Perspectives Blog

The role of asset location

Abram Claude, Vice President, Columbia Management Learning Center | October 23, 2013

Financial advisors and investors should have a good understanding of what is different about taxation in 2013 and beyond – and how it affects after-tax returns. An asset location strategy should consider the benefits of placing less tax-favored investments under tax-deferred or tax-free registrations in order to increase after-tax returns. The Columbia Management Learning Center is dedicating a series of blog articles to this important and time…

New taxes require strategies to maximize after-tax return

Abram Claude, Vice President, Columbia Management Learning Center | March 18, 2014

Higher earners with taxable investments are most susceptible to triggering the net investment income tax, a surtax of 3.8% that applies to taxable investments. An asset location strategy involves placing a greater percentage of the most tax-sensitive investments in tax-deferred accounts. Retirement plans offer significant opportunities for participants and business owners to reduce taxable income. In 2013, new taxes associated with the Afforda…

The end of “risk-on/risk-off”

Anwiti Bahuguna, Ph.D., Senior Portfolio Manager | February 3, 2014

…le A notable event of 2013 was the remarkable decline in cross-asset correlations implying potentially better investment opportunities for active managers. After the financial crisis, cross-asset correlations rose sharply as asset prices reacted predominantly to macro factors and less to individual stock or bond characteristics. For example, while the correlation between equities and commodities used to be negative or very low, it rose to over 8…

The importance of taking a long-term perspective

Jeffrey Knight, CFA, Head of Global Asset Allocation | February 3, 2014

We examine the value in maintaining a long term outlook for major asset classes We review our forecast for several major asset classes over the next five years Why maintaining realistic expectations for long term asset class performance is so important For asset allocation decisions, we find great value in maintaining a long-term outlook for major asset classes. Twice a year, in fact, we conduct an extensive update of our five-year return fore…

Engineering a better retirement portfolio

Columbia Management, Investment Team | June 4, 2013

Experiencing a significant portfolio loss in the early retirement years (timing risk) is one of the greatest risks to the longevity of a retirement nest egg (shortfall risk). This risk is typically a function of being concentrated in the wrong asset class — any asset class — at the wrong time. By looking at a portfolio through a risk lens, investors can gain valuable insight into building a portfolio that minimizes concentration risk and can in…

January asset allocation update

Jeffrey Knight, CFA, Head of Global Asset Allocation | February 3, 2014

…momentum. In addition, we maintain our strong overweight to Japan as we see both favorable monetary and macro conditions continuing. EM equities present a challenge. While global liquidity and valuations are supportive of the asset class, sentiment remains negative and after many years of positive capital flow we are currently seeing that reverse. As a result, we remain neutral on EM equities. We continue to recommend adding non-traditional diver…

Global Asset Allocation Outlook (as of February 24, 2014)

Columbia Management Global Asset Allocation Team, | March 10, 2014

…ated Treasuries, municipal debt and high-yield corporate bonds leading the way. The dollar weakened against both emerging market and developed market currencies. Despite a slight slowdown in recent economic growth, our Global Asset Allocation proprietary investment clock for the U.S. signals continued economic expansion. The investment clock allows us to better understand the behavior of the business cycle and the resulting impact on asset class…