OppenheimerFunds

The Positioning Impact of Launching ETFs

Posted by Mike McLaughlin on Feb 03, 2016, in Thoughts , tagged with ETFs, OppenheimerFunds, positioning, strategy

Last week OppenheimerFunds rebranded the recently-purchased RevenueShares ETF lineup as the Oppenheimer Factor Weighted ETFs. Given that the firm is new to the smart beta ETF space, a simple question crossed my mind: how do they now introduce themselves as a firm?

Traditional (for lack of a better word) actively-managed, mutual fund-oriented firms face a number of important strategic marketing and positioning questions when entering the ETF space. But among the most fundamental is figuring out how to adjust the messaging of who they are and what they do.

In many cases there is an established, legacy messaging platform that emphasizes elements – active management, specific investment philosophy or process tenets – that fail to mesh seamlessly with the expanded product line. As a result the new ETFs appear to be more of an opportunistic “bolt-on” than something grounded in the core beliefs of the firm.

OppenheimerFunds’ illustrates one approach to trying to overcome this issue, namely via a tagline (The Right Way to Invest) and four key principles that focus primarily on themes that are vehicle and strategy agnostic. But there are several firms whose stories fail to match up with their newly-expanded offerings. They, and the anticipated entrants into the ETF universe, will need to reconsider how they primarily want to define themselves and communicate their capabilities to the market.

[ image courtesy of Tony Hall ]

Two Thoughts on Smart (or Strategic) Beta

Posted by Mike McLaughlin on Nov 17, 2015, in Thoughts , tagged with active management, OppenheimerFunds, passive management, smart beta, strategic beta

A few weeks back I commented in a story on OppenheimerFunds’ move into the smart (or strategic) beta realm. Let’s be generous and say that my quote was among the more generic in the story. So I thought I’d take a second to lay out two thoughts based on points within the article.

1. Smart beta WILL be successful

The parade of managers lining up to launch smart beta strategies is a pretty good indication, despite some mixed results in asset gathering. The simple fact though is that there is a sizeable gap between the philosophies of traditional active and passive strategies. There is no reason that strategies that include elements of both shouldn’t be successful as well. The idea that these strategies are solely a marketing gimmick is disingenuous.

If the asset management industry is a (somewhat uneven) barbell with passive at one end and active at the other, I believe the eventual (long-term) outcome is a more evenly-distributed pipe where the middle has significant or even as much traction as the endpoints.

2. Smart beta should align itself with active

To some degree I’ve always felt that the “passive” label for investments is a misnomer. These are still purposeful strategies designed by human beings based on their ideas. So while the day-to-day decision-making on holdings are removed from a portfolio manager, the underlying guidelines remain very much human. These are not robotic strategies divorced from the thoughts of people.

This is even more evident with smart beta strategies, which exist wholly because people think they can improve upon (or at least offer alternatives to) traditional passive. Many smart beta managers regret the prevalence of the word ‘beta’ in the category name; even so, few push to align these strategies explicitly with active. That should (and I believe will) happen more, especially since many of the market entrants are traditional active players. If nothing else, it’s a more accurate way to present what these strategies are.

[ Image courtesy of ValueWalk ]

Best Blogs of the Week #193

Posted by Anu Heda on Jul 13, 2015, in Best Blogs of the Week , tagged with BlackRock, Franklin Templeton, Invesco, JPMorgan, Loomis Sayles, MandG, Natixis, OppenheimerFunds, PIMCO, Principal, Russell, Wells Fargo, WisdomTree

Greece! Our industry’s bloggers are covering the potential Grexit like nothing ever before. At this (blogging) trajectory, I can only imagine the volume around our US 2016 Presidential election.

By my count, 14 firms dedicated at least 1 post to Greece. Here they are, listed from newest (hence most relevant) to oldest. Only two make an actual prediction on Greece leaving the Europe. Follow us on Twitter to see which two (or read all 14 posts).

The More Things Change, the More They Stay the Same –Mesirow
Greece: A resounding “No” to endless austerity –Russell
Greece Frightenin’ –M&G
Greece’s Precarious Position –Franklin Templeton
After the Referendum –Loomis, Sayles (an affiliate of Natixis Global Asset Management)
Definitive vote ushers in further uncertainty (Greek referendum) –Invesco
Greece Likely to Exit –Principal Global Investors
Does Greece Pose a Threat to Global Markets? –BlackRock
Making sense of Greece’s no vote –Wells Fargo
Greece Votes “No.” Is Grexit Next? –Oppenheimer
Greece at Crossroads –JPMorgan
Reflections on Greece –WisdomTree
Greece is the Word –Natixis Global Asset Management
Volatility Futures Suggest Only Near-Term Turmoil From Greece –PIMCO (only post dating from June)

Best Blogs of the Week vol 190

Posted by Anu Heda on Jun 22, 2015, in Best Blogs of the Week , tagged with Lord Abbett, OppenheimerFunds, Russell, Vanguard

We cover five posts this week, three (fixed income transparency, LDI within DB plans, and taxes on international investing) posts offer in-depth analysis on topics rarely covered by the industry’s blogs. We also welcome Lord Abbett. First time one of their posts made the cut.

Bonds: Is More Transparency Better? –Lord Abbett

“… TRACE may be leading to a reduction in liquidity in the corporate bond markets.”

Sortino Ratios Measure Risk the Way Investors Do –Oppenheimer (Sortino Ratio Revealed!)

“This tool – the Sortino ratio – addresses one of the limitations of the Sharpe ratio and looks at the returns that investments deliver only in relation to their volatility during down markets.”

Data in China Points to a Significant Slowdown –Oppenheimer (Chinese Economy Slowdown … in charts!)

“Looking at the Chinese data from these two perspectives provides a stark reminder of how severe the slowdown is.”

International investing doesn’t have to be a tax burden –Russell

“The real reason international equities are typically tax inefficient is due to poor tax management by money managers.”

Surprise ingredient for an LDI recipe: A pinch of global min vol—as an equity suballocation? –Vanguard (Volatility Consideration for Large DB Plans)

“For all but frozen plans near termination, we advise a return-seeking and a liability-hedging asset allocation.”

Best Blogs of the Week vol. 185

Posted by Anu Heda on May 18, 2015, in Best Blogs of the Week , tagged with American Century, OppenheimerFunds, Wells Fargo

Three great posts this week and I thought to try something a little different. Each post with my favorite sentence from the post.

Chart of the Week: It’s a Millennial Takeover! Or Is It? (Part I) -American Century

“65% of millennials are being helped out financially by their parents when they first start out.”

Don’t Confuse Bond Market Liquidity with Volatility -OppenheimerFunds

“The real problem isn’t the illiquidity of the bond market—it’s the volatility of bond prices.”

Addressing currency volatility -Wells Fargo

“it’s important for us to determine how much of a company’s exposure is really domiciled onshore versus offshore and subject to these forces of appreciation and deappreciation. [sic]”