Factor-Based Investing

In the five months prior to U.S. recessions dating to the 1920s, the equity Momentum factor was the top performer, with an annualized cumulative excess market return of +6.7%, on average.

Investors have been loading up on T-bills and money market funds this year, but according to our Total Return team, that is not a sustainable strategy as it exposes investors to both reinvestment risk and inflation while creating an asset/liability mismatch.

Is the debt-ceiling agreement struck between the White House and Republican Party leaders likely to be approved by Congress? Our chief investment strategist explains why we believe the answer is yes.

The concentration of gains up the cap spectrum isn't itself a precursor to weakness; it's the lack of participation from the "average stock" that warrants some caution.

As other nations seek to become less dependent on the U.S. dollar, rumors of the greenback’s potential demise continue to swirl. Can the dollar remain king of the world’s reserve currency?

Like planting seeds, sometimes new investment vehicles take time to take root. David Mann, Franklin Templeton’s Head of Global ETF Product and Capital Markets, draws parallels between gardening and developing and growing new ETFs.

War, inflation, rising rates, banking chaos, and recession are among the challenges facing markets. Investors must balance these shorter-term risks with the long-term return prospects of equities.

A member of Putnam's Fixed Income team since 2007, Onsel Gulbiten analyzes macroeconomic issues, including inflation, interest rates, and policy developments.

Although attendance was down this year compared to last—mostly because Bitcoin’s price is still off its record high of approximately $69,000, set in November 2021—there was nevertheless an impressive turnout of investors of all ages, industry leaders, policymakers and more.

Factor investing has seen increased popularity in the US. Investors may also want to consider increasing their opportunity set by considering factors abroad.

The Federal Reserve’s latest 0.25% interest-rate hike has likely capped one of its most aggressive policy-tightening cycles in 40 years. And the cumulative 5% policy rate increase in just over a year is now starting to have an effect on rate-sensitive sectors and inflation.

Working with a skilled OCIO provider can help you position your portfolio to benefit from investment opportunities and avoid uncompensated risks.

The current economic and investing environment remains one of the most challenging and difficult to navigate in recent times. We have stubborn inflation, economic resilience, geopolitical tensions, tight labour markets, rising interest rates, higher for longer monetary policy, QT, bank failures, overwhelming bearishness and now, issues surrounding the debt ceiling.

Profit margins have remained elevated in the U.S. for a decade, and in a new white paper, GMO’s James Montier examines why that has been the case, ultimately finding the culprit in fiscal deficits.

Economic moats, also called business moats, are competitive advantages that help a company maintain long-term profits and market share over competitors.

Portfolio manager John Paul Lech explores the defining changes of the last three years. Here he explains how he is navigating the new era of rising interest rates and financial tightening.

Stock selection in a climate investing strategy takes more than just avoiding companies exposed to global warming risks. The process should intersect with an active search for diverse opportunities among companies helping to fight climate change, but with high-quality business models, too.

If the Fed pauses, will that revive risk assets? Tom Nelson and Miles Sampson of Franklin Templeton Investment Solutions weigh in on the investment implications of the latest US central bank actions.

Today’s competitive landscape is creating an interesting opportunity for discussions between money managers and their small business owner clients looking to incorporate more technology-centric investments into their portfolios.

Portfolio Manager John Paul Lech explores the defining changes of the last three years and how they have informed his approach to the years ahead.

World economic growth is slowing. That’s so obvious, very few will disagree. I suppose there are people out there predicting imminent 1990s-like expansion, but they are few and far between. If recession begins soon, it will be the most anticipated one in history.

Leadership shifts at the sector and style levels warrant some additional caution, as well as a closer look as to what investors are buying when it comes to "growth vs. value."

Key Takeaways

• The Fed’s tightening cycle is coming to an end
• Concerns about the debt ceiling impasse are rising
• Mega-cap earnings will be key to watch

Portfolio Manager John Paul Lech explores the defining changes of the last three years and how they have informed his approach to the years ahead.

Fear of missing out, or “FOMO,” seems to be a common trend with investors. Whether it was GameStop, AMC, Bitcoin, or the FAANGs, the last few years has seen some investors exhibit FOMO as they chase the hottest trends in the market.

India’s ability to attract foreign investment has long been hampered by subpar infrastructure and excessive bureaucracy. But reputations can obscure real change.

With the European Market’s earning season fully upon us, let’s look at expectations for the month ahead. According to our proprietary analytics, the European energy and real estate sectors have experienced the highest level of downward revision to sales of all sectors on both a one- and three-month basis.

Higher bond yields and improved total return potential may offer advisors a compelling opportunity to move cash off the sidelines.

We hope you enjoy the latest NewsLetter from Harold Evensky.

The vast “cash hoard of 2023” has the bullish media salivating about what it means for the future of equities. That cash hoard in money market funds now exceeds $5.2 trillion.

Tax season isn't the only time advisors should think about how taxes may impact their client portfolios. There are various strategies advisors can use year-round to ensure they are investing in a tax-efficient manner. Helping your clients maximize their after-tax wealth is an important element of the value you provide.

It’s believed that to meet this goal, two out of every three passenger vehicles manufactured in the U.S. would need to be electric models.

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.

After the market selloff in 2022—a period that was particularly hard on growth stocks—we think our companies are attractively priced for the next five years, which is our baseline investment horizon.

Given market uncertainty and the risk of a US recession, is now the time for defensive stocks? Making a case for low-volatility, high-dividend equities with Franklin Templeton Investment Solutions’ Vaneet Chadha and Michael LaBella.

The lack of diversification benefits of government bonds in 2022 was painful for multi-asset investors. The sell-off in US Treasuries in particular was sharp, and we saw correlations versus stocks move well into positive territory.

The stakes are high, and it appears likely that our deeply divided government is headed for another debt-ceiling showdown. Divided governments have typically been good for the markets; however, they often spell trouble when it comes to negotiating fiscal matters.