Perspectives Blog

Predatory trading – Just how big an issue is high-speed trading?

Matt Waldner, Head of U.S. Equity Trading | April 7, 2014

In recent years, U.S. equity markets have become far more complex, competitive and fragmented. Against that backdrop, high-frequency trading was born. With faster connections to exchanges, high-frequency firms are able to get faster signals, and “jump ahead” of slower orders, reaping huge profits. Columbia Management will continue to implement tools to protect our clients’ best interests. High-frequency trading (HFT) is a topic institutional i…

Predicting new drug sales is more art than science

Harlan Sonderling, CFA, Senior Healthcare Analyst | April 14, 2014

Predicting sales of new medicines is highly inaccurate and subject to significant and often costly errors. While investment analysts can draw on research tools and experience, history suggests new drug forecasting will remain more art than science. Despite the high level of uncertainty and variability in new drug forecasts, the innovative medicine industry is alive and well. Predicting sales of new medicines is highly inaccurate and subject to…

Credit alternatives in government-backed debt

Columbia Management, Investment Team | June 23, 2014

One way investors may boost yields without taking on undue credit risk is through U.S. government agency debt. While many investors associate U.S. agency debt with very low yields, other types of agency debt can offer significant spreads to Treasuries with a modest decline in liquidity. We have been increasing our allocation to the agency market in core portfolios as a way to reduce credit risk while maintaining competitive yields. By Carl W….

Take an active approach to selecting your active manager

Robert McConnaughey, Director of Global Research | April 7, 2014

Be sure the manager takes enough risk Be sure the manager takes intentional, well-informed risk Be sure the manager has delivered returns for that risk taken across multiple backdrops For some time, we have written about the challenges active equity managers face from a market with unusually high cross-correlations. We have also stated our belief that the correlation pendulum would swing back to more normal levels (at least) as the aftershocks…

Finding the sweet spots in corporate spending

Robert McConnaughey, Director of Global Research | February 24, 2014

Investors could find opportunity in capital expenditures. Strategic positioning in these areas is key to opportunity. Shale gas and automation are leading the charge in innovation. Cash balances at U.S. non-financials corporations have exploded in the post-crisis era, up 75% since the end of 2007. This is despite a rising return of cash to shareholders in the form of dividends and share repurchases. However, capital expenditures and reinvestme…

Constraints of convention – Does a portfolio design have to be static?

Jeffrey Knight, CFA, Global Head of Investment Solutions and Asset Allocation | July 14, 2014

A 60/40 portfolio may appear to be balanced, but when viewed through a risk lens it is clear that the equity allocation comprises a disproportionate amount of the risk. As a static strategy, the very thing that has helped risk parity succeed over time may prove to be its biggest liability going forward, and that is all those extra bonds. Instead of always being accountable to the same neutral portfolio, why not shift accountability to a startin…

Specialty pharmaceuticals – The fastest growing category of healthcare spending

Harlan Sonderling, CFA, Senior Healthcare Analyst | January 27, 2014

A complex industry has developed to manage the delivery and costs of the therapeutic innovations in specialty pharma Healthcare payers are focused on managing specialty pharma spending, their most rapidly growing medical cost The accelerating pace of change and disruptive therapeutic advances create significant opportunities across healthcare delivery Pharmaceuticals are central to the effort to improve medical outcomes and control medical cos…