Perspectives Blog

Should your income be fixed?

David King, CFA, Senior Portfolio Manager | December 16, 2013

Investors need to rethink the role of fixed income in building portfolios How to provide an adequate rate of return with an acceptable level of risk Benefits of a non-fixed, income-oriented strategy in today’s environment Peanut butter and jelly. Bacon and eggs. Scotch and soda. In the investment industry, the words “fixed” and “income” seem as inseparable as our favorite food and beverage combinations. Something which has served millions of p…

Rates rise, convertibles do what?

David King, CFA, Senior Portfolio Manager | August 9, 2013

There is a very common concern that convertible securities will not perform well in a rising interest rate environment. Analysis of past rising rate periods shows that convertible returns have been neutral or positive as long as stock returns were positive. Accordingly, we do not see concern about rising interest rates alone as a good reason to avoid convertible securities. There is a very common concern that convertible securities will not pe…

Special report – Commodity markets outlook

Columbia Management, Investment Team | July 21, 2014

In the following Q&A, David Donora, Head of Commodities for Threadneedle Investments, addresses some of the key concerns currently facing investors in commodity markets, and explains his view of the outlook for the market. What is your outlook for commodities for the remainder of 2014? We are bullish on the macro outlook for the rest of 2014. The OECD countries and in particular North America, the region where economic growth is currently th…

U.S. rates – An intriguing six point three

Zach Pandl, Portfolio Manager and Strategist | June 9, 2014

…estimates like this. The Levin slack estimates are very large, and if these views were shared by Fed officials it would help to explain their limited response to declines in the U3 unemployment rate. Similarly, Adam Posen and David Blanchflower—economists with similar ideological stripes as Janet Yellen—argued in a recent paper that wages should be used as a central guide to policy due to uncertainty about resource slack. With wages not yet defin…

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…