As the COVID-19 pandemic evolved during the first quarter, the municipal bond market experienced one of its most volatile periods in years. Here, the Franklin Municipal Bond Department shares how they plan to navigate the market, which they think is likely to show signs of distress and elevated volatility for some time.
SMEs and oil are feeling the demand decline, leading to calls for reopening businesses.
When times of turmoil hit, most investors become risk-averse, seeking safety over opportunity for higher returns. The coronavirus-driven crisis is no different in that regard. However, John Beck, our director of fixed income, London, sees some striking differences between this and other crises, and offers some thoughts on where he thinks taking some risk today might make sense.
Rarely has market performance and sentiment changed so quickly than what has been observed in the first quarter of 2020. The start of the year was promising, with the S&P 500 climbing above 5% through the middle of February...
With the U.S. corporate default rate likely to rise, a growing number of investors may be wondering what they should do if their bond issuer is unable to repay its debts. Unfortunately, the answer isn’t always straightforward. There are, however, several things corporate bond investors should know.
Oil prices briefly turned negative this week. What does it mean for energy bonds? And why does the long view for oil matter more?
There is a strong case to be made that such dividends in such an inherently volatile business as oil is asking for trouble.
Critics say private-equity firms are using loans to benefit investors, not workers.
But as internship programs shift online, some are questioning their quality.
Some pension funds will hold it against asset managers that tapped emergency U.S. government money designed for struggling small businesses.
Amid the current crisis, a forceful economic policy response is essential. The central principle here is that the closer we can get economic support to the point where current spending enters the “circular flow” – basic incomes, net rent and lease obligations, utilities, contractual payments, even net interest payments, the better we can support the entire economy.
Using low volatility strategies to lower risk and capture alpha.
Stocks and earnings don’t always move in tandem; with stocks typically leading earnings … but is the market’s rally too much, too soon?
Despite the important role financial advisors play in the design of client portfolios, we know very little about how those portfolios are constructed. New research shows, however, that the model portfolios used by advisors suffer from a number of structural inefficiencies.
We don’t know how this will develop, or how quickly, but I think it is far more likely to bring asset price deflation than inflation. We are going to reprice the world. Probably including your part of it.
MSCI is a leading provider of indices for a variety of asset classes. Its factor Indexes, which we are going to talk about today, are designed to capture the return of factors which have historically demonstrated excess market returns over the long run. These are rules-based, transparent indexes that target stocks with favorable factor characteristics – as backed by robust academic findings and empirical results – and are designed for simple implementation, replicability, and use for both traditional passive and active mandates.
They say that the four most dangerous words in investing/finance/economics are “This time it’s different.”
In a new white paper from GMO’s Emerging Markets Equity Team, Amit Bhartia, Tiger Tong and Uday Tharar examine vulnerabilities and opportunities in emerging markets as the COVID-19 pandemic continues to threaten lives and economies around the world.
Closed-end funds are currently trading at a discount as equity markets have dropped. Here’s where to spot opportunities.
Dare to disagree with Paul Krugman? If you’re prominent enough to merit his attention, he will attack your ideas and worse, label you as evil. But behind his rhetoric is an economist who is often worth listening to.
Remaining on hold and waiting to see where life takes us over the next two to three months (or perhaps longer) is prudent. Patience will prove to be a virtue in these highly uncertain times.
The last decade has been a painful one for investors who believe in a factor-based approach to investing and have stuck with those factors that have historically performed well, namely the value factor. But a breed of products have avoided the plight. ETFs that were designed to be nimble and allocate across a range of factors have not suffered the same performance deficit.
The last decade has been a painful one for investors who believe in a factor-based approach to investing and have stuck with those factors that historically performed well – namely the value factor, which has severely underperformed growth over those 10 years. But a breed of products have avoided that plight. Funds and ETFs that have were designed to be nimble and allocate across a range of factors have not suffered the same performance deficit.
There are large disparities across factors within the U.S. Large Cap asset class, and factor rotation provides opportunities to capture return disparities. Nearly every portfolio has an allocation to U.S. Large Cap and we will discuss using a Large Cap Factor Rotation strategy to complement or replace an existing U.S. Large Cap allocation. Especially after a market downturn, a factor rotation strategy can be beneficial to help adapt to leading factors as they rebound rather than getting in these factors too soon. Using a systematic quantitative approach, a factor rotation strategy removes the emotion from the decision-making process.
Participants will learn:
Our presenters will be available to answer live questions during the webinar.
This webinar is for financial professionals only and is not open to the public.
Minimum volatility strategies are one way to seek more equity stability, which may help investors stay in the markets over the long run.
Once again, no one cares about the economic calendar. There are a few items with recent data – jobless claims, mortgage applications, and Michigan sentiment – but most reports are old news. Everyone is focused on the increase in coronavirus cases and deaths. There are plenty of predictions, each based on model from a reputable source. The variation is wide.
Switching to a tax system where all people filed individually would increase the women’s labor-force participation far more than subsidizing childcare, the IMF found.
Major adjustments in capital markets around the globe have changed our long-term expected return forecasts for the 100+ assets we model. Before the corona crash we forecast long-term real returns for US equities to be only 1% a year. Now new, lower valuations suggest higher returns.
The coronavirus crisis will change the world in many ways. Tony DeSpirito discusses its potential impact on ESG investing and how it may hasten an important trend for active investors.
It’s been said before, but the truth appears to be this crisis is very different than others we’ve experienced. It's not an asset bubble tied to exuberance, greed, default, fraud or mismanagement of a country, currencies or anything else in our manmade economic system.
Uncertainty continues to dominate global securities markets and heightened volatility is the result. Feifei Li, partner and head of equities, asks Rob Arnott, the founder and chairman of Research Affiliates, about the implications of increased volatility on investment strategies and where investors can find the best opportunities.
The majority of the time, when you hear someone say “I bought it for the dividend,” they are trying to rationalize an investment mistake. However, it is in the rationalization that the “mistake” is compounded over time. One of the most important rules of successful investors is to “cut losers short and let winners run.”
As both traditional and alternative asset markets descend into turmoil this month, it’s important to remember the inherent strengths of a diversified portfolio. A market rout always causes correlation to go to 1 across virtually all assets as investors flee to the perceived safety of cash.
Financial markets, and the world, are in unprecedented times. Tony DeSpirito offers some perspective along with ideas for preparing for the eventual return to “normal".
Postcard from Vietnam: On a research trip to Vietnam before the coronavirus crisis, our analysts discovered what it takes for manufacturers to outsource successfully.
A burgeoning Wall Street strategy that’s been pitched as a shelter from storms is proving anything but in this once-in-a-century market turmoil.
As coronavirus-related market volatility expands into municipal bonds, the Franklin Municipal Bond Department explains how they are navigating an increasingly challenging muni-market environment. They also share reasons why they believe a longstanding preference for high-quality municipal bonds supports their efforts to turn volatility into opportunity.
The industry luminary reflects on how financial advisors will be impacted by the coronavirus and why he joined Buckingham Wealth Partners.
Beware of companies that rapidly grow their assets on their balance sheets. The stocks of those companies are more likely to “crash” over the next three to five years, according to newly published research.
An ETF that bets winning stocks will keep on winning has held up quite well amid the recent bout of market turbulence. One reason: it’s got many of the same traits of a popular low-volatility fund.
Compared to past viral outbreaks, COVID-19 appears to be less fatal, yet it has received far more media coverage. Paradoxically, that may be part of the reason why it’s had a much bigger impact on public health and the economy relative to those other diseases.
As the oil surplus builds, we expect U.S. crude oil to linger at $30-$40 per barrel for the next several months.
Small-value investors can choose between index funds and passively managed, structured products. While index funds have lower costs, they don’t offer the same degree of exposure to the small-cap and value factors. Here is how that difference has played out in three prominent funds over the last eight years.
Investors have been awoken to the carnage of the last three weeks. These circumstances, while unenjoyable, may be hiding the actual problems with today’s market. The unforeseen circumstances of today are no different than the past.
Global growth could follow a U-shaped path over the next few quarters, though substantial uncertainty remains as policymakers grapple with the impact of the coronavirus.
I am going to divide this letter into three sections: health and human impact (sometimes a tragic one), economic impact and investment strategy.
The popularity of ESG investing strategies has driven up the valuations of those stocks. New research shows that ESG investors should brace themselves for lower returns – and that underperformance may come at the worst possible time.
We have a modest economic calendar. Only two reports will provide any hint about the coronavirus economic impact. The punditry will not be hampered. Without meaningful data, speculation blossoms. There is one idea that could help both your interpretation of data and your investment decisions.
Monday, March 9, will be the 11th anniversary of the bull market that started back in 2009. With recent pullbacks and turbulence around the coronavirus, it is reasonable to worry that this anniversary will be the last and that a bear market will break the streak sometime in the next year. As such, now seems a good time to consider where we stand—and where the market might be headed.
