Perspectives Blog

The case for active muni management

Kimberly Campbell, Senior Portfolio Manager | April 21, 2014

…rned assets is never easy, municipal bond funds offer several compelling advantages in these challenging times. Many investors are turning to muni bond funds for the opportunity to earn an attractive tax-free yield with lower volatility than equities. In addition, munis have historically provided long periods of positive performance, as shown in the Barclays Municipal Bond Index chart below. Exhibit 1: Barclays Municipal Bond Index calendar-year…

The beginnings of a new moderation in Asia

Soo Nam Ng, Head of Asian Equities | June 2, 2014

The Great Moderation was a period of macroeconomic growth and reduced volatility that provided a backdrop to the strong performance of U.S. equities. The lessons hold relevance for equity investors in Asia as big picture conditions for a Great Moderation are starting to fall into place. We believe the “new moderation” mindset will take Asia into its next leg of development, unleashing its potential in a more sustainable and stable manner. Less…

Interpreting the bond rally from a multi-asset perspective

Jeffrey Knight, CFA, Global Head of Investment Solutions and Asset Allocation | June 2, 2014

…riables during both phases. The contrast is striking. During the early year rally, patterns seemed compatible with fear of an economic slowdown. In addition to falling bond yields, we saw falling stock prices, elevated equity volatility and a distinct decline in economic data surprises. During the more recent rally phase, we have seen precisely the opposite conditions. In fact, with bond yields having broken through to new lows (as of May 28), we…

January asset allocation update

Jeffrey Knight, CFA, Global Head of Investment Solutions and Asset Allocation | February 3, 2014

As we assess the global markets in early 2014, our overall portfolio strategy remains modestly overweight equities and underweight fixed income. While we have been anticipating an increase in volatility, we still believe equities will outperform bonds over the course of the year. The current low level of interest rates suggests returns from bonds remain unattractive on a longer term strategic basis. Real returns are likely to be low to potential…

Special report – 2014 mid-year review and outlook

Columbia Management, Investment Team | June 16, 2014

…econd half of the year may generate “coupon less” returns. Equities Robert McConnaughey, Global research director Review: Year to date through May, the U.S. major market indices are up low-to-mid single digits. Overall market volatility has been very low by historic standards and has trended down through the year. Beyond the high level averages, 2014 has seen some violent moves at a factor and industry level. After a strong start to the year, sma…

Does a perfect policy portfolio exist?

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

…sets in bonds might seem balanced, but in risk allocation terms it is anything but balanced. In fact, roughly 90% of the ups and downs of such a portfolio can be traced to the stocks, with bonds contributing a mere 10% of the volatility. Just by measuring the risk contributions, we can gain awareness of concentrations like this that asset weightings alone would never reveal. So enlightened, we can diminish unwanted risk concentrations and improve…

In the land of 7 footers, 6’8″ plays guard

Fred Copper, Senior Portfolio Manager | May 5, 2014

…th stocks got significantly overbought, but they represented a fairly small percentage of total stock market capitalization so their recent sharp correction has not resulted in broad market action distinguishable from typical volatility (Exhibit 2). Exhibit 2: One year cumulative returns to the S&P Biotech ETF versus the S&P500 Sources: Standard and Poor’s and Columbia Management Investment Advisors, LLC   So has all this bubble dis…