Perspectives Blog

The Yellen Fed

Zach Pandl, Portfolio Manager and Strategist | October 9, 2013

President Obama to nominate Janet Yellen for Fed Chair. Yellen has strongly supported the Fed’s unconventional easing measures in recent years, and we expect that her nomination will therefore be interpreted as favorable to duration and carry trades. Yellen has described an “optimal control” framework, which could indicate a coming revision to the current structure of the FOMC’s forward guidance. According to press reports, Preside…

Capture five tax benefits with a 529 college savings plan

Columbia Management, Investment Team | March 21, 2014

By contributing to a 529 plan, you may benefit from tax advantages — without giving up control of plan assets. As an estate planning tool, 529 plans may allow removal of significant assets from your taxable estate. Investment growth in a 529 plan, as well as distributions, is not subject to the new 3.8% net investment income surtax. Owning a home. A financially secure retirement. A college education for a child or grandchild. These are a…

U.S. rates – Headwinds

Zach Pandl, Portfolio Manager and Strategist | March 17, 2014

…Simple benchmarks like the Taylor Rule only consider the size of the output gap (and inflation gap) to determine the stance of policy. But what does it mean to say that monetary policy is “easy” if factors outside the Fed’s control prevent the output gap from closing? A holistic view of policy should take into account all the other headwinds and tailwinds that drive the economy—it would not only consider the left side of the diagram above. Look…

Antibiotic resistance – What it means for drug manufacturers, hospitals and diagnostic companies

Columbia Management, Investment Team | May 12, 2014

…ruse of this drug class to treat illness coupled with widespread use of antibiotics in animals has led to new classes of “super bugs” that are resistant to current or traditional antibiotic treatments. The Centers for Disease Control and Prevention (CDC) estimates that antibiotic resistance costs over $20 billion in excess healthcare spending and $35 billion in lost productivity. Further, drug resistance is resulting in increased mortality. In 20…

Finding opportunity in Chinese reforms

Robert McConnaughey, Director of Global Research | June 16, 2014

…entation. If there is one simplifying theme, it’s that reforms involving the imposition of power/control (environmental reform and anti-corruption, for example) come more naturally to the government than the relinquishment of control (opening of capital markets and state-owned enterprise (SOE) reform as examples). The most common refrain from all parties to inquiries regarding any challenges in the country is that “the government is well aware of…

Harvesting a New Moderation in Asia

Soo Nam Ng, Head of Asian Equities | June 23, 2014

Companies with competitive strengths still intact should have positive profit growth once adaptive change gets underway. The ability to control cost is essential to surviving the growth slowdown in Asia Pacific ex Japan. We do not just need companies to be adapted; we also need them to be positioned for adapting. A New Moderation in Asia In my previous article, I argued that conditions are in place for the slowdown in Asia to evolve into a sus…

Gifting strategies with 529 plans

Columbia Management, Investment Team | December 3, 2013

529 college savings plans allow parents and relatives to implement advanced gifting strategies. Contributions can be prorated over five years without incurring federal gift tax consequences. With a 529 plan the account owner maintains control of the assets in the account even though contributions are considered completed gifts. Parents and relatives can benefit from advanced gifting strategies available only with 529 plans. With the current an…