reversals. The S&P 500 rose in the first three quarters and posted a decline for the year after a precipitous drop in the fourth quarter, a first ever for the index. International equities were down 11.5% in the quarter and down 14.2% for the year. A strong U.S. dollar, trade t…
White Papers
One of the most consistent questions related to private equity buyout funds is about the impact of fund size on performance. Do smaller funds outperform due to lower acquisition multiples, the ability to capitalize on operational inefficiencies, and inexperienced management teams? Or do larger funds outperform, as targ…
Outsourced CIO
Every quarter, Canterbury's Outsourced CIO committee shares their observations of the market that impact the management of our discretionary portfolios in the Canterbury OCIO Review.
The spike in market volatility and dramatic reversals in the last few months of 2018 was an experience that investors had not had for a…
Asset Class Reports
The economy has continued to see improvement. U.S. equities gained 3.9% in the second quarter coming off a negative start to the year when volatility increased and inflation concerns loomed. U.S. core fixed income experienced pressure as the Fed decided to hike interest rates for a second time in 2018. Oil prices moved…
Outsourced CIO
Every quarter, Canterbury's Outsourced CIO committee shares their observations of the market that impact the management of our discretionary portfolios in the Canterbury OCIO Review. The second quarter was fairly volatile for the global financial markets. Concerns over tighter financial conditions, renewed dollar stren…
White Papers
International small-cap stocks have historically provided strong risk-adjusted returns. Canterbury thinks that now may be an especially opportune time to allocate to these relatively high-quality companies using an active approach. We feel this is particularly true for investors who are underweight what we believe is a…
Asset Class Reports
The economy has continued to see improvement. U.S. equities gained 3.9% in the second quarter coming off a negative start to the year when volatility increased and inflation concerns loomed. U.S. core fixed income experienced pressure as the Fed decided to hike interest rates for a second time in 2018. Oil prices moved…
Outsourced CIO
Every quarter, Canterbury's Outsourced CIO committee shares their observations of the market that impact the management of our discretionary portfolios in the Canterbury OCIO Review. The second quarter was fairly volatile for the global financial markets. Concerns over tighter financial conditions, renewed dollar stren…
Asset Class Reports
Last year’s market optimism continued through most of January, however, most equity markets pulled back significantly in February and once again in March. U.S. equities were slightly negative in the quarter as volatility increased and trade policy and inflation concerns loomed. U.S. core fixed income was negative over…
Asset Class Reports
Risk Assets Continue to Climb as Volatility Disappears
- Risk assets continued to move higher on the back of strong global economic activity. Investor sentiment rose as market participants weighed the potential benefits from U.S. tax reform. The VIX remained at a historically low level over the quarter. The lack of vola…
Asset Class Reports
Risk assets continued to move higher on the back of strong global economic activity. U.S. equities posted their ninth consecutive year of gains, which is tied for the longest stretch without a down year. Core fixed income was neutral to slightly negative over the quarter as interest rates moved higher and credit spread…
Asset Class Reports
Risk Assets Continue to Rally Despite Geopolitical Tensions. The Federal Open Market Committee (FOMC) decided to keep the target federal funds rate neutral over the quarter, however, the group outlined a plan to reduce the Fed’s treasury and agency holdings. The Fed will take a cautious approach to reducing the balance…
White Papers
Taxable investors should consider the impact of excess return expectations, fees, and tax drag on their portfolios. A diversified mix between active, passive, and tax-managed equity strategies can lead to superior after-tax returns. This white paper summarizes Canterbury’s views on constructing equity portfolios while…
Asset Class Reports
Positive global economic data led to a rally in risky assets over the quarter. Emerging markets outperformed all major asset classes as improving global growth characteristics resulted in better trade prospects. Risk-on assets also benefited as U.S. trade and protectionist concerns subsided.
White Papers
The active versus passive investment management discussion has intensified as of late due to active management’s recent inability to outpace their passive benchmarks. Some may have a knee-jerk inclination to fire an underperforming manager, but the data show that investors are better off staying the course. A 2012 stud…
White Papers
This paper seeks to identify the correct fit for publicly traded REITs in a diversified investment portfolio. We explore the merits of REITs for the three categories that form broad portfolio diversification: growth, capital preservation, and inflation protection. A REIT is a security that invests in real estate throug…
Asset Class Reports
Positive global economic data led to a rally in risky assets over the quarter. Emerging markets outperformed all major asset classes as improving global growth characteristics resulted in better trade prospects. Risk-on assets also benefited as U.S. trade and protectionist concerns subsided.
Asset Class Reports
Positive global economic data led to a rally in risky assets over the quarter. Emerging markets outperformed all major asset classes as improving global growth characteristics resulted in better trade prospects. Risk-on assets also benefited as U.S. trade and protectionist concerns subsided.
White Papers
Most foundations, endowments, or nonprofits have probably considered environmental, social, and governance (ESG) investing, or soon will. Interest has escalated, and as a result, advice abounds and it is clear: ESG investing is complex. It seems every answer leads to two questions, and it’s no surprise that many turn a…
Asset Class Reports
Developed market bond yields rose quickly and swiftly as a result of higher growth, higher inflation prospects, and faster than expected interest rate increases by the Fed. Moreover, markets are expecting President Trump to implement significant fiscal stimulus by way of infrastructure spending. As a result, pro-growth…
Asset Class Reports
In September, the FOMC decided to keep the federal funds rate unchanged, citing the need for further improvement in the labor market. While the committee remains constructive on the economy, the group reiterated that rate hikes will happen in a gradual manner given current economic conditions and global externalities.…
Asset Class Reports
In June, the U.K. surprised global markets by electing to exit from the European Union. The news immediately led to a sell off in risk assets and a subsequent bid for safe government bonds. Fast forward a week later, global equity and currency markets reversed course as investors considered the prospect of more accommo…
Asset Class Reports
In March, the FOMC decided to hold short-term rates steady as Chair Yellen cited caution in normalizing interest rate policy. While U.S. unemployment has remained low and labor force participation has increased, growth concerns in China and in other developing nations have resulted in a cautious approach by the Fed. Co…
Asset Class Reports
After delaying a U.S. tightening cycle in September, the FOMC decided to raise short term rates by 25 basis points in December. Policy makers cited strong U.S. employment, growth, and inflation metrics as reasons to begin monetary policy normalization.
Asset Class Reports
During the third quarter, large-cap stocks outperformed small-caps as investors fled riskier assets as volatility spiked. Global markets were slammed by concerns over slowing Chinese economic growth and the free-fall in the Chinese stock market
Asset Class Reports
During the first half of 2015, growth outperformed value as investors continued to anticipate rising U.S. interest rates. Globally, market volatility spiked due to concerns over a Greek Eurozone exit as well as Chinese stock market fluctuations
Asset Class Reports
Steady U.S. growth and a lack of foreign exchange exposure contributed to a second consecutive quarter of small cap stocks outperforming large cap stocks. Non-U.S. stocks outperformed U.S. stocks as foreign exports and earning projections rose as a result of monetary easing in Europe and Japan. As a potential precursor…
White Papers
What are Master Limited Partnerships ("MLPs")? An MLP is a publicly-traded partnership that receives preferential tax treatment if at least 90% of their gross income is considered to be "qualifying." Qualifying income is "income and gains derived from the exploration, development, mining or production, processing, refi…
White Papers
Private equity has come a long way from its earliest days as a cottage industry almost 50 years ago. Leveraged buyout and venture capital, once considered novel concepts pioneered by a select group of financial whizzes, have become widely adopted investment strategies across all stages, sectors, and geographies. As t…
Asset Class Reports
The dispersion of returns between small cap and large cap equities widened in the 3rd quarter with the Russell 2000 index underperforming the S&P 500 index by 850 bps. The rotation from small to large cap stocks is due to small companies’ relatively unattractive valuations and less capitalized balance sheets – making i…
Asset Class Reports
Risk assets performed well in the quarter with all major equity indices posting positive returns. Emerging market equities outpaced U.S. and non-U.S. developed equities for the first time since the third quarter of 2012. Emerging markets saw a reversal in capital flows which helped the undervalued region experience som…
