Center For Investment Excellence Across the Great Divide: Public and Private markets reconsidered
Nov 13, 2024
Jared Gross, Head of Institutional Portfolio Strategy at J.P. Morgan Asset Management, shares expert insights on the evolving landscape of public and private markets. He emphasizes the need for a balanced approach to asset allocation, especially with rising interest rates. The conversation highlights the growing significance of private credit and the interplay between real estate and REITs. Gross also urges investors to reconsider how they view equity investments, advocating for a strategic reevaluation of capital allocation for better diversification and performance.
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Underlying Asset Risks
- Many investment risks are similar at the asset level, whether it's equity, credit, or real estate.
- Key distinctions arise from investment vehicles and added leverage.
Blurred Credit Lines
- The line between investment grade and high-yield credit has blurred.
- Investors should differentiate between core fixed income (duration) and credit allocations (income).
Credit Strategy Advice
- Consider the benefits of credit strategies: additional yield, excess return potential, and lower volatility.
- Active credit management and understanding the credit cycle are crucial for success.