The Active Management Channel

Do Your Target-Date Funds Measure Up to Rising Rates?

Rising US interest rates could pose a challenge for target-date funds (TDFs) that concentrate on “core” US fixed-income exposure. Diversifying across a broad range of bond markets and strategies can create a cushion in a rising-rate environment.

ESG: Improving Your Risk-Adjusted Returns in Emerging Markets

Emerging market economies are more vulnerable to the ill effects of ESG issues, but because transparency into such issues in these regions has been lacking, and because investors may have different understanding of risks and opportunities than ESG ratings agencies, integration has been difficult," the white paper says.

How a Star NFL Player Achieved Financial Success

He was on the receiving end of the passes from Drew Brees that led the New Orleans Saints to victory in the 2009 Super Bowl. But what distinguishes Marques Colston from his fellow ex-NFL players and other retired athletes is his successful post-professional career.

Can Anything Throw the Nine-Year-Old Bull Off its Stride?

The current US equity bull market turned nine years old on March 9, 2018. That’s the second longest run without a correction of 20% on record. It’s natural to wonder if the tide is going to turn.

World Markets Update

Two of eight indexes on our world watch list have posted gains through Monday, March 19, 2018. The top performer this year is Hong Kong's Hang Seng with a gain of 5.33%. In second is our own S&P 500 with a gain of 1.47%. Shanghai's SSE Composite is in third with a loss of 0.84%.

Understanding the Confucian in Xi's Populism

China has dropped norms to allow President Xi Jinping to remain in power after his second term ends. While worrisome at first blush, the populist turn and consolidation of power likely has near-term economic and financial market benefits, and longer-term political risks. Thornburg's Lei Wang weighs in on the populist turn in China, which is among a growing contingent of populist nations.

In Defense of a Structured and Disciplined Approach to Active Portfolio Management in Int'l Equities

The period since the financial crisis has been unprecedented in both the duration of the bull market but also the extreme low levels of volatility. As John Authers of the Financial Times recently pointed out, 2017 was the ‘most serenely positive year for world markets in history’.

Three Emerging Trends That Are Upending Our Profession

Last year, I made a number of bold predictions about how the advisory profession is evolving, and what firms are going to have to do to stay ahead of the curve. How have my predictions held up? Here are three transformations that will force every advisory firm to adapt.

ExxonMobil? Think Again

GE retaught investors the great lesson that things that cannot go on forever don’t. Hopefully, ExxonMobil investors will heed that lesson.

PIMCO Income Update: Finding Value in Volatile Markets

We believe that balancing higher-yielding assets with higher-quality assets is the best way to achieve the strategy’s objectives across different market environments.

The key to using active funds: Setting client expectations

Prepare clients for active fund volatility.

With Rollback, Dodd-Frank Is Now Officially a Dud

You can be forgiven, for missing what I believe is the most significant development of the past few days. On Wednesday, the Senate, in a bipartisan vote, quietly approved plans to roll back key banking rules in 2010’s Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank).

Why Active Management Failed…and Didn’t

Passive equity strategies have seen massive inflows over the last decade, in part owing to active management’s struggles. But a closer look at the story within the story suggests that leaving active out of the equation could be leaving money on the table.

Why Financial Statements Don’t Work for Highly Innovative Companies

Several weeks ago three professors from the Columbia and Dartmouth business schools recapped some of their work on accounting for intangible investment in a Harvard Business Review article. Their key finding, which builds on Professor Baruch Lev’s analysis in The End of Accounting, is that, “accounting earnings are practically irrelevant for digital companies”.

Performance Measurement: How to Do It If We Must

Assessing our portfolios’ performance is a necessary activity, but by being aware that measurement over shorter time horizons is dominated by noise, we can better resist the natural human instinct to “do something”—typically selling the underperforming investment at exactly the wrong time—if near-term performance falls below expectations.