Wall Street Comes to Grips With How Wrong It’s Been in 2023
Stock-market strategists who were largely wrong about this year’s rally are finally starting to come to face their mistake, raising year-end targets for the S&P 500 Index.
Grayscale’s Bitcoin Win Is Still Only Half the Battle
News that a Washington DC Court of Appeals ruled in favor of Grayscale Investments LLC over the Securities and Exchange Commission has ignited hope that a Bitcoin exchange-traded fund will soon be available. Bitcoin prices jumped.
Running of the Bulls
Equity markets have rallied since October, but the Franklin Templeton Investment Solutions team thinks markets have run ahead of both current and expected growth. Learn why—and what it may mean for investors.
Estimating Value Chain Emissions for Portfolio Construction
Climate change presents a significant source of transition risk for investors as companies face increasing pressures from regulators, consumers, and shareholders to lower their carbon footprints.
Return to Normal? Surveying the Landscape for Emerging-Market Bonds
After the disruptions of the past few years, many of us are looking for a return to normal. For investors in emerging-market bonds, normal would mean a world in which global inflation is in check, interest rates are no longer rising, China is healthy, and traditional asset correlations resume.
VettaFi Voices On: One Year as VettaFi
Last week the VettaFi Voices gathered to reflect on a year at VettaFi under the firm’s new name. The team celebrated wins, and time spent together, and shared their favorite insights and highlights from a busy twelve months.
Live at the Sub-ICs
The semiconductor cycle is dead, long live the super cycle!
Strategic Income Outlook: And We Thought 2022 Was a Crazy Year
2023 has already been an eventful year, featuring a banking crisis and more Fed rate hikes. In our view, this is not a “set it and forget it” type of market – investors need to stay vigilant.
The Case For Secular Inflation
Inflation regimes often coincide with changing political regimes and agendas, much of which stems from the rise of populism and fiscal dominance. As a result of decades of globalisation and rising wealth inequality, we may well be entering a new regime - one of higher inflation and higher inflation volatility.
Small Cap Growth Investing Across Market Cycles
Markets are unpredictable, which is one of many reasons it is difficult to consistently deliver alpha over long periods. In their latest commentary, our small cap growth team explains why their approach to managing the trade-off between risk and reward gives them the opportunity to outperform across market cycles.
America Must Invest
The United States must grasp the opportunity that the money revolution has made possible by undertaking a government-financed investment program in 21st century industries and technologies on such a large scale that it would be certain to succeed.
Private Debt Funds Offer Attractive Yield
Private credit can be an attractive asset that has provided high yield and protection against the risks of rising inflation. In addition, the asset class has a strong credit history – specifically senior, secured, sponsored debt.
In his latest memo, Howard Marks writes that the investment world may be experiencing the third major sea change of the last 50 years. Events in recent years – especially the spike in inflation and the Federal Reserve’s response – appear to have caused a reversal of the market conditions that prevailed after the Global Financial Crisis and for much of the last four decades. Howard discusses what this potentially new era could mean for lenders, especially bargain hunters.
Newsletter Volume 15, No. 5
“95 years ago, your crystal ball reveals: Russian debt default, LTCM fail, DotCom implosion, 9/11 attacks, financial crisis and great recession, pandemic killing millions, 3 market crashes. Would you put your money into stocks? No? You missed a 10X return.”
The Drivers of the Efficiency of Protected Lifetime Income Benefit (PLIB) Strategies: Part 3
I explore some of the factors driving the superiority of PLIBs, in particular lapsation, mortality experience differences, accessing the equity risk premium, and the marginal role of annuities as part of a retirement strategy.
Tax Planning and Health Insurance Premium Subsidies under the Affordable Care Act
A matter that can have large impacts on the marginal tax rates faced by individuals who obtain health insurance coverage through the ACA exchanges is the reduction of the tax credits (or subsidies) for health insurance coverage as incomes increase.
The Price the U.S. Will Pay for Faster Recovery
Compared to the dotcom and great financial crisis recessions, our fiscal and monetary response over the last two years has been far more aggressive. But the true cost – in terms of inflation – presents a more threatening risk.
I Beg to Differ
Howard Marks’s latest memo argues that investors seeking superior performance must have the courage to depart from the pack, even though doing so means accepting the risk of being wrong. Thinking differently and better than others is key to outperformance, he explains, because in investing, it’s not enough to be right.
Global Convertible Market Update: Portfolio Manager Q&A
Diverse opportunities in Global Convertibles, as well as structural features, provide tailwinds to counter rising rates and equity volatility. In rising rate environments, convertibles have historically done quite well relative to longer-duration traditional fixed income investments.
Female Financial Advisors: Breaking Biases and Barriers
This year, the theme for International Women's Day is #BreakTheBias. This theme celebrates the achievements that women have made, takes action for equality, and raises awareness against bias. What better way to honor the holiday than to examine how women are breaking down barriers in the financial services industry?
The Strategy for a Bull Market in Bonds
I propose a strategy that can produce larger price gains or losses than bonds and higher yields than traditional bond funds or ETFs. If yields decline soon, investors can expect double-digit returns in a relatively short period.
Howard Marks’s latest memo considers one of investing’s most fundamental questions: when to sell. Howard explains that it’s foolish to sell because prices are up and because they’re down – and why, most of the time, staying invested is ultimately “the most important thing.”
Press Release: Osterweis Emerging Opportunity Fund Receives Five-Star Five-Year Morningstar Rating
The fund is rated 5 stars in the Small Cap Growth category for the 5-Year, 3-Year, & Overall Periods. As of November 30, 2021, the fund was rated against 507 small cap growth funds in the 5-year category and 574 funds in the 3-year and overall categories, based on total returns.
Finding Opportunities in the Closed-End Fund Market
Historically, fourth quarter tax loss selling of closed-end funds (“CEFs”) has been prevalent in the market. CEFs may be more susceptible to tax loss selling given they trade on a stock exchange and market prices (investor return) can deviate from underlying net asset values (“NAVs”) (fund return).
The Problem with Open-Ended Life-Settlement Funds
For life settlements, open-ended funds offer more liquidity than closed-end funds, but they also have lower returns and the management and performance fees are often based on the net asset value of the fund – which can be hard to accurately assess for assets with unlevel cashflows.
2022 Schwab Market Outlook: Ebb Tide
The S&P 500 index is up more than 20% so far this year, but more than 90% of its member stocks have had “correction” level drawdowns—more than 10% from a peak—at some point this year. In short, while overall stock market performance has been strong, there has been a lot of churn beneath the surface.
New Junk-Bond ETFs Are Born of Fed Moral Hazard: Brian Chappatta
In case there was any uncertainty about the moral hazard created by the Federal Reserve’s decision to buy junk-bond exchange-traded funds, a group of former senior leaders at BlackRock Inc., JPMorgan Asset Management and HSBC is leaving no room for doubt.
How SMAs and Interval Funds Can Help Meet Municipal Investor Needs
There are many potential advantages to investing in tax-exempt municipal bonds, but not all advisors are aware of additional strategies and investment vehicles that can help them meet muni-focused client needs.
Why It’s So Hard to Choose ESG Funds and ETFs
Choosing a fund or ETF with a positive ESG profile is fraught with risk. New research shows how carefully investors must weigh considerations such as screening criteria, factor exposures, industry concentration and expenses.
Why Secular Growth Matters, and How We Find It
Growth stocks have lagged cyclicals so far in 2021, but we remain steadfast in our belief that secular growth is the key to generating long-term returns. In this piece, we discuss how we find attractive opportunities in the small cap universe.
Total Return Perspectives: May 2021
Treasury yields fell again in May and credit spreads approached recent tights as the virus continued to recede, allowing the reopening of the economy to progress. Economic data was noisy this month, largely due to base effects, but confirms the ongoing trend of renewed growth and signs of inflation.
Short Selling Keeps Markets Efficient
High-profile episodes, such as that involving GameStop, have led some to advocate for banning short selling. But new research confirms that short sellers play a valuable role in keeping markets efficient and preventing prices from overshooting their intrinsic value.
Total Return Perspectives: February 2021
Treasury yields rocketed higher in February, with the move again concentrated in longer maturities. Volatility spiked as liquidity dried up in the Treasury market, especially after a very weak 7-year auction that briefly pushed 10-year Treasury yields to 1.60%. The news flow was largely the same direction: an improving economy, increased vaccine rollout with deaths and hospitalizations turning sharply lower, and a continued march toward a substantial fiscal stimulus plan.
Reports of Value's Death May Be Greatly Exaggerated
Rob Arnott: “There hasn’t been a better time to be a value investor at any other time in my career. I look back at the tech bubble and I never thought I would see valuations stretched the way they were then. We're back to that, and then some." We invite you to revisit “Reports of Value’s Death Have Been Greatly Exaggerated” now published in the Financial Analysts Journal.
Schwab Market Perspective: Disconnection
Hope is high that economic growth will accelerate as more people are vaccinated against COVID-19, but so far economic data has been lackluster. Meanwhile, bond investors are expecting inflation despite signs that the economic recovery’s momentum may be stalling. Why does everything seem so disconnected?
Total Return Perspectives: January 2021
Treasury yields continued to march higher in January, with the move again concentrated in longer maturities. Mortgage spreads tightened slightly, while corporate bond spreads were mostly mixed. The market remains stuck between the push/pull of the prospect for greater fiscal stimulus and ongoing vaccine rollout versus continued lockdowns and the greatest one-month mortality rate since the pandemic began nearly a year ago.
ETFs, Message Boards and Volatility
Internet message boards are lighting up and certain stocks have seen some unusually dramatic price moves. David Mann, our Head of Global Exchange Traded Funds (ETFs) Capital Markets, ponders whether ETFs could be subject to similar volatility.