A challenged 60/40 highlights the need for alts
The 60/40 may have thrived in the past, but today, alternative investments appear better-positioned across these four key metrics.
![](https://fsinvestments.com/wp-content/uploads/2024/07/COTW_2024-07-26_v1_thumbnail-247px.jpg?w=250&h=150&crop=1)
Cash left behind amid rapid market rotation?
Money market fund AUM is rising, even as yields decline, setting up an environment where investors could be subject to significant opportunity cost.
![Line chart showing money market funds assets under management growing steadily since January 2023, from $4.9 trillion to just over $6.1 trillion as of July 2024. While investors have been plowing money into cash, Treasury yields have stepped down -55 basis points since mid-April. Declining inflation readings suggest cash could also become less attractive.](https://fsinvestments.com/wp-content/uploads/2024/07/COTW_2024-07-19_v1_thumbnail-247px.jpg?w=250&h=150&crop=1)
U.S. middle market optimism outshines the world
This week’s chart examines the case for U.S. middle market firms, which expect a notably brighter future than their international peers.
![Column chart showing the percentage of middle market firms by country that expect to generate higher profit growth over the next 12 months. U.S. middle market firms lead the way, with 70% of companies expecting higher profits compared a global average of 59%. Just 45% of firms in the European Union expect higher profits over the next 12 months compared to 56% of Asian Pacific firms, 58% of firms in the EMEA region and 63% of Latin American firms.](https://fsinvestments.com/wp-content/uploads/2024/07/COTW_2024-07-12_thumbnail-247px.jpg?w=250&h=150&crop=1)
Private equity has historically outperformed public markets
The Magnificent 7 makes all the headlines, but private equity has quietly outperformed the S&P 500 over the past 5-, 10-, 15- and 20-year periods.
![](https://fsinvestments.com/wp-content/uploads/2024/06/COTW_2024-06-14_v1_thumbnail-247px.jpg?w=250&h=150&crop=1)
Diversification is key as the Mag 7 overshadows market
The Magnificent 7 tech stocks increasingly dictate the risk and return profile of the S&P 500, emphasizing the importance of diversification.
![Line chart shows the steadily rising contribution of the Magnificent 7 to the monthly volatility of the S&P 500 as these stocks (Microsoft, Apple, Amazon, META, Invidia, Tesla and Google) represent 32% of the Index. Investing in the S&P 500 increasingly implies a bet on their performance.](https://fsinvestments.com/wp-content/uploads/2024/06/COTW_2024-06-07_thumbnail-247px.jpg?w=250&h=150&crop=1)
Negative equity risk premium highlights investor complacency
The current negative equity risk premium suggests markets may not be sufficiently compensating investors for today’s market and economic risks.
![Line chart shows equity risk premium, a common way for analysts to decipher the level of excess return investors demand to assume equity market risk. It turned negative in 2H 2023, which may highlight a level of investor complacency as markets have rallied this year.](https://fsinvestments.com/wp-content/uploads/2024/05/COTW_2024-05-31_thumbnail-247px.jpg?w=250&h=150&crop=1)