Mutual Funds

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Frontier Markets Dangers

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U.S. Economy

Frontier Markets Dangers

Frontier  Markets  Dangers

As of September 2013, the MSCI Frontier Markets Index (141 companies) was valued at $123 billion, a valuation < 1/3 of Apple. Being small can have negative consequences. For example, it has been estimated that it would take > 10 days to liquidate a $100 million position in a frontier market (but just an hour to dispose of a similar position in an emerging market).

 

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Stock Indicator

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S&P 500 P/E Ratio

Closed-End Bond Funds

Closed-End  Bond  Funds

Closed-end funds (CEFs) trade on exchanges and almost always trade at a NAV discount or premium. For example, at the end of September 2012, 70% of CEFs traded at premiums; a year later, 89% traded at discounts (67% traded at discounts > 5%). One risk often not considered is the fact may CEFs are leveraged, which can magnify yields, losses, and gains. 

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American Funds

American Funds

American  Funds

Since the introduction of its first fund (ICA) in 1934, 67% of the mutual funds offered by American Funds have outperformed their respective indexes on a 5-yearing rolling period basis through the end of 2012. Since 2003, 77% of its funds have beaten their indexes on a rolling 5-year basis; the percentage increases to 92% for rolling 10-year periods starting in 2003.

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Private Equity Debt

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American Funds

Tactical Asset Allocation

Tactical  Asset  Allocation  Funds

Tactical asset allocation funds allow managers to shift their asset mix; the goal is to exploit the market’s strong periods while avoiding its weaker periods. According to Morningstar, there were > 40 such funds as of September 2013. The track record of these funds has consistently lagged returns from a balanced portfolio (60% S&P 500 + 40% Barclays Aggregate Bond Index).

 

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Home Equity Gifts

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Trust Dismantling

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Home Equity Gifts

Bogle and Swedroe Interviews

August  2013  Interviews

The September/October 2013 issue of Journal of Indexes includes interviews with a number of well-respected investment experts. Shown below are edited versions of two of those interviews.

 

John Bogle, founder of The Vanguard Group

Even if current P/E ratios see a small decline, 7% is a very rational expectation for annual stock returns (2% dividend + 5% earnings growth).

 

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Caregiver Tips

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Online Advisors

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MLP Returns

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