Portfolio Building

In this period of higher interest rates, the quest to capture alpha and mitigate risk in corporate credit requires a more refined approach.

Advisors face a number of challenges in current markets, given risks and stock and bond correlations. They must grapple with how to invest smartly as well as keeping their clients invested in the traditional 60/40 portfolio.

Higher macro and market volatility, along with greater dispersion, creates a favorable environment for active trading, according to K2 Advisors. Get the team’s latest hedge-fund strategy outlook.

As with most new expressions, “smart beta” is in the process of seeking an established meaning. It is fast becoming one of the most overused, ill-defined, and controversial terms in the modern financial lexicon.

Active ETFs have gained in popularity in recent years. However, some pundits have prematurely taken out their shovels for some funds. Even as these products show signs of vitality.

As investors face continued macroeconomic and market uncertainty, evolving the 60/40 portfolio of stocks and bonds to include alternative investments may help build portfolio resiliency.

A multi-asset approach to sustainable investing brings a broad and more balanced palette to paint with.

Some investors are considering making tactical tilts to their fixed income portfolios to take advantage of the current high-yield environment.

There is a growing movement among investors to align their portfolio to their values or belief systems. Advisors can use Direct Indexing products and Separately Managed Accounts to help their clients pursue faith- or values-based investing.

Global central bank hiking cycles have dominated financial market headlines for the last 18 months, keeping many investors on the sidelines, hiding out in cash as inflation and the resulting rate hikes were serious headwinds to returns.

Public credit markets offer high quality investments with attractive yields and downside resilience, while we see growing longer-term opportunities in private markets.

Rising real interest rates invariably trigger recessions. The residual impact of pandemic related
behaviors delayed the impact in this cycle.

Intermission is over. Today we resume my series on the global cycle theories that, probably not by coincidence, all point to major change unfolding in the next few years. Finishing it may take some time since I keep finding new material.

Private infrastructure offers unique investment characteristics and potential diversification benefits for portfolio construction.

In many ways, 2023 continues to be the mirror image of 2022, with the most volatile assets being some of the best performers for much of the year.

Investment-grade credit is currently offering impressive yields, with relatively less risk than other fixed income sectors, according to Josh Lohmeier of Franklin Templeton Fixed Income. He makes a case for investing in the space today.

Financial advisors often face the challenge of transitioning a new client into their practice in a tax-efficient way.

ETF Trends interviewed three sources about active ETFs, why financial advisors are opting for these investment solutions for clients, and how these factors have changed in recent years. Each source responded to the same questions in their respective interviews.

When Exchange first launched in 2022, it redefined what an advisor-focused conference could look like. Now, Exchange 2024 is just around the corner. The financial services industry prepares to unite at Miami Beach on February 11th-14th.

Today, I am going to do something that I've never done. I am going to start a two-part series describing what is in my personal portfolio and why. Let me start by offering two caveats: This letter is in the “do as I say and not as I do” category.

Today's economic conditions are attractive for BDCs (business development companies), and some benefit from businesses seeking alternative financing sources.

Last week, the VettaFi AI Symposium was one of the more popular places to be in the days before Labor Day.

As multi-asset income investors, we seek to help a wide range of clients meet their income needs. The benefits of an income-centric approach are especially relevant for investors as they enter retirement – and that’s especially true today. We bring that to life with two case studies.

Many advisors are now providing customized wealth management services to their clients and their families, often across multiple generations.

Declining commercial real estate valuations will not likely lead to a wave of defaults among muni issuers, according to Franklin Templeton Fixed Income’s municipal bond team.

In the current landscape, where bonds and stocks are experiencing positive correlation, it becomes even more important (if not critical) to incorporate additional diversification strategies to help mitigate portfolio risk and preserve portfolio balance.

Russia’s 2022 invasion of Ukraine and the ensuing war have prompted new and difficult questions for sovereign debt investors.

U.S. corporate earnings have stagnated for a year, but Q2 beat a low bar. Expectations of improving margins look rosy. We stay selective in equities.

Following the YTD strength in equity markets, Russ Koesterich discusses how a combination of cyclical, and a growth bias may serve investors well in today’s market.

For the better part of the last century, the largest companies in the world were those that produced physical property – traditional transportation machines, the energy that powered them, or the capital that financed them.

Effective tax planning means thinking about how tax rates might change.

Broader domestic equity benchmarks turned in impressive showings through the first seven months of the year. A significant portion of that bullishness comes thanks to large- and mega-cap growth stocks.

Each year, I head to the woods of Maine for an event called “Camp Kotok.” Over the coming week or so, I’ll be sharing some videos of conversations I had with attendees while there (and also pointing to coverage from other attendees, as well).

We see emerging markets better withstanding volatility and benefiting as supply chains rewire. We switch our EM debt preference to hard currency from local.

Markets posted a strong first quarter, though it was a rollercoaster ride. The path forward will likely stay turbulent, with bank turmoil likely tightening credit conditions and the Fed still wrestling with inflation.

The sale of a business, property, or large stock position can generate a financial windfall that may trigger a large tax liability.

Russ Koesterich CFA, JD, Managing Director, and Portfolio Manager discusses how improving economic expectations may suggest adding to cyclical areas of the market.

Central banks are set to hike policy rates this week. Markets expect rate cuts to soon follow due to cooling inflation, whereas we see central banks holding tight.

Transitioning to a green net-zero economy requires climate solutions that enable the economy to decarbonise, such as renewable energy, electric vehicles, and recycling technologies.

We favor emerging market (EM) to developed market (DM) assets on a brighter macro backdrop. We get granular and harness mega forces, per our playbook.

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.

The second quarter was characterized by a debt ceiling showdown (which perversely provided a boost to liquidity) and by a big spurt in tech stocks.

Higher expected corporate earnings mask broad pressure under the surface. We see more earnings pain ahead and look for opportunities at the sector level.

Shifting the risk-reward ratio in your favor.

We see different and abundant opportunities in the new macro regime. We go granular within asset classes, regions, and sectors – and harness mega forces.

Spring cleaning is essential to a cleaner home, just like rebalancing is essential to keeping an investor on track.

A direct indexing solution can help make an investment portfolio as personalized as a home.

Macroeconomic uncertainty has remained front and center in 2023 as the new investment regime continues to play out. Inflation remains above central bank targets and some signs of economic weakness have started to surface in the wake of rapid monetary tightening.

Since the March trough the S&P 500 Index has gained around 14% and ten-year Treasury yields have risen roughly 0.50%. As market conditions have improved, inter-asset correlations have also shifted.

Sticky inflation looks to compel developed markets (DM) central banks to crank policy rates higher – and keep policy tight for longer. The Federal Reserve paused last week but pointed to more hikes on the way.

Macroeconomic uncertainty has sparked questions over the durability of the traditional 60/40 portfolio—highlighting why investors may want to add alternative investments to the mix.