Imagine an asset class with a decently positive expected rate of return, little to no equity beta, and little to no interest rate duration. A unicorn? We think not.
Passive “doing-by-not-doing” is no way to run a bond portfolio today.
Can target date plans be better? That’s the question many defined contribution plan sponsors are asking and a new paper from GMO’s Peter Chiappinelli and Ram Thirukkonda argues yes, they can.
Many asset allocation strategies that focus on value have had disappointing returns lately, with their managers having some explaining to do. However, the S&P 500 Index has some explaining to do as well.