Search results for: absolute return

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Reducing risk — Absolute return and the pursuit of better diversification

Most investors are familiar with diversification — reducing one’s risk profile (i.e, annual volatility) without affecting return by adding different asset classes or investments to your portfolio. While this is true, the degree of risk reduction benefit depends directly upon the correlation of the portfolio’s assets.

Tagged with: Asset Allocation, Economy, Equities, Fixed Income, Markets

Holding multiple investments does not ensure better diversification

The degree of risk reduction benefit in diversification depends directly upon the correlation of the portfolio’s assets. Adding just one zero-correlated asset to a portfolio reduces risk 29.5%, while adding a thousand 66%-correlated assets reduces risk by only 19%.

Tagged with: Asset Allocation, Investing

Finding the sweet spot — Value investing along the muni yield curve

We look for securities that offer a balance of credit fundamentals and yield. We use a “roll-down” analysis to identify the sweet spot on the yield curve.

Tagged with: Fixed Income, Investing, Muni Perspectives Blog, New Tax Regime

Q&A with Jeff Knight, Global Head of Investment Solutions and Asset Allocation

Q: What do you mean by “solutions” as referenced in your title and domain of responsibility? A: We use that word to refer to investment strategies whose success and risk are defined in an outcome-oriented way as opposed to a benchmark-oriented way.

Tagged with: Asset Allocation, Equities, Fixed Income, Global Economy, Global Perspectives, Investing, Markets

Q&A with Jeff Knight

Q: What indications did you observe that pointed to the recent market volatility storm? A: In our adaptive risk allocation framework, one of the key first level characterizations we make on markets is whether interest rates are normal or too low.

Tagged with: Asset Allocation, Equities, Fixed Income, Global Economy, Investing

Building better portfolios in a low return world

The near-zero interest rate environment has been a support for the financial markets, but as the economy normalizes so will interest rates. While we expect the bull market in equities to continue, returns will likely be far more modest over the next 10 years.

Tagged with: Asset Allocation, Equities, Fixed Income, Investing, Markets

Fixed income strategies — The pros and cons of generating returns with negative duration

Unconstrained multi-sector bond funds have become very popular due to their flexibility to invest tactically across sectors and manage interest rate sensitivity. While it may be useful for a fixed income manager to employ a negative duration strategy, getting the timing right can be very challenging.

Tagged with: Fixed Income, Investing, Markets

Global market mid-year outlook

Overall macroeconomic picture in U.S. should push bond yields higher, particularly if the Fed stops its QE program later this year. We remain positive on emerging market debt while maintaining a bias against emerging market equities.

Tagged with: Economy, Equities, Fixed Income, Global Economy, Investing, U.S. Economy

Building wealth through dividend investing

We believe a disciplined dividend strategy that focuses on rising dividends produced by high-quality companies can help investors build wealth over time. Historically,  dividends have been an important component of total return, with the best opportunity for total return in the stocks of high-quality companies that can sustain and grow their dividend over time.

Tagged with: Equities, Investing
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About Us

Backed by more than 100 years of experience, Columbia Management is one of the nation’s largest asset managers. At the heart of our success and, most importantly, that of our investors, are highly talented industry professionals, brought together by a unique way of working. At Columbia Management, reaching our performance goals matters, and how we reach them matters just as much.