23 results found.
Peculiar Stock Leadership in 2016
Bank of America started tracking the performance of active managers in 2003, and 2016 has—thus far—been the most difficult year on record for active managers: only 18 percent of large cap managers have outperformed the Russell 1000® through June 30. The Russell 1000 Value has beaten the Russell 1000 Growth, but the companies with the highest returns this year have had a peculiar profile.
Alpha or Assets? — Factor Alpha vs. Smart Beta
More and more investors are buying “factor”-based strategies, which invest using measures like valuation and low volatility. However, the most popular strategies are applying factors the wrong way. We believe that strategies should be built for alpha, not scale—but the asset management industry has gone in the opposite direction.
Stocks You Shouldn't Own
by Travis Fairchild, Chris Meredith, Patrick O'Shaughnessy, Ehren Stanhope of O'Shaughnessy Asset Management,
Active management has two potential advantages versus an index. The first advantage is the one that most people think of: active stock selection. But this paper instead focuses on the second potential advantage: active stock elimination, or identifying stocks not to own in the portfolio. While owning strong performers is the most obvious source of excess returns versus a benchmark, the stocks that are in an index but not in an active portfolio often explain as much of the active portfolio’s relative returns.
Microcap as an Alternative to Private Equity
Private equity has become a central component of many institutional and high-net-worth investment portfolios over the past decade. While private equity offers potential advantages, it also requires taking distinct risks. This paper highlights an alternative to private equitymicrocap equitieswhich mitigates several of these particular risks.
The Power of Share Repurchases
One of the most effective stock selection strategies in the U.S. over the past several decades has been to buy stocks that are in the midst of repurchasing significant quantities of their sharesbut just blindly following buybacks isnt always the best strategy. While many companies that are repurchasing large quantities of their shares make for great investments, others are dangerous and should be avoided. There are several important factors that should be considered when evaluating a stock with impressive buybacks.
Tax Management - Optimized for Investors
Academic studies of portfolio management often neglect real world considerations. Turnover is often used to gauge tax management capabilities, but used in isolation turnover can be misleading. Tax lot accounting is integral to maximizing after-tax returns. Tax management must be an integral part of a managers buy/sell discipline, and should be applied throughout the year. OSAMs after-tax results in 2013 are indicative of an effective, integrated tax management process.
The Myth of the Most Efficient Market
Perception of the U.S. large cap value market is that its the most efficient in the world, and therefore the hardest category for managers to outperform the benchmark. As a result, index funds and ETFs have been gaining dramatic market share. Our latest whitepaper debunks conventional thinking with empirically-proven factors that have significantly outperformed in the U.S. large cap space.
Enhanced Dividend for Income
It is axiomatic in the financial planning canon that investors searching for a steady source of income should rely heavily on bonds. Stocks are for capital appreciation and bonds for income. The practice is so ingrained, that I have not heard of many investors who would make the case for using an equity portfolio to generate income. Bonds also appeal to advisors because of their inherent principal protection advantage. As a bond owner, you are a creditor, not an owner.
The Case for Global Dividends: Valuations and the Impact of Rising Rates
The S&P 500 Index has risen over 150 percent since March 9, 2009 in what could arguably be deemed the most hated equity rally of all time. The MSCI All Country World Index, one of the broadest global indices, has risen just 110 percent since its March 2009 nadir. Evidence indicates that United States (U.S.) investors have not participated in this rallya truly sad state of affairs. It is worthy of noting that over the last several years a number of well known market pundits have viscerally rejected the equity rally due to macroeconomic concerns.
A Generational Selling Opportunity for the U.S. Long Bond
Because investors tend to extrapolate what their general experience in markets has been recently well into the future, its easy to see why investors are having a long-term love affair with bonds. Yet the data in this paper suggests that a crisis in long bonds is coming and, given this information, individual and institutional investors alike should reconsider the bond portion of their portfolios.
Emerging Market Opportunities
Emerging market equities present both unique opportunities and also unique risks. Unlike more mature economies, emerging markets economies have the potential for impressive growth rates. But emerging markets also have the potential for damaging socio-economic and political instability. Equity returns in these countries are often impressive, but to earn these returns investors must deal with considerably higher volatility than in the developed equity markets.
Combining the Best of Passive and Active Investing
Should investors pay higher fees to active managers in an attempt to beat the market? Or should they instead buy cheap passive index funds or exchange-traded funds (ETFs) thereby surrendering to the compelling long-term evidence that successful money managers are few and far between and very difficult to identify. It is an important and ongoing debate because the choice between the passive or active approach to investing can have a huge impact on long-term results.
Expanding Horizons: The Most Difficult Environment for Generating Income in 140 Years
In the most difficult environment for generating income in 140 years, we survey the landscape of income-generating options, review lessons from the previous bond Bear Market, and demonstrate why we believe global, dividend-paying equities deserve a prominent role in investor portfolios.
The Fiscal Cliff and Your Portfolio
Whether or not we find ourselves staring over the fiscal cliff come January 1 is still very much in question, but investors are understandably concerned with what the resultant tax increases may mean for their portfolio values and dividend income. If Congress is unable to reach a compromise between now and January 2013, President Bush's 2003 tax cuts will expire and tax rates on income, dividends, and capital gains will increase by significant margins.
Dividend Yield vs. Dividend Growth
Investor demand for high-yielding companies has grown even stronger because of the perception that these companies are more defensive and recent news that the Federal Open Market Committee (FOMC) has extended its forecast of low rates until 2015. We believe buying a portfolio of high-quality, global, market-leading companies with superior valuations and high dividend yields provides investors with an excellent opportunity to consistently beat the market, while providing high income relative to fixed income securities in the current environment.
Stocks, Bonds, and the Efficacy of Global Dividends
First, we look at the prospects for the two assets classes that comprise a majority of investors portfolios: stocks and bonds. Second, we review one of the most tried-and-true investment strategies that has been a part of the investment lexicon since the beginning of the modern investment era: dividends. But we do so with a caveat global dividends. Finally, we review the results of two strategies back to 1977 to demonstrate the applicability of our approach. We think you will find the results both eye opening and compelling.
Why U.S. Investors Should Look Beyond Dividend Yield
Many investors are fed up with yields on fixed income securities and are in search of higher yield. As a result, U.S. stocks with high yields have become very popular with individual and professional investorsbut we believe that investors are looking at the wrong kind of yield. Though dividend yield works very well internationally, investors in U.S. stocks should instead focus on shareholder yield, a factor we have long advocated that has provided considerably stronger returns for U.S. stocks for more than 80 years.
August Market Commentary
Mike Tyson once warned, Everyone has a plan until they get hit in the face. The plan, for investors, is to be disciplined and not react emotionally. But right now the enemy is panic and Tyson is the market.There is no question that the level of debt in the U.S. and the financial weakness of other countries are alarming. However, the future of the S&P 500 is not likely to be tied to the current state of the economy. If any relationship exists between the market and the economy through history, it is a negative one where investors should be buyers of equities when GDP growth is negative.
Inflation and the U.S. Bond and Stock Markets
With the Federal Reserve well into QE2 in its response to the recent economic crisis and recession, we thought it would be an ideal time to review the effects of inflation and deflation on the returns of US bonds and stocks. The adjusted monetary base for the United States has exploded over the last several years. As a result many economists and investors expect inflation to increase in the coming years. Let?s review the history of US inflation and the returns for U.S. stocks and bonds and see what it can teach us about the returns of stocks and bonds during a variety of inflationary periods.
The Economy and the Stock Market
Patrick O'Shaughnessy examines the relationship between historical unemployment levels, GDP growth rates and marginal tax rates with subsequent equity returns. The data suggests that while worries about the economy are legitimate, those fears do not necessarily translate into weak prospects for stocks. While economic variables are not good indicators of future stock returns, the market's price-to-earnings ratio has been a good indicator in the past, and it continues to suggest the market is a good buy today.
Thoughts on the Correction
From an entirely rational perspective, the last few weeks of volatile market declines have created a strong opportunity for investors. The average stock in the S&P 500 is 13 percent cheaper than it was on April 23, 2010 - a fine bargain considering nothing much has changed about sales and earnings prospects. Unfortunately, fear has and will continue to precipitate selling, when it should do the opposite. A recent Stanford study yields interesting insights into the impact of fear on investors.
23 results found.