In this Q&A, Thornburg’s Connor Browne doubts the Senate will pass the House’s American Health Care Act (AHCA) in its current form, and is cautious that the status quo may even prevail.
With markets seeking to avoid similar toe-stubbing in the policy arena, we examine the drivers of the fixed income markets for the near term. In doing so, we consider President Trump’s fiscal policy influence, Janet Yellen’s monetary policy impacts and evolving exogenous geopolitical dynamics. So, who or what will determine the market’s course moving forward?
DALBAR’s report is commonly cited as “proof” that mutual fund investors have historically made poor market-timing decisions. While DALBAR does not publicly disclose its approach, in this article I use a transparent and industry-accepted methodology, based on publicly available data, to demonstrate that investors’ returns have not been nearly as bad as DALBAR claims.
It is unfortunate that Blanchett’s article misses the central point that the Quantitative Analysis of Investor Behavior (“QAIB”) measures the mutual fund investor experience and not the areas raised as concerns. In fact, the author admits by his ignorance of its contents that he has not read the report that he so roundly criticizes.
In the last 20 years, the U.S. stock market has undergone an alarming change that too few people are aware of or talking about. Between 1996 and 2016, the number of listed companies fell by half, from 7,300 to 3,600, according to a recent report by Credit Suisse. This occurred despite the U.S. economy growing nearly 60 percent over the same period.
When it comes to credit investing, we believe passive investors are implementing a suboptimal strategy and may be leaving money on the table as active management offers several potential advantages.
Fixed-income closed-end funds (CEFs) should perform poorly when the yield curve flattens, according to Jeffrey Gundlach, because those funds borrow short and lend long. But DoubleLine’s CEFs have more than withstood the flattening of the yield curve over the last six years.
Political risk may have ratcheted lower after the first round of the French presidential election. But the latest jump in asset prices across Europe appears to have tailwinds well beyond politics.
While there was plenty of ink spilled and electrons fired regarding the White House tax reform proposal last week, it could be a very long time before anything actually gets voted on. And who knows if it will even be passed.
if you are overcome with fear of missing out on the next stock market move; if you feel like you have to own stocks no matter the cost; if you tell yourself, “Stocks are expensive, but I am a long-term investor”; then consider this article a public service announcement written just for you.
It took nearly 66 years for Jack Bogle’s embrace of the index fund to become the dominant trend in the mutual fund industry. In the wake of that dominance, the rest of the industry faces a painful decline, according to Bogle. His thesis can be applied to a key group of fiduciary advisors – those that are part of a “roll-up” entity – whose business models are flawed in the same way as those doomed fund companies.
Emerging markets have shot out of the gate in early 2017, even as the Fed is hiking rates. Renewed global growth, earnings cycle and valuations bode well.
Trump’s 100th day arrives next Sunday, April 29, and it would be disingenuous to describe his tenure so far as smooth sailing. He’s faced a number of significant setbacks and distractions, including federal judges’ smackdown of his two travel bans, a failure to repeal and replace Obamacare and an ongoing investigation into his administration’s possible collusion with the Russian government in the months leading up to the November election.
With over 30,000 individual issuers and one million distinct securities, the supply of municipal bonds is highly fragmented.
A review of last month’s market-moving events across countries and asset classes.
The popularity of smart-beta products has raised concerns that certain factors have been “overgrazed” – that their expected return has been driven down due to popularity-driven demand. A new research paper purports to refute this concern. But its logic is flawed and practitioners should be highly skeptical of its conclusions.
ETFs can have significant costs that aren’t entirely evident in expense ratios. From transaction to holding costs to ETF composition, the total costs of ETFs can be a significant drag on returns, which are coming under the microscope, as are the robo-advisors that typically use them.
In their second-quarter (Q2) 2017 outlook, K2 Advisors’ Research and Portfolio Construction teams share the key market events they have an eye on.
In 2016, Research Affiliates published a series of articles challenging the “smart beta” revolution. We pointed out that, while there is merit in many factor tilt and smart beta strategies, performance chasing in these strategies—buying the popular outperforming strategies whose relative valuations are at extremely high levels—can be just as dangerous as performance chasing in other realms of asset management.
As the Fed raises rates and suggests it may start shrinking its balance sheet later this year, managing duration risk becomes much less straight forward.
The first quarter of 2017 was a profitable one for many strategic domestic and global equity investors. All major domestic large cap indices are up for the year: S&P 500 is 5.53%, Dow 4.56%, and NASDAQ 9.82%. On the other hand, domestic small cap underperformed with the Russell 2000 gaining 2.12%.
While it might sound obvious, we find it important to remember that knowing about the past only helps you place bets on the future to the extent that the future is like the past.
So should we sing or weep? Warren Buffett has a brilliant way of making the complicated simple. Let’s think about valuations like we think about the price of hamburgers and see if we are going to get more or less for our money. Today, I share with you my favorite valuation charts and story them in a way I hope your clients might better understand.
My firm recently approved a new alternative investment, one that until recently was only available through hedge funds, the Stone Ridge Reinsurance Risk Premium Interval Fund (SRRIX).
Yes, active management has had its collective head beaten bloody for the past few years; and the proclivity for passive investing may persist a lot longer than any of us imagine, driving markets higher than many of us believe possible; but I think the stampede into passive investment is going to end up painfully, at the bottom of a cliff, for many investors.
US indices made their all-time high in early March; aside from the Nasdaq, which made new highs this week, these indices have since moved sideways. SPX has alternated up and down 5 weeks in a row, producing little net gain. Seasonality is particularly strong in April, so a fuller retest of the March highs might still be ahead this month. And indications that 2017 will be a good year for equities continue to add up. But there is a notable set up in place for the first correction since November to trigger. This week is likely to be pivotal.
In case you haven’t already noticed, inflation has been steadily creeping up since July. In February, the most recent month of available data, consumer prices advanced at their fastest pace in five years, hitting 2.7 percent year-over-year.
Many investors still have misconceptions about exchange-traded funds (ETFs), including the type of market exposure they are getting with traditional capitalization-weighted ETFs. Dr. Chandra Seethamraju, director of systematic modeling, Franklin Templeton Solutions, gives us the lowdown on the concept of “beta” within ETFs—specifically strategic beta—and how it can offer a smarter investment approach.
Headline CPI rose from 2.5% to 2.74% last month, fueling speculation about higher interest rates. But inflation readings will be lower in the next few months, according to Jeffrey Gundlach.
Growth funds were the top performers in the first quarter of 2016. Moreover, nine of the top 10 performing funds over the last decade were in the growth category.
President Zuma's sacking of his market-friendly finance minister amid a broader cabinet reshuffle has spooked markets, creating attractive entry points for longer-term, valuation sensitive investors.
I’m going to try to tie two related themes together today. The first, and I have to admit I was surprised when I saw the research, is the incredible shrinking universe of stocks. Think corporate share buybacks, mergers and acquisitions and fewer companies going public. The second is the popularity of index investment products...
It is St. Patrick’s Day and I am thinking of my grandmother, who used to make the most horrific corned beef and cabbage every Wednesday night; the corned beef had a metallic sheen. So when I am offered corned beef and cabbage on this day I always shudder and decline.
Children eventually reach an age when they outgrow the need or desire for an elaborately staged birthday party. In the case of a certain bull born back in March 2009, that age appears to be eight.
With new data emerging showing consumers lack an understanding of alternative investments, we explore different alternative strategies investors can use to help educate their clients.
Time segmentation is wildly popular in practice and it goes by many different names. But it is also the least studied retirement-income approach. Whether time segmentation is a superior investing approach for retirement income has led to many heated debates.
Households have 30% of their financial assets in equities, the same proportion as they held at bull market peaks in the 1960s and in 2007. Does this mean another bear market is imminent? No.
As the National People’s Congress convenes, we highlight three government priorities to watch.
The proliferation of liquid alternative mutual funds happened in response to the 2008-2009 recession, which was followed by an extended period of unusually low interest rates.
We believe the consensus view of a Trump presidency translating into a blanket “stay clear of ” investing in emerging markets is overly simplistic. Our analysis of President Trump’s proposed policy of trade protectionism suggests that the impact on emerging markets is more nuanced – the vulnerability of these markets is significantly lower today than it was five years ago...
The yield on the 10-year Treasury bond has been tightly coiled in a “zone of death,” Jeffrey Gundlach said. Since the start of the year, it has traded between 2.4% and 2.5%, but it is poised to rally to 2.25% before it retreats to 3.0% by the end of the year, according to Gundlach.
Historical studies show individual investors are very poor asset allocators, and are undoubtedly no better at selecting ETFs. At RBA, our Pactive® Management portfolios combine the benefits of low-fee, transparent and liquid passive investments with RBA’s asset allocation expertise.
2017 is off to a remarkably similar start to 2013. No two years are ever exactly the same, so there's no reason to suggest that 2017 will repeat the 30% gains achieved in 2013. But many of the technical and fundamental similarities between these years suggest that 2017 may continue to be a good year. There are two watch outs, however, that make 2017 much higher risk than 2013. It's also worth recalling that equities fell 3-8% at six different points in 2013. Expecting 2017 to continue to ride smoothly higher will probably prove to be a mistake.
Snap’s IPO, Warren Buffett’s annual shareholder letter and the looming April 18 tax deadline all impact investment decisions. Let’s explore what is happening for growth-oriented investors.
One of the key themes I and my strategy colleagues highlighted in our 2017 outlook was the regime change from monetary policy being the only game in town to fiscal policy taking at least one of the reins.
Shundrawn Thomas serves as Northern Trust’s executive vice president, head of funds and managed accounts group. I spoke to him about his annual president’s perspective on the ETF industry, which was just released.
The Fed’s signals that rate increases could soon come seem to fall on deaf ears. U.S. stocks continue to climb as bond yields decline. Although recent data reflect accelerating economic growth, which is necessary to justify frothy valuations, structural challenges and unclear policy outcomes remain. Caveat emptor.
Dramatic growth offers significant opportunity for the index fund industry, but not without its risks. As assets move from active to passive management, what systemic danger lurks? What market disruptions might occur with a concentration of assets backed by monolithic indexes on autopilot?
Fama and French’s 1992 seminal research, which identified the value and size factors, was met with skepticism. Even the authors questioned the underlying economic rationale for their findings. With a quarter century of data, let’s look back and see if the skepticism was justified. Have value and small-cap outperformed?
Citing an improving economy and the possibility of more spending and lower taxes from the Trump administration, Fed officials are signaling rising rates immediately ahead.
