News Mentions & Press Releases
Strategic Investor Radio published Charley’s interview with CLS’s Case Eichenberger, CIMA, titled “CLS Investments Portfolio Management with Case Eichneberger”. The interview exclusively features Case and provides their listeners, which are primarily advisors, an introduction to CLS, how you add value to advisors and your relationship with American Funds.
Rusty Vanneman, CFA, CMT, Chief Investment Officer at CLS Investments, says CLS uses smart beta ETFs as a core portion of their portfolios. He discusses his firm’s use of smart beta ETFs and how they evaluate the products. This is a daily ETF podcast from Bloomberg’s Catherine Cowdery.
Factors are powerful tools for managing risk and producing excess returns – a pretty consistent message across the financial blogosphere. However, after reviewing the data, it seems investors are underperforming. So, what gives? There are likely many reasons for investor underperformance, but I want to highlight a few that I think pertain to investors – both sophisticated and unsophisticated – who utilize factors. How do I know these mistakes can lead to underperformance? I’ve made them myself!
Ignore Valuations
Like any asset class or style, factors trade in ranges of relative valuations. This has been disputed in recent years, but evidence points to a healthy emphasis – or at least awareness – of the valuation level of factors relative to their histories.
An analysis of the MSCI USA Index “Big 5” factors, which we generally look at, illustrates this point. Simply using price-to-book as a valuation metric (we recommend a composite of several) relative to the parent index, we can determine what factors are trading above or below their historical ranges. One-year forward returns of factors trading below their historical relative price-to-book ratios are shown in the top row below, and those trading above their histories are shown on the bottom.
As the announcement of the proposed sale of Cabela’s to Bass Pro Shops approaches a key deadline, speculation is mounting about when the combination of the nation’s two largest outdoor sporting-goods retailers will come to pass.
Investors are looking hard at Cabela’s, publicly traded on the New York Stock Exchange, as the third quarter is set to begin. Cabela’s said at the time of the announcement of the Bass Pro tie-up that it expected the transaction to close in the third quarter, which begins next month and ends Sept. 30.
As things unfold, one aspect investors watch is the current share price as it compares with the price offered by the buyer in the pending sale. As of late last week there was a premium of about 15 percent to be earned between the market price of about $53 a share and the Bass Pro offering price of $61.50. A spread that wide could indicate at least some degree of pessimism about a deal being completed in a timely manner, if at all, analysts said.
Factor-based equity has become increasingly popular in recent years, and for good reason: It works over time, especially in down markets.
I wrote an article on this point last year, specifically about reinterpreting the classic “Callan chart” by showing the performance of equity factors instead of asset classes. The revised chart had two important twists.
First, it showed relative performance (versus the overall stock market) instead of absolute performance. Second, it showed the strong probability of positive relative returns over time. As a single picture, it’s extremely compelling evidence that factors worked in the stock market, at least over the last two decades.
A career managing a billion-dollar investment portfolio was nowhere on Paula Wieck’s radar when she was a personal trainer in college.
Her concentration in nutrition was simple: she wanted people to learn how to manage their health and fight obesity. But after hearing her clients discuss their ongoing struggles with managing money, her focus shifted.
“So many people are forced to be aware of their health because they have to have regular physicals or health insurance,” she says. “But people aren’t necessarily forced to confront their finances, and I think that’s where they get into trouble.”
Newly minted advisors often assume that if they do great work, clients will come. They soon realize it doesn’t always work that way.
Your superior technical know-how, coupled with a commitment to integrity, will not guarantee a thriving practice. People still need to find out about you.
One of the core lessons that successful advisors learn is that marketing efforts alone — from advertising to leading public seminars — are only one piece of the puzzle. They also need to network in a range of formal and informal settings.
News of a massive worldwide cyberattack involving Windows pushed the PureFunds ISE Cyber Security ETF (HACK) and the First Trust Nasdaq Cybersecurity ETF (CIBR) sharply higher Monday. Both funds, which focus on cybersecurity firms, were on the frontline of action following the latest news.
That’s a great example of what niche investing is all about.
The Wannacrypt ransomware attack late last week caused the appeal of cybersecurity ETFs soar this week. HACK and CIBR rallied some 3% on Monday, putting year-to-date gains at 16% and 13.5%, respectively.
There aren’t many women advisers for women clients’ growing assets.
Women are expected to control two-thirds of private wealth in just three years, and yet not even a third of personal financial advisers these days are women: that could be a problem.
The financial services industry is known to lack diversity — there’s a significantly small portion of minority advisers (6% are black, 7.7% are Asian and 7.1% are Hispanic), and not many more are women — 31.6% of all personal financial advisers in 2016 were women, according to the Bureau of Labor Statistics. At the same time, women’s wallets and net worth are growing — in 2015, women passed the halfway mark for controlled personal wealth in the U.S., according to the Bank of Montreal’s Wealth Institute, and by 2020, they’re expected to hold $22 trillion
Oil majors Exxon Mobil (XOM) and Chevron (CVX) as well as a slew of energy companies are gushing their best profits in years, yet crude prices are plunging again to levels last seen in November, clouding the outlook for dividends.
Will glimmers of a profit recovery in the troubled energy sector mean a rush to plow money back to shareholders? Or will weakness in oil prices keep shareholder returns muted?
“First and foremost, oil prices need to improve” before the energy sector’s dividends and buybacks return to historical levels, said Lindsey Bell, investment strategist at CFRA Research. “Energy earnings are very highly correlated to energy prices. With oil prices at $45 a barrel, it will be very hard for those stocks to perform.”