U.S. Bancorp Asset Management
The latest research and outlooks in the ProAllocate library
- Fixed Income
The Credit Story Behind AI: How the Data Center Buildout Is Reshaping Capital Markets
U.S. Bancorp Asset Management's Winnie Cheng argues that AI data center investment is straining free cash flow and raising leverage across cloud providers, making financing structure and execution key credit differentiators. Scale advantages favour hyperscalers like Amazon and Microsoft, while smaller, more leveraged issuers such as Oracle face greater downgrade risk.
- Fixed Income
Back to School: Credit Pressures Build for U.S. School Districts
Rising negative rating actions among U.S. school districts reflect enrollment declines, expiring ESSER federal aid, and property tax reform pressures, driving greater credit differentiation across the municipal sector. The analysis argues disciplined, issuer-specific credit selection is increasingly essential as fiscal outcomes diverge.
- Portfolio Construction
From Manager Selection to Portfolio Construction: How Manager Research Supports OCIO Portfolio Outcomes
The article argues that manager research within OCIO mandates is a portfolio construction discipline, not just manager selection, focused on active-versus-passive decisions, factor-based diversification, and ongoing monitoring via a
- Fixed Income
The Potential Benefit of Discretion: Active Versus Passive Management for Institutional Investment-Grade Fixed Income
The article argues that structural features of investment-grade bond markets—benchmark construction, issuer heterogeneity, and uneven liquidity—favor active management over passive index replication. Historical data show active core fixed income managers have outperformed the Bloomberg Aggregate Index net of fees over most trailing periods since 1986.
- Portfolio Construction
Introduction to Our OCIO Investment Process: Strategic Asset Allocation Framework
An OCIO investment team outlines its strategic asset allocation framework, arguing for dedicated allocations across domestic/international equities, core and high-yield fixed income, and listed real assets to build resilient, diversified portfolios.
- Portfolio Construction
Latest Endowment Study Shows Broad Gains Across the Board in FY 2025
The 2025 NACUBO-Commonfund study found U.S. college endowments returned 10.9% in FY2025, trailing a 60/40 portfolio short-term but outperforming over longer horizons. Spending rates hit record highs while ESG adoption remained uneven and OCIO usage stayed prevalent among smaller institutions.
- Macro
Conflict in the Middle East - Implications for Inflation, Growth, and Financial Markets
Military conflict involving Iran has disrupted oil supplies via the Strait of Hormuz, raising inflation and slowing growth risks, though markets have reacted in an orderly manner so far. The firm advises against major portfolio shifts, instead favoring tactical fixed income adjustments amid higher yields and wider spreads.
- Fixed Income
Q&A - The ABCs of Asset-Backed Commercial Paper
An explainer describes how asset-backed commercial paper differs from traditional unsecured commercial paper, detailing its multi-seller structures, credit and liquidity enhancements, and risks. The author outlines how disciplined due diligence and diversification can let ABCP safely add yield to short-term portfolios.
- Fixed Income
CMO Primer: The Ins and Outs of Collateralized Mortgage Obligations
An educational primer explaining how collateralized mortgage obligations differ from agency MBS pass-throughs, detailing sequential-pay and PAC/support tranche structures and their cashflow and prepayment risk characteristics.