Asset Allocation

Earnings have built a strong foundation. As we wrote earlier this month, earnings have provided a strong foundation for stocks this year. With second quarter earnings growth for the S&P 500 on track to exceed 30% (excluding private investment mark-ups) and analysts continuing to raise estimates, it's safe to say this season strengthened the fundamental case for equities.

Victory Capital Holdings, Inc. (VCTR) announced an acquisition of First Eagle Investments Wednesday, a deal that will create a combined asset manager with $571 billion in client assets, the companies said.

The most durable assumption in global investing is also the most outdated: that the United States is fundamentally a consumption story and China is fundamentally a capital-expenditure story.

European equities have long been written off as the ultimate value trap — a sleepy, slow-growth market living in the shadow of Wall Street’s tech-fueled mega-rally. But a massive shift in market dynamics is unfolding across the Atlantic.

Equity markets stumbled this week despite an economic backdrop that continues to show signs of broadening. While concerns about consumer strain are mounting, those worries have so far been offset by ongoing strength in business investment, particularly spending tied to artificial intelligence (AI).

Markets continue to hold up remarkably well as we move through the traditionally difficult second half of August, but the risks beneath the surface have shifted. Commodity prices are rising, money growth remains stronger than I would like, and long-term interest rates are again testing important levels.

As the credit cycle ages, defaults are likely to remain front and center. But for investors evaluating private credit alongside public markets, measuring defaults is not as straightforward as it may seem.

We think the gap between women’s confidence and ability underscores that effective plan communications must educate, engage and empower participants across the board. Women may worry more, but they’re clearly knowledgeable and forward-thinking—qualities that can be reinforced. Men may register more confidence but could still use refreshers on financial basics.

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

The 30-year U.S. Treasury yield has touched roughly 5.3% in the past week, a level not seen in nearly two decades. Global counterparts in Europe, the U.K., and Japan have climbed to similar heights.

For the past five weeks, markets have been focused on a steady stream of corporate earnings, supported by upbeat management commentary and another quarter of strong results. But with second quarter 2026 earnings season nearing its end, investors' attention is shifting back to the macro backdrop.

When it comes to equities exposure, investors typically gravitate toward a passive, market-cap-weighted index as the default strategy. These strategies are often billed as an efficient, low-cost method to capture broad market returns. As such, cap-weighted funds that track the S&P 500 or MSCI World have taken in trillions of dollars in global capital. However, within these market-cap-weighted indexes, a structural flaw exists.

The debt problem is real. It just isn’t a bomb. As we’ve written before, the debt and deficit problem isn’t what you think. It’s a tax on future growth, collected slowly, and normal interest rates are simply the price of money doing its job, not the crisis the headlines keep selling.

Most of us try to be mindful not to put all our eggs in one basket. But the now-familiar concern that most portfolios are quite concentrated in a relatively small group of large US tech companies means that investors may still be doing just that.

Today, the backdrop for real assets has reset. Growth is returning, but in different parts of the market than many investors remember. While in the post-pandemic period performance was defined by scale, now it is the result of adaptability and having access to a broad array of organization sizes and business plans.

To some, the debate over inflation targeting is largely an academic exercise. But its outcome will have direct consequences for the paths of global interest rates and global markets. Some background on how we arrived at this juncture, and where we might go from here, follows.

In this video, Chuck Carnevale examines 20 fast-growing businesses that appear reasonably or attractively valued, focusing on the GARP principle—Growth at a Reasonable Price. The central message is that investors shouldn’t simply look for great companies; they should look for great businesses at sensible valuations.

In the early weeks of Kevin Warsh’s start as chair of the U.S. Federal Reserve, there has been renewed focus on how “underlying” inflation should be measured to guide decisions on interest rates.

U.S. debt may not be at an immediate breaking point, but persistent deficits, higher rates, and rising interest costs are narrowing fiscal space and market tolerance.

GMO’s liquid alternatives are hedge fund strategies (e.g., equity long-short, global macro, event-driven) managed with an emphasis on risk control and liquidity. The GMO Alternative Allocation Strategy (“ALTA”) is a liquid alternative solution combining several underlying strategies; ALTA is available in a mutual fund with daily liquidity.

Morningstar's study, Mind the Gap 2026 reveals a 1.2% return gap. Learn how financial advisors can use automation to protect client wealth.

On August 19, the US Treasury announced that it will at least double the size of its long-term bond buybacks, from $2 billion to $4 billion per operation, between September 9 and the November Quarterly Refunding. The announcement followed a rise in the 30-year Treasury yield to roughly 5.3% and is drawing attention to how the Treasury may respond if pressure at the long end persists.

High-yield municipal bonds are one of the best performing asset classes this year but that doesn't mean we think all investors should consider adding them to their portfolio.

The headline U.S. unemployment rate has been falling for several months, but a closer look at who is leaving the workforce – and who isn’t entering or returning to it – reveals why average wages are stagnating, and why labor markets aren’t a source of inflationary pressure.

Market leadership has broadened beyond mega-cap tech, but the next phase is likely to reward disciplined, diversified investors, write Chris Galipeau and Lukasz Kalwak of Franklin Templeton Institute.

Hedged equity as a liquid alternative uses an options-based equity strategy — specifically Swan Global Investments’ Defined Risk Strategy (DRS), in continuous operation since 1997 — as a permanent alternatives allocation that stays invested in the equity market while actively managing downside risk through LEAPS put options

Global business activity is showing signs of stabilization, but beneath the surface, the world economy remains divided. Growth momentum has improved in several major developed economies, led by a stronger U.S. expansion and a tentative recovery in parts of Europe.

Anthropic’s preliminary second-quarter results reignited enthusiasm across the artificial intelligence sector, lifting semiconductor stocks 1% on Monday despite broader tech sector declines. Q2 revenue topped $11.5 billion — a 14x surge year-over-year and more than 2x last quarter’s figures.

FactSet finds core clients still favor cheap funds, while active ETF buyers pay a premium for performance, a trade-off advisors should watch.

Learn how RAFI fundamental indexing offers an alternative to market-cap weighting in this interview with Rob Arnott and TMX VettaFi.

BDC bonds have recovered most of their underperformance while equities continue to lag, suggesting investors are demanding a higher risk premium to compensate for uncertainty around portfolio valuations.

Gold’s outlook has brightened considerably following its first-half correction. Spot prices have rebounded to flirt with $4,400 per ounce, supported by renewed central-bank buying, softer economic data, and diminished expectations for further Fed tightening.

Equity markets continued to push higher this week, with nearly all major indices in the U.S. and abroad closing near or at record highs. While longer-term interest rates continued to drift higher, shorter-term interest rates moved lower as investors pushed out both the timing and magnitude of potential Federal Reserve rate hikes.

Discounted municipal bonds could expose you to unexpected taxes. Here's what to know before you buy.

Small-cap equities are winning out against their large-cap counterparts in a classic David versus Goliath ETF battle. After years of mega-cap technology dominance, small-cap equities have delivered investors a historic first half of 2026.

There is no one-size-fits-all approach to choosing between individual bonds and bond funds. The choice depends on an investor’s goals, time horizon, risk tolerance, need for predictable income, and available assets.

For over two decades, US equities have been the global market leader, outperforming the Stoxx Europe 600 by an astonishing approximately 530%. While Europe’s recent comeback has narrowed the gap, the forces underpinning US leadership remain firmly intact. Below, we revisit the case for US versus European equities and reiterate why we maintain our preference for US equities.

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

Today’s market does not represent today’s economy. The ratio of market value dependent on future economic activity versus present activity has never been higher. These companies have earnings now, but those earnings stem from investments in the future, not present consumption.

Investors are remaining cautious about the markets, according to our U.S. stocks and economy report this month. Our report notes that while investors have continued to pile into the market via strong ETF flows and high margin debt balances, they've done so reluctantly with more subdued attitudes.

Recent trends are sending confusing signals about the health of the U.S. labor market. Since late 2025, the employment/population ratio has moved lower even as the unemployment rate has declined.

In 3Q26, global fixed-income markets continue to navigate a complex backdrop as resilient growth, elevated inflation, hawkish central-bank pricing and the AI infrastructure buildout intersect. Growth remains supported by the US consumer, fiscal spending in Europe and AI-related capital investment, while inflation is expected to moderate through 2026 and into 2027.

Franklin Templeton Institute finds valuations across fixed income sectors becoming more attractive, with all-in yields approaching compelling levels—a signal to consider moving from a short-duration bias toward core bond portfolios.

For most high-net-worth investors, the bond sleeve of a portfolio isn't there to generate eye-popping returns or provide cocktail party fodder. Its job is much more mainstream: support a targeted lifestyle, cover tax bills, dampen equity market volatility, and provide "dry powder" when the world turns sideways.

The consumer remains resilient, but spending is becoming increasingly selective. Bank of America’s August Consumer Checkpoint showed total card spending per household increased 5.0% year-over-year in July, with spending excluding gasoline up 4.3%.

Royce Investment Partners: Co-CIO Francis Gannon examines the myth that rate hikes are bad news for US small-cap returns—and finds that history tells a different story.

In this video, Chuck Carnevale, co-founder of FAST Graphs, aka Mr. Valuation explores 14 growth stocks that he believes offer strong growth potential at reasonable valuations. While finding quality growth stocks has become more challenging, opportunities still exist for investors willing to focus on fundamentals, valuation, and future earnings growth.

While institutions have embraced private markets for decades, individuals have historically had limited access to these potentially valuable and versatile tools. Tony Davidow from Franklin Tempelton Institute demonstrates that private markets can be potentially valuable sources of growth and income during the accumulation and distribution phases of retirement.

There are routes towards adding innovation exposure in portfolios without going overboard on the biggest names. The ETF ecosystem has provided for significant innovation in investment strategies in recent years.

The fixed income landscape continues to offer real opportunity this year as well as persistent, events-driven uncertainty. Still, cutting through the headlines, investors can find major opportunities inside the portfolios and in adding new funds.

The risks of a rate hike have increased lately, but we don't believe we're there just yet. If the data changes—specifically if inflation comes in hotter-than-expected over the next few months—we'll likely change our view.

Discover the top ETF launches of summer 2026, including new funds from iShares, Amplify, and Defiance targeting crypto, AI, and core equity.

Goldman Sachs Asset Management is continuing its aggressive expansion into active, high-yielding options strategies with a definitive agreement to acquire NEOS Investments. Similar to Innovator Capital Management, another recent acquisition, NEOS has established a firm leadership position in the ETF space.

The market was jolted by a much weaker-than-expected employment report, sending Treasury yields sharply lower as investors quickly reduced the odds of another Federal Reserve rate hike. At first glance, the payroll number looked alarming, particularly when combined with sizable downward revisions to prior months and unexpectedly soft wage growth.

Demand continues to outpace record supply. Municipal bonds remain an attractive income opportunity in a market where the Federal Reserve (Fed) is likely to remain on hold and carry is driving returns. Despite record issuance of roughly $50 billion per month, demand has remained strong. 

Tech and AI are driving a greater share of global equity market returns and earnings growth, raising concentration risks and the need for broader diversification.