Smart Beta

US equities continued to climb higher in May, with the S&P 500 Index rising 5.1%. Further de-escalation of geopolitical tension in the Middle East has paved the way for the market’s 19.5% advance from the late-March lows.

Private markets have become integral to modern portfolios, with many investors searching for higher returns and diversification, including from public markets. But recent fund redemptions have reinforced that illiquidity isn’t theoretical, raising questions about the benefits of giving up liquidity. We see several—but investors must understand the trade-offs.

For the dollar-denominated investor weighing how to position for the back half of 2026, last week tightened a thesis we have been building all year.

Reducing equity exposure during periods of elevated risk is not the same as market timing. The financial industry has spend decades blurring that distinction.

Would I be better off waiting for the Fed to make its move on rates before investing?” “Should I wait to increase duration because a blocked Strait of Hormuz could push oil prices higher and push rates even higher?” “Should I invest in bonds gradually to reduce the risk of missing the rate peak?

Rising office delinquencies within commercial mortgage-backed securities (CMBS) reflect genuine pressures from shifting work patterns, higher interest rates, and greater refinancing risk.

Taylor Topoussis and Chris Galipeau discuss high-conviction insights that go beyond media headlines.

LPL Research analyzes stock valuations, finding them fair given growth, rates, inflation, and AI-driven earnings outlook despite risks.

AI is a transformative technology with both near-term and long-term implications for the economy. For investors, while the debt-funded AI buildout has the potential to become a secular driver of risk premia, we believe any such shift would only play out through a multi-year adjustment and would not override the cyclical forces that affect markets.

Every family has a money story. It gets passed down quietly, invisibly, in the way families talk around the dinner table or on long walks together.

May’s 5.3% S&P 500 gain masked a deeply uneven market: technology surged 16% on AI spending momentum while most sectors declined, and a surprise inflation rebound flipped the Fed narrative from cuts to potential hikes.

Geopolitical risks are still lingering in the background, but the story lately has been all about earnings. A strong 1Q26 season, paired with a steady drumbeat of upbeat management commentary, has helped push the S&P 500 to 21 record highs this year.

Businesses are racing to build the physical infrastructure that makes AI usable at scale – data centers, the graphics processing unit (GPU) hardware stack, power, and cooling.

The market continues to demonstrate remarkable resilience. Lower oil prices, easing Treasury yields, and the relentless buildout of artificial intelligence infrastructure are still providing a favorable backdrop for risk assets.

If you’re not familiar with the name Leopold Aschenbrenner, you should be. A 24-year-old wunderkind, Aschenbrenner was hired by OpenAI in 2023 to work on the company’s “superalignment” team, essentially trying to figure out how to keep AI systems safe once they become smarter than the people building them.

Economies around the world aren’t just reliant on AI investments for growth. The appreciation of AI stocks has supported spending, which is following “K-shaped” patterns. A significant correction to the valuations of tech leaders would therefore be even more likely to result in recession.

The global defense industry continues to move rapidly from legacy, heavy-hardware platforms to agile, unmanned systems. Today, the Trump Administration announced that it’s pursuing funding deals for drone companies in an effort to increase domestic production in today’s defensive landscape.

Vocabulary is a power builder. Every time I use the word “hegemonic” in a conversation, I see my listeners’ eyebrows go up as if to say, “what does this guy know that I don’t?” Then again maybe they’re just signaling that I’m full of more than baked beans.

The ETF landscape includes a wide variety of innovative, intriguing funds that look to meet investor goals. From equities to fixed income, all kinds of strategies offer intriguing spins on areas like income and dividends.

J.P. Morgan Asset Management has expanded its alternative lineup with the launch of the JPMorgan Managed Futures Plus ETF (JPFP) on the Nasdaq. The actively managed fund combines a core U.S. equity allocation with a systematic managed futures strategy spanning equities, bonds, currencies, and commodities.

Closed-end funds may not be a hot topic right now, but they offer a highly compelling means to solve today's macroeconomic woes.

New York City is facing one of the most significant fiscal challenges in recent memory. The NYC Comptroller has projected a $2.2 billion budget shortfall for FY2026, growing to a $10.4 billion gap in FY2027 (Source: New York City Comptroller, January 2026). That is a two-year deficit of roughly $12.6 billion.

For the last eight years, GMO’s Asset Allocation team has held a differentiated view on Japanese equities. Long before Japan re‑entered the global investment narrative, we argued that the country was undergoing slow but durable structural changes aimed at improving corporate governance, growth, and capital efficiency. These reforms were never expected to deliver quick results. Instead, we expected them to compound quietly over time.

The essential feature of a useful alternative asset isn’t that it’s unusual or exotic, but that its returns aren’t tightly linked to the risks that already dominate the portfolio. The value of an alternative asset comes from the way it interacts with the other assets in the portfolio.

The dollar is supposed to be dying. We’ve heard that argument for the better part of a decade, and it’s getting louder, not quieter. Dollar dominance isn’t fading. In fact, the events of late April 2026 just delivered the loudest counter-signal in years.

Equities extend gains as earnings and semiconductors lead markets higher. Consumer confidence remains subdued despite economic resilience. Inflation is easing gradually but remains above the Fed’s targey.

Recent Federal Reserve communications have turned more hawkish, reflecting concern that persistent supply-driven price pressures could begin to feed into inflation expectations. But unlike in prior cycles, today’s environment is not defined by supply shocks alone.

Ahead of next week’s May employment report, the summer jobs market is coming into focus as teenagers and students finish the school year. According to Challenger, Gray & Christmas, teen hiring from May through July is expected to total just 790,000 jobs this summer, down slightly from 801,000 last summer.

Artificial intelligence (AI) poses many ethical issues that may translate into risks for consumers, companies and investors. AI regulation, which is developing unevenly across jurisdictions, adds to the uncertainty. The key for investors, in our view, is to focus on transparency and explainability.

What is unusual about today, and I mean genuinely unusual, historically unusual, is that the people building the equivalent of Newcomen's engine today know exactly (or think they do) what they are building. They are not just pumping water. They “know” the vast potential.

In the 24-hour financial news cycle, there’s much buzz surrounding the buildout of infrastructure for artificial intelligence (AI). What about infrastructure beneficial to humans? There are plenty of ETF opportunities in the sector that’s gone from defensive hedge to dynamic capital appreciation engine.

Last week’s data tracked a shifting economic trajectory over the last several months. While the latest reading on first-quarter GDP confirms the economy started the year with steady growth, subsequent inflation metrics moved higher and ultimately weighed on consumer confidence.

The reality is, the American people wouldn’t accept the level of taxation necessary to maintain the warfare/welfare state. There would be a tax revolt. So, the government resorts to a less obvious tax.

Many debates in defined contribution (DC) circles focus on fees, new asset classes, and ever more complex solutions. But the biggest improvement available to plan participants may come from something far simpler: how their fixed income is managed.

Risk appetite remains firmly intact as optimism surrounding a potential resolution to the war with Iran continues to improve investor sentiment. The S&P 500 has now advanced for eight consecutive weeks, with price action remaining remarkably resilient throughout the recovery.

The next IPO wave may create a different kind of portfolio challenge for institutions already holding private stakes in companies like SpaceX and OpenAI.

As globalization gives way to reshoring and resurgent resource nationalism, emerging markets may offer fresh alpha opportunities through their ability to supply the raw materials required to fuel the AI boom.

Kevin Warsh was officially sworn in as 17th Federal Reserve chair on May 22. Warsh is likely to build consensus at the Fed rather than push for aggressive action to cut rates.

The U.S. government’s decision to invest $2 billion directly into nine quantum-computing companies through minority equity stakes—not just grants—signals a major shift toward treating quantum as a strategic commercial industry, with potential implications for investors seeking targeted exposure through funds like the WisdomTree Quantum Computing Fund (WQTM).

May is 529 Month. As college costs rise, learn five practical ways to maximize your plan’s tax benefits, flexibility and growth potential to prepare for the future.

Commodity market trends: Commodity markets have been on an impressive, and volatile, run so far this decade, with leadership oscillating between energy and precious metals. Not surprising, after commodities’ “Lost Decade” of the 2010s, given the asset class tends to move in long capital cycles.

Equity investors are facing monumental questions about their allocation strategies in a new market regime. Market concentration has risen sharply, valuations have climbed to record highs in parts of the market and factor volatility has dominated returns.

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.

Since early April, U.S. stocks have rallied sharply despite an ongoing war, rising inflation fueled by soaring oil prices (near $100/barrel), higher bond yields (up 0.6 to 0.7 percentage points), and frothy valuations (21 times projected earnings vs. a historical average of 17 times for the S&P 500 Index).

The ETF industry has exploded in popularity in recent years. Old mutual fund heavy firms have increasingly leaned into the space, while new shops have proliferated, adding all kinds of new ETFs for investors to consider. That has benefitted investors and advisors immensely.

On the surface, last week looked engineered to embarrass our positioning. The dollar index climbed to a six-week high above 99.3 by Friday and finished the week roughly flat at those levels.

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.

An unexpected rap on your front door is sometimes cause for anxiety. You are not sure who or what is out there, wanting to get in.

This persistent growth highlights how central low-cost core index products remain to advisor and retail portfolios alike. Even as asset managers roll out specialized strategies, capital continues to flow within broad-market beta.