May 2016

Smart Money Insights: Weekly Brief May 31

Welcome back after the holiday weekend. Last week we revisited some recent dire predictions that have faded from the headlines. This week, we’ll focus on a single issue — value vs growth stocks – since this is having a big impact on active investors of all stripes. The catalyst is that value-focused ETFs have had inflows of $5.5 billion this year while growth ETFs have seen outflows – causing some to forecast a reversal of the growth-chasing trend over the past several years. Key points follow below. Value Has Performed Terribly vs. Growth There’s a good article today in Bloomberg …

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Smart Money Insights: Weekly Brief May 24

It’s time to revisit some of the big macro risks over the past year.  The risks of $10 oil, a recession in 2016, a sudden devaluation by China, Brexit and a renewed Grexit crisis all appear contained – see below.  If we’d polled readers in January about where the equity markets would be by Memorial Day if those five risks had all subsided in the second quarter, the answer most likely would not have been “flat to down YTD.”  But here we are.  Perhaps the markets are shifting to concerns about more rapid Fed rate hikes or the rise of …

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Smart Money Insights: Weekly Brief May 17

We’re picking up again after a lull due to intensive work on a webinar and several research topics.  First, despite a flat S&P year-to-date, active managers are having one of the worst years on record.  Second, we may be at the tipping point for hedge fund fees – long overdue and a validation of what we’ve been shouting from the rooftops for years.  Third, the equity market recovery seems to be driven by short covering – not a stable foundation.  We are working on several research projects, which will show up as dedicated blog posts.  If there are any specific …

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Chasing Fund Returns is a Very, Very Bad Idea

How does a fund earn over $500 million in management fees yet lose over $1 billion for investors since inception? No, sorry.  It’s not a hedge fund.  It’s a mutual fund:  the Marketfield Fund, arguably the poster child for returns chasing in the liquid alts space. Here’s the background. The Marketfield Fund was launched in July 2007 and outperformed the S&P 500 by a cumulative 34.5% during the crisis. As one of a handful of long/short mutual funds, it stood to benefit from the rise of liquid alts in the years following the crisis. From mid-2008 through the end of …

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