The Active Management Channel

Yawn…

Expectations for U.S. growth continue to slow as distractions in Washington D.C. take away from the aggressive legislative agenda.

Equity Growth Stars: Bargains in Disguise

Investors are wary about US stock multiples. But elevated valuations of high-growth stocks may be deceiving. Growth overachievers that can deliver persistent fundamental strength often make a mockery of their short-term valuations in hindsight.

Can Smart Beta think (twice)?

Recent introductions of multi-factor Smart Beta products demonstrate causality among its components and an ability to replicate past future pricing. Unclear is the extent to which Smart Beta adequately discerns the directional value of securities at points of inflection to consistently outperform allocated Beta, Index-plus or Alpha portfolio strategies.

Don’t Wait for Rough Markets to Take a Look at Alternatives

Volatility is remarkably low today, but it’s not likely to stay that way. Alternatives have the potential to provide diversification and reduce risk when markets get stormy again. But what’s the best way to design an alternatives allocation?

On My Radar: Near Term Looks Good, Long Term Looks Scary

This is one of the more important pieces I’m sharing with you. It’s a candid look at where we are in the economic cycle and what that likely means for the global markets.

The Best Fund Managers – As Voted by their Peers

Today’s indexing mania is driving the marketing people at the best active fund complexes completely crazy, but the top portfolio managers – that is, the people who really, truly enjoy investing – are seeing a lot of new opportunities.

Why the Future is Bright for AUM-Based Advisors

Over the past several months, I have been reading Dan Solin’s thought pieces in Advisor Perspectives[1] and believe his gloomy outlook for the planning profession, and, more specifically, for advisors who are compensated via AUM-based fees, is misguided.

Comparing Different Strategies for Getting into the Market

Is it better to jump in all at once, to average-in over time or to wait for a market correction?

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.

The Great Reset: How Should We Then Invest?

This letter will cover the philosophical underpinnings of my thinking. I’ll also introduce some investment tools (which I will give you access to through a link later on in the letter) that express that philosophy, but you could also design a different answer that fits your own (or your client’s) portfolio construction.

Will the Fed Change Course?

The Fed story may well command attention. I classify it as an important story, but not an urgent one. I have some strongly-held viewpoints:

  1. The exact timing of rate hikes is not important for long-term investors. The Fed has been following a policy of rate increases in line with economic data. While many do not believe this, the data are supportive. Tim Duy on recent strength.
  2. That said, the rate increases have second- and third-order effects. The perception of the pace of hikes impacts exchange rates. The weaker dollar affects major corporate earnings – in both directions. This makes the Fed news worth watching.
  3. Current data are stronger than widely thought, but much depends upon how one views the Q1 softness—meaningful or aberrant. Recent Fed speeches suggest a moderation in the rate-hike path.
  4. Rates will be increased more slowly, but the balance sheet will be reduced.

Hedge Fund Managers Pour SALT on U.S. Stocks, Look to Europe

Europe is back on the map. That was one of the main takeaways this week from the SkyBridge Alternatives (SALT) hedge fund conference in Las Vegas, where $3 trillion in assets was represented. Speaker after speaker touted European equities for their attractive valuations and as a means to diversify away from the volatile American market in light of rising U.S. geopolitical risk. France’s election of centrist Emmanuel Macron over far-right nationalist Marine Le Pen this month has especially eased investors’ fears that antiestablishment forces would challenge the integrity of the European Union (EU).

A Long Runway for Small-Cap Value?

Co-CIO Francis Gannon explains what investors should know about the current state of small-caps.

China's Trilemma

On the surface, China continues to outperform expectations. It has sustained a high rate of economic growth for longer than most other developing countries.

The Active versus Passive Performance Debate Is Nonsensical

One of the most hotly contested debates in finance is the argument over which is better – active or passive investing. Moreover, this debate has spurred numerous academic studies that claim to identify whether passive outperforms active investing or vice versa.