Are corporate bonds additive to portfolios that already own stocks and government bonds? Jared Kizer revisits this question with a look at the historical justification for, and some facts and fiction regarding, the investment-grade credit premium.
In this post, we’ll look specifically at emerging markets by examining five lessons from long-run and current market data that reinforce some of the reasons investors should remain committed to emerging markets equity investing.
Contributing to the literature: Jared Kizer and Sean Grover chat about the publication of their new journal article:
Ken French’s recently updated global factor data shows the global size and value premiums were basically flat for the past 10 years (the value premium was actually about –1 percent per year over this span). This long-term historical result has surprised many people and naturally led some to ask whether these premiums can be expected in the future. Figure 1 graphs the one-, three-, five-, 10-, 15- and 20-year average size and value premiums using the global data set.
International diversification has come under attack over the last couple of years as both international developed and emerging markets have underperformed U.S. stocks. Figure 1 illustrates this underperformance by looking at the growth of $1,000 invested in U.S. and international developed market stocks over the period from January 2008 through November of this year.