The last year has been surprising in many ways for investors and advisors, alike. In what will be remembered for a wild ride in equities, and maybe (finally) the end to the 30-year bull market for core bonds, one thing was easily predictable – the financial press reaction to liquid alternatives’ (Diversifiers) performance for the year. Is there more to the story?
The new FTJ FundChoice Risk Tolerance Questionnaire has been designed to provide the initial opportunity to engage prospective clients in a unique conversation that would set the advisor apart from other advisors and new “robo” alternatives.
As we review the current results of various Managed Futures strategies we find a wide set of potential returns, as well as a wide variety of options as to the type of investments offered. These strategies include single manager, multi manager and indexed.
Most tactical firms will tell you that volatility brings opportunity. Whether they believe markets to be under or overvalued, their more active periods are linked to more active Market Movement. We thought that it would be a good time to look at some of the industry’s more popular tactical firms and see how the last several months of volatility have impacted their returns. We recognize that many of the tactical moves that they are making today will impact their returns over the next full market cycle, but it is always interesting to try and monitor more recent trends.
Market Neutral is a strategy undertaken by an investor or an investment manager that seeks to profit from increasing and decreasing prices in a single or numerous markets. Market-neutral strategies are often attained by taking matching long and short positions in different stocks to increase the return from making good stock selections and decreasing the return from broad market movements. Market neutral strategists may also use other tools such as merger arbitrage, shorting sectors, and so on.
As we move into the fourth quarter it looks more and more like 2015 may not be a particularly good year for investors. The year to date return for most mutual funds of all kinds is now break even or below, and this year will be remembered more for volatility than return.
Most tactical firms will tell you that volatility brings opportunity. Whether they believe markets to be under or overvalued, their more active periods are linked to more active Market Movement.
There’s no question that robos are trending. The big guns are in, and an entrant launches monthly. The question for advisers to ask is, what does the robo future hold? Having worked for 20 years in the TAMP industry, I see similarities daily between our TAMP experience and the current robo evolution. Let’s take the lessons from my past to predict the robo future and plan our offensive strategy going forward.
At the May 2015 FTJ FundChoice Advisor Summit Frank Barbera, who manages Ocean Park Asset Management Balanced Risk, warned us of the global issues being played out in our markets. As a participant of our Bull/Bear panel, Mr. Barbera’s bearish view of the markets certainly gave those of us in attendance something to think about.
Federal Reserve officials in June saw the economy moving toward conditions that would support an interest-rate increase, while also expressing concern about weak consumer spending and risks from China and Greece.
The Liquid–Alternative Mutual Fund category is doing well with over $20 billion is estimated to be invested this year. For future growth, the starting point is to educate advisors and their clients on the selection and monitoring of the Diversifier universe to complement and enhance the overall portfolio.
Within weeks FTJ FundChoice will begin to offer an approach we believe maximizes the tools available for our advisor base. By combining the tech platform of the UMA with the oversight offered through our new partnership with Rocaton Advisors, we will offer our Three Mandate approach to portfolio construction with emphasis on the selection, scoring, and monitoring of Diversifiers to complement client portfolios.
Last night the greatest rock band in the world began their final tour in San Diego’s Petco Park.