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Kamis, 31 Juli 2014
9 New Channels on IFTTT!
Rabu, 30 Juli 2014
Fed watchers see more tapering and little else from today's minutes
Plus: Putin's next move could be painful, Argentina teeters on the brink of another default, another naysayer calls for a correction, the long view on a higher minimum wage, and a portfolio rebalance refresher
Credit: RSS for Investments
Credit: RSS for Investments
Selasa, 29 Juli 2014
Multialt fund: A hedge with its own risks
Multialt fund: A hedge with its own risks
Strong demand might cloud advisers' judgment
Jul 27, 2014 @ 12:01 am
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Multialternative strategy mutual funds have become one of the fastest-growing fund subcategories, and that should be a red flag for financial advisers to sharpen their due diligence on these products.
Most interesting about the surging growth — with assets almost doubling, to $33.8 billion, and the number of funds up almost 50%, to 120, over the past 18 months — is that it isn't about chasing performance.
In fact, the category's average return this year through mid-July was just under 2%, according to Morningstar Inc. Its average last year was a gain of 4.2%.
Meanwhile, the S&P 500 was up 8.7% by mid-July. The index gained 32.4% last year.
What's driving the growth in the multialternative category is a heightened sense of risk aversion as the equity markets continue to push new highs.
From a financial planning perspective, one could argue that things are unfolding according to plan. When valuations get rich, pull some chips off the table and feel comfortable with a little hedge.
So far, so good.
But the challenge for investors and advisers gets back to the same issues they confront every time a particular fund category starts to get hot. Sometimes sales and marketing lead the way, and the actual strategies can become a secondary focus.
Most vulnerable are those in-vestors, and even some advisers, who might be new to alternatives but subscribe to the idea of hedging some risk at current market levels.
PLUG-AND-PLAY
Right off the top, the notion of a multialternative mutual fund sounds like an easy plug-and-play solution.
But a look under the hood of the products in the category reveals that these mutual funds, which invest in several different underlying alternative strategies, are not all created equal. Fact is, even Morningstar acknowledges that the category has become somewhat of a catch basin for strategies that don't fit neatly elsewhere.
Among the 120 distinct funds in the category, only about a third allocate to outside mutual funds and money managers for what is typically structured as an underlying portfolio of a half-dozen or more slices of alternative investment exposure.
Looking only at those funds that best fit the category as offering diversified alternative-strategy exposure in the form of a fund of funds, one of the biggest distinctions among funds relates to whether the underlying portfolios are allocated to other registered alternative mutual funds or to separately managed accounts that are often managed by hedge funds or other private money managers.
SEPARATE ACCOUNTS
From a marketing perspective, there might be an advantage to touting a multialternative mutual fund that is allocated to hedge fund separate accounts.
But that edge doesn't always show up in the performance numbers.
Of the 45 funds in the subgroup, those funds using underlying registered mutual funds have averaged better performance over the past few years.
On a three-year annualized basis, six of the top 10 multialternative funds allocating to outside managers are investing in registered mutual funds as opposed to hedge fund separate accounts. On a trailing 12-month basis, the funds of mutual funds hold seven of the top 10 spots, and year to date through July 14, funds of mutual funds made up half the top 10 funds.
Bradley Alford, chief investment officer at Alpha Capital Management, believes the performance gap relates to the type of hedge fund managers the multialternative mutual funds are able to attract to run the underlying separate accounts.
Citing the typical hedge fund fee structure of 2% on assets and 20% on performance, Mr. Alford asks, “What good 2-and-20 manager is going to take a pay cut to manage money for a mutual fund?”
'ADVERSE SELECTION'
“I think they're getting adverse selection, because they're getting the B-level managers who aren't good enough to charge 2% and 20%,” he said. “And if you do have a manager charging 2-and-20 in his hedge fund, do you think he's going to put his best ideas in the separate account he's managing for 1%?”
The category average expense ratio is 1.83%.
Mr. Alford admittedly has a dog in the fight as the manager of two multialternative funds of mutual funds, Alpha Defensive Alternatives (ACDEX) and Alpha Opportunistic Alternatives (AXOPX), each of which hovers near the top performers.
Andy Dudley, senior portfolio manager at Context Asset Management, acknowledges some of the performance disparity but insists investors should be paying attention to the quality of the underlying portfolio managers in a strategy designed to be a diversifier.
“To the extent that some funds have exposed themselves to traditional market risk, they have won in these markets,” he said. “Strategies that have leaned with the market will populate the upper end of the performance spectrum.”
Mr. Dudley manages the Context Alternative Strategies Investor Fund (CALTX), which was launched in March as a strategy that allocates to separate accounts.
“In some cases these multistrat funds are trying to mix a full range of asset class exposures,” he said. “We're trying to get at the skill and the value of the individual subadviser to actually generate alpha.”
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Jumat, 25 Juli 2014
Claiming bad oversight, ex-rep moves on REIT
Claiming bad oversight, ex-rep moves on REIT
Says adviser is lowballing American Spectrum
By Bruce Kelly
Jul 25, 2014 @ 12:30 pm (Updated 1:33 pm) EST
Credit: RSS for Investments
Nontraded REIT signals liquidity on the way
Nontraded REIT signals liquidity on the way
Phillips Edison-ARC Shopping Center REIT Inc. has hired advisers to evaluate alternatives
By Bruce Kelly
Jul 25, 2014 @ 12:21 pm (Updated 1:21 pm) EST
Credit: RSS for Investments
Kamis, 24 Juli 2014
Legg Mason adds global equity specialist
Legg Mason adds global equity specialist
Legg plans to work with UK-based institutional investor to develop retail funds
Credit: RSS for Investments
Rabu, 23 Juli 2014
Giddy markets continue to look blissfully past mounting geopolitical unrest
Breakfast with Benjamin: Looking past all the geopolitical risk. Plus: U.S. investors finally start diversifying overseas, what's not to like about a marijuana ETF, how the Millennial generation slept through the bull market run, and a tribute to a fund industry critic.
Credit: RSS for Investments
Credit: RSS for Investments
Global consumer confidence soars
Plus: Credit Suisse exits the commodities trading business, Allianz stands by Bill Gross, silver has a golden summer run, three taxes we can all dislike together, and don't let tourist scams rain on your vacation
Credit: RSS for Investments
Credit: RSS for Investments
Multialternative mutual funds gain in popularity
But funds are built differently and due diligence is critical.
Credit: RSS for Investments
Credit: RSS for Investments
Schorsch's RCS Capital moves into crowdfunding
With acquisition of Trupoly portal, RCS will run the 'We R Crowdfunding' investment platform.
Credit: RSS for Investments
Credit: RSS for Investments
Thompson's former nontraded REIT drops nearly 30%
Investors in a nontraded REIT launched by Tony Thompson, the one-time noted real estate sponsor, were told last week that the net asset value of the REIT had eroded by nearly 30%.
Credit: RSS for Investments
Credit: RSS for Investments
Junk-bond investors are jumping ship
Breakfast with Benjamin: What's up with junk bond investors? Plus: Four sorry years of Dodd-Frank, ignore the Fed's warnings at your own risk, mathematical excuses for sluggish wage growth, and it's not too late for a mid-year portfolio checkup.
Credit: RSS for Investments
Credit: RSS for Investments
Giddy markets continue to look blissfully past mounting geopolitical unrest
Plus: U.S. investors finally start diversifying overseas, what's not to like about a marijuana ETF, how the Millennial generation slept through the bull market run, and a tribute to a fund industry critic
Credit: RSS for Investments
Credit: RSS for Investments
Senin, 21 Juli 2014
Schorsch's RCS Capital moves into crowdfunding
Schorsch's RCS Capital moves into crowdfunding
With acquisition of Trupoly portal, RCS will run the 'We R Crowdfunding' investment platform
By Joyce Hanson
Jul 21, 2014 @ 3:16 pm (Updated 3:23 pm) EST
Credit: RSS for Investments
Rabu, 16 Juli 2014
Liquidity events heating up REIT market this summer
Liquidity events heating up REIT market this summer
New deals are being announced, while others are being completed
By Bruce Kelly
Jul 16, 2014 @ 12:15 pm (Updated 3:45 pm) EST
Credit: RSS for Investments
Selasa, 15 Juli 2014
Finra asks for delay in implementing rule affecting nontraded REIT customer statements
Finra asks for delay in implementing rule affecting nontraded REIT customer statements
Changes would not take effect until 18 months after SEC signs off, three times longer than originally proposed
By Bruce Kelly
Jul 15, 2014 @ 1:03 pm (Updated 3:12 pm) EST
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Senin, 14 Juli 2014
MainStay jumps into MLP space with mutual funds
MainStay jumps into MLP space with mutual funds
A mutual fund wrap provides easier access to MLPs but mutes their tax advantages
Jul 14, 2014 @ 1:43 pm (Updated 4:43 pm) EST
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Markets brace for the Fed's big talk about normalization
Plus: Individual investors zig as professionals zag, hedging the U.S. market by going global, Citigroup in the spotlight, and futbol mania
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Credit: RSS for Investments
Jumat, 11 Juli 2014
Carl Icahn advises caution in the equity markets
Carl Icahn advises caution in the equity markets
Plus: The direction of interest rates and volatility are raising red flags, one man's take on the Fed-fueled bubble that isn't a bubble, the SEC is watching for political-donation conflicts, gold gets no respect, and institutional money is cha
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Kamis, 10 Juli 2014
Volatility looks cheap and risky
Breakfast with Benjamin: Barclays: Following in the footsteps of Sallie Krawcheck. Plus: The volatility play: Cheap but risky, bond managers brace for higher rates, dancing around the issue of student loan debt, and a potato salad venture whets the tax man's appetite.
Credit: RSS for Investments
Credit: RSS for Investments
Rabu, 09 Juli 2014
The financial fallout from Germany's World Cup rout of Brazil
The financial fallout from Germany's World Cup rout of Brazil
Plus: The SEC takes another stab at curbing high-speed trading, investment lessons from a crumbling cub cake chain, and dividend stocks are looking better than ever
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Selasa, 08 Juli 2014
Investors bracing for a wild second half of 2014
Breakfast with Benjamin: Buckling up for a rocky second half. Plus: Companies tweak bylaws to tamp down shareholder lawsuits, Morningstar settles software piracy case, JPMorgan embraces smart-beta investing, and buying beer stocks when it's hot outside.
Credit: RSS for Investments
Credit: RSS for Investments
Some advisers using ill-suited benchmarks to measure alts performance
Morningstar survey shows a quarter of advisers look to standard index benchmarks to evaluate 'liquid alts.'
Credit: RSS for Investments
Credit: RSS for Investments
Bond anxiety in $1.6 trillion repo market as failures soar
In the relative calm that is the market for U.S. Treasuries, a sense of unease over a vital cog in the financial system's plumbing is beginning to rise.
Credit: RSS for Investments
Credit: RSS for Investments
Investors bracing for a wild second half of 2014
Investors bracing for a wild second half of 2014
Plus: Companies tweak bylaws to tamp down shareholder lawsuits, Morningstar settles software piracy case, JPMorgan embraces smart-beta investing, and buying beer stocks when it's hot outside
Credit: RSS for Investments
Senin, 07 Juli 2014
Some advisers using ill-suited benchmarks to measure alts performance
Some advisers using ill-suited benchmarks to measure alts performance
Morningstar survey shows a quarter of advisers look to standard index benchmarks to evaluate 'liquid alts'
Jul 7, 2014 @ 12:18 pm (Updated 2:55 pm) EST
Credit: RSS for Investments
Bond anxiety in $1.6 trillion repo market as failures soar
Bond anxiety in $1.6 trillion repo market as failures soar
In the relative calm that is the market for U.S. Treasuries, a sense of unease over a vital cog in the financial system’s plumbing is beginning to rise.
Credit: RSS for Investments
Rabu, 02 Juli 2014
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Selasa, 01 Juli 2014
Fidelity has lowest-cost target date funds, edging out Vanguard
Fidelity has lowest-cost target date funds, edging out Vanguard
But low fees don't necessarily translate into better performance
Jul 1, 2014 @ 11:38 am (Updated 1:36 pm) EST
Credit: RSS for Investments