Rebalancing During a Time of Crisis

The Global Financial Crisis (GFC) of 2008 and the recent experience with COVID-19 both coincided with extreme market movements, resulting in questions about the optimal approach to rebalancing. Understanding the consequences of rebalancing (or not) can help drive the appropriate strategy for a particular pool of assets. ACG discusses the goals, considerations, and best practices of rebalancing during a time of crisis.
 


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Energy: Recovery or Impaired?

As consumers have stayed home amidst the Covid19 pandemic, the resulting decline in oil demand has created new challenges for a market that was arguably already oversupplied with oil. ACG examines the longer term implications, outcomes and opportunities for investors.

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Modern Monetary Theory

The decision of central banks to move to unlimited Quantitative Easing (QE) has essentially connected fiscal policy with monetary policy. As a result, the path back to “normal” may be long and winding. In this report, ACG explains the implications of rising debt, how various asset classes might be impacted, and what investors should consider when rebalancing portfolios.
 

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Concentrated Leadership

The collective weight of the top five holdings in the S&P 500 has approached levels last seen in 2000. Concentration has become more prominent as five companies have accounted for nearly one-third of the S&P 500’s total return since 2017. While reallocating to an S&P 500 Equal-Weight product may alleviate concerns over holdings concentration, ACG discusses why investors should consider the dispersion in returns, lower average market cap, and higher expense ratios and turnover relative to passive products tracking the cap-weighted index.

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