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Getting Back into Value Equities
by Kevin Simms of AllianceBernstein,
It finally feels like a great time to be a value investor again. After several challenging years, market conditions have become much more conducive to finding undervalued, controversial stocks with long-term payoff potential. Even after this years equity-market rally, we think the value rebound is just beginning.
What Uncle Sam Taketh Away, You Can Give Back (and Get a Tax Deduction)
The government shutdown, now in its second week, has temporarily stopped the flow of government funding for many worthy organizations and may strain the resources of others. Federal grant administration is being delayed. For example, the grant administration staff at the National Institutes of Health has been furloughed; that may stop or slow grants for medical research.
Better Beta Is No Monkey Business
by Patrick Rudden of AllianceBernstein,
The infinite monkey theorem states that a monkey hitting keys at random on a typewriter keyboard for an infinite amount of time will almost surely type a given text, such as the complete works of William Shakespeare. This makes perfect sense to me, but says more about infinity than it does about monkeys.
Illinois and California: Similar Challenges, Different Approaches
Every state faces challenges when it comes to balancing the books, but not every state is equally effective at tackling them. The responses of California and Illinois to post-2008 difficulties show how different the approaches can beand how much is at stake.
Companies Can Do More to Unlock Shareholder Value
by Kurt Feuerman of AllianceBernstein,
As the global recession and financial crisis move further back in the rearview mirror, companies have been more proactive about using their balance sheets in ways that enhance shareholder value. But we think they can do a lot more.
Expect Business as Usual After the German Election
by Darren Williams of AllianceBernstein,
Many pundits believe the German federal election on September 22 will prove a turning point in the sovereign debt-crisis. We are less convinced. Barring a massive shock, Angela Merkel is set to be endorsed as Chancellor for another four years. If this is the case, Germany is unlikely to depart much from the playbook that has served it well in recent years and which may now be delivering positive results.
Time to Bench the Equity Benchmark Too?
by Patrick Rudden of AllianceBernstein,
While fixed-income investors are growing increasingly aware of the risks of benchmark-oriented bond portfolios in a period of rising rates, equity investors have recently also started to question the wisdom of cap-weighted indices. We would go even further and argue that the performance of a cap-weighted benchmark may be irrelevant for the long-term goals of many institutional investors.
The Party's Over. Why Own Commodities?
Commodity prices soared during the first decade of this century. But now the partys over: new sources of supply are coming on line just as demand from China is slowing, leading to expectations of price declines. So should investors shun commodity-related investments?
GSE Reform Lumbers Up to the Starting Gate
by Michael Canter of AllianceBernstein,
Momentum is finally building to do something with Fannie Mae and Freddie Mac. The bipartisan Corker-Warner proposal, now making the rounds on Capitol Hill, aims to dissolve the GSEs and start fresh. Meanwhile, Fannie and Freddie are testing innovative mortgage-security structures that transfer the risk of borrower defaults to the private sector.
Is China Past Its Manufacturing Prime?
by Sammy Suzuki of AllianceBernstein,
China has been an incredible export engine of manufactured goods over the past decade and the central player of the BRICs era. But mounting competition from other countries is gradually pulling production away from China. How should investors proceed?
Beware the Dangerous Stretch for Yield
by Ashish Shah of AllianceBernstein,
The US Federal Reserve talked in early summer about tapering its quantitative easing plan and raising interest ratesin part to stop investors from chasing yield into the arms of riskier loans. In the high-yield market, however, the conversation had exactly the opposite effect.
Is Asian Turbulence a Win for China?
by Anthony Chan of AllianceBernstein,
While this weeks sell-off in Asian currency and bond markets does not, as yet, amount to a crisis in our view, it is obviously cause for concern. At this stage, we think two outcomes are likely: one is that central banks and supranational funding agencies will work together to avert a full-blown crisis; the other is that China will emerge with its power and prestige as a regional financial powerhouse considerably enhanced.
What's the Point of Investing in Dreams?
by Vadim Zlotnikov of AllianceBernstein,
Is innovation dead or are we on the cusp of new technological revolutions? Without resolving this epic debate, we believe that market conditions today are conducive to investing in companies with disruptive potential, but it takes a sober approach to find big dreams that can deliver big returns.
To Manage Rising Rates, Consider Benching Your Benchmark
As we enter a period of rising rates, many bond investors are growing more aware of the risks of benchmark-oriented bond portfolios. It may be time to sit the benchmark down and consider more flexible, unconstrained approaches to fixed income.
How to Invest in Emerging Markets 3.0
by Sammy Suzuki of AllianceBernstein,
Its been 25 years since the emerging-market equities index was created, and much has changed. Today, we believe that emerging markets are on the cusp of a third phase that might compel investors to shift away from benchmarks and focus on absolute risk.
Rising Rates? Keep the TIPS, Leave the Duration
by Greg Wilensky of AllianceBernstein,
Treasury Inflation-Protected Securities (TIPS) have been popular in recent years with investors worried about inflation, and returns have been strong. But TIPS have benefited from a long bull market for bonds and high interest-rate sensitivity. This could be a problem aheadunless investors do something about it.
Municipal Bonds: Equipped to Weather Rising Rates
by Guy Davidson of AllianceBernstein,
Muni bonds suffered a rout recently when anxiety over the Feds taper of bond buying roiled fixed-income markets, leaving many investors wondering where to turn. As it turns out, munis have historically been effective shock absorbers. We believe that, given the right positioning, munis can help weather rising rates.
ECB's Attitude to Portugal Raises Questions about Bond-Purchase Programme
by Darren Williams of AllianceBernstein,
Political upheaval in Portugal has thrown the spotlight on the European Central Banks (ECBs) bond-purchase programme, known as Outright Monetary Transactions (OMTs). Many are asking whether the ECB is ready to support the market if yields rise further. And if not, why not?
Triangulating a Truer Course Through Emerging Markets
Where can you find a car market which will double in size in the next five years? Brazil and Russia might be obvious places to look, but would you have expected Chile, Colombia, Ukraine and Vietnam? Picking the next big themes in emerging consumer markets is even harder than in the well-researched developed world. To get a better handle, we think, requires a triangular approach.
Opportunity Knocks for Mortgage Investors
by Matthew Bass of AllianceBernstein,
We dont usually think of rising rates as being good for homeowners. That may be because were accustomed to thinking of financing (and refinancing) as the key to reviving sagging housing markets. And its true that financing availability remains tight, at least by historical standards, and isnt going to get looser with rising rates.
Rising Rates: Time to Position, Not Panic
by Douglas Peebles of AllianceBernstein,
It finally happened. After endless discussion about the potential for rates to rise, they finally didin a big way. During May and June, the 10-year US Treasury yield soared by nearly one percent, and markets reeled. Instead of panicking, investors should make sure their portfolios are positioned effectively.
For Abenomics, the Hard Part Is Still to Come
by Guy Bruten of AllianceBernstein,
Prime Minister Shinzo Abes Abenomics program, designed to revive Japans economy, was a big success in its first five months, easily surpassing low expectations. But its drifted off course since it began, and the going is sure to get tougher from here. Still, its too early to write off this policy experiment.
Quality Can Deliver in Times of Rising Rates
As talk of an early Fed tapering triggered a sell-off in bonds, safe-haven equities have also suffered. Can low-volatility strategies survive rising rates and an unraveling of the safety trade, in which investors rushed headlong into safe assets no matter the cost? We say, yesbut youll need an active approach to navigate the near-term pitfalls.
Municipals: A Glimpse of What's to Come?
by Guy Davidson of AllianceBernstein,
Federal Reserve Chairman Bernanke reiterated today that a healthier economy would prompt the Fed to end its unprecedented bond-buying program, which has kept yields artificially low. Speculation on this question over the last several weeks has caused a sharp bond sell-off and rising yields. But we dont see this as the start of a rout for most municipal bonds.
Managing Equity Risk: Some Rules for the Road
by Kurt Feuerman of AllianceBernstein,
Under the surface of Mays strong equity returns were major shifts in sector leadership, notably a rotation from defensive to traditional cyclical sectors. Given the markets tendency to change gears, it helps to be flexible in managing portfolio risk. In fact, it should be a daily exercise.
Cyclical Stocks Appeal After Defensive-Led Rally
by Vadim Zlotnikov of AllianceBernstein,
This years equity market rally was initially led by defensive stocks, as macroeconomic concerns persisted despite improved risk appetite. With valuations in these sectors looking stretched and cyclically oriented stocks starting to rebound in May, is a bigger shift starting to unfold?
Detroit Municipal Bonds: Who'll Share the Pain?
It could be several weeks or a few months. But before long, the city of Detroit is likely to default on some of its outstanding bonds and possibly file for Chapter 9 bankruptcy protection. It would be a historic bankruptcy and is sure to create uncertainty in the municipal bond market. Some types of debt will fare better than others in the final restructuring.
DC Solutions: Adding Global Bonds to Target-Date Funds
Within US defined contribution (DC) target-date funds (TDFs), whether were considering customized TDFs for larger plans or packaged solutions for smaller plans, our research shows that having a bond allocation that is not US-centric can lead to better outcomes and enhance the effectiveness of the glide path.
Why Don't Investors Understand Emerging Markets?
Big is not necessarily beautiful when it comes to forecasting emerging markets. In fact, the kind of big numbers that are often bandied around can actually make it harder for investors to understand whats really going on. We think there is a better way.
Finding Healthy Stocks in Europe's Troubled Landscape
by Tawhid Ali of AllianceBernstein,
European equity markets continue to face severe stress as the continent struggles to contain fallout from the sovereign-debt crisis. Yet this seemingly toxic environment is creating some exceptional investment opportunities in relatively healthy companies that can control their own destinies.
DC Plan Sponsors Should Look Further than Their Own Backyard
US defined contribution (DC) plan sponsors large and small are seeking ways to help plan participants achieve better outcomes. Over the last 30 years, compelling evidence has accumulated that suggests currency-hedged global bonds may be an important part of the solution.
Likely Rate Cut from the European Central Bank Will Be No Magic Wand
by Darren Williams of AllianceBernstein,
Disappointing April data suggest that the ECB is set to cut the refinancing rate at Thursdays Council meeting. This is likely to have limited economic impact but could encourage expectations of more creative policy action later, helping to take some upward pressure off the euro.
Beware of the New Systemic Risk
It felt like there was nowhere to hide from the market declines last Monday, April 15, when stocks, bonds and commodities fell in unison across the world, well before the Boston bombings that day. We believe that this failure of diversification was instigated by increasingly powerful multi-asset funds, many of which use leverage, which may have become a new source of systemic risk for investors.
Value Investing and the Philosopher's Stone
When J.K. Rowling finished her first manuscript of Harry Potter and the Philosophers Stone in 1995, she submitted it to 12 publishers, who all rejected the book. In time, those publishers would regret missing the chance to back an unknown author who would later take the world by storm. Like the publishers who passed over Harry Potter, we believe that many investors today risk missing a historic opportunity to invest against the grain in attractively valued stocks across the globe.
Safe Harbor Is Safe for Secure Lifetime Income Default Investments
by Daniel Notto of AllianceBernstein,
The new frontier in US defined contribution (DC) plans involves qualified default investment alternatives (QDIAs) with a secure lifetime income component. Will such vehicles retain their safe-harbor protections? Yes.
Will Emerging-Market Stocks Close Gap with Global Equities?
by Morgan Harting of AllianceBernstein,
Companies in emerging markets are more profitable and less debt burdened than their developed-market peers, and their shares trade at a deep discount. So when will emerging-market stocks close the gap with global equity markets?
Is There a Silver Lining to the Gold Price Plunge?
by Jon Ruff of AllianceBernstein,
Its been a volatile week for gold prices, which tumbled by the most in 30 years. Although gold is still not obviously undervalued, we think the recent market moves make stock prices of gold miners look attractive when compared with prices of the precious metal.
Emerging-Market Debt: Pure High-Yield Strategies Come of Age
We believe investors should be thinking about emerging-market debt in terms of credit quality buckets (investment grade or high yield) rather than sectors (sovereign or corporate). For some types of investor, pure high-yield strategies can offer significant advantages.
Results 1,701–1,750
of 1,861 found.
