There’s considerable uncertainty in today’s municipal market. Questions persist about the likelihood of rising interest rates, inflation that may not be transitory and the impact on municipalities once the benefits of fiscal stimulus fades. Active bond managers have many decisions to make and need to be nimble in a changing landscape. What’s next for municipal bonds, and how can trading and portfolio management technology help investors navigate this changing environment?
If you review the investment research articles and notes published during the 1970s and early 1980s, what you pick up is that during periods of high inflation, equity markets failed to live up to expectations.
If there is one experience common to us all during the global pandemic, it is that the spread of COVID-19 around the world caused everyone—young or old, rich or poor, male or female—to reassess our priorities.
Six out of eight indexes on our world watch list posted gains through August 2, 2021. The top performer is France's CAC 40 with a gain of 20.26%, our own S&P 500 is in second is with a gain of 16.80%, and India's BSE SENSEX is in third with a gain of 10.89%. Coming in last is Hong Kong's Hang Seng with a loss of 3.66%.
ESG proponents claim that “green” high-yield bond returns offer better risk-adjusted returns. New research disproves this claim, although ESG investors do not incur a penalty by owning green bonds.
For advisors looking to add diversification and growth potential to client portfolios, life settlements are a compelling asset class.
Here are 12 types of clients who have recently established DAF accounts with the assistance and encouragement of their financial, legal, tax advisors.
Frank Pape is the senior director, portfolio consulting for Russell Investments’ advisor and intermediary solutions business. In this interview, he discusses the latest research on how advisors can maximize the after-tax income for their clients.
You may not be familiar with the term metaverse, but if you’ve been a consumer of popular books, movies and video games over the past 30 years or so, you probably are aware of the concept.
The yield curve is a powerful indicator. More powerful than many others as May West reminds us. As the greatest reopening momentum now appears behind us, today, our All-Weather portfolio looks more all-weather than it did earlier in the year.
Valid until the market close on August 31, 2021.
The S&P 500 closed July with a monthly gain of 2.27% after a gain of 2.22% in June. At this point, after close on the last day of the month, all five S&P 500 strategies are signaling "invested" — Vanguard Total Stock Market ETF (VTI), Vanguard FTSE All-World ex-US ETF (VEU), iShares Barclays 7-10 Treasury (IEF), Vanguard REIT Index ETF (VNQ), and Invesco DB Commodity Index Tracking (DBC) — up from last month's quadruple "invested" signal.
What is the degree of Emerging Markets (EM) stocks’ undervaluation relative to United States (US) equities?
Today the National Association of Realtors released the June data for their Pending Home Sales Index. According to the National Association of Realtors®, "Pending home sales declined marginally in June after recording a notable gain in May."
Most equity portfolios today are dominated by US stocks. That’s understandable, as they’ve outperformed for years. But Invesco Investment Solutions believes that the tide is turning, and that the next 10 years will see international equities outperform. Fortunately, preparing your portfolios for this scenario is easy. In this session, we will explore key forces that are driving growth and shaping the global economy, the landscape for equity returns over the next 10 years, investment strategies that can prepare today’s portfolios for tomorrow’s market environment and why you should consider Globalizing Your Thinking with Invesco.
he current inflationary surge is temporary. When flexible prices, especially some of those mentioned, normalize, inflation is likely to follow suit.
The great philosopher, John Locke, brilliantly captured the way the world works.
Early adopters to VIX options, Brian Stutland and Joe Tigay were active pit traders who grew the firm into the largest electronic market makers of VIX options at a time when VIX popularity was second only to the SPX. The team identified a knowledge gap for advisors wanting to hedge for their customers versus experienced traders. Using their expertise, the team forged Equity Armor Investments into an advisory firm in 2011, developing strategies and supporting advisors with access to professional VIX hedging knowledge that few industry professionals possess.
New research documents the abject failure of the vast majority of municipal bond funds to outperform a passive benchmark.
Tweedy Browne is one of the most respected value managers in the world, with a legacy that includes having Benjamin Graham and Warren Buffett as clients. In this interview, members of its investment committee explain why value investing is on the cusp of a resurgence.
Recent protests offer hope that change may be right around the corner. But for now, gold and Bitcoin have helped fill the gap created by disastrously mismanaged currencies.
The impacts of passive investing are not as well understood as they should be.
The worst is behind us, and over the next two years the global economy will continue to experience a strong economic recovery.
The title of this comment may seem odd, given that – as I write this on July 14, 2021 – the S&P 500 is at a record high.
The top ten stocks in the S&P500 add up to 27% of the index. Is that a problem?
Market crises and macroeconomic recessions typically create fertile ground for value stocks to outperform in a recovery.
During the second quarter, global equity markets extended their strong performance.
Congress is aiming to hobble China’s ability to recruit scientists and academics in the U.S. as part of broader moves in Washington to confront the Asian nation’s growing clout.
COVID-19 resurgences appear to be the primary driver of moves across many markets this year.
New research shows that a company’s history of bad ESG events foretells poor stock performance. That contrasts with other research showing that ESG ratings lack such predictive power.
In a new paper, Taleb aims a scattergun at bitcoin and its underlying database technology, blockchain. Some of those scatter shots ding bitcoin or blockchain slightly or not at all. But some of them hit the mark squarely.
Xi has been trying to balance economic freedom and authoritarian control and it’s not working like it used to. Today we’ll review some recent events that illustrate where Xi went wrong.
Choosing a fund or ETF with a positive ESG profile is fraught with risk. New research shows how carefully investors must weigh considerations such as screening criteria, factor exposures, industry concentration and expenses.
Markets, and particularly cyclical stocks, have made great strides in the first six months of the year.
Our Chief Market Strategist Stephen Dover explores how quantum computers will soon unlock and slice through infrastructure and financial systems’ public key cryptography.
Halfway through the year 2021, we must be reminded to “not confuse brains with a bull market.”
Heading into the second half of the year, pandemic concerns are not completely in the rear-view mirror.
A comeback by megacap growth stocks and the stalling of the value trade arrived at exactly the wrong moment for one $15.3 billion exchange-traded fund.
Cathie Wood’s Ark Investment Management has been selling Chinese tech stocks, with holdings in one of the firm’s funds falling to the lowest on record as Beijing’s crackdown on the sector intensifies.
The global economy is in a mid-cycle expansion, following peaks in policy support and growth, and what is likely a transitory spike in inflation. We expect global growth to moderate to a still above-trend pace in 2022.
Forcing the price of money to absurdly low or even negative rates is slowly but constantly detracting from economic progress and ripping the social fabric of our nation.
After a devastating selloff last year and a remarkable rebound since, it's as important as ever to have a good mental model of what is driving the market.
Rising interest rates generated negative year-to-date returns for investment grade bonds in 2021, but the second half of the year looks more promising. We believe the combination of reduced supply and strong demand will create attractive opportunities, and we are constructive on corporate credit and asset backed securities (ABS).
Be forewarned – we are going to empty the quote bin this quarter.
This is the story of how Chicago evolved from a wilderness outpost of 350 residents in 1833 to the global capital of derivatives trading.
New research has uncovered a paradox. Energy firms have been, by far, the most prolific producers of “green” innovations and patents. But those are the stocks that are routinely shunned by ESG investors. Are ESG investors’ goals aligned with their dollars?
Following the June Federal Open Market Committee (FOMC) meeting, the Treasury curve flattened as the market reacted to a more aggressive hiking schedule than previously expected. Risk continued to perform well as investment grade (IG) corporates outperformed again and tightened through levels not seen since 2018. Economic data continues to improve showing the reopening remains on track, but investors remain focused on elevated levels of inflation.
Gold notched its third straight week of higher prices as the yield on the 10-year Treasury dipped below 1.3% for the first time since February. The highly transmissible Delta variant was also ruled the most dominant strain of coronavirus in the U.S., threatening economic growth and raising uncertainty about the next interest rate hike.
TINA has been applied to investing. You must buy stocks because TINA. You can’t make money any other way. Just close your eyes, buy and hold forever. Or at least through a full market cycle. Frankly, I think that’s stupid.
In the last few weeks, stock market leadership reversed back to lockdown-era defensives as the stock market made new all-time highs.
Central bankers are engaged in the most sweeping rethink of their role in decades, spurred by the success of tight collaboration with governments in countering the pandemic crisis and a new political reality of increased demands on monetary policy makers.
The reflation trade that hammered bonds, drove stock gauges to repeated records and re-energized long dormant value shares this year is in rapid retreat.
For international investors, we believe the United Kingdom is home to many companies that offer an especially attractive combination of growth, value and quality.
With respect to managing portfolios in an inflationary environment, we have taken great care to emphasize companies that we believe have pricing power due to the mission-critical or value-add nature of their products and services.
Pro-value cycles have historically been long and durable.
This article is about an exception to a rule – an exception that, I believe, has ceased to be. And so the rule has become stronger, and there is a little less joy in the investing world.
A new exchange-traded fund from Ross Gerber is all-in on the once-unsavory parts of society.
To critics of the $11 trillion passive boom, active management is the original form of ethical investing -- and time is running out to save it from the indexing onslaught.
Bond investors are worried, and who can blame them?
Financial theory predicts that stocks of “green” or climate-friendly companies should underperform brown ones, but empirical evidence demonstrates that has not been the case. New research explains that paradox, showing that green stocks have had a temporary benefit from adverse climate-related news.
Constructing sustainable and risk-adjusted portfolios in a global context
Summer is a good time to sit down and reflect on what you would like to see happen in the fall and 2022.
The global economic reopening remains on track as COVID-19 vaccination rates climb.
We have observed that additions and deletions to the S&P 500 Index follow a dependable pattern: additions underperform and deletions overperform over the subsequent 12-month period.
Emerging Market Debt Portfolio Manager Elisabeth Colleran shares why she believes EM corporates have a particularly strong value proposition within the broader EM debt universe.
If we could travel back in time to the beginning of 2020, many of us would be surprised at how good things were.
My guest today, Ken McAtamney, says we are witnessing the “Mother of All Recoveries,” with yearly growth at a level not seen in decades. He expects this recovery to last years, not months or quarters. Unlike the post-global financial crisis recovery, he says this cycle will likely be driven by domestic demand, not relying on China’s stimulus to drive the global economy. I am going to ask Ken about what led him to this forecast.
This year’s SIC closing day was a blockbuster. In this letter, I’ll wrap up my conference reviews by wrapping that day for you.
Inflation continues to be a concern these days, and many investors are looking for investments that can keep pace with, or hopefully beat, the rate of inflation
This Fund has a focus on China’s small companies—could you explain the investment idea behind this? Why China? Why small cap?
The Fed meeting last week led to higher asset price volatility across asset classes.
The yield on the benchmark 10-year Treasury note is 1.62%, and that is up approximately 130 basis points from its low of 32 basis points in March of last year. Moreover, the central debate among economists is whether the U.S. faces a new regime of inflation and higher rates, or whether inflation will be only transitory, as the Fed expects. This context of volatility and uncertainty about interest rates makes the job for advisors who want to generate steady income for their clients exceedingly difficult. Here to discuss one solution to that problem is Scott Kefer of Victory Capital.
Over the past few months, economic recoveries have been uneven across regions and sectors.
Sir John Templeton famously said that “this time is different” are the four most dangerous words for investors.
Here are the top five reasons to convert to a referral-only practice.
Managed futures strategies have historically delivered attractive returns over the long run with low equity correlations.
The global economy is changing, yet many investors seem to have static portfolios. RBA explains why we believe the current shift in market leadership will last longer than investors are expecting.
Domestic business travel is well on its way to recovery. Forty percent of poll respondents said that business travel within the country where their firm is based has already resumed, while a third said that their company has either decided on a start date or is working toward a date.
A proposal by the Biden administration would remove the preferential tax considerations for long-term holders of stocks. In so doing, it will cause investors to favor active ETFs over traditional actively managed mutual funds.
Now that investors are reconsidering active stock picking and are especially interested in value stock strategies, let’s analyze where excess stock market returns come from.
With investors anxious to hear the Federal Reserve’s latest take on inflation after last week’s hot reading, certain corners of the market are already simmering down.
In our last issue we suggested that the "Inflation Genie" was out of the bottle.
I spoke with Staley Cates, the vice chairman of Southeastern Asset Management, on the value opportunities he sees in the U.S. and abroad, and why his firm’s process has generated superior returns for its partners/investors.
The investment opportunities are constantly changing as economic reopenings roll on.
When Congress passed the SECURE Act in 2019, it was with the noble intention of helping those Americans who work in small businesses plan for retirement.
I’ve been writing about the possibility of higher inflation for months, and now it looks to have finally made landfall. The headline consumer price index (CPI) came in at 5% year-over-year, the highest in over a decade.
With the post-pandemic US economy on the mend, a new threat has emerged: inflation.
David Swensen, the manager of Yale’s endowment who passed away earlier this month, wrote the following in his 2005 book Unconventional Success:
Southeastern Asset Management (sponsor of the Longleaf Partners mutual-fund family) exemplifies every fundamentally important, investor-friendly characteristic conducive to active-management success. Portfolio managers exhibit the courage to hold concentrated portfolios, to commit substantial funds side by side with shareholders, to limit assets under management, to show sensitivity to tax consequence, to set fees at reasonable levels, and to shut down funds in the face of diminished investment opportunity.
Past studies found some evidence of persistence of outperformance in private equity and venture capital. But new research challenges those findings and makes a compelling case that advisors and their clients should proceed with caution in those assets classes, investing only when they are confident they have identified a compelling strategic advantage.
With only a few brief downturns in an otherwise upward trend in the U.S. equity market since the Global Financial Crisis, declining interest rates have pulled forward the net present value of distant earnings and propelled growth stocks (and the market as a whole) higher.
Proponents of the fiduciary standard claim that it will lead to better financial outcomes for clients. But a new study of Canadian advisors, who resemble U.S.-based RIAs but do not adhere to a fiduciary standard, casts doubt on this assertion.
Active Management
Taking Muni Bonds to the Next Level: Where Cutting-Edge Tech and Fundamental Research Meet
There’s considerable uncertainty in today’s municipal market. Questions persist about the likelihood of rising interest rates, inflation that may not be transitory and the impact on municipalities once the benefits of fiscal stimulus fades. Active bond managers have many decisions to make and need to be nimble in a changing landscape. What’s next for municipal bonds, and how can trading and portfolio management technology help investors navigate this changing environment?
The Limits of Equities as an Inflation Hedge
If you review the investment research articles and notes published during the 1970s and early 1980s, what you pick up is that during periods of high inflation, equity markets failed to live up to expectations.
C Is For A Customized Client Experience: Looking At The Holistic Planning Services Advisors Now Provide
If there is one experience common to us all during the global pandemic, it is that the spread of COVID-19 around the world caused everyone—young or old, rich or poor, male or female—to reassess our priorities.
World Markets Update: August 2, 2021
Six out of eight indexes on our world watch list posted gains through August 2, 2021. The top performer is France's CAC 40 with a gain of 20.26%, our own S&P 500 is in second is with a gain of 16.80%, and India's BSE SENSEX is in third with a gain of 10.89%. Coming in last is Hong Kong's Hang Seng with a loss of 3.66%.
ESG High-Yield Bonds Have Not Outperformed
ESG proponents claim that “green” high-yield bond returns offer better risk-adjusted returns. New research disproves this claim, although ESG investors do not incur a penalty by owning green bonds.
How to Evaluate the Risks of Life Settlements
For advisors looking to add diversification and growth potential to client portfolios, life settlements are a compelling asset class.
Which Clients Should Open Donor-Advised Funds
Here are 12 types of clients who have recently established DAF accounts with the assistance and encouragement of their financial, legal, tax advisors.
How Advisors Can Maximize After-Tax Returns
Frank Pape is the senior director, portfolio consulting for Russell Investments’ advisor and intermediary solutions business. In this interview, he discusses the latest research on how advisors can maximize the after-tax income for their clients.
The Metaverse: What Every Early-Stage Investor Needs to Know
You may not be familiar with the term metaverse, but if you’ve been a consumer of popular books, movies and video games over the past 30 years or so, you probably are aware of the concept.
End of the Recovery and Reflation Trade?
The yield curve is a powerful indicator. More powerful than many others as May West reminds us. As the greatest reopening momentum now appears behind us, today, our All-Weather portfolio looks more all-weather than it did earlier in the year.
Moving Averages: S&P Up 2.3% in July
Valid until the market close on August 31, 2021.
The S&P 500 closed July with a monthly gain of 2.27% after a gain of 2.22% in June. At this point, after close on the last day of the month, all five S&P 500 strategies are signaling "invested" — Vanguard Total Stock Market ETF (VTI), Vanguard FTSE All-World ex-US ETF (VEU), iShares Barclays 7-10 Treasury (IEF), Vanguard REIT Index ETF (VNQ), and Invesco DB Commodity Index Tracking (DBC) — up from last month's quadruple "invested" signal.
Measuring EM Stocks’ Undervaluation
What is the degree of Emerging Markets (EM) stocks’ undervaluation relative to United States (US) equities?
Pending Home Sales Down Marginally in June
Today the National Association of Realtors released the June data for their Pending Home Sales Index. According to the National Association of Realtors®, "Pending home sales declined marginally in June after recording a notable gain in May."
Are Your Portfolios Ready if US Stocks Underperform?
Most equity portfolios today are dominated by US stocks. That’s understandable, as they’ve outperformed for years. But Invesco Investment Solutions believes that the tide is turning, and that the next 10 years will see international equities outperform. Fortunately, preparing your portfolios for this scenario is easy. In this session, we will explore key forces that are driving growth and shaping the global economy, the landscape for equity returns over the next 10 years, investment strategies that can prepare today’s portfolios for tomorrow’s market environment and why you should consider Globalizing Your Thinking with Invesco.
Just How Transitory Is Inflation?
he current inflationary surge is temporary. When flexible prices, especially some of those mentioned, normalize, inflation is likely to follow suit.
The Law of Fashion
The great philosopher, John Locke, brilliantly captured the way the world works.
Volatility as an Asset Class
Early adopters to VIX options, Brian Stutland and Joe Tigay were active pit traders who grew the firm into the largest electronic market makers of VIX options at a time when VIX popularity was second only to the SPX. The team identified a knowledge gap for advisors wanting to hedge for their customers versus experienced traders. Using their expertise, the team forged Equity Armor Investments into an advisory firm in 2011, developing strategies and supporting advisors with access to professional VIX hedging knowledge that few industry professionals possess.
The Dismal Failure of Actively Managed Municipal Bond Funds
New research documents the abject failure of the vast majority of municipal bond funds to outperform a passive benchmark.
Tweedy Browne: We Are in the Early Stage of Value’s Resurgence
Tweedy Browne is one of the most respected value managers in the world, with a legacy that includes having Benjamin Graham and Warren Buffett as clients. In this interview, members of its investment committee explain why value investing is on the cusp of a resurgence.
Cuba and Venezuela Offer Cautionary Tales of Socialism
Recent protests offer hope that change may be right around the corner. But for now, gold and Bitcoin have helped fill the gap created by disastrously mismanaged currencies.
The Consequences of Passive Investing
The impacts of passive investing are not as well understood as they should be.
Don’t Fear the Delta Variant
The worst is behind us, and over the next two years the global economy will continue to experience a strong economic recovery.
What Triggered the Crash?
The title of this comment may seem odd, given that – as I write this on July 14, 2021 – the S&P 500 is at a record high.
Are Market-Cap-Weighted Indexes Too Concentrated in the Biggest Stocks?
The top ten stocks in the S&P500 add up to 27% of the index. Is that a problem?
Quality Enhances Value for Investors After Market Crises
Market crises and macroeconomic recessions typically create fertile ground for value stocks to outperform in a recovery.
3Q 2021 OUTLOOK
During the second quarter, global equity markets extended their strong performance.
Congress Takes Aim at China’s Recruitment of Talent in U.S.
Congress is aiming to hobble China’s ability to recruit scientists and academics in the U.S. as part of broader moves in Washington to confront the Asian nation’s growing clout.
Where To Invest Now: COVID And Correlation
COVID-19 resurgences appear to be the primary driver of moves across many markets this year.
Bad ESG News Predicts Poor Stock Performance
New research shows that a company’s history of bad ESG events foretells poor stock performance. That contrasts with other research showing that ESG ratings lack such predictive power.
Why Nassim Taleb Says Bitcoin is Worthless
In a new paper, Taleb aims a scattergun at bitcoin and its underlying database technology, blockchain. Some of those scatter shots ding bitcoin or blockchain slightly or not at all. But some of them hit the mark squarely.
Xi’s Big Mistake
Xi has been trying to balance economic freedom and authoritarian control and it’s not working like it used to. Today we’ll review some recent events that illustrate where Xi went wrong.
Why It’s So Hard to Choose ESG Funds and ETFs
Choosing a fund or ETF with a positive ESG profile is fraught with risk. New research shows how carefully investors must weigh considerations such as screening criteria, factor exposures, industry concentration and expenses.
Three Qs for Q3: Insights for inquiring equity investors
Markets, and particularly cyclical stocks, have made great strides in the first six months of the year.
Quick Thoughts: Think Quantum with Cybersecurity
Our Chief Market Strategist Stephen Dover explores how quantum computers will soon unlock and slice through infrastructure and financial systems’ public key cryptography.
Stock Picking is Dead
Halfway through the year 2021, we must be reminded to “not confuse brains with a bull market.”
K2 Advisors Third Quarter Hedge-Fund Strategy Outlook
Heading into the second half of the year, pandemic concerns are not completely in the rear-view mirror.
A $15.3 Billion Quant ETF Loses Out in Badly-Timed Rebalance
A comeback by megacap growth stocks and the stalling of the value trade arrived at exactly the wrong moment for one $15.3 billion exchange-traded fund.
Cathie Wood Sells China Tech Stocks, Warning of Valuation Reset
Cathie Wood’s Ark Investment Management has been selling Chinese tech stocks, with holdings in one of the firm’s funds falling to the lowest on record as Beijing’s crackdown on the sector intensifies.
Mid‑Cycle Investing: Time to Get Selective
The global economy is in a mid-cycle expansion, following peaks in policy support and growth, and what is likely a transitory spike in inflation. We expect global growth to moderate to a still above-trend pace in 2022.
The Fed’s Role in Dismantling Capitalism
Forcing the price of money to absurdly low or even negative rates is slowly but constantly detracting from economic progress and ripping the social fabric of our nation.
Market review Q221
After a devastating selloff last year and a remarkable rebound since, it's as important as ever to have a good mental model of what is driving the market.
Investment Grade Credit Midyear Report: A Challenging First Half, but Opportunities Remain
Rising interest rates generated negative year-to-date returns for investment grade bonds in 2021, but the second half of the year looks more promising. We believe the combination of reduced supply and strong demand will create attractive opportunities, and we are constructive on corporate credit and asset backed securities (ABS).
Don’t Get Rugged
Be forewarned – we are going to empty the quote bin this quarter.
The Second City: First in Derivatives
This is the story of how Chicago evolved from a wilderness outpost of 350 residents in 1833 to the global capital of derivatives trading.
The Great ESG Paradox
New research has uncovered a paradox. Energy firms have been, by far, the most prolific producers of “green” innovations and patents. But those are the stocks that are routinely shunned by ESG investors. Are ESG investors’ goals aligned with their dollars?
Total Return Perspectives: June 2021
Following the June Federal Open Market Committee (FOMC) meeting, the Treasury curve flattened as the market reacted to a more aggressive hiking schedule than previously expected. Risk continued to perform well as investment grade (IG) corporates outperformed again and tightened through levels not seen since 2018. Economic data continues to improve showing the reopening remains on track, but investors remain focused on elevated levels of inflation.
Gold Is Catching a Bid on Pandemic and Inflation Fears. Are You Participating?
Gold notched its third straight week of higher prices as the yield on the 10-year Treasury dipped below 1.3% for the first time since February. The highly transmissible Delta variant was also ruled the most dominant strain of coronavirus in the U.S., threatening economic growth and raising uncertainty about the next interest rate hike.
TINA Is Stupid
TINA has been applied to investing. You must buy stocks because TINA. You can’t make money any other way. Just close your eyes, buy and hold forever. Or at least through a full market cycle. Frankly, I think that’s stupid.
Lockdown Leadership Unlikely To Last
In the last few weeks, stock market leadership reversed back to lockdown-era defensives as the stock market made new all-time highs.
Do-It-All Central Banks Risk Rates Flexibility With New Mission
Central bankers are engaged in the most sweeping rethink of their role in decades, spurred by the success of tight collaboration with governments in countering the pandemic crisis and a new political reality of increased demands on monetary policy makers.
The Great Reflation Trade Is Buckling Around the World
The reflation trade that hammered bonds, drove stock gauges to repeated records and re-energized long dormant value shares this year is in rapid retreat.
Markets Generally Favored the Wasatch Approach During the Second Quarter
For international investors, we believe the United Kingdom is home to many companies that offer an especially attractive combination of growth, value and quality.
International and Global Markets Commentary & Investment Outlook
With respect to managing portfolios in an inflationary environment, we have taken great care to emphasize companies that we believe have pricing power due to the mission-critical or value-add nature of their products and services.
Investors Can Plant the Seeds for Outperformance in Value Stocks
Pro-value cycles have historically been long and durable.
What Ever Happened to Value Investing?
This article is about an exception to a rule – an exception that, I believe, has ceased to be. And so the rule has become stronger, and there is a little less joy in the investing world.
New Gerber ETF Invests in Tech and ‘Things That Were Illegal’
A new exchange-traded fund from Ross Gerber is all-in on the once-unsavory parts of society.
Wall Street Rebels Warn of ‘Disastrous’ $11 Trillion Index Boom
To critics of the $11 trillion passive boom, active management is the original form of ethical investing -- and time is running out to save it from the indexing onslaught.
What Are Bond Investors Thinking? Their Three Top Concerns
Bond investors are worried, and who can blame them?
Bad Climate Change News is Good for “Green” Stocks
Financial theory predicts that stocks of “green” or climate-friendly companies should underperform brown ones, but empirical evidence demonstrates that has not been the case. New research explains that paradox, showing that green stocks have had a temporary benefit from adverse climate-related news.
The Case for Global Bonds
Constructing sustainable and risk-adjusted portfolios in a global context
Summertime Is Here and “Normal” Is Coming Back!
Summer is a good time to sit down and reflect on what you would like to see happen in the fall and 2022.
2021 Global Market Outlook – Q3 update: The song remains the same
The global economic reopening remains on track as COVID-19 vaccination rates climb.
Revisiting Tesla’s Addition to the S&P 500: What’s the Cost, Before and After?
We have observed that additions and deletions to the S&P 500 Index follow a dependable pattern: additions underperform and deletions overperform over the subsequent 12-month period.
Eyeing EM Corporate Debt?
Emerging Market Debt Portfolio Manager Elisabeth Colleran shares why she believes EM corporates have a particularly strong value proposition within the broader EM debt universe.
Midyear Outlook 2021: The Long and Winding Road Back to Normal
If we could travel back in time to the beginning of 2020, many of us would be surprised at how good things were.
Minisode - The Mother of All Recoveries
My guest today, Ken McAtamney, says we are witnessing the “Mother of All Recoveries,” with yearly growth at a level not seen in decades. He expects this recovery to last years, not months or quarters. Unlike the post-global financial crisis recovery, he says this cycle will likely be driven by domestic demand, not relying on China’s stimulus to drive the global economy. I am going to ask Ken about what led him to this forecast.
Long Humanity
This year’s SIC closing day was a blockbuster. In this letter, I’ll wrap up my conference reviews by wrapping that day for you.
Treasury Inflation-Protected Securities: FAQs about TIPS
Inflation continues to be a concern these days, and many investors are looking for investments that can keep pace with, or hopefully beat, the rate of inflation
Market Insights from Portfolio Manager Winnie Chwang
This Fund has a focus on China’s small companies—could you explain the investment idea behind this? Why China? Why small cap?
Opportunities In Local Currency Assets After The Sharp Dollar Move
The Fed meeting last week led to higher asset price volatility across asset classes.
Creative Solutions to Generate Income for Clients
The yield on the benchmark 10-year Treasury note is 1.62%, and that is up approximately 130 basis points from its low of 32 basis points in March of last year. Moreover, the central debate among economists is whether the U.S. faces a new regime of inflation and higher rates, or whether inflation will be only transitory, as the Fed expects. This context of volatility and uncertainty about interest rates makes the job for advisors who want to generate steady income for their clients exceedingly difficult. Here to discuss one solution to that problem is Scott Kefer of Victory Capital.
Inflation Inflection
Over the past few months, economic recoveries have been uneven across regions and sectors.
Quick Thoughts: Sourcing Income in Bonds, Real Estate, and Multi-Asset Solutions
Sir John Templeton famously said that “this time is different” are the four most dangerous words for investors.
Five Reasons to Become a Referral-Only Practice
Here are the top five reasons to convert to a referral-only practice.
PIMCO Trends: Managed Futures: Seeking Diversification and Returns
Managed futures strategies have historically delivered attractive returns over the long run with low equity correlations.
Momentum Investors Will Be Buying Energy and Materials in a Year
The global economy is changing, yet many investors seem to have static portfolios. RBA explains why we believe the current shift in market leadership will last longer than investors are expecting.
When Will Business Travel Recover? Sooner Than You Might Think
Domestic business travel is well on its way to recovery. Forty percent of poll respondents said that business travel within the country where their firm is based has already resumed, while a third said that their company has either decided on a start date or is working toward a date.
Proposed Tax Law Changes Will Favor Active ETFs
A proposal by the Biden administration would remove the preferential tax considerations for long-term holders of stocks. In so doing, it will cause investors to favor active ETFs over traditional actively managed mutual funds.
Taking Lumps for Alpha
Now that investors are reconsidering active stock picking and are especially interested in value stock strategies, let’s analyze where excess stock market returns come from.
From Copper to Corn, Markets Show Peak Inflation Fear Has Passed
With investors anxious to hear the Federal Reserve’s latest take on inflation after last week’s hot reading, certain corners of the market are already simmering down.
Where Have All The Workers Gone?
In our last issue we suggested that the "Inflation Genie" was out of the bottle.
Staley Cates: Southeastern’s Advantage as a Value Investor
I spoke with Staley Cates, the vice chairman of Southeastern Asset Management, on the value opportunities he sees in the U.S. and abroad, and why his firm’s process has generated superior returns for its partners/investors.
Non-U.S. Markets Brimming In Investment ‘Excitement’
The investment opportunities are constantly changing as economic reopenings roll on.
Using the SECURE Act to Support Small Business Clients
When Congress passed the SECURE Act in 2019, it was with the noble intention of helping those Americans who work in small businesses plan for retirement.
Transitory or Not, Inflation Is Here. It Could Be Much Higher Than You Realize
I’ve been writing about the possibility of higher inflation for months, and now it looks to have finally made landfall. The headline consumer price index (CPI) came in at 5% year-over-year, the highest in over a decade.
Muni Strategies for an Inflationary Climate
With the post-pandemic US economy on the mend, a new threat has emerged: inflation.
Staley Cates: Where Value Investors are Finding Opportunities
David Swensen, the manager of Yale’s endowment who passed away earlier this month, wrote the following in his 2005 book Unconventional Success:
Southeastern Asset Management (sponsor of the Longleaf Partners mutual-fund family) exemplifies every fundamentally important, investor-friendly characteristic conducive to active-management success. Portfolio managers exhibit the courage to hold concentrated portfolios, to commit substantial funds side by side with shareholders, to limit assets under management, to show sensitivity to tax consequence, to set fees at reasonable levels, and to shut down funds in the face of diminished investment opportunity.
The Troubling Evidence Against Private Equity and Venture Capital
Past studies found some evidence of persistence of outperformance in private equity and venture capital. But new research challenges those findings and makes a compelling case that advisors and their clients should proceed with caution in those assets classes, investing only when they are confident they have identified a compelling strategic advantage.
Real World Overlay Solutions in Challenging Times
With only a few brief downturns in an otherwise upward trend in the U.S. equity market since the Global Financial Crisis, declining interest rates have pulled forward the net present value of distant earnings and propelled growth stocks (and the market as a whole) higher.
The Misguided Faith in the Fiduciary Standard
Proponents of the fiduciary standard claim that it will lead to better financial outcomes for clients. But a new study of Canadian advisors, who resemble U.S.-based RIAs but do not adhere to a fiduciary standard, casts doubt on this assertion.