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Asset Allocation Committee Outlook

3Q 2021
From Hanging Ten to Choppy Waves: AAC Outlook 3Q2021
On July 13, Erik Knutzen, CIO of Multi-Asset Class, and Raheel Siddiqui, Senior Research Analyst, led an engaging discussion on the Asset Allocation Committee's views on today's economic winds of change. ACCESS REPLAY
From Hanging Ten to Choppy Waves
“The pattern established in May and June is how the Committee thinks the rest of 2021 is shaping up: elevated volatility in sentiment and market pricing, derived from a new tension in central bank messaging, which could provide opportunities to add portfolio risk in accordance with our pro-growth medium-term views.”

—Erik L. Knutzen, CFA, CAIA, Chief Investment Officer—Multi-Asset Class

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Commentary

Since last November’s vaccine news, financial markets have been “hanging ten” on a swell of cyclical, value and small-cap stocks, and rising Treasury yields. That move, when a surfer balances with all 10 toes over the edge of her board, is possible only on smooth, “glassy” waves. Crosswinds started to grow in the second quarter, however, as economic and inflation data ran hot: rising yields stalled and growth stocks regained their footing. Investors were looking for a change in the weather forecast from the U.S. Federal Reserve, and when it came, on June 16, it introduced notable choppiness into markets. The Asset Allocation Committee (“the AAC” or “the Committee”) expects the choppy waters to persist as the Fed edges nearer to a likely “tapering” decision toward the end of the year. That said, on a 12-month horizon we still think the economic re-opening waves are rideable and that investors will be able to use the potential volatility to add portfolio risk. Our hanging-ten days are probably over. To stay upright now may warrant rooting our feet firmly in the center of the surfboard.

Surprisingly High Inflation Data

At the end of March, the AAC identified the leading concern for investors as “the recent momentum behind Treasury yields and what it implies for inflation and the trajectory of central bank policy.” Those concerns reached fever pitch through the second quarter.

Between September 2020 and April 2021, the International Monetary Fund estimates that global pandemic-related fiscal support rose by a third, to just over $16 trillion. This helped drive strong growth as economies began recovering from the pandemic shock: by April, Purchasing Managers’ Indices (PMIs) were exhibiting expanding activity in every region of the world, and in some cases hitting all-time highs. The result was headline U.S. consumer prices posting 4.2% year-on-year inflation in April and 5% in May. Core U.S. personal consumption expenditure, the U.S. Federal Reserve’s favored measure of inflation, has risen by 3.1% over the past 12 months, well ahead of the central bank’s 2% long-run average target.

Instead of adding momentum to the nine-month rise of U.S. Treasury yields, however, these surprisingly high inflation data appeared to stop that trend in its tracks. If this seems counterintuitive, in our view it reflects the complexity of current market narratives and the importance of central bank liquidity in the way markets are pricing.

U.S. Inflation Soars to a Post-Financial Crisis High
U.S. Consumer Price Index, all items, year-on-year inflation rate
U.S. Inflation Soars to a Post-financial Crisis High
Source: U.S. Bureau of Labor Statistics. Data as of July 7, 2021.
The Fed Changes Its Message

Leading up to the Fed meeting in mid-June, there was (and remains) a fierce debate about whether current inflation data reflect “transitory” factors (such as the low base set by the pandemic crisis this time last year, pent-up demand for goods and services associated with economies re-opening, and temporary recruitment difficulties) or a “structural” change in the growth and inflation environment.

Many market participants were unnerved at how adamant and coordinated central bankers had become in support of the dovish, “transitory” side of that debate. Rather than pricing for runaway inflation, however, they moderated their exposure to the re-opening trade instead, buying Treasuries and defensive stocks at the margins. The logic was that problematic inflation might force the Fed to tighten its policy earlier than planned, thus choking the recovery—effectively bumping us from an early-cycle to a mid-cycle environment.

When the Fed met in June, its messaging changed. The central bank raised its inflation forecast for 2022 and Chair Jerome Powell acknowledged that “inflation could turn out to be higher and more persistent than we expect.” Federal Open Market Committee (FOMC) members’ expectations for their first rate hike moved forward into 2023. And on the topic of asset purchases, Powell confirmed that the Fed was “talking about talking about” tapering.

Negative-Growth Rotations Below the Surface

Here was a hint of what the market had feared.

On the surface, the response appeared calm. Treasury yields spiked, but quickly settled back to pre-meeting levels. The S&P 500 Index dipped by less than 2% before recovering ground over the following days. Overall financial conditions remained extremely accommodative. The Fed is likely to conclude that it pulled off exactly what it wanted: reassuring us that it has its eye on inflation risk without spooking everyone with its hawkishness.

Look below the surface, however, and there are strong rotational rip tides. Market participants doubled down on the doubts about growth and recovery that began to surface in May. Breakeven inflation rates, the difference between the yields of nominal and inflation-protected Treasuries and a key measure of market inflation expectations, which had been declining for a month, slumped still further. Yield curves flattened as long-dated forward interest rates declined. Equity investors rotated sharply out of cyclical and value stocks into defensive and growth stocks.

Cyclical Stocks and Inflation Expectations Wiped Out in April and May
Cyclical Stocks and Inflation Expectations Wiped Out in April and May
Source: FactSet. Data as of June 23, 2021. For illustrative purposes only. Nothing herein constitutes a prediction of future economic or market environments. Due to a variety of factors, actual events, including the characteristic of economic or market environments may vary significantly from any views expressed. Past performance is no guarantee of future results.

The AAC does not believe much has changed, fundamentally.

What has changed, at the margins, is investors’ focus on the narrative around whether inflation is transitory or structural and how central banks might react to it: right now, the story is that inflation will prove stickier than we would like, the hawks will become emboldened, tapering will prove disruptive, and early cycle is giving way to mid cycle.

But in our view, there are equally convincing narratives leaning the other way: the economic data could cool off, or investors might notice that the leadership of the Fed is more dovish than its broader membership and its “dot plot” suggest. Indeed, within a week of its June meeting, the Fed leadership was urging investors to focus less on potential hikes in 2023 or talk of tapering and more on how accommodative their current plans are.

Using Potential Volatility to Ease Into Pro-Growth Views

That pattern is how the Committee thinks the rest of 2021 is shaping up: elevated volatility in sentiment and market pricing, derived from a new tension in central bank messaging, which could provide opportunities to add portfolio risk in accordance with our medium-term views.

Tactically, then, we would have used the negative-growth sentiment evident beneath the markets’ surface in May and June to implement positions in line with those views, which remain pro-growth. Indeed, where the Committee’s views have changed from last quarter, they have become incrementally more favorable on equities and other risky assets.

Our view on investment grade fixed income is downgraded to underweight on lower yields and tighter spreads. Treasury Inflation Protected Securities (TIPS) remain at a neutral view. High yield remains at an overweight view, with a bias toward the floating rates available in loans and collateralized loan obligations (CLOs) over fixed rate bonds; but most Committee members noted that, in a multi-asset class context, they would now prefer equities over the tight spreads in credit.

Along the same lines, the AAC upgraded its view on U.S. large-cap equities to neutral to reflect its broad-based positive view on equities, particularly against investment grade bonds. That clearly adds net risk overall, but by adding exposure to the large growth and defensive names that dominate the U.S. large-cap segment, its aim is also to balance our overweight views on small- and mid-caps, our preference for value and cyclical stocks, and our pro-cyclical regional views. Non-U.S. developed and emerging markets equities retain their overweight views, as does emerging markets debt. We believe the recent comeback for the U.S. dollar is a reaction to the marginally more hawkish Fed messaging that is likely to fade over time, lending support to these non-U.S. markets.

Commodities are more sensitive to short-term spikes in inflation than the medium-term growth trajectory, and after six months of very strong performance the AAC has less conviction in its overweight view. Nonetheless it remains in place, as we think some vulnerability in the agriculture complex is offset by more upside potential in energy and industrial metals.

All that said, the AAC also acknowledges the likelihood of elevated volatility, as interpretations of the inflation and central bank policy narratives flow back and forth with new data and new messaging from Fed members.

What we have now are what surfers would call “blown-out” waves: still rideable, but choppy and difficult. Hanging ten on the predictable, glassy swell of the reflation trade has given way to the need for a more balanced stance, the better to stay upright amid the narrative crosswinds.

That comes across in our upgrade for U.S. large caps—the equivalent of shuffling back to the middle of the surfboard in risky assets. We reflect it in our anticipation that the next six months may call for more frequent tactical trading, with tighter risk parameters for triggering exits from positions. And it is also evident in our continuing overweight views on private equity and private debt, where quality and earnings growth justify current high valuations, and where value can be added through operational improvements to businesses, away from the potential volatility of the public markets. In addition, the Committee is expressing an overweight view on private real estate, reflecting the improving fundamentals of this segment as economies reopen, as well as its positive sensitivity to inflation. The Committee noted that REITs should also benefit from these dynamics.

Secular Stagnation Looms Over the Horizon

While the AAC thinks that short- and medium-term negative-growth sentiment is overdone, it is worth ending with a glance over the 12-month horizon, where we think the clouds may be darker.

To extend our surfing analogy, the question is whether the pandemic was merely a storm depression whose passing will return us to the familiar calm waters of an extended, moderate, post-financial crisis style expansion, or a force profound enough to have raised the growth tide and reshaped the seabed into a generator of persistent wave activity.

Financial markets appear unwilling to price in a major break from the past. U.S. breakeven inflation rates for the next five and 10 years have fallen back to less than 2.5%. More strikingly, one-year forward interest rate swaps suggest that U.S. rates will likely struggle to break 2% before 2026, at which point rates in the Eurozone and Japan will still be barely above zero.

Rates Markets Are Pricing for Secular Stagnation
One-year forward USD Libor, Euribor and Euroyen Tibor interest rate swaps
Rates Markets Are Pricing for Secular Stagnation
Source: Bloomberg. Data as of June 7, 2021. For illustrative purposes only. Nothing herein constitutes a prediction of future economic or market environments. Due to a variety of factors, actual events, including the characteristic of economic or market environments may vary significantly from any views expressed. Past performance is no guarantee of future results.

This accords with consensus estimates which see global growth declining from 6% this year to under 3.5% by 2023, U.S. growth going from 6.6% to 2.3%, the Eurozone settling at 2% and China at 5.5%. For the U.S. and Europe, those rates are only slightly higher than the average of the past 20 years. China’s is considerably lower. This is despite the $16 trillion of global fiscal stimulus combatting the economic impact of the pandemic: indeed, even with the longer-term elements of the U.S. spending packages in place, we think the expiration of stimulus measures is likely to result in a negative fiscal impulse as early as the middle of next year. A rising tax burden to pay for those measures may also begin to drag on growth and corporate earnings.

While evidence of strong multiplier effects or wage inflation could persuade us to change our view, the AAC therefore anticipates a return to something like the conditions of the post-financial crisis years by 2023 – 24. That may begin to impinge upon our 12-month asset class views as we move into 2022. For the time being, however, we are steadying ourselves on our surfboard, waiting to catch the next wave of the post-pandemic re-opening.

Fixed Income Market Views
Fixed Income Market Views
Regional Fixed Income
Investment Grade Fixed Income
  • The Committee downgraded its overall view from neutral to underweight.
  • The new, marginally more hawkish messaging from the Federal Reserve appears to have consolidated the two-way market in government bonds, effectively capping yields for now, but the relative valuation case is more difficult to make after corrections in some parts of the equity markets.
Non-U.S. Developed Market Bonds
  • The Committee maintained its underweight view.
  • While not at the extreme valuations we saw in 2020, yield curves remain suppressed and flat, and we see more attractive value in high yield and equity markets.
High Yield Corporates
  • The Committee maintained its overweight view.
  • An environment of low rates and conservative management of corporate balance sheets will be supportive of credit markets in general.
  • We still see some value in higher quality issuers, particularly “fallen angels” that have the potential to become upgraded “rising stars” over the coming 12 – 24 months; we also have a preference for floating rates via loans and collateralized loan obligations (CLOs).
  • Following corrections in some parts of the equity market, however, we are slightly less positive on high yield and fixed income in general, from a relative valuation perspective.
Emerging Markets Debt
  • The Committee maintained its overweight view.
  • This is one part of the fixed income market that has improved its relative valuation over recent months, largely due to the reversal of many pro-cyclical and reflation-and-recovery trades, and the strengthening of the USD.
  • We believe these recent rotations are overdone, which makes emerging markets debt our highest-conviction overweight in fixed income.
Global Equity Market Views
Global Equity Market Views
Regional Equities
U.S. Equities
  • The Committee maintained its overweight view on U.S. small and mid caps, and upgraded U.S. large caps from underweight to neutral.
  • The AAC believes a tilt toward higher quality small caps is justified as economic recovery takes hold, and has more conviction in that view after the recent pullback in valuations of reflation-and-recovery assets.
  • In U.S. large caps, the AAC maintains its preference for cyclical and value stocks.
  • The recent pullback in valuations of reflation-and-recovery assets accounts for some of the decision to upgrade; it also adds exposure to defensive and growth stocks, which helps to balance our slightly higher-conviction view on equities overall.
Non-U.S. Developed Market Equities
  • The Committee maintained its overweight view.
  • Japanese and European equities remain relatively cheap and are also more highly geared to global trade and general economic recovery.
  • Relative valuation has improved still further due to the recent reversal of many pro-cyclical and reflation-and-recovery trades, and the strengthening of the USD, which we believe is overdone.
  • On the margins, the AAC favors Japan, where big changes in management attitudes to shareholder value are creating substantial opportunity.
Emerging Markets Equities
  • The Committee maintained its overweight view.
  • Emerging markets are highly geared to global trade and the general economic recovery.
  • China and Asia more broadly stand out as sources of high-quality exposure to global economic recovery.
  • Relative valuation has improved still further due to the recent reversal of many pro-cyclical and reflation-and-recovery trades, and the strengthening of the USD, which we believe is overdone.
Real and Alternative Asset Market Views
Real and Alternative Asset Market Views
Currency
Commodities
  • The Committee maintained its overweight view.
  • Commodities could provide exposure to a continuing surge in pent-up demand—although some parts of the complex, especially in agriculture, appear fully valued and others, such as lumber, have already gone through some mean reversion.
  • Gold and other precious metals could serve as a haven during any periods of volatility, as well as a hedge against fiat currency depreciation—although caution is warranted given the recent strength of the USD.
Hedge Funds
  • The Committee maintained its underweight view.
  • After providing much-needed ballast for portfolios through the worst of the coronavirus crisis, the major liquid alternative strategies have less of a role to play as the recovery gains a firmer footing.
  • Opportunities are growing in merger arbitrage and distressed.
  • Some uncorrelated strategies, such as insurance-linked strategies, could still provide useful diversification over the anticipated volatility of the coming months.
Private Equity
  • The Committee maintained its overweight view.
  • Very few transactions are being completed in companies that are highly exposed to coronavirus risk which means that current deals are mainly in robust businesses.
  • While that raises concerns about valuations, the operational enhancements that private equity can bring could be an effective tool for mitigating that risk; creating value away from the volatility of the public markets may also provide some portfolio stability as the cycle matures.
Private Debt
  • The Committee maintained its overweight view.
  • While some portfolios may be exposed to legacy assets affected by the coronavirus crisis, those focused on higher quality assets have fared well and are positioned to benefit from favorable current conditions, as well as offering floating-rate exposure.
  • The market is becoming more borrower-friendly, with full valuations and (already loose) covenants loosening further, which makes credit selection important.
Private Real Estate
  • The Committee upgraded this category to an overweight view.
  • Economic re-openings are removing a major headwind to this asset class, and strong economic growth dynamics should provide a boost to key sectors within real estate, including data centers, warehouses, industrial and multi-family residential.
  • The sector’s inflation sensitivity is attractive, and the COVID-19 crisis has created value opportunities in sectors such as lodging and offices.
Currencies
USD
  • The AAC maintained its underweight view.
  • The currency is still overvalued based on purchasing power parity (PPP) metrics and faces headwinds from accommodative monetary policy, the compression of rate differentials with the rest of the world and the U.S.’s twin deficits.
  • The dollar could benefit from this being a U.S.-led recovery, however, and potential volatility could also result in short-term USD rallies, such as the one we have seen recently in response to a marginally more hawkish message from the Federal Reserve.
EUR
  • The AAC maintained its neutral view.
  • The EUR tends to be positively geared to global economic activity, particularly relative to the USD, and it benefits from a large current account surplus and limits to the dovishness of European Central Bank messaging.
  • The view remains marginal as the already accommodative European Central Bank is unlikely to tolerate further threats to its inflation target from an overly strong currency.
JPY
  • The AAC maintained its overweight view.
  • Both PPP and real exchange rates suggest the JPY is undervalued, while very low yields globally now make Japan’s low rates less discouraging, and hedged foreign investments are at their most attractive levels for years for JPY-based investors.
  • The JPY could reassert itself as a safe haven currency, given the potential for higher volatility for the rest of the year.
GBP
  • The AAC maintained its neutral view.
  • The U.K.’s budget is growth-supporting this year, the country’s vaccination program has been a success, the Bank of England has adopted a relatively hawkish stance, and the GBP still appears undervalued based on PPP measures.
  • The view remains marginal, as market participants are long GBP, new-variant coronavirus infections have been on the rise and the vaccine head start is likely to be temporary, and there is rising risk of a premature fiscal tightening.
CHF
  • The AAC maintained its underweight view.
  • The CHF is still very overvalued on PPP measures, market participants remain very long in their positioning, and the resulting strength is causing a disinflation headache for the central bank, forcing it to stay active in the currency markets.
Up For Debate
Is the Early-Cycle Rally Already Over?

While the consensus on the Committee was undoubtedly still in favor of equities over fixed income for the next 12 months, some members questioned whether the rally for value stocks, cyclical sectors and inflation-sensitive assets specifically might have run its course. One-third of Committee voters favored growth over value stocks, for example. One fixed income team member advocated downgrading our views on Treasury Inflation Protected Securities (TIPS) and commodities.

Their case for favoring more defensive-growth exposures is built mainly on a mix of relative valuations, anticipation of greater uncertainty and volatility in the economy and markets, and, ultimately, getting ready for when investors begin to price for a slowdown from 2023 onwards. One Committee member also invoked the oppressive weight of long-anchored secular stagnation sentiment, excess central bank liquidity and the zombified corporate landscape: “There are so many reasons for reflationary trades to do well, but they have underperformed expectations despite unprecedented fiscal and monetary impetus—and then Treasury yields collapse at the first excuse they get.”

Against this, the prevailing view puts the pullback in Treasury yields down to short covering by investors who had been aggressively positioned for curve steepening since the start of the year; advocates of this view anticipate a moderate resumption of the cyclical rally once market participants digest the Fed’s message that they needn’t fear either runaway inflation or premature tightening.

After the Financial Crisis of 2008 – 09, Cyclical Stocks Outperformed Until 2011
After the Financial Crisis of 2008 – 09, Cyclical Stocks Outperformed Until 2011
Source: FactSet. Data as of June 23, 2021. The 2009 – 2011 series begins on March 2, 2009; the 2020 – 2021 series begins on April 1, 2020. For illustrative purposes only. Nothing herein constitutes a prediction of future economic or market environments. Due to a variety of factors, actual events, including the characteristic of economic or market environments may vary significantly from any views expressed. Past performance is not indicative of future results.

As one AAC member observed, while equity markets often experience a wave of risk-off sentiment two to three months after a peak in Treasury yields, suggesting a period of volatility in the immediate term, a full rotation from cyclical and value exposures back to defensive growth tends to occur much later in the cycle than where we are now. Following the financial crisis of 2008 – 09, for example, it did not happen until 2011.

This pattern would be justified by the current corporate earnings recovery. At Neuberger Berman, we believe S&P 500 companies will book $205 of earnings per share this year, 47% higher than last year. Moreover, the probability that valuations remain constant or even edge higher is greater now than it was two months ago, as the Fed’s new messaging could effectively cap Treasury yields for the foreseeable future.

Volatility may be higher for the rest of the year, therefore, but the AAC’s consensus sees more potential upside to come for recovery trades.

OUTLOOK
The 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 26 years of experience.
Joseph V. Amato
President and Chief Investment Officer—Equities
26 Years of Industry Experience
26 Years with Neuberger Berman
Erik L. Knutzen, CFA, CAIA
Chief Investment Officer—Multi-Asset Class
36 Years of Industry Experience
7 Years with Neuberger Berman
Ashok Bhatia, CFA
Deputy Chief Investment Officer—Fixed Income
28 Years of Industry Experience
4 Years with Neuberger Berman
Thanos Bardas, PhD
Co-Head of Global Investment Grade Fixed Income
23 Years of Industry Experience
23 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 business. 

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 Regents and the Business School’s Board of Advisors. He is also Co-Chair of the New York City Board of Advisors of Teach for America, a national non-profit organization focused on public education reform.

Erik L. Knutzen, CFA, CAIA, Chief Investment Officer—Multi-Asset Class
Erik Knutzen, CFA, CAIA and Managing Director, is Co-Head of the Neuberger Berman Quantitative and Multi-Asset Class investment team and Multi-Asset Class 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 class and quantitative solutions. Previously, Erik was with NEPC, LLC where he served as chief investment officer since 2008. As CIO, he oversaw a group of more than 45 investment professionals, including 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 25 years of experience in the financial services industry, including nine years at Putnam Investments. In 2013, he was recognized by aiCIO magazine, ranking atop their 25 most influential investment consultants. Erik holds an MBA from Harvard Business School and a BA from Williams College. He has been awarded the Chartered Financial Analyst designation, as well as the Chartered Alternative Investment Analyst designations. Erik sits on the Boards of the Massachusetts Audubon Society, where he is a member of their Investment Committee, and of Start Small Think Big.

Ashok Bhatia, CFA, Deputy Chief Investment Officer—Fixed Income
Ashok K. Bhatia, CFA, Managing Director, joined the firm in 2017. Ashok is the Deputy Chief Investment Officer for Fixed Income. He is a lead portfolio manager on multi-sector fixed income strategies and is also a member of the Multi-Asset Class portfolio management team, the Fixed Income Investment Strategy Committee and the firm’s Asset Allocation 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.
Thanos Bardas, PhD, Co-Head of Global Investment Grade Fixed Income
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, Global Equity Research
23 Years of Industry Experience
21 Years with Neuberger Berman
Alan H. Dorsey, CFA
Chief Investment Officer of Neuberger Berman Trust Company
15 Years with Neuberger Berman
Tokufumi Kato, PhD
Senior Portfolio Manager
12 Years with Neuberger Berman
Hakan Kaya, PhD
Senior Portfolio Manager
15 Years of Industry Experience
14 Years with Neuberger Berman
Timothy F. Creedon, CFA, Director, 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 Operating Committee and Investment Risk Committee, and he also serves on the Board of Room to Grow in New York City.
Alan H. Dorsey, CFA, Chief Investment Officer of Neuberger Berman Trust Company
Alan H. Dorsey, CFA, Managing Director, joined the firm in 2006. Alan is Chief Investment Officer - Wealth Management & Neuberger Berman Trust Company, and he is a member of the firm’s Asset Allocation Committee. He most recently served as the firm’s Chief Risk Officer and previous to that as Head of Investment Strategy. Formerly, Alan was managing director and director of Non-Traditional Investments and Research at RogersCasey, a leading consultant to pension funds and other institutional investors. In this role, he had responsibility for managing research and investment teams pertaining to hedge funds, private equity, real estate, and hard asset investing. He was also director of research for Bryant Park Capital and its affiliates, focusing on investment banking for, and proprietary investment in, middle-market companies. Alan began his career as a securities analyst at Dillon Read & Co. and Argus Research Corp. He holds a BA in Economics from Wesleyan University, and has been awarded the Chartered Financial Analyst designation. From 1997 through 2007, he served as a member of the investment committee of the endowment for Wesleyan University, where he is a past trustee. He is also the author of numerous publications on selecting, implementing and managing investments.
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 Class (“QMAC”) 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
22 Years of Industry Experience
10 Years with Neuberger Berman
Ugo Lancioni
Head of Global Currency
26 Years of Industry Experience
14 Years with Neuberger Berman
Suzanne F. Peck
Head of Investments – Private Wealth Management
26 Years of Industry Experience
Raheel Siddiqui
Senior Research Analyst
24 Years of Industry Experience
17 Years with Neuberger Berman
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 after years of investing experience in the consumer credit space, 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, the Investment Risk Committee and the Model Risk Subcommittee. 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. In his portfolio strategy role, he authored papers on asset allocation and helped develop Goldman’s quantitative asset allocation framework for high-net-worth investors. David is the Chairman of The Johns Hopkins Physics & Astronomy Advisory Council and is a member of the Cornell University Council. David holds an MA and a PhD in physics from Johns Hopkins University and a BA and an ME from Cornell University.

Ugo Lancioni, Head of Global Currency
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.
Suzanne F. Peck, Head of Investments – Private Wealth Management
Suzanne F. Peck, Managing Director, is the Head of Investments for Private Wealth Management at Neuberger Berman, and a member of the firm’s Asset Allocation Committee. Prior to joining the firm in 2021, she was Head of BlackRock's Endowments and Foundations effort, which provides investment management services and risk advisory solutions to endowments and foundations, including outsourced CIO services. Prior to joining BlackRock in 2013, Suzanne spent 18 years with Goldman Sachs, most recently in its Investment Management Division, where she served in a number of roles including Portfolio Manager and member of the Investment Committee of Institutional Client Solutions. She also led a team that built an outsourced CIO offering for endowments and foundations. Previously, Suzanne spent nine years in the Investment Banking Division. Suzanne serves on the Investment Committees and Boards of UJA-Federation of NY and the New-York Historical Society. She earned a BA in history from Columbia College, MA in economics from New York University and MBA from Columbia Business School.
Raheel Siddiqui, Senior Research Analyst

Raheel Siddiqui, Senior Vice President, Senior Research Analyst, joined the firm in 2004. Raheel is the Portfolio and Quantitative 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
29 Years of Industry Experience
1 Year with Neuberger Berman
Brad Tank
Chief Investment Officer—Fixed Income
40 Years of Industry Experience
18 Years with Neuberger Berman
Anthony Tutrone
Global Head of Alternatives
33 Years of Industry Experience
33 Years with Neuberger Berman
Robert Surgent, Senior Portfolio Manager
Bob Surgent joined the firm in March 2020 as a Managing Director and Senior Portfolio Manager working in the Multi-Asset group. Prior to Neuberger Berman, Bob 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, Bob 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, Bob was a member of the Equity Divisions Principle Strategies Group specializing in the European Tech, Telecom, and Financial sectors. Bob 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, Chief Investment Officer—Fixed Income
Brad Tank, Managing Director, joined the firm in 2002 and is the Chief Investment Officer and Global Head of Fixed Income. He is a member of Neuberger Berman’s Operating, Investment Risk, Asset Allocation Committees and Fixed Income’s Investment Strategy Committee, and leads the Fixed Income Multi-Sector Group. From inception in 2008 through 2015, Brad was also Chief Investment Officer of Neuberger Berman’s Multi-Asset Class Investment business and remains an important member of that team along with the firm’s other CIOs. From 1990 to2002, 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.

Anthony 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.