Wealth Outlook 2024 - Slow then grow

Glossary 135 US, the most-used SMID-cap benchmark is the Russell 2000 Index, which straddles all the stocks in the small- cap (S&P 600) and mid-cap (S&P 400) space. Structured credit is a type of investment in which an issuer utilizes securitization to pool similar debt obliga- tions, creating novel financial instruments to enable bet- ter use of available capital or serve as a cheaper source of funding, especially for lower-rated originators. Different classes of securities (typically with different credit rat- ings) from the same pool of assets are often pooled (called “tranching”) to create different investment classes for the securities. Structured credit can offer investors an oppor- tunity for enhanced yield and diversification benefits at the portfolio level. Products includeUSmortgage-backed securities (MBS), asset-backed securities (ABS) and com- mercial-mortgage-backed securities (CMBS). When des- ignated “Agency” (as in “US Agency MBS”), it means that in addition to a first lien, underlying loans are secured by a guarantee from a US Government-Sponsored Enterprise (GSE) such as Fannie Mae or Freddie Mac. Treasury Inflation-Protected Securities (TIPS ) are a type of Treasury bond indexed to an inflationary gauge. TIPS can help protect investors froma decline in their purchas- ing power and are a popular asset for protecting portfoli- os against inflation. USD-denominated EM fixed income is represented by the FTSE Emerging Market Sovereign Bond Index (ESBI), covering the sovereign debt of EM governments issued in USD. The most common form of what is also known as “hard currency” debt, these bonds are less volatile than local debt due to the lack of EM currency risk. Other index definitions: Bloomberg US Aggregate Bond Inde x consists of the US IG fixed-rate bond market, including government and credit securities, agency mortgage pass-through securi- ties, ABS and CMBS. Bloomberg US Corporate Bond Index measures the IG fixed-rate, taxable corporate bond market. It includes USD-denominated securities publicly issued by US and non-US industrial, utility, and financial issuers. Bloomberg Latin America Local Currency Bond Index measures exposure to debt of Latin American issuers denominated in local currencies, making it a way to di- versify fixed income exposure beyond US borders and USD. Indeed, this asset class can be a hedge against USD weakening and a means for enhancing current returns in low-interest-rate environments. Bloomberg Latin America Sovereign + Corporate Index measures sovereign and corporate debt securities from Latin American issuers denominated in USD, euro, and local currencies of issuers. Bloomberg US Treasury Index measures USD-denomi- nated, fixed-rate, nominal debt issued by the US Treasury. Cambridge Associates LLC US Private Equity Index measures US private equity funds – buyout, growth equi- ty, private equity energy, and subordinated capital funds – including fully liquidated partnerships. Cliffwater Direct Lending Index (CDLI) measures the un- levered, gross-of-fees performance of USmiddle-market corporate loans, as represented by the underlying assets of Business Development Companies (BDCs), including both exchange-traded and unlisted BDCs, subject to cer- tain eligibility criteria. CSI 300 Index is an indicator for Chinese stock market performance. It includes the 300 largest companies by market capitalization traded on the Shanghai and the Shenzhen stock exchanges. It is somewhat equivalent to the S&P 500 Index in the US. Federal Reserve Bank of Philadelphia Partisan Conflict Index tracks the degree of political disagreement among US politicians at the federal level. It does this by measur- ing the frequency of newspaper articles reporting dis- agreement and contention in each month between the two dominant political parties, various factions within Congress, and the president. FTSE EPRANareit Global Real Estate Index is a free float– adjusted, market capitalization-weighted index designed to track the performance of listed real estate companies in both developed and emerging countries worldwide. Constituents of the Index are screened on liquidity, size, and revenue. Wealth Outlook 2024