Russell Investments

Hi, and welcome to Russell Investments Market Week in Review for the week ending Friday, September 25th.

My name is Ruti Samanta, Global Co-Head of Fixed Income here at Russell Investments.

This week, I'd like to discuss the recent rate hikes, some increased transparency on the state of AI issuance in credit markets, and the possibility of AI issuance impacting demand for treasuries with the potential for crowding out.

Markets have continued to process the growing hawkishness among central banks following the Federal Reserve's 25 basis point rate hike on September 16th.

Since July, the two-year Treasury yield has risen from about 4.2% to 4.9%, while the 10-year yield has similarly climbed from 4.4% to 5.1%.

Rather than being isolated to any one part of the yield market, we've seen a meaningful upward shift across the entire yield curve as investors are reassessing both the level and the staying power of elevated policy rates.

And one of the key questions investors have been asking is what is driving this rise in long-term yields? From our perspective at Russell Investments, we see a range of factors at play.

Expectations around tighter monetary policy in general, growing enthusiasm around the AI-related investment spending, and elevated uncertainty on the trajectory of inflation.

Susan spent over two decades at Pantheon, a global private markets investor with roughly $85 billion in assets under management, first as a partner allocating to GPs and then leading global business development, where she built the firm's wealth channel from the ground up.

Before that, her career ran through Morgan Stanley, Russell Investments, and the Pentagon.

On today's episode, we discuss why evergreen funds were never about liquidity.

what the recent gating headlines have gotten wrong and what they got right, and where the Wealth Channel goes next from single GP funds to 401ks.

What was the catalyst or the inflection point for you into private markets and into asset management?

very important mentor in my life, a gentleman named Hal Strong.

Hal hired me at Russell Investments.

And so there's also kind of a theme of Russell in the first kind of 10 years of my private markets career.

Hi, I'm Chris Nelson, Senior Portfolio Manager and Head of Sustainable Investing at Russell Investments.

This is Market Week in Review.

This week, the market story is really about interest rates.

[laughs]

But it's just like the Vanguard Advisor Alpha, Russell Investments have a report.

I think Dimensional have a report.

Morningstar have a very similar one.

Welcome to Without Boundaries, a podcast by Russell Investments.

Today, we've got the distinct pleasure of Bruce Richards joining us, who's the co-founder, the CEO, and the chairman of Marathon Asset Management.

So thank you so much for being with us.

Let's talk about Marathon Asset Management.

And in particular, so you've been investing for well over three decades in global credit markets in pretty much every asset category.

The Russell Investments clients mainly have allocations to you through your emerging market debt portfolios or your multi-asset credit portfolios.

Over those years, what is it that you've learned, I guess, that has sort of influenced the current investment philosophy, your investment approach at Marathon?

It's been a long time and there's a lot of economic cycles, a lot of financial cycles that, you know, kind of define some of these periods of time.

And they also cover global managers as well.

And then we've also got a deep partnership, not specifically on the black manager side, I'll get back to that now, but with Russell Investments, which assists us to cover the global universe.

So Russell Investments has basically an over 100-year track record in multi-management.

So they really give us a strong arm to be able to play in that space.

And yeah, on the black manager side, because we've got this team of six people that are dedicated to manager research, they do a regular monthly quantitative screen and then Once we identify managers that have come through that quantitative screen, which looks at not just performance, as I mentioned earlier, but also risk adjusted returns.

But your investments, if managed well, can last the rest of your life.

I know Russell Investments put out a statistic a few years back that showed some high amount of future returns come after you retire.

I don't remember the numbers, so I'm just going to stop that part of the conversation there.

But it's a profound shift in thinking.