Perspectives Blog

2015 Outlook — Same song, slightly different arrangement

Jeffrey Knight, CFA, Global Head of Investment Solutions and Asset Allocation | December 15, 2014

…global monetary policy brings to asset prices and the potential headwind of currency volatility complicates the investment strategy challenge for 2015. While valuation strongly suggests an equity-dominated portfolio strategy, a portfolio concentrated in risk assets remains vulnerable to volatility spikes, such as those we observed during early autumn 2014. As we argued in our fourth-quarter Investment Strategy Outlook, the real loser in the face…

Defense industry outlook – Looking past the headlines

Ben Blomberg, Senior Equity Analyst | March 17, 2014

The outlook for U.S. defense contractors has been improving despite all the negative headlines. Army spending is under pressure, but Navy and Air Force spending remain well supported. The recent Ryan-Murray deal is a substantial positive, with a more predictable DoD outlook. Defense investors have had their share of bad news around the trajectory of defense spending, starting with the Budget Control Act of 2011, followed by the failure of the…

The case for active muni management

Kimberly Campbell, Senior Portfolio Manager | April 21, 2014

…wer After determining that muni bonds should play a part in a diversified portfolio, the next question is: Which investment approach should one take — active or passive? With so many investment options to choose from, some believe that picking a passive municipal investment strategy is a no-brainer. A passive approach provides exposure to municipal bonds, tax-exempt income and low investment costs. Passive strategies seek to mirror the chosen ind…

The role of asset location

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

…is different about taxation in 2013 and beyond, how it affects after-tax returns and then consider ways to meet investment objectives while increasing after-tax returns. The tax tail should not wag the investment dog. The investment strategy and asset allocation approach come first. But once that is in place, it can be beneficial to apply asset location as a follow-on strategy that considers the benefits of placing less tax-favored investments u…

Asset allocation: Q4 equity strategy

Columbia Management Global Asset Allocation Team, | October 27, 2014

After the recent correction and with the breadth of our asset allocation research still favoring equities, we are rebuilding an equity overweight, primarily using U.S. large-cap stocks. While the Fed heads toward the exit, the European Central Bank is planning to provide further monetary easing and the Bank of Japan is continuing to expand its balance sheet. We are neutral on the eurozone, overweight Japan, neutral on overall EM equities favori…

Special report – 2014 mid-year review and outlook

Columbia Management, Investment Team | June 16, 2014

…ess inclined to add to debt, particularly for discretionary purposes, with income gains remaining tepid at best. Outlook: Economic trends still appear likely to pick up in the second half of 2014 to near 2.75%, as drags continue to unwind. Positives for the outlook include a reversal of the brake from fiscal contraction, further gains in capital spending and manufacturing activity, and a diminishing trade imbalance as U.S. exports are bolstered b…

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…