Author: Anu Heda

Best Blogs of the Week #238

Posted by Anu Heda on Jul 11, 2016, in Best Blogs of the Week , tagged with Franklin Templeton, Invesco

We have a return to semi-normalcy in the industry’s blogs. While there’s still considerable discussion on Britain, the pound and Euro-implications; many posts returned to regular programming.

Franklin Templeton – What an (Economic) Drag It Is Getting Old – The world is getting older (much older in some geographies), and to us this is without question becoming a meaningful drag on economic growth—one that will likely persist into the future.

Invesco – How much is a stock worth? There’s more to valuation than simple P/E ratios – First, low yields are driving investment decisions and creating flows into fixed income securities and fixed income substitutes – namely, dividend-paying stocks like utilities.

Best Blogs of the Week (SPECIAL – BREXIT III – FINAL EDITION)

Posted by Anu Heda on Jul 05, 2016, in Best Blogs of the Week , tagged with BlackRock, Franklin Templeton, Invesco

This will be the final issue related to Brexit. Less than one week later, the US equity markets (as measured by the S&P 500) returned to pre-Brexit levels. In fact the S&P 500 index is nearly at its 52-week high (off by 42 points, or 1%). In this issue, we’ll return to our standard format of highlight the best (Brexit) blog posts and not inventorying posts.

BlackRock – Where to find opportunities in a post-Brexit world – The big takeaway for those seeking to buy into market weakness: Be wary of buying notionally cheap assets that face challenges…

Franklin Templeton – Brexit: “I Have Confidence in Confidence Alone” – In my view, a real risk of political impasse and a lack of direction will be a further element of negative confidence.

Franklin Templeton – Brexit: Serious Consequences, but “Not the End of the World” – I expect financials and domestically oriented cyclical stocks to be the hardest-hit areas of the equity market within the United Kingdom and the EU

Invesco – Has the Brexit sell-off created an entry point? – These attributes give the Invesco International Companies Fund team a high degree of confidence in our belief that the UK will enjoy long-term economic success outside of the European Union.

Three quick learnings from following the industry’s BREXIT coverage.

Many firms were caught flat-footed expecting a “Remain” vote and readying nothing substantive by the 23rd June. This reflected very poorly on these firms as their institutional and intermediary clients looked for a point of view and found nothing (or something highly superficial).
Creating a cross-functional internal team (Sales, Marketing, PR) to create an execution plan for something that may not occur is simply not in the DNA for most asset managers. Teams are already resource-constrained and thus shifting 100 team hours from business as usual to a Brexit planning effort is a tough decision to make.
The best Brexit blog posts provide a clear point of view. Messages such as “we’ll not panic” or “we encourage our advisors to plan for risk related to geo-political issues” were few and far between. Instead there was too much news regurgitation.

Brexit BlackRock

Best Blogs of the Week (SPECIAL – BREXIT II)

Posted by Anu Heda on Jun 27, 2016, in Best Blogs of the Week , tagged with American Century, BlackRock, Franklin Templeton, Invesco, MandG, MFS, Natixis, PIMCO, TIAA, Wells Fargo, William Blair, WisdomTree

Shocking the capital markets globally, the referendum to leave the EU passed. BREXIT. Asset managers were ready with comment. The proceeding table aggregates industry blog posts on Friday (only). This is an impressive volume (e-mail me if you’re seeking a perspective on quality) though as you see very little thought went to titling these posts. Of the titles below, BlackRock and WisdomTree clearly put thought into their respective titles.

Asset Manager	Blog Post
American Century	Our Views on the Brexit Vote
BlackRock	What data can tell us about the Brexit vote 5 key takeaways from the Brexit vote
Fenimore	Brexit & The value of patience
Franklin Templeton	In The Know: The UK Votes to Leave the EU Brexit: How Quickly May the Surprise Wear Off? A Global Macro View of Brexit Implications
Invesco	UK votes for ‘Brexit’ Beyond Brexit: What happens next?
M & G	Bond market reaction to UK “Leave” vote
MFS	Brexit Rattles the Market
Natixis	Brexit Interviews: Implications of the vote Brexit Vote: The New Unknowns
PIMCO	Brexit: Initial Impact and the Road Ahead Brexit’s Impact on the Eurozone
TIAA	Response to Brexit requires long-term perspective – UPDATED
Wells Fargo	Brexit: Buy the dip, or wait? Brexit vote sends shock waves through markets
William Blair	Brexit Update: Our Base Case Scenario
WisdomTree	Sterling’s Structural vs. Euro’s Political Weakness: “Brexit” Opens Opportunities

Best Blogs of the Week #234

Posted by Anu Heda on Jun 27, 2016, in Best Blogs of the Week , tagged with Russell

With so much focus (rightfully so) on BREXIT, we’ll highlight a single best blog post unrelated to this massive global topic. The post is from Russell Investments, titled “You cannot work out what’s next for China by extrapolation.”

Marketing Tax Loss Harvesting (Robo-Advisors)

Posted by Anu Heda on Jun 20, 2016, in Thoughts

Robo-advisors have been on my mind as we’ve been asked to help a few firms adjust (potentially) strategic marketing plans to consider their impact on asset management. One interesting marketing component is “tax loss harvesting” championed by Betterment and Wealthfront. Is this is an important concept, though?

On the one hand, what would typical Americans think? Well 50% of Americans believe their taxes are too high. So anything that could harvest (by definition “to win, achieve a gain”) taxes would be viewed positively viewed by that half (and probably most others) of America.

On the other, the potential benefit simply isn’t very large. According to a 2014 Betterment ADV, the 2014 average Betterment account size is nearly $15,000. Coupled with the stated benefit by 0.77% yearly, the average account holder harvests $115 yearly. Over 30 years, that could become nearly $7,000 and Betterment keenly shows you this long-term impact through videos and calculators. $115 annually for a person originating an account isn’t anything to mock. Yet, that same person probably fares better by replacing 10% of latte consumption with homebrewed coffee.

So then is tax loss harvesting a worthy tenet?

Again, on the one hand, I would say no unless you’re a ultra high-net worthy investor, tax loss harvesting isn’t meaningful enough to conceptually engage on (see image below). Yet on the other hand, because the term evokes such a compelling image, I believe it’s a quality brand message and one without much ownership.

Robo-Advisors: Betterment