DC plan sponsors are increasingly using TDFs that blend active and passive strategies to seek lower fees and enhanced alpha potential.
Welcome to the 2020s. Some weren’t sure we would make it this far, but we did. Now we face a new decade and new challenges. How we handle them will determine what kind of conversation we have in 2030.
Sustainable investing has come a long way. In its early days, investment managers, like Saturna Capital, created faith-based investment processes, focused on excluding companies or industries that conflicted with the tenets of an investor’s faith. This led to proactive investing, often referred to as advocacy investing, a process that encourages companies, sectors, and regions to engage in better business practices.
Imagine you wake up tomorrow from a three and a half-year coma. Everything that’s happened in the meantime—the election of Donald Trump, impeachment, Brexit and more—is a complete mystery to you.
What follows is an interview I conducted with an experienced financial advisor at an anonymous, major brokerage firm. It shows how easily someone can transition from a commission-based, stock-picking mindset to acting as a true fiduciary.
Boris Johnson’s victory bodes well for Trump in 2020. The British PM’s Conservative party toppled the so-called “red wall,” winning seats across rural, working-class North and Midlands counties that had for decades been considered safe Labour territory.
Model portfolios are built on the premise that asset allocation drives long term portfolio returns. Alternative strategies like hedge funds can provide diversification benefits that may improve long-term returns and reduce drawdowns.
Next year is set to start on a high note, with consumers and the Fed keeping the economy and market afloat; but risks remain elevated, including trade and elections.
Factor-driven investing, while highly popular among equity investors, has not been widely adopted in the bond market. But new research shows how to construct highly efficient fixed-income portfolios using factors, as well as the ongoing importance of reducing expenses.
A brief monthly update on what's happening in the municipal bond market.
Predicting a major economic or financial event—whether that’s a recession, market downturn or even your own retirement—requires that you also take action. Otherwise your prediction was meaningless.
Did you know that more than $12 trillion in assets under management are engaged in one or more strategies of sustainable investment in the United States? This comprises more than 25 percent of the professional managed assets across the country and is a 38 percent growth from 2016 figures.
In the U.S., between one quarter and one third of all assets managed are done so with an ESG or SRI mandate. Outside the U.S., that percentage is even higher. The Vitium Global Fund, formerly the Vice Fund, buys what most ESG/SRI investors scorn, stocks in the tobacco, alcoholic beverage, gaming and aerospace/defense industries.
Research Affiliates discusses why they believe value investing is still alive and well and explains how changes to the display of expense ratios seek to enhance clarity for investors.
“This is not QE. In no sense is this QE.” That was Jerome Powell in early October, answering a reporter’s question on whether the Federal Reserve’s intervention in the overnight U.S. repo market constituted another round of quantitative easing (QE).
Positive returns across asset classes in 2019 may limit tax loss selling in closed-end funds, but we see potential long term value in select sectors where investors can still buy assets at a discount.
Factor performance, as conceived by Fama and French and refined by others, is based on adding the returns of a “long” portfolio of securities that most embody the factors to a “short” portfolio that least represent the factors. But it is common practice for mutual funds and ETFs to use only the long portfolio. New research show that this approach does effectively capture the returns of the underlying factors.
To get the attention of smart beta investors in a crowded marketplace, some smart beta providers are laying claim to performance that appears implausible. So what is plausible? We look at historical live performance to answer this important question.
With many investors seeking to diversify their equity exposure as the U.S. bull market charges into its historic 10th year, asset managers are now providing innovative and cost-effective SMA offerings that provide US investors access to the full breadth of the emerging market universe; a feature not previously available.
We discuss Neil Hennessy’s thoughts on the market as 2019 concludes, along with his 2020 outlook. Neil explains the key tenets of his investment strategy and why he thinks the market is not overvalued. Neil spends a great deal of his time talking to advisors and he discusses the key themes he is hearing.
While most Americans support providing free medical care to those who need it most, not imposing an additional cost on the middle class has never been accomplished by any country that has universal health care.
Baby Boomers are arriving at retirement with large accumulations that have not yet been exposed to federal income tax. I describe a program that synchronizes the distribution of pre-tax assets with availability of generationally-low tax rates, while keeping the dictates of Medicare, Social Security and the governing IRS tax code firmly in view.
Models can help advisors streamline portfolio management while retaining the level of discretion appropriate for their practice.
For SRI optimized index funds, stable ownership of a range of companies and industries provides a platform for helping investors integrate their values into their investment decisions.
Earlier this year, passive management was attacked in two high-profile articles. Those criticisms were proven to be false – and driven by active managers seeking to protect their livelihoods. But that still left the question, which I now examine, of whether flows to passive funds have increased certain risks.
-U.S. stocks entered November in the process of finally breaking out of their post-January 2018 trading range. -Along with new highs has come elevated optimistic sentiment; a near-term warning sign. -Spread between the “smart money” and “dumb money” recently reached an extreme.
College is expensive. We all know that – and that is why parents come to financial advisors to talk about how they’ll pay for it. What you and your clients’ families may not be aware of is that the posted tuitions are rarely the price anyone pays. College tuition discounts vary widely and the methodology used to calculate tuitions is not disclosed by any college.
The economic calendar is normal with a focus on housing. Some will be parsing the Fed minutes while others watch the impeachment hearings. This week’s topic may not be a media focus for the week ahead, but it gets constant attention. With a government shutdown and the debt ceiling on the agenda, let’s seize the moment and ask: Is it time to worry about debt? I suspect that many readers believe it is way past time!
S&P’s SPIVA scorecard provides persuasive evidence of the futility of active management. But its most recent scorecard illustrates something else – why active managers underperform even in the best performing asset class.
Throughout this 10-year bull market, investors have been overly cautious toward equity markets and ignored “new highs”. Now in this late-cycle market environment, investors are piling into cyclicality, private equity and venture capital. It’s time to stop saying everyone is so bearish.
RIA investment platforms – specifically the vehicles and tools they use to manage client portfolios – are about to undergo the most profound change in a generation. With the race to zero for trading stocks, mutual funds are becoming outdated. Customized portfolios of individual stocks will be the winner.
As two recent commentaries demonstrate, in their zeal to promote their agendas, asset managers are claiming that the humble 60/40 portfolio is doomed to the dustbin. But their analysis is flawed. The 60/40 will outlive us all.
If you’re an advisor looking to differentiate your practice from others, consider this article to be your first step toward a better understanding of impact investing.
Read Harold Evensky's latest Newsletter.
The first Litman Gregory Masters Fund was launched December 31, 1996. Litman Gregory Masters Equity was created because, as financial advisors, the team at Litman Gregory wanted more control over the mutual funds they used in its client portfolios, and it had specific ideas about how to build a “better fund.” Since then, Litman Gregory has been a pioneer in the development of liquid alternative funds and, in 2018, launched a high-income alternatives fund.
Listen... do you hear that? A bubble is popping. No, we aren’t talking about the stock market... well, at least not the stock market you’re probably thinking about. Generally, public companies have the economics to back up their lofty valuations, even if those valuations are, well, lofty. It is the market for private companies, specifically those backed by venture capital (VC), that looks truly bubblelicious.
Chris Davis is chairman of Davis Advisors, a firm founded by his father that has followed the same value-investing discipline for its 50-year history. In this interview, Chris discusses the exceptional opportunities he is finding among the financial stocks, how financial advisors can add the greatest value and the biggest changes he has seen over his career.
What was once the world’s largest commodities hedge fund is officially closing, creating new opportunities for some investors to get exposure to raw materials and mining using other funds. According to Bloomberg, Blenheim Capital Management’s CEO and chief investment officer, Willem Kooyker, is calling it quits after a 50-year money management career that made him a legend in oil, metals and agricultural markets.
If you’re committed to helping your clients achieve their financial outcomes, don’t avoid discussing taxes.
Never in my investment career can I recall political “happenings” carrying so much weight in daily market movements. Today’s markets are whipsawed by political slings and arrows, often in the form of tweets or breaking news reports. And “investors” increasingly are reacting impulsively to a reality that’s shifting minute-by-minute.
Do factor premiums survive implementation costs? To answer this question, I’ll examine the returns of live mutual funds to see if they have been successful at capturing the returns of small-cap and value premiums.
When baby-boomer adults were in their twenties, we sang along with Mark Knopfler and Dire Straits. Their song, “Money for Nothing” defined the era of music videos. We got cable in 1981 and will admit that we were glued to the TV watching music videos of the bands and performers we loved.
A review of the risks which keep the markets range-bound. Investors are bearish, but remain aggressively allocated.
Clients have started commenting on the connection between my new, expensive car (which I am excited about) and their fees.
As we look ahead to the closing months of 2019, most of the year’s volatility drivers remain in place. With that in mind, we believe now may be the time to adopt a more defensive posture without deviating from your long-term strategic asset allocation.
Lon Erickson, CFA, is a portfolio manager and managing director for Thornburg Investment Management and oversees five of its fixed income mutual funds. Erickson says that rates could be as low as 1.1% in the next year, and he explains why a collaborative, bottom-up construction process will benefit advisors and their clients.
For those advisors seeking to outsource their portfolio construction, the proliferation of model portfolios leaves them with an overwhelming challenge to properly analyze the thousands of choices. Indeed, the fate of those who fail to overcome that challenge will be reminiscent of that of Blockbuster Videos.
As the financial markets enter what I expect to be a rather disruptive completion to the recent speculative half-cycle, it will be helpful for investors to consider certain propositions that are readily available from history, rather than insisting on re-learning them the hard way.
