Commodities managers may in fact benefit from a distinct advantage over their equity and fixed income peers – that is they seem to have a credible information advantage.
Carla Zevnik-Seufzer • The Strategic Financial Alliance
- The problem with pie charts by Greg Gann
- Oil price surge troubling, but still within ranges
- Serving special needs (Russell Luce, Foresters Equity Services, Inc.)
Matthew Gaude • FSC Securities
- Gaining the peer-to-peer advantage: The 2015 NAAIM annual conference highlighted the importance of collaboration by Linda Ferentchak
- Debate over valuations heats up
- Fundamentalists vs. technical analysts by Martha Stokes, CMT
- Marketing the unrealized potential of 403(b) plans (Ryan Finnell, Retirement Tax Advisory Group)
Steve Miller • Transamerica Financial Advisors
- Active management in plain English: An advisor's perspective by Greg Gann
- Spike in VIX briefly shatters market calm
- Making a 10-year succession plan work (John Gutfranski & Debra White Stephens, Cetera Advisor Networks LLC)
Why Emerging Managers Now? - Infusion Global Partners WhitepaperAndrei Filippov
Traditional asset classes appear to offer uninspiring beta returns at present, and recent years’ hedge fund returns have disappointed both in magnitude and diversification benefits, likely reflecting capacity pressures associated with the concentration of AUM and inflows with larger funds. We argue that, by contrast, Emerging hedge funds offer a rich opportunity set with far fewer capacity issues where skilled managers with concrete competitive advantages in less efficient, smaller capitalization market segments can generate better, more sustainable and less correlated excess returns. Emerging managers do involve more investment and operational risk than larger peers; to that challenge we offer some suggestions on a thoughtful and rigorous approach to constructing an Emerging Managers allocation and balancing effective due diligence with scalability.
Carla Zevnik-Seufzer • The Strategic Financial Alliance
- The problem with pie charts by Greg Gann
- Oil price surge troubling, but still within ranges
- Serving special needs (Russell Luce, Foresters Equity Services, Inc.)
Matthew Gaude • FSC Securities
- Gaining the peer-to-peer advantage: The 2015 NAAIM annual conference highlighted the importance of collaboration by Linda Ferentchak
- Debate over valuations heats up
- Fundamentalists vs. technical analysts by Martha Stokes, CMT
- Marketing the unrealized potential of 403(b) plans (Ryan Finnell, Retirement Tax Advisory Group)
Steve Miller • Transamerica Financial Advisors
- Active management in plain English: An advisor's perspective by Greg Gann
- Spike in VIX briefly shatters market calm
- Making a 10-year succession plan work (John Gutfranski & Debra White Stephens, Cetera Advisor Networks LLC)
Why Emerging Managers Now? - Infusion Global Partners WhitepaperAndrei Filippov
Traditional asset classes appear to offer uninspiring beta returns at present, and recent years’ hedge fund returns have disappointed both in magnitude and diversification benefits, likely reflecting capacity pressures associated with the concentration of AUM and inflows with larger funds. We argue that, by contrast, Emerging hedge funds offer a rich opportunity set with far fewer capacity issues where skilled managers with concrete competitive advantages in less efficient, smaller capitalization market segments can generate better, more sustainable and less correlated excess returns. Emerging managers do involve more investment and operational risk than larger peers; to that challenge we offer some suggestions on a thoughtful and rigorous approach to constructing an Emerging Managers allocation and balancing effective due diligence with scalability.
Saving With Negative Real Interest RatesInvestingTips
As historically low interest rates persist and inflation accelerates, saving with negative real interest rates becomes increasingly futile.
https://youtu.be/d9qhofw8ZVc
Proactive Alternatives strategies for the sophisticated HNW investor with actively managed accounts. A currency hedge works well against rising interest rate volatility.
Russell Luce • Foresters Equity Services
- Slicing the market: An active manager's view of a complex investment world by Ron Rowland
- Recession job losses finally recovered
- Profit with business valuation (Mark Miehe, SII Investments)
Investors often endure poor timing and planning as
many chase past performance. They buy into funds
that are performing well and initiate a selling spree
following a decline.
Mercer Capital's Asset Management Industry Newsletter | Q1 2015 | Focus: Mutu...Mercer Capital
Mercer Capital’s Asset Management Industry newsletter is a quarterly publication providing perspective on valuation issues pertinent to asset managers, trust companies, and investment consultants.
Building and Maintaining a Private Market Portfolio: Inroduction to Private M...BrookePollack
CTC Consulting White Paper: Introduction to private market portfolio management and cash flow characteristcs of these investments for long-term private market investors.
In the fourth part of our ‘As If People Matter’ series, Michael Townsend takes the investor’s perspective, as they too try and make sense of a changing world.
[Another blast-from-the-past, published four years ago, this piece highlighted the shift towards sustainable investment and ESG metrics that we now see taking real shape.]
Saving With Negative Real Interest RatesInvestingTips
As historically low interest rates persist and inflation accelerates, saving with negative real interest rates becomes increasingly futile.
https://youtu.be/d9qhofw8ZVc
Proactive Alternatives strategies for the sophisticated HNW investor with actively managed accounts. A currency hedge works well against rising interest rate volatility.
Russell Luce • Foresters Equity Services
- Slicing the market: An active manager's view of a complex investment world by Ron Rowland
- Recession job losses finally recovered
- Profit with business valuation (Mark Miehe, SII Investments)
Investors often endure poor timing and planning as
many chase past performance. They buy into funds
that are performing well and initiate a selling spree
following a decline.
Mercer Capital's Asset Management Industry Newsletter | Q1 2015 | Focus: Mutu...Mercer Capital
Mercer Capital’s Asset Management Industry newsletter is a quarterly publication providing perspective on valuation issues pertinent to asset managers, trust companies, and investment consultants.
Building and Maintaining a Private Market Portfolio: Inroduction to Private M...BrookePollack
CTC Consulting White Paper: Introduction to private market portfolio management and cash flow characteristcs of these investments for long-term private market investors.
In the fourth part of our ‘As If People Matter’ series, Michael Townsend takes the investor’s perspective, as they too try and make sense of a changing world.
[Another blast-from-the-past, published four years ago, this piece highlighted the shift towards sustainable investment and ESG metrics that we now see taking real shape.]
Not only are many factors becoming really expensive due to their popularity, the realized historical returns were only half as good as they looked on paper. Since smart beta is all the rage RAFI is doing important work.
The last decade has been a challenge for many investors, especially those investing for the long term and retirement. Given declines in global stock markets, many investors have seen little to no real growth in their portfolios over this period. This Wealth Guide explains why investors’ portfolios may underperform in both bear and bull markets and incur substantial costs in the process. It also details the impact this chronic underperformance can have on achieving long-term financial goals.
For more free wealth management guides on portfolio performance and for expert consultation, visit SolidRockWealth.com.
This paper discusses how institutional-quality hedge funds possess a much greater risk/reward pay off then the leading liquid alternative funds can offer.
Join CMT Level 1, 2 & 3 Program Courses & become a professional Technical Analyst, CMT USA Best COACHING CLASSES. CMT Institute Live Classes by Expert Faculty. Exams are available in India. Best Career in Financial Market.
https://www.ptaindia.com/chartered-market-technician/
Hedge funds have been criticized for taking hefty fees without a performance to match. This presentation takes a look at the issue of hedge fund performance looking at both sides of the equation and evaluating how hedge funds fit into an investment portfolio.
C
A
SP
A
R
B
EN
SO
N
/G
ET
TY
IM
A
G
ES
STRATEGY
IN THE AGE OF
SUPERABUNDANT
CAPITAL
MONEY IS NO LONGER A SCARCE RESOURCE.
THAT CHANGES EVERYTHING.
BY MICHAEL MANKINS, KAREN HARRIS,
AND DAVID HARDING
66 HARVARD BUSINESS REVIEW MARCH–APRIL 2017
most of the past 50 years, business leaders viewed fi-
nancial capital as their most precious resource. They
worked hard to ensure that every penny went to fund-
ing only the most promising projects. A generation
of executives was taught to apply hurdle rates that
reflected the high capital costs prevalent for most
of the 1980s and 1990s. And companies like General
Electric and Berkshire Hathaway were lauded for the
discipline with which they invested.
Today financial capital is no longer a scarce
resource—it is abundant and cheap. Bain’s Macro
Trends Group estimates that global financial capital
has more than tripled over the past three decades and
now stands at roughly 10 times global GDP. As capital
has grown more plentiful, its price has plummeted.
For many large companies, the after-tax cost of bor-
rowing is close to the rate of inflation, meaning that
real borrowing costs hover near zero. Any reasonably
profitable large enterprise can readily obtain the capi-
tal it needs to buy new equipment, fund new product
development, enter new markets, and even acquire
new businesses. To be sure, leadership teams still need
to manage their money carefully—after all, waste is
waste. But the skillful allocation of financial capital is
no longer a source of sustained competitive advantage.
The assets that are in short supply at most compa-
nies are the skills and capabilities required to translate
good growth ideas into successful new products, ser-
vices, and businesses—and the traditional financially
driven approach to strategic investment has only com-
pounded this paucity. Indeed, the standard method
for prioritizing strategic investments strives to limit
the field of potential projects and encourages compa-
nies to invest in a few “sure bets” that clear high hur-
dle rates. At a time when most companies are desper-
ate for growth, this approach unnecessarily forecloses
too many options. And it encourages executives to
remain committed to investments long after it’s clear
that they’re not paying off. Finally, it leaves companies
with piles of cash for which executives often find no
better use than to buy back stock.
Strategy in the new age of capital superabundance
demands a fundamentally different approach from the
traditional models anchored in long-term planning
and continual improvement. Companies must lower
hurdle rates and relax the other constraints that reflect
a bygone era of scarce capital. They should move away
from making a few big bets over the course of many
years and start making numerous small and varied
investments, knowing that not all will pan out. They
must learn to quickly spot—and get out of—losing
ventures, while ag ...
Financial Assets: Debit vs Equity Securities.pptxWrito-Finance
financial assets represent claim for future benefit or cash. Financial assets are formed by establishing contracts between participants. These financial assets are used for collection of huge amounts of money for business purposes.
Two major Types: Debt Securities and Equity Securities.
Debt Securities are Also known as fixed-income securities or instruments. The type of assets is formed by establishing contracts between investor and issuer of the asset.
• The first type of Debit securities is BONDS. Bonds are issued by corporations and government (both local and national government).
• The second important type of Debit security is NOTES. Apart from similarities associated with notes and bonds, notes have shorter term maturity.
• The 3rd important type of Debit security is TRESURY BILLS. These securities have short-term ranging from three months, six months, and one year. Issuer of such securities are governments.
• Above discussed debit securities are mostly issued by governments and corporations. CERTIFICATE OF DEPOSITS CDs are issued by Banks and Financial Institutions. Risk factor associated with CDs gets reduced when issued by reputable institutions or Banks.
Following are the risk attached with debt securities: Credit risk, interest rate risk and currency risk
There are no fixed maturity dates in such securities, and asset’s value is determined by company’s performance. There are two major types of equity securities: common stock and preferred stock.
Common Stock: These are simple equity securities and bear no complexities which the preferred stock bears. Holders of such securities or instrument have the voting rights when it comes to select the company’s board of director or the business decisions to be made.
Preferred Stock: Preferred stocks are sometime referred to as hybrid securities, because it contains elements of both debit security and equity security. Preferred stock confers ownership rights to security holder that is why it is equity instrument
<a href="https://www.writofinance.com/equity-securities-features-types-risk/" >Equity securities </a> as a whole is used for capital funding for companies. Companies have multiple expenses to cover. Potential growth of company is required in competitive market. So, these securities are used for capital generation, and then uses it for company’s growth.
Concluding remarks
Both are employed in business. Businesses are often established through debit securities, then what is the need for equity securities. Companies have to cover multiple expenses and expansion of business. They can also use equity instruments for repayment of debits. So, there are multiple uses for securities. As an investor, you need tools for analysis. Investment decisions are made by carefully analyzing the market. For better analysis of the stock market, investors often employ financial analysis of companies.
How to get verified on Coinbase Account?_.docxBuy bitget
t's important to note that buying verified Coinbase accounts is not recommended and may violate Coinbase's terms of service. Instead of searching to "buy verified Coinbase accounts," follow the proper steps to verify your own account to ensure compliance and security.
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the what'sapp number of my personal pi merchant who i trade pi with.
Message: +12349014282 VIA Whatsapp.
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
Seminar: Gender Board Diversity through Ownership NetworksGRAPE
Seminar on gender diversity spillovers through ownership networks at FAME|GRAPE. Presenting novel research. Studies in economics and management using econometrics methods.
1. Elemental Economics - Introduction to mining.pdfNeal Brewster
After this first you should: Understand the nature of mining; have an awareness of the industry’s boundaries, corporate structure and size; appreciation the complex motivations and objectives of the industries’ various participants; know how mineral reserves are defined and estimated, and how they evolve over time.
The European Unemployment Puzzle: implications from population agingGRAPE
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
Lecture slide titled Fraud Risk Mitigation, Webinar Lecture Delivered at the Society for West African Internal Audit Practitioners (SWAIAP) on Wednesday, November 8, 2023.
when will pi network coin be available on crypto exchange.DOT TECH
There is no set date for when Pi coins will enter the market.
However, the developers are working hard to get them released as soon as possible.
Once they are available, users will be able to exchange other cryptocurrencies for Pi coins on designated exchanges.
But for now the only way to sell your pi coins is through verified pi vendor.
Here is the what'sapp contact of my personal pi vendor
+12349014282
5 Tips for Creating Standard Financial ReportsEasyReports
Well-crafted financial reports serve as vital tools for decision-making and transparency within an organization. By following the undermentioned tips, you can create standardized financial reports that effectively communicate your company's financial health and performance to stakeholders.
1. June 2016
1
olatility in the financial markets triggered
by mismatched expectations surrounding
central bank policy, the likelihood of a
hard landing for China, US growth, and
Brexit, highlights both uncertainty and opportunity.
There exist a myriad of interesting political and
economic questions to ponder, but from an investor
perspective there remains a more practical and
immediate question - how to position portfolios for
what seems to be a very nervous and choppy market.
Even Goldman Sachs has turned gloomy “owing to
heightened drawdown risk and growth scarcity,” and
in a recent research note cautioned investors “both
equity and bonds could sell off.”
Though most investor portfolios will remain heavily
weighted towards traditional long-only equity and
fixed income, there exist a number of investment
strategies that can profit without the tailwind of
rising asset prices, benefiting instead from changing
volatility regimes, arbitrage events and, perhaps, an
information advantage.
One method to mute portfolio volatility and improve
overall return may be an allocation to managed
futures. When some investors are guided towards
Commodity Trading Advisors (CTAs) alarm bells go off
as they envision large exposures to energy, metals
or currency, to which they already have abundant
exposure (or at least sensitivity) in their portfolios,
or of gold, which is clearly hit or miss depending
on perspective. Investable commodities for CTAs,
however, can include anything from cocoa to corn
and lumber to rubber.
These commodities managers may in fact benefit
from a distinct advantage over their equity and
fixed income peers – that is they seem to have a
credible information advantage. Whilst a difficult
pill to swallow is that one investor has a competitive
advantage in understanding Apple or Google over
another, it does however sound plausible that a
seasoned futures trader can better interpret the
shape of a curve, opportunities associated with
contango and potential pitfalls of negative roll yield
relative to many other investors.
A contemplated investment in wheat, for example,
aptly underscores the necessity of understanding the
nuances of agricultural commodities before treading
into the market. Jay Cassidy, CIO of Perennial Capital
and veteran commodities trader, points out that
Variable Storage Rates (VSRs) “were designed to
expand the cost-of-carry for wheat during heavily
supplied, weak basis, environments in an attempt
to better enhance the cash to futures convergence.”
An increase of these VSRs makes a big impact on the
investment decision, and according to Cassidy, “an
initial increase can ramp on the annual cost-of-carry
by over 30% for a passive long-only holder of wheat.”
These buzz words - cost-of-carry, contango and
roll-yield - often materialise in the mouths of the
investment community at large but are perhaps
difficult for some to comprehensively dimension if
taken to task. In any event, the commodities space is
clearly less crowded than that of stocks and bonds,
though of course often more thinly traded too.
Investors have long grappled with the decision
whether to include managed futures in their
portfolios. In a cynical and sarcastic myth-busting
assault, Forbes published Frank Armstrong’s gospel
of the ‘Nine Reasons to Just Say No to Managed
Futures’. The gist of his argument is that managed
futures have no expected return, uncertain
correlation benefits, unproven history as a portfolio
investment, opacity, limited access and extremely
high cost. Although analysis has shown CTAs tend to
be uncorrelated to equity and fixed income, they can
experience large periods of drawdown that in the
short-term may feel like a costly premium to pay for
portfolio diversification.
Another reason why investors may be put off by CTAs
is that they often have lackluster returns relative to
stocks and bonds during strong bull markets. This
has been particularly acute over the recent long-
running rally. And in the eyes of many investors,
whether or not CTAs provide insulation against
inflation (some do, some do not) matters little, as
these pressures are perceived by many to be a long
way off.
Those that do opt to make an allocation to
commodities face a much debated and fundamental
decision whether to invest passively or through
an active manager. There are benefits to each
approach, but an allocation to an active manager
over a passive structure seems to have more pros
than cons. Certainly an ETF will have lower cost
and probably preferred liquidity terms, but a highly
skilled manager should more than compensate
with intimate knowledge of the commodities
markets and greater flexibility of investment in
a market where knowledge and flexibility truly
matter.
With commodities, where value can be greatly
impacted by a multitude of factors - including
profoundly difficult ones to forecast like weather -
the ability to dynamically change trading strategy
and direction is crucial, as it offers abundant profit
opportunities for seasoned traders. A current
tangible example exists in raw sugar where “a
four-year supply surplus bear market (from 2011)
has ultimately led to a supply malaise,” says Oliver
Kinsey, Portfolio Manager at Ballymena Capital.
The world’s two largest producers – Brazil and India
– have been forced to operate under the cost of
production, and Kinsey estimates that the “ensuing
consolidation and bankruptcy has caused Brazil
Center-South sugarcane capacity to be cut from
its peak of 331 mill producers in 2010 to 284 mills
today.”
With robust annual demand growth, the supply
shortfall has been further exacerbated by the
historic El Nino weather event in 2015 that
clipped as much as a tenth of the potential
crop of both. A weak monsoon in 2015 has
further reduced plantings in India, which could
turn the world’s second largest producer into
a structural importer over 2016-17. Current
conditions present unique opportunities
for the right trades but also call for careful
exposure management and nimble reallocation
among strategies as conditions change.
Reap What You Sow
The role of commodities in a drought investment climate
BEN FUNK
V
Fig.1 CTAs’ performance during the 20 worst months for the S&P500 over the past decade
Source: Bloomberg
-15%
-10%
-5%
0%
5%
Oct-08
Feb-09
Sep-08
Jun-08
Jun-09
May-10
Nov-08
Sep-11
Aug-15
May-12
Jan-08
Aug-11
Jun-10
Jan-16
Aug-10
Nov-07
Jan-10
Jan-14
Feb-06
Jul-07
CTAs S&P 500
2. June 2016
2
ETFs and index funds tend to be long only and are
often required to hold a certain portion of their
assets in each futures market regardless of the
fundamental drivers of the spot commodity price.
They typically are structured to hold long positions
in the near-dated contract, regardless of the shape
of the curve and the size of the positive or negative
roll yield. Timing of the roll of a contract can have
a very significant impact on performance, and
passive structures tend to be very mechanistic.
Active managers, on the other hand, are at least
theoretically advantaged from greater degrees of
freedom in their selection of contracts. They have
the mandate to make short (bearish), market-
neutral or long (bullish) investments and will
attempt to strategically roll their positions at a date
other than that of the index rolls, thereby greatly
reducing the market impact of their maneuvers.
Long-term allocation to CTAs can improve the
risk-adjusted performance of typical investment
portfolios. This is partially due to low (or even
negative) correlation between managed futures
and traditional long only equity and fixed income
investments that dominate most investors’
holdings. Over the past 10 years, for example, CTAs
have demonstrated no correlation to stocks and
bonds, registering -0.07 and 0.13, respectively, to
the S&P 500 and Lehman Aggregate Bond Index.
This decorrelated return stream can lessen overall
portfolio volatility and recent history has shown
that CTAs can fare well during the most troubled
times for the broader markets. They have, for
example, posted positive results during - eight of
the 10 worst and 12 of the 20 largest - monthly
declines for the S&P 500 over the past decade.
Because loss from exposure to the stock market
is generally the largest contributor to a typical
investor’s drawdown, it follows naturally that CTAs
have delivered some level of portfolio insurance to
many investors who have embraced them.
A simple analysis of the impact of adding a 10%
allocation to CTAs to a stereotypical institutional
portfolio made up of 35% equity and 65% fixed
income establishes striking results. The portfolio,
which includes CTAs, had significantly improved
risk-adjusted returns over the traditional stock
and bond portfolio with an increased return of
almost +1.5%, reduced volatility of more than
-0.5% and a +15% improvement in Sharpe Ratio
over the past 10 years.
The same assessment, but limited to the financial
crisis of 2008 (January 2008 through February
2009), reveals that although the CTA allocation
was insufficient to swing the portfolio near
profitability, it did diminish drawdown by -3% and
shaved off about -1.25% of the overall volatility.
Because CTAs were profitable - seven out of
the 10 worst and 11 out of the most difficult
20 - months for the hypothesised portfolio, their
inclusion greatly improved the overall result. THFJ
ABOUT THE AUTHOR
BEN FUNK
Ben Funk is an investor, entrepreneur and
senior advisor to investment management
firms. Previously he was a founding member of
Liongate Capital Management where he served as
Managing Director until his retirement after the
firm’s acquisition by Principal Global Investors.
Funk has been named by Institutional Investor as
a “Rising Star of Hedge Funds” and is a regular
contributor to the financial press. Funk was
formerly at Morgan Stanley. He earned a Bachelor
of Arts from Purdue University and was awarded
his Master of Research and PhD from London
Business School.
“Commodities
managers
may benefit
from a distinct
advantage over
their equity and
fixed income
peers – that is
they seem to
have a credible
information
advantage.”