Active Management

The flows strike a blow for Vanguard in the increasingly fierce battle to dominate a more than $4 trillion market.

The COVID-19 pandemic has brought major changes to how advisors are working with clients, especially based on the comments we received during our recent webinar, “How the Pandemic Has Changed Advisory Practices.”

All eight indexes on our world watch list posted losses through July 6, 2020. The top performer is our own S&P 500 with a loss of 1.58%. China's Shanghai is in second with a loss of 2.15% and in third is Tokyo's Nikkei 225 with a loss of 3.98%. Coming in last is London's FTSE 100 with a loss of 16.66%.

The five largest US growth stocks now comprise more than a third of the Russell 1000 Growth Index. Investors should be alert to the risks of high benchmark concentration.

Pricing dislocations and adjustments between companies, industries, regions and asset classes due to the impact of COVID-19 offer opportunities for select hedged strategies, according to K2 Advisors.

While the “annuity puzzle” is well-documented in the academic literature, there is no “mutual fund puzzle.”

The protracted low-yield environment has left many investors with insufficient returns to meet their goals: how can credit help? Here we highlight where we see 5 credit opportunities.

American ingenuity is something to take pride in this weekend as we (safely) celebrate the Fourth of July.

As you read this, the Financial Planning Association is engaged in one of the most consequential initiatives in its history, and for some reason this important program is getting zero publicity.

As states ease their COVID-19 lockdown measures, rising case numbers have put pressure on equity markets.

After a decade of steady growth and rising asset prices, economies and financial markets were rocked by the COVID-19 pandemic. The global health crisis forced most governments to lock down their communities, halting economic activity almost overnight and causing financial markets to reprice lower at an unprecedented speed.

Companies are coping with diverse challenges through the coronavirus crisis. Investors who integrate environmental, social and governance (ESG) factors into their research can gain important insights on how businesses are adapting—and how future return potential might be affected.

Large-scale studies have shown that actively managed funds underperform their passive benchmarks on an absolute basis. New research shows that this is also true on a risk-adjusted basis – and this is true across asset classes and sub-classes.

As if the Coronavirus outbreak wasn’t enough of a problem for society to deal with, shortly afterwards, two American police officers ended the lives of two American civilians. Why that will affect financial markets for a long time to come you can read here.

Investors continue to pile into gold-backed exchange-traded funds, with holdings at a record.

Valid until the market close on July 31, 2020.

The S&P 500 closed June with a monthly gain of 1.84% after a gain of 4.53% in May. All three S&P 500 MAs are signaling "invested" and three of five Ivy Portfolio ETFs — Vanguard FTSE All-World ex-US ETF (VEU), Vanguard REIT Index ETF (VNQ), and Invesco DB Commodity Index Tracking (DBC) — are signaling "cash".

Unusual times require more than the usual sources of information to assess the investing backdrop. Jeff Shen discusses how alternative data is making a difference today.

Markets have rallied on hopes for an economic recovery as coronavirus-imposed lockdowns are eased across the globe. The rebound has been helped by oversold investor sentiment, but with sentiment back to neutral, so too is our strategists’ market outlook.

As we reach the half-way point of what has been an extremely eventful year in asset markets, this week we take a step back and assess the current landscape from a momentum perspective. Where is the momentum and how likely is it to persist?

Join the Nasdaq Dorsey Wright (NDW) analyst team to discuss market developments through a technical lens and highlight areas to monitor in the coming weeks.

Over the years, we have illustrated the value of relative strength-based sector rotation in a variety of ways. Most of these studies have treated the sectors generically, i.e., they looked at the performance of the best performing sector without regard to which sector that happened to be at any given time.

Here are the six key investment-platform considerations for brokers moving to an RIA.

With markets extremely difficult and volatile as we work through COVID-19, we thought it would be good to review important parts of our investment discipline. One way to do that is to consider stocks we found via our eight criteria for stock selection and did not keep long enough to get to their ultimate rewards.

If you’re following our Nasdaq Dorsey Wright commentaries here, you’ll notice that we have been discussing the factors driving the wide performance dispersion between some top-performing broad market funds, namely, the Invesco QQQ Trust (QQQ) and the Invesco S&P 500 Top 50 ETF (XLG)...

In a post-coronavirus investment world, Jeff argues that investors should be rethinking the role of fixed income in portfolio construction and ask themselves if they are at risk of investing without a parachute?

Today the National Association of Realtors released the May data for their Pending Home Sales Index. According to the National Association of Realtors®, "Pending home sales mounted a record comeback in May, seeing encouraging contract activity after two previous months of declines brought on by the coronavirus pandemic."

A “perfect storm” of surging government debt levels, plunging real bond yields, rising coronavirus cases and deteriorating economic forecasts pushed the price of gold to an eight-year high this week, and some analysts now project the metal to top its all-time high within the next 12 months.

With sentiment currently at very high levels, combined with low volatility, and a high degree of investor complacency, all the ingredients necessary for a market reversal are currently present. Am I sounding an “alarm bell” and calling for a massive correction? No.

Pundits, prognosticators, and even investment boards often make misleading declarations that an asset class is broken, that its prospects for earning investors a reasonable future return are very dim. These proclamations can lead to investors’ abandoning these assets to chase recent winners.

Recent underperformance has led some to declare the death of value investing, but don’t be so quick to dismiss it.

Just as any propaganda needs a certain germ of truth to grow from, so do bubbles. The FANGAM are incredible companies (germ of truth), and they function better in the virus-infested world (another germ of truth). But at the core, their existence is grounded in the world that is built of atoms, not bytes.

Even after the partial rebound from COVID-related losses, we think high-quality companies in certain developed and emerging markets remain compelling investments. High-quality companies outside the U.S. look especially attractive to us.

Dislocations resulting from the pandemic shine a light on environmental, social and governance (ESG) issues, which can be used as an additional tool to identify leading companies from the laggards, according to Franklin Templeton’s Global Head of ESG, Julie Moret.

Can you reignite the growth of your business in the the second half of 2020? We think so. Here’s why we believe the next six months may hold a once-in-a-lifetime opportunity.

The recent poor performance of value funds has led some investors to illogically shift to products with less exposure to the value factor. The evidence that the value factor has worked over long periods of time means you want more exposure to it, not less.

During the coronavirus pandemic, people are drinking less. (Yes, you read that correctly.)

The US Federal Reserve (Fed) recently announced it would purchase individual corporate credit bonds. David Mann, our Head of Capital Markets, Global ETFs, makes a case for using smaller ETFs to accomplish that goal.

The unprecedented amount of fiscal and monetary stimulus that has been showered on the US and global economies has the potential to lead to inflation...an environment of generally rising prices. Unfortunately, this could be playing out in an environment of little to no economic growth.

Francis Gannon, Co-Chief Investment Officer at Royce Investment Partners digs into the opportunities present in the small cap sector. As Francis relays, the drastic hit smalls caps have taken due to the coronavirus pandemic, provides enhanced opportunities for active managers looking at the space.

There is accumulating evidence that market conditions are growing more attractive for showcasing stock-picking skills.

Get the ins and outs of green bonds in this two-part series. Let’s start with the basics.

Coronavirus cases and hospitalizations are spiking again in several countries, including the U.S. California had its biggest one-day jump in infections. Arizona, Florida and Texas are also turning into new hotspots.

As everyone in the financial services industry knows, the US equity market is open from 9:30 am – 4:00 pm EST. However, the US market now also has pre- and post-market trading from 7:00 am until open and from close until 8:00 pm.

Economies and markets whipsawed in the first half of 2020. Here’s what we expect for the rest of the year.

Municipal bonds—especially higher-quality issues—bounced back after a rough March. But not all munis have rallied. We see potential among overlooked mid-grade issues.

Deficits are rising across the developed world as governments aggressively loosen their purse strings in response to the COVID-19 pandemic. But what are the ramifications of all this debt?

As the global economy slows, we remain optimistic about the long-term growth potential of Chinese equities. From a public health perspective, China has flattened its curve of new cases COVID-19. Fiscal and monetary stimulus, while incremental, remains supportive. Interest rates remain positive, giving China's central bank room to maneuver.

Back in March, I predicted that the total U.S. economic response to the COVID-19 crisis would be at least $10 trillion.

The common characterization of US-China relations as a new Cold War is wrong. Instead, the most recent spike in tensions between the two countries – the second time this has happened since US President Donald Trump took office in 2016 – is primarily motivated by political considerations ahead of the November US presidential election.

In many ways large cap, and especially large cap growth, has dominated the story in 2020.

Read Harold Evensky's latest NewsLetter.

What kind of role does private markets play in building a resilient portfolio in the post-Covid world? Mike explains.

COVID-19 is triggering a new era of central banking. We believe this will play out just as powerfully in the euro area as elsewhere.

I want to begin today by sharing with you the latest question I am getting over and over from colleagues and friends. That question is: How have the stock markets rallied to record or near-record highs in light of the terrible economic news due to the coronavirus crisis?

Through its process of lowering interest rates and attempting to meet its inflation mandate, the Fed is driving the world's interconnected economy.

Recently, Advisor Perspectives published two articles based on the data found in The Robo Report regarding the performance of robo advisors compared to our normalized benchmark. We feel it is important to introduce our perspective on the data in our report and respond to the conclusions drawn in those articles.

Having trouble helping your clients appreciate a balanced portfolio? These charts may help.

On June 4, 2020, eBay (EBAY) released a business update to make investors aware that the quarantine circumstances have caused their business to perform “significantly better than expectations,” compared to their earnings report on April 29, 2020.

New research shows that companies that adhere to positive ESG principles have lower costs of capital, higher valuations, are less vulnerable to systemic risks and are more profitable. But beware; those higher valuations translate to lower expected returns for investors.

Join the Nasdaq Dorsey Wright (NDW) analyst team to discuss market developments through a technical lens and highlight areas to monitor in the coming weeks. Topics this week include reviewing recent market movement through near-term overbought/oversold levels, equity-based participation indicators, and support levels on major indices.

The selloff this week was “perfectly normal,” according to the math. Find out why it makes sense to have a long-term investment horizon.

Rob Amodeo, Head of Municipals at Western Asset Management, digs into the state of the muni-bond market, his outlook moving forward and what investors have to look for to find winners in the sector.

While a cap-weighted index derives its performance from the movement of the underlying holdings multiplied by their respective allocations as determined by market cap, the Dow Jones Industrial Average is a price-weighted index, which simply means that stocks with the highest share price receive the greatest weighting in the index.

The stock market has been on an absolute tear since the end of March, evidenced by the S&P 500 Index (SPX) rallying almost 43% through Friday’s close (3/23 – 6/5). While the rebound has been a relief for many, conversations concerning the overbought status of the equity market are beginning to circulate, and perhaps justifiably so.

It is imperative that all Americans see recent events around racial inequality as a call for action and work to ensure equality for people of color. In his latest memo, Howard Marks shares his thoughts and pledges to heed this call.

Join the Nasdaq Dorsey Wright (NDW) analyst team to discuss market developments through a technical lens and highlight areas to monitor in the coming weeks. Topics this week include the increasingly overbought posture of domestic equity indexes and the laggard rally in size & style classifications.

There is a parallel between today’s stock market and Fischer random chess.

I consider Oracle an attractively valued dividend growth stock with an emphasis on growth. Oracle has a long history of generating above-average growth of earnings and cash flows, and since paying its first dividend in 2009, its dividend growth has been nothing short of extraordinary.

In our 2020 Global Market Outlook, we cited many indicators pointing to heightened risk of a recession; now we highlight increasing signs of a recovery from one.

One of the most popular and successful strategies over the last decade has been low-risk (i.e., low-beta or low-volatility) investing. New research shows that those strategies have persisted even after the publication of the research documenting their existence, and that they can be pursued in low-cost, low-turnover portfolios.

A manager's alpha thesis can offer insight into an investment strategy's performance potential. Our growth equity alpha thesis is the differentiated philosophy & process behind what we do every day.

This year marks the 100th anniversary of the renowned investment firm Tweedy Browne. The firm was originally a broker, and one of its clients was Benjamin Graham. I interviewed six members of Tweedy, Browne’s investment committee.

Between mid-February and late March 2020, we saw a “take no prisoners” market crash. Anything with a whiff of perceived risk crashed, in direct proportion to its perceived risk. The only assets that soared—because of tumbling interest rates—were long Treasury bonds, and with them, the net present value of pension obligations.

From a performance perspective, I give robos an “A” for being average, and hope that future research can make more meaningful statements as to how robos truly impact investor outcomes.

Severe economic recessions often feature what might be called an “incubation phase,” where an exuberant rebound from initial stock market losses becomes detached from the quiet underlying deterioration of economic fundamentals and corporate balance sheets.