Perspectives Blog

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

Paul Fuchs, CFA, Portfolio Manager, Municipal Bonds | August 27, 2014

…eld curve positioning, followed by credit quality allocation. Our yield curve strategy is formulated by combining our assessment of the slope of the current yield curve with our expectations for curve reshaping going forward. Investing, in part, based on the slope of the yield curve is commonly referred to as “roll-down,” which signifies the aging process of bonds. As bonds age, or become shorter in maturity, they are evaluated at lower interest…

Building wealth through dividend investing

February 18, 2014

…ctable capital appreciation for the cash return on an investment. And, historically, dividends have been an important component of total return, accounting for 42% of total return on average since the 1920s.* Keys to dividend investing Dividend growth. Rather than focusing on yield, the best opportunity for total return resides with the stocks of high-quality companies that can sustain and grow their dividend over time (Exhibit 1). Free cash flo…

Has dividend investing lost its luster?

Columbia Management, Investment Team | May 12, 2014

Higher-yielding equities underperformed the market last year raising questions about whether dividend investing remains an attractive strategy. Even if rates continue a long-term increase from current levels, we expect that equities sensitivity to rising rates will decline. We believe the drivers that have resulted in historical stock market outperformance from high-yielding equities remain intact. By Paul Stocking, Senior Portfolio Manager an…

Investing selectively in Asia

Soo Nam Ng, Head of Asian Equities | July 14, 2014

…ips are easier to turn than others. A depressed stock may still be an exciting opportunity if the company understands its challenges and has started doing what is necessary to survive. Of course, one of the keys to contrarian investing is not to get into the stock too early. Opportunities can open up if we expand our concept of the turning ship to include corporate governance improvements. In Korea, decades of sub-par practices amongst the conglo…

Does it still pay to hold municipal bonds?

Anders Myhran, Municipal Portfolio Manager | July 29, 2014

Price is important but income should be a factor when considering an investment. Don’t get caught on the sideline, the opportunity cost could be detrimental. You must consider the short and long term when investing. Many investors say they don’t want to own bonds because interest rates are going up. They would have a point if yields were to shoot up tomorrow or next week. Since most bonds and bond funds include some degree of interest rate sen…

Does a perfect policy portfolio exist?

Jeffrey Knight, CFA, Global Head of Investment Solutions and Asset Allocation | May 5, 2014

…icy portfolio, the core strategic asset class weightings for an investment portfolio, has evolved significantly during the course of my career as an asset allocation specialist. From the humble beginnings of standard balanced investing (the good old 60/40), investors have searched for the best neutral asset allocation to serve their goals over the long term. Over the last 20 years, we have seen these portfolios broaden as new asset classes are de…

The case for active bond management

Carl Pappo, Head of Core Fixed Income | August 25, 2014

There have been instances where the passive approach to bond investing produced significant underperformance relative to a benchmark. Index funds are at a significant disadvantage to active portfolios in which managers incorporate valuation into their decision making process. The many nuances and inefficiencies of the fixed income market create both difficulties for indexing and opportunities for active management. Co-authored by Michael W. Za…