The Benefits of Active Municipal Bond Management
Robert DiMella is an executive managing director and co-head of MacKay Municipal Managers team, overseeing approximately $20 billion in municipal bond assets. In this interview, he discusses the opportunities for muni bond investors and the outlook for the coming year.
USAA’s Unique Strategy for the Advisor Market
Keith Sloane serves as head of third-party distribution and Steve Fry is director of analyst relations at USAA Investments. I spoke with them about their strategy for serving advisors and the 60 million families with connections to the U.S. military, which has been USAA’s traditional focus.
A Platform to Democratize Alternative Investments
Eileen Duff is managing partner and head of distribution for iCapital Network, where she is responsible for sales, relationship management and investor relations supporting the RIA, broker-dealer, private banking and family office communities. In this interview, she discusses how iCapital democratizes the access to high-quality alternative investments for financial advisors.
Gundlach: When to Avoid Closed-End Funds
Fixed-income closed-end funds (CEFs) should perform poorly when the yield curve flattens, according to Jeffrey Gundlach, because those funds borrow short and lend long. But DoubleLine’s CEFs have more than withstood the flattening of the yield curve over the last six years.
Bogle’s Dire Forecast for the Mutual Fund Industry
It took nearly 66 years for Jack Bogle’s embrace of the index fund to become the dominant trend in the mutual fund industry. In the wake of that dominance, the rest of the industry faces a painful decline, according to Bogle. His thesis can be applied to a key group of fiduciary advisors – those that are part of a “roll-up” entity – whose business models are flawed in the same way as those doomed fund companies.
Flawed Research on Factor Investing
The popularity of smart-beta products has raised concerns that certain factors have been “overgrazed” – that their expected return has been driven down due to popularity-driven demand. A new research paper purports to refute this concern. But its logic is flawed and practitioners should be highly skeptical of its conclusions.
Joel Greenblatt: “The Opportunities for Active Managers are Getting Better”
Joel Greenblatt serves as managing principal and co-chief investment officer of Gotham Asset Management and is one of the foremost value managers. His fund, the Gotham Index Plus Institutional Fund (GINDX) is in the 1st percentile of its Morningstar peer group (Large Cap Blend) for the period since inception (March 31, 2015) through March 31, 2017, significantly outperforming the S&P 500.
Gundlach: The 10-Year is in a “Zone of Death”
The yield on the 10-year Treasury bond has been tightly coiled in a “zone of death,” Jeffrey Gundlach said. Since the start of the year, it has traded between 2.4% and 2.5%, but it is poised to rally to 2.25% before it retreats to 3.0% by the end of the year, according to Gundlach.
Southeastern Asset Management: “We welcome unpredictability”
Ross Glotzbach is head of research and a principal at Southeastern Asset Management, one of the most respected value managers. In this interview, he discusses his investment outlook in an era of political and economic uncertainty.
As Seen on TV: The Annuity Action Network
In the prior installment on this series, I exposed the deceptive marketing used to sell fixed-index annuities. Today I will look at a firm that purchases annuities from investors – the Annuity Action Network. It is a way for clients to borrow money at a high interest rate, but it may be an appropriate solution under certain circumstances.
As Seen on TV: Financial Products You Should Avoid – Ty J. Young
An ideal retirement product should provide steady, secure income and upside participation in the stock market. That’s why advertisements that promise performance that will be “up with the market and never down, forwards with your money and never backwards” are so tempting. That’s exactly what Ty J. Young claims in his advertisements. I’ll explain why investors should be extremely wary of the products his firm sells.
Are Investors in Denial?
You’re in denial if you believe that U.S. stocks are fairly valued, the Eurozone does not face a crisis or a strong dollar will support stability in the global economy. Those themes were presented by Albert Edwards and his fellow speakers at the annual investment conference sponsored by Societe Generale.
The Top 10 Great Articles You Probably Missed
Great articles don’t always get the readership they deserve. Earlier this week we published the top 10 most-read investing and financial planning articles and a similar top 10 practice management articles. Below are another 10 that you might have missed, but I believe merit reading.
The 10 Largest Closet-Index Funds
The flow of assets to passive products over the last several years has increased the pressure on active mutual funds. Analysts are predicting an industry consolidation with the prime target being those funds that track an index but charge relatively high active management fees – the so-called closet-index funds. Here are the 10 largest such U.S. large-cap equity funds.
As Seen on TV: Financial Products You Should Avoid – Lear Capital
Good financial products are bought, not sold. We are beginning a series of articles analyzing some of the most aggressively sold financial products – those which are advertised on television. This is the first installment in our series.
The 10 Most Read Articles for 2016
As is our custom, we conclude the year by reflecting on the 10 most-read articles over the past 12 months. The list below reflects articles focused on investing, financial planning and the economy. On Thursday, we will publish the 10 most-read articles on practice management.
A Top Performing Small-Cap Value Fund
The Queens Road Small Value fund has outperformed its benchmark, the Russell 2000 Value Index, over the past 10 years and since inception in 2002, earning an annualized return of 9.59% vs. 8.38% for the Russell 2000 Value Index. I spoke with Steven Scruggs, who has served as portfolio manager for that entire 14-year period.
Kellyanne Conway: How the Democrats Blew It
Donald Trump’s electoral win was in part the result of very shrewd analysis and tactics. As his campaign manager, Kellyanne Conway was responsible for Trump’s campaign strategy and its execution. Yesterday, she offered candid insights into the key decisions that led to Trump’s victory.
Top Experts Predict the Future of the DOL Rule
A mere 80 days separates President-elect Trump’s inauguration from the April 10, 2017 effective date for the Department of Labor’s (DOL’s) fiduciary standard rule. Yesterday, four industry experts gave their predictions on whether the rule will survive under the Trump administration.
Donald Trump and the “F” Word
If there’s one belief that enjoys broad, bipartisan support, it is that the U.S. faces a debt crisis. Democrats and Republicans routinely bemoan America’s irresponsibility and immorality by claiming it is borrowing from the “bank of China” and leaving that debt for our children and grandchildren to repay. Donald Trump threatens to challenge that paradigm by aggressively using the “f” word.
The Compelling Opportunity in Emerging Growth Stocks
Jim Callinan is a portfolio manager for the Osterweis Emerging Opportunity Fund (OSTGX). In this interview, he discusses how he identifies high-quality companies in emerging industries and defensible growth niches that have open-ended growth potential.
A Top-Performing Global Income Fund
The First Eagle Global Income Builder Fund (FEBIX) seeks to provide meaningful and stable income that persists over time and holds its value in real terms. It has approximately $1.2 billion in assets and is a leading performer in its Morningstar peer group. I spoke with two of its co-managers, Kimball Brooker and Edward Meigs.
Two Exciting New Global Value Funds
Abhay Deshpande founded Centerstone Investors and serves as the chief investment officer. He previously worked at First Eagle Investment Management with Jean-Marie Eveillard. In this interview, he discusses the opportunities he sees for his two recently introduced value funds.
Gundlach: Trump Should be Commended
Speaking before the results of the presidential election were known, Jeffrey Gundlach commended Donald Trump for his campaign and the results he achieved. Gundlach did not, however, reiterate his prediction that Trump would win and, as in the past, he neither endorsed Trump nor said that he would vote for him.
Reich Takes on Simpson – And We Do the Fact Checking
Robert Reich, a prominent Democrat, and Alan Simpson, a distinguished Republican, engaged in a friendly debate to discuss issues that they said were not addressed during this campaign season. But on crucial subjects, both relied on out-of-date and inaccurate reasoning.
Ian Bremmer – We Face a Profound Geopolitical Recession
The world will enter a geo-political “recession,” according to Ian Bremmer, resulting in a large list of failed states. The U.S. will be relatively insulated from that crisis, but faces its own challenges driven by globalization and wealth inequality.
Rick Rieder – The Fixed Income Outlook for 2017
The Fed will raise rates in December, as long as the election goes as expected and there are no surprises in the economic data, according to Rick Rieder. But, according to Rieder there are secular influences in the economy that are much more important than monetary policy.
Mark Zandi: Why Trump is Wrong and We Need Immigrants
Immigration policy is the biggest divide between Hillary Clinton and Donald Trump. U.S. growth will falter unless the measures proposed by Clinton are adopted to spur increased immigration, according to Mark Zandi. Trump’s policies, Zandi contends, will put the U.S. on a trajectory similar to Japan’s “lost decade.”
Thornburg’s View of the Corporate and Municipal Bond Markets
The Thornburg Strategic Income Fund (TSIAX) has returned 5.87% over the last five years (the longest period for which Morningstar provides data), outperforming the Barclay’s AGG benchmark by 277 basis points. The Thornburg Limited-Term Muni Fund (LTMFX) has returned 3.16% over the last 15 years (the longest period for which Morningstar provides data), versus 2.46% for its Morningstar peer group, placing it in the 18th percentile of that group. I spoke with Christopher Ryon and Lon Erickson, who are respectively managers of those funds.