A common approach by investors is to invest in funds that have historically outperformed their benchmark index, hoping that a fund’s past outperformance will continue. Our research finds this approach can often work — until it doesn’t. We see a persistence effect in fund performance data, whereby funds with strong three-year performance often have another three-years of good performance in the following period. But when the relationship breaks down, it is often painful. The prior winners tend to become losers around big inflection points in the market, such as the 2008 Global Financial Crisis and the 2022 sell-off for stocks

Many have drawn the comparison between the current AI buildout with the dotcom period in the late 1990s, when the infrastructure for the internet was built. It’s a sensible comparison to make because of the massive amount of capital deployed to commercialize the buildout of revolutionary and life-changing technology. It’s also a reasonable comparison to make because technology stocks drove one of the biggest stock market rallies in history more than 25 years ago, and some are using similar language today when discussing the potential (and we underscore potential) of AI and bidding up the valuations of AI companies poised to benefi

The Post-Powell Transition: As Jerome Powell’s tenure as Federal Reserve (Fed) chair draws to a close, markets are beginning to look beyond the familiar playbook that has guided monetary policy for much of the past decade. A likely transition to a Kevin Warsh–led Fed would represent more than a change in leadership — it could signal a shift in how the central bank interacts with markets, balances transparency with discipline, and defines its own role in the financial system.

A Smaller Fed Footprint: Warsh has consistently argued for a smaller Fed footprint, less explicit guidance, and a greater role for market p

With April behind us, we conducted a deep dive into exchange-traded fund (ETF) flows over the month and year-to-date (YTD) periods. Flows measure the net movement of cash into and out of investment vehicles, such as mutual funds and ETFs. We analyzed flows to gain insight on investor demand and sentiment surrounding asset classes, sectors, and other segments of markets.

Broad Asset Class Flows

Following a global market sell-off in March, risk assets surged in April, with most equity categories posting double-digit gains. Easing geopolitical tensions and lower oil prices helped stabilize sentiment, allowing investors to ref...
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