Tag: ETF economic and industrial analysis

Healthcare fiduciaries are wise to be aware of any exposure to interest-rate risk across their investment portfolios, especially considering the impact of rising interest rates on pension plan liabilities and returns on long-term investments.

If we do the same exercise derived from the aforementioned building blocks, we get 2.8% for inflation, 1.85% for growth of real earnings, 1.89% for an increase in valuations (multiple expansion), and, as previously stated, 3.87% for the dividend.

When we consider the long-term average real fundamental return (dividends and earnings) on stocks has been 5.79% over the last 100 years, our spectacular decade looks nothing more than slightly above average

“Growth managers that were underweight this handful of technology stocks were likely to have underperformed last year,” Ohsung Kwon, a quantitative strategist at BofA, told the Financial Times.

Investment outflows mounted last year, extending an exodus from active funds that has gone back to 2008 as more investors turn to cheap and easy-to-trade ETFs. Withdrawals from actively managed U.S. domestic equity funds rose to $392.7 billion in 2021, according to preliminary data from the Investment Company Institute.

A high tide of growth, aided by a sea change in fiscal policy, is likely to help float the global economy safely over the rocks of risks in 2022, despite waves of worries emanating from COVID, inflation, shortages, and rate hikes.
Historically, when global growth is above average, international stocks perform well, even when that growth rate is slowing, due to a high weighting in economically sensitive sectors.

Often investors look at covered call strategies and wonder, is this the alpha generating strategy that I need to add to my portfolio? Now, investors don’t even have to construct covered call strategies all on their own – multiple ETFs have popped up in the last decade that create and roll over the strategy for an investor using call options on the S&P 500, NASDAQ 100, and Russell 2000.

Recent shortages are not only due to COVID-19 related lockdowns restricting supplies. In many cases, demand is also running far stronger than it did during the previous business cycle. As the following chart illustrates, retail sales spiked as the U.S. economy reopened and demand has remained elevated.

We’re all getting used to things moving faster. It probably shouldn’t (but yet it does) feel shocking the speed at which economic cycles are galloping through the global economy now. But, like a good Netflix binge-watch, we are becoming accustomed to this new reality.

SUMMARY In our view, international markets are less efficient, creating opportunities for active portfolio management. We believe a passive approach to international investing may lead to unintended sector concentrations. A surprising number of the best performing stocks in a given year are based outside of the US.

Recent re-openings in the United States and Europe have caused a surge in demand for energy as China’s manufacturing industry moves to meet the increase in orders .

Will the mid-market tech companies outpace big tech? Is there a limit to big tech’s unstoppable climb to trillion-dollar valuations ? The answer is looking more and more like yes. FAMGA—Facebook, Amazon, Microsoft, Google and Apple—have long used M&A as a mechanism to expand into new markets.

By Kevin Nicholson, CFA, Global Fixed Income Co-CIO, Co-Head of Investment Committee. SUMMARY We believe the Fed’s actions should not derail investors before it begins raising interest rates. We believe the trend and sentiment both suggest proceeding with some caution.Collectively, the three tactical rules still point to a pro-risk allocation, in our view.