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Asset Allocation Committee Outlook

1Q 2024
Webinar Replay
On January 11, Erik Knutzen, Chief Investment Officer—Multi-Asset, was joined by Gregory Spiegel, Portfolio Manager on The Small Cap Team, to discuss how these dynamics seem to be playing out in the quarter ahead. View Replay
Flows and Fundamentals
“One of the lessons to take from 2023 is that markets can defy apparently soft fundamentals for much longer than one might expect.”

—Erik L. Knutzen, CFA, CAIA, Chief Investment Officer—Multi-Asset
—Niall O'Sullivan, Chief Investment Officer, Multi Asset Strategies – EMEA

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Commentary

Many investors remain overweight cash, but markets have begun to price for a substantial decline in short-term interest rates. The Asset Allocation Committee (“the AAC”) therefore thinks it is time to deploy liquidity, locking in bond yields before they, too, are dragged down, and seeking out value in equities and other markets. As a result, we have heavily downgraded our view on cash. However, while a redeployment of cash and declining rates could sustain current market momentum, rates are priced for a decline because economic growth is expected to slow, and that fragile fundamental backdrop makes us cautious where valuations are full. Instead, we favor the laggards of the past 12 months, which we think could benefit not only from liquidity coming in from the sidelines, but also from our central scenario of gradually declining inflation and slowing but not recessionary U.S. growth. That includes large swaths of the fixed income universe, especially short to intermediate maturities where yields still reflect today’s high policy rates. It also includes those pockets of the equity market that have priced for a harder landing or appear structurally undervalued, such as small caps, industrial, real estate and healthcare sectors, value stocks and Japan. Commodities, especially industrial metals, have also priced for a harder landing, and could be a useful hedge against unexpected upside in inflation or growth—particularly should that originate in China. When cash begins to drag on returns but economic fundamentals remain uncertain, conservative valuations become an investor’s friend.

According to the fund-flows data provider EPFR, almost $1.2tn flowed into U.S. money market funds in the first 11 months of 2023. At almost $6tn, those fund assets are at an all-time high.

A growing perception that interest rates have peaked and may even be cut in the first quarter of 2024 could start to reverse those flows. Investors who see the market pricing for a rapid decline in cash rates and appreciate the potential for non-cash assets to benefit may already be putting their liquidity to work.

Fixed Income: Locking in Yield

In fixed income, the case for doing so is clear, in our view—even when considering short- to intermediate-duration government bonds.

Today’s U.S. dollar cash rate is still more than a percentage point higher than the U.S. two-year Treasury yield to maturity, and 1.5 percentage points higher than the bond’s current or “running” yield. But forward-rate pricing, particularly following the U.S. Federal Reserve’s (Fed) December meeting, suggests this is unlikely to last.

Fed Chair Jerome Powell has said that further hikes are not expected, and of the 19 policy-setters, only eight now see inflation risks biased to the upside, down from 14 at the previous meeting. The median outlook from the Fed’s new “dot plot” suggests there could be 75 basis points of cuts during 2024, up from 50 basis points in the previous plot. That is not as aggressive as the path priced into forward rates, as several central bank officials have pointed out, but the direction of travel is becoming clearer.

If we assume those forward rates come to pass, and that the two-year bond yield rolls down steadily to the projected cash rate in two years’ time, the estimated total return from rolling the cash position would be only slightly higher than the income gained from reinvesting the bond coupons. Add in the capital appreciation from the bond rolling down a steepening curve, and the estimated total return of the bond equals that of cash.

In our view, it is time to start locking in yield.

Is Cash Still King?
While the current cash rate is high, the estimated two-year total return on cash has fallen below that of the two-year Treasury bond.
N0298_0124_chart_1-01_AAC-1Q2024 
Source: Refinitiv, Neuberger Berman. Data as of December 14, 2023. Total return on cash estimated based on rolling into the new three-month cash rate, as projected by the forward rates market, for two years. Total return on the two-year Treasury bond estimated based on reinvested coupons and capital appreciation, assuming the bond yield converges steadily and meets the projected three-month cash rate at maturity. Nothing herein constitutes a prediction or projection of future events or future market behavior. Historical trends do not imply, forecast or guarantee future results. Due to a variety of factors, actual events or market behavior may differ significantly from any views expressed or any historical results. Investing entails risks, including possible loss of principal. Past performance is no guarantee of future results.

Why are rates projected to decline? Because inflation and growth are also expected to decline. Against that background, we continue to favor government and investment-grade corporate bonds. We also take a positive view on securitized products, especially mortgage-backed securities, where high quality is currently paired with attractive value due to a supply-and-demand mismatch through 2022 and 2023.

Shorter-duration, high-quality, high yield bonds could also be attractive for those seeking more potential return. Leverage is low and interest coverage is high, in general, and recent months have seen the worrisome maturity wall pushed out quite substantially: according to JPMorgan data, 2024 and 2025 maturities in the U.S. market have declined by some 40% since April and 2024 maturities are down almost 80% in the European high yield market. Overall, however, we remain neutral on high yield given relatively tight spreads, the still unfolding impact of higher rates and the potential for slower growth.

Ultimately, our fixed income views are largely unchanged since last quarter, with one big exception: the value we saw for cash as part of our favorable view on shorter duration bonds is no longer there.

Equities: Fundamentals Versus Liquidity

The AAC’s outlook for equities is more complex. Here investors face an “optionality” consideration rather than a simple question of the relative value of short-term income streams. Is now an opportune time to deploy cash into the equity market, or might valuations get cheaper?

Equities May Be Expensive Relative to the Fundamental Outlook
Equity valuation multiples have recovered meaningfully from the 2022 correction
N0298_0124_chart_2-01_AAC-1Q2024 
Source: Bloomberg. Data as of November 30, 2023. Nothing herein constitutes a prediction or projection of future events or future market behavior. Historical trends do not imply, forecast or guarantee future results. Due to a variety of factors, actual events or market behavior may differ significantly from any views expressed or any historical results. Investing entails risks, including possible loss of principal. Past performance is no guarantee of future results.

Declining inflation, growth and rates could boost valuations, but U.S. large-cap multiples in particular are already quite high. Moreover, they are high even on ambitious earnings growth projections for the coming year. Analysts are currently forecasting 2024 S&P 500 Index earnings at $244 per share, which would be a rise of around 12% on 2023. For comparison, earnings grew by less than 2% in 2023, while GDP growth was constantly surprising on the upside. In Europe, where we see a more challenging economic growth outlook, analysts are similarly forecasting 6% earnings growth this year after a decline of 1.2% in 2023.

Nonetheless, one of the lessons of 2023 is that markets can defy apparently soft fundamentals for much longer than expected. Furthermore, the recent rally has brought us back only to the price levels equities reached two years ago, with some way to go to re-test highs for valuation in most categories. Index valuations also appear less full once mega-cap technology stocks are stripped out. Finally, last year’s recovery got going with rates rising rapidly and investors rushing into cash—we think it is rash to assume the recovery will fizzle out while rates are declining and a huge pile of cash is potentially coming off the sidelines.

Equities: Conservative Valuations Are Your Friend

When the market is subject to a tide of liquidity, sentiment and momentum, that tide is likely to lift all boats. A lot of potential return can be left on the table if investors make meaningful bets against “overvalued” stocks, sectors, regions or styles. For that reason, the AAC retained its neutral view on most of the headline equity categories.

That said, as the illustration above suggests, some valuations rebounded less than others during 2023. Those relatively lower valuations could provide a buffer against downside growth surprises and especially upside inflation surprises next year. They may also attract a meaningful share of flows from cash or from a rotation out of mega-cap tech, if investors are concerned about stretched valuations and seek out last year’s laggards.

The outstanding example, in our eyes, is U.S. smaller-company stocks. The Russell 1000 Index of U.S. large-caps finished 2023 up 24% on a valuation multiple of 22 times earnings, while the Russell 2000 Index of small-caps was up 16% on a multiple of 14 times. Some of that gap could close this year, potentially quite rapidly. Smaller companies are also likely to find greater relief in easier financing conditions.

The value style is another area that has not fully participated in the upswing of recent months. The Russell 1000 Growth Index outperformed the Value Index last year by 41% to 12%. Their multiples are 33 and 16 times, respectively. Lagging sectors include financials, industrials, materials and healthcare.

Regionally, we think the picture is more ambiguous.

European equities appear relatively cheap, but Europe’s economy is already weaker than that of the U.S. and appears to be weakening still further. A growth surprise out of China would help, as it did at the beginning of 2023, but that is not our central scenario. A weaker U.S. dollar would also help, but that is not in our immediate outlook, either (see “Up for Debate: Are We Dollar Bulls or Bears?”).

The AAC continues to prefer Japan, which benefits from a number of tailwinds: attractive valuations (even after some recent catch-up); a long-awaited return to positive growth and inflation; Japanese investors’ growing appetite for domestic exposure; the strong dollar and weak yen; and a structural turn to more shareholder-friendly governance and management. Perhaps the biggest risk to Japanese equities in the first half of 2024 is the overwhelmingly positive buy-side and sell-side consensus in favor of the market.

On emerging markets, the AAC comes out neutral as it balances a cautious view on China, which dominates the category, against a more favorable view on other markets, such as India, where strong growth should continue to provide a tailwind.

Private Markets: Seek Out Capital Shortages

In private markets, we believe our longstanding major theme of seeking out liquidity and capital shortages has some way to run. Whereas abundant flows have been and could continue pushing public-market valuations up, a lack of flows from over-allocated investors in private markets is resulting in some attractively valued opportunities.

General Partner-led secondaries, as well as the emerging category of mid-life co-investments, offer to provide liquidity in exchange for often-discounted exposure to high-quality assets. Capital solutions, which can help sponsors of private companies bridge the gap between equity and debt when they have opportunities to grow but are unable to borrow and unwilling to dilute shareholders, can realize attractive returns with lower leverage. Consumer lending, residential mortgage lending and receivables financing can step in and earn attractive rates where banks remain tentative. These approaches account for much of the AAC’s decision to maintain their overweight views in private markets. The capital-shortage theme is no longer as strong in senior lending to private equity-sponsored companies, where the broadly syndicated loan market is starting make a comeback, but the AAC remains positive given high yields, declining leverage and ample deal flow.

Liquid Alternatives: A Contrarian View Favoring Commodities

The theme of seeking out capital shortages also crosses over into the AAC’s views on liquid alternatives. It is why insurance-linked strategies, such as catastrophe bonds, are one of the few genuinely bright spots in the category: a shortage of capital in the property-and-casualty insurance sector is leading to an abundance of risk transfer at attractive prices.

The other area where the AAC takes a favorable view—somewhat at odds with the bearishness of the market heading into an expected economic slowdown—is commodities. Commodities in the energy and especially the industrial metal sectors, which have been sensitive to the slowdown in China and global manufacturing, are priced for a hard landing, even as large parts of the equity and bond market are priced for a near-immaculate disinflation. We do not anticipate meaningful growth in supply through 2024, but we could see some restocking of inventories as the manufacturing recession eases and rates decline; that has the potential to push up prices, as well as the roll yield from the futures curve.

U.S. Equities and Copper Are Telling Very Different Stories About Economic Growth Prospects
N0298_0124_chart_3-01_AAC-1Q2024 
Source: Refinitive. Data as of December 20, 2023. For illustrative purposes only. Nothing herein constitutes a prediction or projection of future events or future market behavior. Historical trends do not imply, forecast or guarantee future results. Due to a variety of factors, actual events or market behavior may differ significantly from any views expressed or any historical results. Investing entails risks, including possible loss of principal. Indexes are unmanaged and are not available for direct investment. Past performance is no guarantee of future results.

Furthermore, in our view, commodities are the perfect hedge against the biggest risks to our central economic scenario: an unexpected spike in inflation or an upside growth surprise, particularly if it originates from China, and any further additions to the long list of recent political and geopolitical shocks.

As we head into a record-breaking year of elections worldwide, with Taiwan at the outset and the U.S. Presidential election in November, we believe this exposure could prove a valuable source of diversification.

Up for Debate
Are We Dollar Bulls or Bears?

A number of the AAC’s views hinge upon the outlook for the U.S. dollar—particularly our views on regional equity allocations.

The dollar raced to its recent peak at the end of 2022 as the Fed marched ahead of the other major central banks with its rate hikes. It then declined steadily as markets began to price for the terminal rate. A rally through July, August and September last year, driven by a widening growth gap with the rest of the developed world, has been reversing. Market positioning has started to become quite bearish.

We understand that sentiment—and some members of the AAC share it. The dollar remains expensive, according to purchasing power parity (PPP) metrics. Some signals from the Fed that have been more dovish than those from the European Central Bank (ECB), especially since their December meetings, have pushed the dollar lower.

The majority on the Committee believe that the dollar is likely to stay in the trading range that has been developing through 2023, however, at least for the first quarter of this year.

While PPP metrics make the currency look expensive, it looks more reasonably valued based on interest-rate differentials; so far, setting aside the yen, these differentials have not moved significantly because the market has been repricing expectations for other central banks alongside the Fed. U.S. economic data continues to surprise to the upside while data out of Europe and China have been disappointing. The majority of AAC members believe we need to see not only a fundamental weakening in the U.S. jobs market to push the dollar through the bottom of its trading range, but also some signs of recovery from Europe and/or China.

Those conditions may materialize, but they may not—and either way, we do not think they are likely early in 2024, leaving us neutral to positive on the dollar over the near term.

Heading Down or Finding a Range?
U.S. Dollar Index
N0298_0124_chart_4-01_AAC-1Q2024 
Source: Refinitiv. Data as of December 21, 2023. For illustrative purposes only. Nothing herein constitutes a prediction or projection of future events or future market behavior. Historical trends do not imply, forecast or guarantee future results. Due to a variety of factors, actual events or market behavior may differ significantly from any views expressed or any historical results. Investing entails risks, including possible loss of principal. Past performance is no guarantee of future results.
Where Are the Opportunities in Real Estate?

While it has been a volatile few years for equity and bond markets, real estate investors have experienced significant ups and downs over this stretch as well. The commercial property sector has arguably been the epicenter for some of the biggest economic disruptions and dislocations of recent times, enduring first the “amazonification” of retail, then the empty offices of the pandemic, and finally the rapid rise in interest rates.

Does the prospect of declining rates signal an opportune time to invest? The AAC believes so, but its overall view remains neutral because the sector exhibits a series of extreme bifurcations.

First, there is the bifurcation between public Real Estate Investment Trusts (REITs) and core private real estate funds. Because the market can express a view on the pricing of REITs, it has: the FTSE EPRA NAREIT U.S. Index fell by 36% between the end of 2021 and October 2023. With the turn in sentiment on interest rates, the REITs market has since staged a substantial rally and may have bottomed out. By contrast, the value of the NCREIF Open End Diversified Core Equity Fund Index (NCREIF ODCE) began to adjust only a year later at the end of 2022, and is currently down just 10.5% from its peak. We suspect there could still be further downward adjustments to private funds’ net asset values.

The second bifurcation is between what our Real Estate Team describes as “the haves and the have-nots”: strong, proven operators with resilient balance sheets in sectors that have strong fundamentals, and those with vulnerable balance sheets stranded in sectors on the wrong side of structural trends. Examples of vulnerable sectors include offices and suburban retail malls, which we see as being on the wrong side of structural remote-working and retail trends, where valuations may struggle to recover. Other sectors are more likely to benefit from those trends, such as single- and multi-family residential, industrial and real estate credit strategies. We also view student housing and self-storage facilities favorably.

Our positive view on real estate credit reflects a broader theme of investing in stakes in real estate General Partners (GPs) themselves, or investing alongside strong operators: in all cases, GPs are seeking out financial and strategic capital, for which they are prepared to pay a premium to keep their businesses growing and ensure they can execute their pipeline of deals. This same theme also informs a positive view on real estate secondaries, where we see attractive discounts being offered by investors seeking liquidity to recycle portfolios, reduce their over-allocations to private markets, or offload assets experiencing temporary distress. All of these views extend our theme of seeking out liquidity and capital shortages in private markets.

Fixed Income Investment Strategy Committee
N0298_0124_chart_abacus_1_abacus_1b_F1_AAC-1Q2024
N0298_0124_chart_abacus_2_abacus_1b_RegFI_AAC-1Q2024
Investment Grade Fixed Income
  • We maintain our overweight view on U.S. TIPS and investment grade corporates, and continue to favor the short and intermediate parts of the yield curve—but no longer cash, which we have downgraded from an overweight to an underweight view.
  • We remain cautious on longer-dated bonds on debt sustainability concerns.
  • Corporate spreads are now quite tight, and we see the most attractive opportunities in mortgages and securitized credit.
Non-U.S. Developed Market Bonds
  • Hawkishness at the European Central Bank is keeping yields at relatively attractive levels, especially in the two- to seven-year part of the curve, but high economic uncertainty in Europe, caution on Japanese government bonds and longer-dated bonds in general inform against moving to a more positive view.
High Yield Corporates
  • Our outlook for credit stresses remains mild and idiosyncratic rather than systemic, and we see a case for shorter-duration, high-quality exposure.
  • That said, we think investors buying yield have kept spreads tighter, in many cases, than fundamentals warrant.
Emerging Markets Debt
  • Valuations have become less attractive.
  • Within the asset class we favor sovereigns over corporates and Latin America over other regions.
Global Equity Market Views
N0298_0124_chart_abacus_1-01_Equities_AAC-1Q2024
N0298_0124_chart_abacus_2-01_RegEQ_AAC-1Q2024
U.S. Equities
  • Both the fundamental outlook and valuations make us cautious, but we think it could be risky to ignore market momentum with the potential for so much investor cash to be deployed as rates come down.
  • We favor sectors, styles and regions that lagged during the 2023 recovery, including small and mid caps, which the AAC upgraded from a neutral to an overweight view.
Non-U.S. Developed Market Equities
  • We see growing signs of a slowdown in Europe, but retain our more favorable view on Japan due to attractive valuations, a structural turn to more shareholder-responsive governance structures and culture, and the Bank of Japan’s gradualist approach to policy normalization.
Emerging Markets Equities
  • A cautious outlook on China is balanced by a more favorable view on other emerging markets, including India, where strong growth should remain a tailwind.
Real and Alternatives Asset Market Views
N0298_0124_chart_abacus_1_abacus_1c_Real-Alternate_AAC-1Q2024
N0298_0124_chart_abacus_2_abacus_1c_Currency_AAC-1Q2024
Commodities
  • Some parts of the commodities complex are pricing for an economic hard landing, but we believe demand could revive as the manufacturing slowdown eases, and we do not anticipate meaningful additional supply.
  • Commodities can be a useful hedge against inflation spikes, upside growth surprises and geopolitical shocks in 2024.
Hedged Strategies
  • We see some opportunity in insurance-linked strategies (where there is a capital shortage) and global macro strategies (which can take advantage of sustained trends), but many other hedged strategies are likely to struggle in a momentum- and liquidity-driven market.
Private Equity
  • Private equity remains attractive as policy rates peak and exit activity looks set to pick up. Secondaries and co-investments are attractive as both Limited Partners and General Partners seek liquidity options to increase distributions.
Private Debt
  • While signs of a re-opening in the syndicated loan market point to a potential rise in competition for deals over the coming quarters, yields remain attractive, leverage levels are declining and we see ample deal flow.
Real Estate
  • Conditions remain volatile, but higher interest rates and uncertainty about the office sector is creating value opportunities for liquidity providers in public REITs and private real estate secondaries, and there may be value to come in primary private markets.
  • More structurally, we believe post-pandemic growth dynamics will continue to support key sectors such as data centers, warehouses, industrial, student housing and single- and multi-family residential.
Currencies
USD
  • While the USD has become overvalued based on purchasing power parity (PPP) metrics, it is no longer expensive relative to interest rate differentials. U.S. economic data has surprised to the upside while Europe and China have been disappointing, and the USD tends to benefit from risk aversion and global growth slowdowns.
EUR
  • The EUR remains undervalued and the European Central Bank remains hawkish in pursuit of its inflation target, but Germany is dragging on Europe’s manufacturing economy, and it is likely we are at the peak of this cycle’s rates.
JPY
  • The JPY still appears very undervalued, even after the Bank of Japan’s adjustments to yield curve control and the reappearance of inflation. Japan’s growth remains modest and the central bank appears unwilling to act aggressively, but we still think there is more policy adjustment to come.
GBP
  • Despite being undervalued in terms of PPP and interest rate differentials, and supported by recent economic data coming in better than expected, the concerns are growing over U.K.’s growth prospects, balance of payments and housing market.
CHF
  • While Switzerland has a positive current account balance and declining global yields could relieve some of the carry-trade pressures from the CHF, the currency is still very overvalued on PPP metrics and global yields remain relatively high.
Outlook
Asset Allocation Committee Outlook
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Asset Allocation Committee
About the Members
Neuberger Berman’s Asset Allocation Committee meets every quarter to poll its members on their outlook for the next 12 months on each of the asset classes noted and, through debate and discussion, to refine our market outlook. The panel covers the gamut of investments and markets, bringing together diverse industry knowledge, with an average of 28 years of experience.
Joseph V. Amato
President and Chief Investment Officer—Equities
29 Years of Industry Experience
29 Years with Neuberger Berman
Erik L. Knutzen, CFA, CAIA
Chief Investment Officer—Multi-Asset
38 Years of Industry Experience
9 Years with Neuberger Berman
Ashok Bhatia, CFA
Co-Chief Investment Officer—Fixed Income
30 Years of Industry Experience
6 Years with Neuberger Berman
Thanos Bardas, PhD
Senior Portfolio Manager and Global Co-Head of Investment Grade
26 Years of Industry Experience
26 Years with Neuberger Berman
Joseph V. Amato, President and Chief Investment Officer—Equities

Joseph V. Amato serves as President of Neuberger Berman Group LLC and Chief Investment Officer of Equities. He is a member of the firm’s Board of Directors and its Audit Committee. His responsibilities also include overseeing the firm’s Fixed Income and hedge fund businesses.

Previously, Joe served as Lehman Brothers’ Global Head of Asset Management and Head of its Neuberger Berman subsidiary, beginning in April 2006. From 1996 through 2006, Joe held senior level positions within Lehman Brothers’ Capital Markets business, serving as Global Head of Equity Research for the majority of that time. Joe joined Lehman Brothers in 1994 as Head of High Yield Research. Prior to joining Lehman Brothers, Joe spent ten years at Kidder Peabody, ultimately as head of High Yield Research.

He received his BS from Georgetown University and is a member of the University’s Board of Directors. He currently serves on the McDonough School of Business Board of Advisors and the Psaros Center for Financial Markets and Policy Board of Advisors. He is Co-Chair of the New York City Board of Advisors of Teach for America, a national non-profit organization focused on public education reform. He is also a Board Member of KIPP NJ, a charter school network based in Newark, NJ, which focuses on educational equity.

Erik L. Knutzen, CFA, CAIA, Chief Investment Officer—Multi-Asset
Erik L. Knutzen, CFA, CAIA and Managing Director, is Co-Head of the Neuberger Berman Quantitative and Multi-Asset investment team and Multi-Asset Chief Investment Officer. Erik joined in 2014 and is responsible for leading the management of multi-asset portfolios, driving the asset allocation process on a firm-wide level, as well as engaging with clients on strategic partnerships and multi-asset and quantitative solutions. Previously, Erik was with NEPC, LLC where he served as Chief Investment Officer since 2008. As CIO, he oversaw dedicated research teams focused on Alternative Investments, Traditional Strategies and Asset Allocation for NEPC’s client base with, collectively, more than $800 billion in assets under advisement. He has over 30 years of experience in the financial services industry. Erik holds an MBA from Harvard Business School and a BA from Williams College. He has been awarded the Chartered Financial Analyst and Chartered Alternative Investment Analyst designations. Erik is an Associate Editor of the Journal of Investing, is on the Investment Committee of the Massachusetts Audubon Society, and on the Board of Directors of the charity Start Small Think Big.
Ashok Bhatia, CFA, Co-Chief Investment Officer—Fixed Income

Ashok Bhatia, CFA, Managing Director, joined the firm in 2017. Ashok is Co-Chief Investment Officer for Fixed Income, co-Head of Multi-Sector Fixed Income, and a member of Neuberger Berman's Partnership and Asset Allocation Committees and Fixed Income's Investment Strategy Committee. Previously, Ashok has held senior investment and leadership positions in several asset management firms and hedge funds, including Wells Fargo Asset Management, Balyasny Asset Management and Stark Investments. Ashok has had investment responsibilities across global fixed income and currency markets. Ashok began his career in 1993 as an investment analyst at Morgan Stanley. Ashok received a BA with high honors in Economics from the University of Michigan, Ann Arbor, and an MBA with high honors from the University of Chicago. He has been awarded the Chartered Financial Analyst designation.

As previously announced, Brad Tank will transition from Co-CIO of Fixed Income to a Senior Advisor role at the end of 2024, at which time Ashok Bhatia will assume the role of sole CIO of Fixed Income.

Thanos Bardas, PhD, Senior Portfolio Manager and Global Co-Head of Investment Grade
Thanos Bardas, PhD, Managing Director, joined the firm in 1998. Thanos is the Global Co-Head of Investment Grade and serves as a Senior Portfolio Manager on Global Investment Grade and Multi-Sector Fixed income strategies. He sits on the firm’s Asset Allocation Committee and Fixed Income’s Investment Strategy Committee, and is a member of the Fixed Income Multi-Sector Group. Thanos also leads the Global Rates team in determining rates exposure across various portfolio strategies and oversees both inflation and LDI investments. Thanos graduated with honors from Aristotle University, Greece, earned his MS from the University of Crete, Greece, and holds a PhD in Theoretical Physics from State University of New York at Stony Brook. He holds FINRA Series 7 and Series 66 licenses.
Timothy F. Creedon, CFA
Director of Global Equity Research
26 Years of Industry Experience
23 Years with Neuberger Berman
Tokufumi Kato, PhD
Senior Portfolio Manager
16 Years of Industry Experience
15 Years with Neuberger Berman
Hakan Kaya, PhD
Senior Portfolio Manager
18 Years of Industry Experience
16 Years with Neuberger Berman
David G. Kupperman, PhD
Co-Head, NB Alternative Investment Management
25 Years of Industry Experience
13 Years with Neuberger Berman
Timothy F. Creedon, CFA, Director of Global Equity Research
Timothy Creedon, CFA, Managing Director, joined the firm in 2005 and has been the Director of Research for the Global Equity Research Department since 2011. Tim previously served as an equity analyst covering Consumer companies for the firm. Before that, he worked at Lehman Brothers, also covering consumer stocks, and worked in the Private Equity group at Lehman Brothers, where he was responsible for analyzing and executing investments in early-stage telecom/media companies. Tim began his career at Merrill Lynch, where he worked in Investment Banking, covering the Communications industry. He is a CFA charterholder and graduated magna cum laude from Georgetown University’s School of Foreign Service with a concentration in International Economics. Tim is a member of the firm’s Partnership Committee and Investment Risk Committee.
Tokufumi Kato, PhD, Senior Portfolio Manager
Fumi Kato, PhD, Managing Director, joined the firm in 2009. Fumi is Head of Portfolio Construction and Risk Management and serves as a Portfolio Manager in the Multi-Asset Class Investment Team. He is responsible for portfolio construction, asset allocation, risk management and daily management of multi-asset class portfolios, as well as cross-asset class research and idea generation. Fumi also sits on the firm’s Asset Allocation Committee and the Model Risk Subcommittee. Prior to joining the team, he was a member of the Investment Strategy and Risk team, where his focus was multi-asset class solutions for strategic partners and global institutional clients. He also worked at Neuberger Berman East Asia, where he was a client portfolio manager for strategies across asset classes. Prior to joining the firm, Fumi served as a quantitative analyst in the Investment Management team at SPARX Asset Management. Fumi earned his BS in Physics and Mathematics with honors and holds an MA and a PhD in Physics from State University of New York at Stony Brook. Fumi is on the Board of Directors of Asia Initiatives, a 501(c)(3) nonprofit organization.
Hakan Kaya, PhD, Senior Portfolio Manager
Hakan Kaya, PhD, Managing Director, joined the firm in 2008. Hakan is a Senior Portfolio Manager on the Quantitative and Multi-Asset Strategies team responsible for Global Risk Balanced Portfolios and Commodities. He contributes to asset allocation research with a focus on risk management and has a record of publishing research in both refereed journals and white papers on timely investment issues. Prior to joining the firm, he was a consultant with Mount Lucas Management Corporation where he developed weather risk and statistical relative value models for commodities investment. Dr. Kaya received BS degrees summa cum laude in Mathematics and Industrial Engineering from Koc University in Istanbul, Turkey and holds a PhD in Operations Research & Financial Engineering from Princeton University.
David G. Kupperman, PhD, Co-Head, NB Alternative Investment Management
David Kupperman, PhD, Managing Director, is Co-head of the NB Alternative Investment Management team and a member of its Investment Committee. He is also on the Investment Committee of the Specialty Finance Group which he co-founded, as well as Chairman of the NB Insurance-Linked Strategies Underwriting Committee and a Director of NB Reinsurance Ltd. David also sits on the firm’s Asset Allocation Committee and the Investment Risk Committee. Prior to joining the firm in 2011, David was a partner and member of the investment committee at Alternative Investment Management, LLC. Before that, he was a managing director and member of the executive committee at Paloma Partners Management Company, a multi-strategy hedge fund focused on relative value trading strategies. Previously, David was a principal at The Carlyle Group, one of the world’s largest alternative investment managers. Prior to joining Carlyle, he was a vice president in both the private equity and portfolio strategy groups at Goldman, Sachs & Co. David is on The Johns Hopkins Physics & Astronomy Advisory Council and the Krieger School Advisory Board. David holds an MA and a PhD in physics from Johns Hopkins University and a BA and an ME from Cornell University.
Ugo Lancioni
Senior Portfolio Manager
29 Years of Industry Experience
16 Years with Neuberger Berman
Shannon L. Saccocia, CFA
Chief Investment Officer—Private Wealth
25 Years of Industry Experience
1 Year with Neuberger Berman
Raheel Siddiqui
Senior Investment Strategist
27 Years of Industry Experience
20 Years with Neuberger Berman
Robert Surgent
Senior Portfolio Manager
32 Years of Industry Experience
4 Years with Neuberger Berman
Ugo Lancioni, Senior Portfolio Manager
Ugo Lancioni, Managing Director, joined the firm in 2007. Ugo is the Head of Global Currency and serves as Senior Portfolio Manager on Global Investment Grade and Multi-Sector Fixed Income strategies. He sits on the firm’s Asset Allocation Committee and is a member of the senior investment team that sets overall portfolio strategy for Global Investment Grade. Ugo leads the Currency team in determining FX exposures across various portfolio strategies. Prior to joining the firm, Ugo was employed by JP Morgan for 11 years. At JP Morgan AM he worked as Currency Strategist and Portfolio Manager in charge of the FX risk in Fixed Income Portfolios. Prior to this, Ugo worked as a Trader at JP Morgan Bank, both in London and Milan, in the short term interest rate trading group (STIRT) where he was responsible for foreign exchange forwards market making and rates derivatives trading. Ugo received a Master’s in Economics from the University “La Sapienza” in Rome.
Shannon L. Saccocia, CFA, Chief Investment Officer—Private Wealth

Shannon Saccocia, CFA, is the Chief Investment Officer of NB Private Wealth ("NBPW"), a division of Neuberger Berman. In her role, Ms. Saccocia works closely with investment leadership across Neuberger Berman to establish market views, asset allocation and portfolio recommendations tailored specifically for NBPW clients. She is also responsible for leading the NBPW investment platform to enable comprehensive delivery of the firm's investment capabilities. Prior to joining Neuberger Berman in 2023, she was the Chief Investment Officer for five years for SVB Private and Boston Private Wealth, which SVB acquired in July 2021. In this capacity, she oversaw all investment management functions, including portfolio construction, asset allocation, third-party manager selection, equity and fixed income portfolio management, performance and trading. Previously, she had senior roles at Banyan Partners and Silver Bridge Advisors focused on manager selection and portfolio construction.

Shannon received her BA in Economics and History from Brandeis University, and has been awarded both the Chartered Financial Analyst and Certified Investment Management Analyst® designations.

Raheel Siddiqui, Senior Investment Strategist

Raheel Siddiqui, Managing Director, Senior Research Analyst, joined the firm in 2004. Raheel is the Senior Investment Strategist in the Neuberger Berman Global Equity Research Department. In this role he researches impending inflection points in the business cycle, risk appetite, inflation, global asset classes, US sectors, style (growth vs. value), and size to enhance fundamental stock selection and portfolio construction processes by taking advantage of emerging trends not fully appreciated by the market. His research spans finding systematic ways of distilling leading or confirming messages from macroeconomic, quantitative, derivatives data, and behavioral data as well as periodically evaluating portfolios for efficient asset allocation.

Prior to this role, Raheel was a part of Lehman Brothers US Equity Strategy Team where he co-authored over 100 strategy reports, many of which were quoted in the Wall Street Journal, Financial Times, and Barron’s. Raheel also worked as a senior member of the Corporate Development team at Monsanto for six years, where he developed industry leading and award winning approach for valuing genomics assets.

Raheel earned MS/BS degrees in Biochemical Engineering from the Indian Institute of Technology and an MBA from Columbia University. Raheel has also been published with the American Institute of Physics.

Accolades referenced are issued by independent third-parties and information regarding specific criteria for accolades is available upon request and generally may be found on such third-party’s website. Barron’s rankings are based on a proprietary formula that considers various factors: assets under management, revenues generated by advisors for their firms, and the quality of the advisors’ practices. Investment performance is not an explicit criterion because performance is often a function of each client’s appetite for risk. Third-party accolades referenced do not reflect the experiences of any Neuberger Berman client and readers should not view such information as representative of any particular client’s experience or assume that they will have a similar investment experience as any previous or existing client. Third-party accolades are not indicative of the past or future performance of any Neuberger Berman product or service.

Robert Surgent, Senior Portfolio Manager
Robert Surgent joined the firm in March 2020 as a Managing Director, Senior Portfolio Manager and Head of Fundamental Tactical Asset Allocation, working in the Multi-Asset group. He is also lead Portfolio Manager of the Tactical Macro Fund. Prior to Neuberger Berman, Robert was a Managing Director at Goldman Sachs managing the Multi Asset Tactical Portfolio for GSAM's GPS Group where he was a member of the Investment Committee providing input for longer term asset allocation decisions as well as shorter-term absolute return opportunities. Previously, Robert was a Macro Portfolio Manager at Tudor Investments and a Global Macro Proprietary trader at Goldman Sachs in both the London and New York offices. Before joining the Macro Prop Team at Goldman, Robert was a member of the Equity Divisions Principle Strategies Group specializing in the European Tech, Telecom, and Financial sectors. Robert graduated with an MBA in Finance from the Wharton School of Business in 1993 and from the University of Pennsylvania in 1988 with a Bachelors in Economics.
Brad Tank
Co-Chief Investment Officer and Global Head of Fixed Income
42 Years of Industry Experience
21 Years with Neuberger Berman
Elizabeth Traxler
Managing Director
22 Years of Industry Experience
16 Years with Neuberger Berman
Anthony D. Tutrone
Global Head of Alternatives
36 Years of Industry Experience
28 Years with Neuberger Berman
Brad Tank, Co-Chief Investment Officer and Global Head of Fixed Income

Brad Tank, Managing Director, joined the firm in 2002. Brad is Co-Chief Investment Officer and the Global Head of Fixed Income. He is a member of Neuberger Berman’s Partnership, Investment Risk, Asset Allocation Committees and Fixed Income’s Investment Strategy Committee. From inception in 2008 through 2014, Brad was also Chief Investment Officer of Neuberger Berman’s Multi-Asset Class Investment business. From 1990 to 2002, Brad was director of fixed income for Strong Capital Management in Wisconsin. He was also a member of the Office of the CEO and headed institutional and intermediary distribution. In 1997, Brad was named “Runner Up” for Morningstar Mutual Fund Manager of the Year. From 1982 to 1990, he was a vice president at Salomon Brothers in the government, mortgage and financial institutions areas. Brad earned a BBA and an MBA from the University of Wisconsin.

As previously announced, Brad Tank will transition from Co-CIO of Fixed Income to a Senior Advisor role at the end of 2024, at which time Ashok Bhatia will assume the role of sole CIO of Fixed Income.

Elizabeth Traxler, Managing Director
Elizabeth Traxler is a Managing Director of Neuberger Berman and a senior member of the Private Investment Portfolios and Co-Investments team. She is also a member of the Private Investment Portfolios & Co-investments Investment Committee and Secondary Investment Committees, as well as Neuberger Berman's Asset Allocation and Investment Risk Committees. Prior to joining Neuberger Berman in 2008, Ms. Traxler was at Wachovia Capital Partners (now known as Pamlico Capital), where she focused on making direct growth equity and buyout investments across a broad range of industries. Ms. Traxler also worked at Wachovia Securities in the Leveraged Capital Group, which provided senior and mezzanine debt for private equity-backed transactions. She is currently an Advisory Board member for a number of private equity funds, a member of the Kellogg Private Equity Advisory Council and a member of the Pension Fund Leadership Council of Ownership Works. Ms. Traxler received an MBA from the Kellogg School of Management at Northwestern University and a BA, cum laude, in Economics from Vanderbilt University.
Anthony D. Tutrone, Global Head of Alternatives
Anthony Tutrone is the Global Head of NB Alternatives and a Managing Director of Neuberger Berman. He is a member of all Neuberger Berman Private Equity’s Investment Committees. Anthony is also a member of Neuberger Berman's Partnership, Operating, and Asset Allocation Committees. Prior to Neuberger Berman, from 1994 to 2001, Anthony was a Managing Director and founding member of The Cypress Group, a private equity firm focused on middle market buyouts that managed approximately $3.5 billion of commitments. Anthony began his career at Lehman Brothers in 1986, starting in Investment Banking and in 1987 becoming one of the original members of the firm’s Merchant Banking Group. This group managed a $1.2 billion private equity fund focused on middle market buyouts. He has been a member of the board of directors of several public and private companies and has sat on the advisory boards of several private equity funds. Anthony earned an MBA from Harvard Business School and a BA in Economics from Columbia University.