Portfolio Building

Changes in government inevitably bring new priorities and policies, one being the area of taxes. Fiduciary Trust International Managing Director Craig Richards examines possible tax implications for individuals under President Joe Biden’s new administration.

Over the last dozen years, investors holding the classic US 60/40 portfolio were substantially better off than their diversified peers, yet now is not the time to abandon diversification and diversifying asset classes. We believe it is imprudent to trust that escalation in valuations will continue unabated into the next decade...

Global output and demand are likely to rebound strongly in 2021, but we see risks that call for careful portfolio positioning.

With a record high number of SPAC IPOs and the success of some well-documented investments with triple digit returns, investors and advisors might be interested in evaluating a potential allocation to their portfolios. In this article I focus on a few basic criteria of the best-performing SPACs and tips on how to perform your own analysis.

Free from a house view on economies, markets or stocks, J O Hambro Capital Management’s (JOHCM) fund managers invariably see the world in different ways. We asked a number of our managers for their thoughts on the outlook for their asset class next year, what they would like to see and the possible surprises that 2021 could bring.

A nascent global recovery presents both risks and opportunities for fixed income investors. Portfolio Manager Teresa Kong, CFA, discusses why China dominates the universe for EM debt and why Asia may outperform the rest of EM for the foreseeable future.

GMO’s new quarterly letter to clients examines the worst 12-month performance for value stocks in history and explores how investors can profit from a period reminiscent of previous bubbles in global markets.

Recently we discussed the “rotation trade” and examined the performance of the S&P 500 sectors during shifts from growth to value. Another facet of the rotation trade has been a shift from large cap to small. Today we wanted to examine sector performance in another facet of this rotation – a shift from large cap to small cap.

Debt of many emerging market countries can offer robust yields and enhance portfolio diversification, provided the asset manager has the resources and sophistication to avoid potential pitfalls.

As we arrived at the beginning of November, much of the investment community had heightened concerns about the prospects for continued domestic equity growth during what was assumed to be a volatile market environment with the potential for a contested US presidential election.

The better informed the investor is, the better the investment decisions they can make. But being an informed investor can be a very arduous task, and some would even say that conducting research on common stocks is a real snoozer.

Wide performance dispersion underscores the importance of portfolio construction.

Amid the ongoing COVID-19 crisis, we believe that investing in private markets may offer a raft of potential opportunities. Here's why.

In an environment where interest rates are low and the risk of higher Treasury yields has risen, Portfolio Managers from Janus Henderson Investors discuss how allocations to AAA rated CLOs may help investors diversify a traditional fixed income portfolio, offering lower volatility, higher credit-quality and less sensitivity to any rise in interest rates.

Volatility swept across US markets over the last several days as fear and uncertainty surrounding the coronavirus as well as the US presidential election continue to take hold, causing the Nasdaq Composite to post its worst week since March.

Domestic Equities currently hold the number one spot in the Nasdaq Dorsey Wright Dynamic Asset Level Investing (DALI) tool and populate the upper echelon of the Asset Class Group Scores (ACGS) page, confirming the technical strength/leadership from that group.

On October 21st, 2020, the First Trust Focus Five Model FTRUST5 turns 11 years old. While many investors have been following this model for years, those of you who have not can read more about the model’s methodology in the First Trust Focus Five Model Fact Sheet, which includes a detailed account of the methodology, the inventory, and performance numbers that go back to inception.

What is impacting investing? How is it different from ESG? Equity investor Eric Rice answers these questions and more in this one-minute read.

We are roughly two months removed from seeing US Equity make its way back to the number one ranked asset class in the Nasdaq Dorsey Wright DALI (Dynamic Asset Level Investing) tool. This is the eighth time going back to 2000 that US Equity has been the number one ranked asset class.

Investors should consider many angles when evaluating what active managers can offer through a global crisis and an indefinite period of uncertainty.

The S&P 500 SPX and Nasdaq NASD have recently hit a series of fresh all-time highs and the Dow DJIA now sits less than 2% off of its all-time high which has many people wondering if the market is overbought and due for a correction.

A basket of emerging market bonds may offer the same appeal investors have long sought from U.S. Treasuries.

The S&P 500 SPX and Nasdaq NASD have recently hit a series of fresh all-time highs and the Dow DJIA now sits less than 2% off of its all-time high which has many people wondering if the market is overbought and due for a correction.

Evaluating the unusual characteristics of the profitability factor

September has historically been one of the weakest months for the S&P 500. The momentum factor, on the other hand, has historically been very strong in September.

Gold has been on a tear over the last year, rising 32% while global equities have languished. A common objective of gold is to hedge against some type of risk. This paper shows how gold can reduce downside risk during big down markets, but isn’t the most effective inflation hedge.

The odds of a stagflation environment are continuing to rise in our opinion. Over the past few weeks/months we have made this view clear by looking at both sides of the coin, growth and inflation. Over that time, the evidence continued to mount in favor of our view.

In addition to its tragic human toll, COVID-19 triggered the sharpest recession in recent history, and efforts to control its spread have transformed the way we work, the way we shop and how we connect with others. We think these changes will last awhile—with implications for asset allocation.

This review will explore why passive investing may not provide the bargain most advisors think they are getting for their clients. This is especially important as most managers have underperformed their benchmark YTD with such cyclical market performance. Although difficult to find, investors should still seek out skilled managers that stick to quality investment philosophy and process.

The economic calendar is modest, and many market participants will probably extend their long weekends. The ISM Non-Manufacturing Index and jobless claims data will be the most important.

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.

Admiral James Bond Stockdale was the highest-ranking United States military officer in the “Hanoi Hilton” POW camp during the Vietnam War. His jet was shot down in 1965, and after parachuting into a small village, he was taken as a prisoner of war.

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?

Rick Rieder, Russ Brownback and Trevor Slaven contend that in the tug-of-war between the considerable economic damage stemming from the coronavirus and subsequent lockdowns, and the fiscal and monetary policy responses put in place, the latter factor is being underestimated by markets. Further, the instruments used by investors in previous years won’t be what’s required for the time ahead.

Over the last several years, we have recognized what has been going on with negative or near negative interest rates in Japan, and is now bleeding into parts of Europe. We never imagined that those troubles from afar would be any more than banter amongst economists and financial doomsdayers. The reality of those environments have now made it to the shores of the good ol’ USA.

Rick Rieder and Jacob Caplain contend that with profound uncertainties still present in the economy and markets, and the dislocations witnessed in many market segments in the past couple months, investors don’t need to resort to lower-quality assets. In fact, to achieve potentially attractive returns, higher-quality spread assets can serve quite well.

The Fama–French value factor, and value investing in general, has suffered an extraordinarily long 13.3 years of underperformance relative to the growth investing style. The current drawdown has been by far the longest as well as the largest since July 1963. Arnott, Harvey, Kalesnik, and Linnainmaa examine the potential causes of value’s underperformance and provide estimates of value’s performance relative to growth’s performance under different revaluation scenarios over the next decade.

Russell Investments has long held that it is possible to create investment value while incorporating values into the decision-making. In this blog post, we continue on that theme and highlight a small collection of securities that demonstrate doing well while doing good.

Low Price to Something investing, or “value” investing as it has come to be known since Fama/French introduced the “value” factor has been a disaster for investors over the past 10 plus years.

The spread of the COVID-19 virus has blindsided conventional risk models. By understanding what went wrong, investors can develop a more forward-looking approach to risk management that considers multiple scenarios for a highly uncertain market environment.

The economic calendar includes several important releases, but few reflect the COVID19 effects. Everyone knows the economic news is dismal. Just how dismal does not seem to matter.

Rick Rieder, Russ Brownback and Trevor Slaven contend that even as markets are gripped with the trauma of wild swings, and continued uncertainties, the seeds of future investment opportunity are being sown.