The Asset Allocation Channel

Hotchkis & Wiley: Exploiting the Inefficiencies in Small-Cap Stocks

Judd Peters is a portfolio manager of the Hotchkis & Wiley Small Cap Diversified Value Fund (HWVIX). Since its inception, the fund’s annualized return has been 9.45%, resulting in a 254 basis point outperformance versus Russell 2000 Value Index. The fund is rated five stars by Morningstar. I interviewed Judd last week.

The Madness of Crowding Out

Public debt may be growing at the expense of private debt, the Chinese bond market is opening up, and important dates for tariffs are fast approaching.

The Fundamentals of RAE: Seeking Value Beyond Borders

It may be time for U.S. investors to challenge their home-country equity biases.

YCG Q1 2018 Quarterly Review

In-depth write up of Moody's (MCO) highlighting how it fits into YCG's investment framework which focuses on identifying "great business" and "market-timing" mispricings.

A Strategic Income Fund that is Thriving in a Challenging Bond Market

Carl Kaufman is the co-president, co-chief executive officer and managing director, fixed income at Osterweis Capital Management. He is the lead portfolio manager for the Strategic Income Fund. That fund has had an annualized return of 6.18% since its inception on 8/30/02. Its performance exceeded the AGG by 278 basis points. I interviewed Carl last week.

The Future for Factor Investing May Be Different Than its Backtested Past

Data mining is a huge risk with factor-based investment strategies. Many factors have proven to not work in practice. Even the most popular factors, like value and momentum, may prove less effective going forward.

Fund Managers' Current Asset Allocation

In the past 9 months, US equities have outperformed Europe by 6% and the rest the world by 5%. Despite this, fund managers remain underweight the US. US equities should continue to outperform their global peers on a relative basis.

Socially Irresponsible Investing

Socially responsible investing on an institutional level, where one body makes “socially responsible” capital allocation decisions for a pool of investors, is a utopian concept, just like socialism. It is simply impractical.

Outlook May 2018

Market signals have been decidedly mixed thus far into the year. By this time a year ago, the S&P 500 had already returned 5%. Today, in early May, the S&P 500 is down fractionally, while volatility and bond yields are up.

A Strong Defense Can Win Championships: Actively Managing Your Cash and Short‑Term Investments

We are positioning our ultra-short and short-term bond portfolios with the goal of not only navigating rising rates but also ultimately benefiting from them.

Fund Managers' Current Asset Allocation

In the past 9 months, US equities have outperformed Europe by 6% and the rest the world by 5%. Despite this, fund managers remain underweight the US. US equities should continue to outperform their global peers on a relative basis. Fund managers' inflation expectations are near a 14 year high...

Is Passive Investing Destroying the Markets?

Passive investing has been ridiculed by Wall Street for decades. The common theme is that indexing has become such a force that the market’s price discovery function is no longer working properly. Given the number of questions I get about this issue, one would think that passive investing is now dominating markets.

A-Rod’s Financial Plan

Even the most avid baseball fan may not realize that A-Rod, who was one of the highest paid players in MLB history, says that committing to a financial plan from the onset enabled him to successfully make it from rags to riches.

A More Demanding Powell Put to Test EM’s Strengthened Mettle

The Fed chairman makes clear the bar for slowing monetary tightening is higher nowadays, and argues emerging markets are much better positioned to handle higher U.S. yields than they were before.

Is Investing Starting to Get Difficult Again?

In a new quarterly letter to GMO's institutional clients, head of asset allocation Ben Inker reflects on a change in the investment environment in the first quarter, characterized by a rise in volatility and a significant shift in the correlation between stock returns and bond returns ("Is Investing Starting to Get Difficult Again? I Hope So").