Dodge & Cox
The latest research and outlooks in the ProAllocate library
- Pensions
Pension Surplus: A Wealth of Opportunities
Dodge & Cox argues that well-funded, hedged frozen US corporate pension plans are largely self-sustaining, making surplus management—rather than full termination or large-scale risk transfer—an increasingly attractive strategy. It outlines how surpluses can fund retiree benefits, M&A shortfalls, or a broader redesign combining cash balance DB plans with DC plans.
- Pensions
1H 2026 Pension Perspectives
Corporate DB pension funded status hit a 25-year high of 109.5% in H1 2026 amid rising discount rates and equity gains, but AI-driven bond issuance is concentrating credit risk in the Aa segment. The report advises sponsors to maintain interest rate hedges, underweight credit spread risk, and monitor shifts toward buy-ins, PRT litigation, and proposed accounting changes favoring market-return cash balance plans.
- Fixed Income
2026 Semi-Annual Fixed Income Review
Dodge & Cox's Income and Global Bond Funds posted positive H1 2026 returns despite rising Treasury yields and historically tight credit spreads, aided by security selection in Pemex, hyperscaler bonds, and mortgage-backed securities. The team remains defensively positioned in credit while adding duration via Hungary, Japan, and Colombia.
- Equities
2026 Semi-Annual Equity Review
Dodge & Cox's Steve Voorhis and Matt Beck review 2026 equity performance, attributing underperformance in US and global strategies to underweights in surging semiconductor stocks, while highlighting rotation into higher-quality, reasonably valued companies across sectors.
- Emerging Markets
Emerging Markets in Focus: The Opportunity Ahead
Dodge & Cox argues emerging market equities offer a rare combination of historically wide valuation discounts, superior earnings growth, and underappreciated exposure to AI infrastructure supply chains. It contends geopolitical risks are already priced in, favouring active, bottom-up stock selection over passive index exposure.
- Fixed Income
Global Bonds: Navigating a Weaker Dollar
A weaker U.S. dollar and elevated global rates are prompting investors to reconsider global fixed income allocations and currency hedging decisions. The author argues for an active, calibrated approach to currency exposure rather than fully hedged or fully unhedged strategies.
- Pensions
2H 2025 Pension Perspectives
U.S. corporate pension funded status hit a 20-year high of 108.1% in 2025 as equity gains outpaced modest discount-rate declines. The authors recommend curve-steepening, underweighting U.S. equities/credit, and reassessing surplus governance amid PRT litigation and regulatory shifts.
- Portfolio Construction
Asset Allocation Through the Eyes of a Bottom-Up Investor
Dodge & Cox argues US equities are overly concentrated and richly valued, favoring active, value-oriented stock selection and hedging, while international equities and fixed income offer more attractive relative valuations and yields. It recommends rebalancing portfolios toward non-US equities, credit selectivity, and currency awareness amid a weakening dollar.
- Fixed Income
Out of Benchmark, but Not Out of Scope
Dodge & Cox argues investment-grade credit managers should embrace out-of-benchmark exposures—like Treasuries, securitized assets, hybrids, 144A bonds and derivatives—to enhance returns and manage risk without necessarily increasing tracking error. It also urges liability-hedging plan sponsors to favor broader IG credit benchmarks over narrower corporate-only ones.