Member Educational Materials 2017

2020  2019    2018   2017   2014-2016


ALT-Thinking on Gold, Bitcoin

October 27, 2017
Welling on Wall St. LLC

Trey Reik is the fellow whose photo graces this issue’s cover – it’s hard for me to believe, looking at it, that I’ve known him for, oh, more than 20 years.

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VantagePoint Fourth Quarter 2017

October 18, 2017
Cambridge Associates LLC

VantagePoint is a quarterly publication from our Chief Investment Strategist summarizing CA’s total portfolio advice.

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Conclusion – Tying It All Together

October 18, 2017
Transaction Group

If you’re not confused, you don’t understand things very well. Charlie Munger

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Portfolio Hedging: Targeting Risk, Not Returns

September 2018
Man Solutions

Over the last 10 years, we believe investors have become increasingly frustrated with the cost and performance of hedges, despite outsize gains across their broader portfolios. Investment banks, recognizing client fatigue with hedging losses, have turned to pitching products that are tailored to clients’ biases against losing premium, rather than to their portfolio risks. The drive to lower the cost of hedges has resulted in the creation of complex option structures, seemingly random basis trades and back test fitted strategies. We believe when assessing these, portfolio managers need to be just as rigorous in their analysis of hedges as they are on their investments to ensure they are not giving up significant protection in an attempt to cheapen hedge costs.

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Active VS. Smart Beta VS. Passive

October 2017
Man

One of the biggest trends in asset management over the last several years has been the acceleration of flows out of active equity strategies, and nowhere has this trend been as pronounced as in US equities. Many of these assets have flowed into passive and smart beta investments due to a combination of lower fees and performance difficulties among many active managers. But as this significant shift is occurring, it is important to try to understand the underlying dynamics.

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Strategy Report

October 2017
Sprott Asset Management USA, Inc.

A longstanding curiosity in the investment business has been the widespread indifference towards precious metals shared by many institutional investors. Whether from the handful of consultants now leading the institutional space, or directly from the stewards of our nation’s pension, endowment, and family-office wealth, skepticism over gold’s portfolio relevance remains fairly pervasive.

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Index Investing Supports Vibrant Capital Markets

October 2017
BlackRock

Index investing has profoundly changed the way investors seek returns, manage risk, and build portfolios. For nearly 50 years, index investment vehicles have lowered costs and simplified access to diversified investments for all investors, from sophisticated institutions to individuals.

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FAANG SCHMAANG: Don’t Blame the Over-valuation of the S&P Solely on Information Technology

October 2017
GMO LLC

A small group of technology stocks have recently delivered stellar returns. Facebook, Apple, Amazon, Netflix, and Alphabet (Google), the so-called “FAANG” stocks, are up 36% on average year to date through September.

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Golub Capital Middle Market Report

Q3 2017
Golub Capital

Middle market private companies in the Golub Capital Altman Index experienced year-over-year revenue growth of 6.79% and earnings growth of 4.89% during the first two months of the third quarter of 2017.

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Rise of passive funds is rebooting active management

September 8, 2017
CREATE-Research

Active managers are coming out of the doldrums at long last, but few expect a return to the good old days. Actives and passives may well be entering an era of oexistence, due as much to the reappearance of old cyclical forces as to the arrival of new structural ones, with the headlong rise of passives in this decade.

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The S&P 500: Just Say No

August 2017
GMO LLC

This is a somewhat fictionalized version of a comment or conversation that has gone on in many committee discussions over the last several years in one form or another. And why wouldn’t it? Being a US equity investor over the past several years has felt glorious.

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Four Lessons from the Taper Tantrum of 2013

August 2017
Western Asset Management Company

When a signal from the Federal Reserve (Fed) regarding its plans to “step down” asset purchases in 2013 led to a sharp sell-off in markets—as bonds, risk assets, and especially emerging markets (EMs) all moved down in price simultaneously—the taper tantrum of 2013 had arrived.

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A World Of Pure Imagination

July 30, 2017
Things That Make You Go Hmmm…

This week’s Things That Make You Go Hmmm… is built around the presentation I gave this past week at the Sprott Natural Resources Symposium in Vancouver.

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Q2 2017 Market Review & Outlook

Q2 2017
Morgan Creek Capital Management

Amos 8:9 in the Bible says, “And it shall come to pass in that day, sayeth the Lord God, that I will cause the sun to go down at noon, and I will darken the earth in the clear day.” In their book, Totality: Eclipses of the Sun, Mark Littmann, Ken Willcox and Fred Espenak describe the events leading up to the precise moment when darkness falls, saying, “The darkness in the west is very noticeable and gathering strength, a dark amorphous form rising upward and spreading out along the western horizon. It builds like a massive storm, but in utter silence, with no rumble of distant thunder.”

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GMO Quarterly Letter

Q2 2017
GMO LLC

Long-time GMO clients have become accustomed to a certain kind of behavior from our asset allocation portfolios. If they are reading stories about how well an asset class has been doing, chances are pretty good that their next account statement will show that we are a seller of that asset (assuming we owned some in the first place).

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The Best Strategies for the Worst Crises

June 2017
Man

It is notoriously hard to find an affordable yet effective hedge against large equity market sell-offs. ■ Holding. and continuously rolling, at-the-money S&P 500 put options is costly, but the most reliable of the candidate hedge strategies considered. • Holding ‘safe-haven’ US Treasury bonds is an unreliable hedge generally. despite providing a positive and predictable long-term yield. since the post-2000 negative bond-equity correlation is a historical rarity. • We argue that long gold and long credit protection sit between long puts and long bonds strategies in terms of both cost and reliability.

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Distributed Ledger Technology

May 2017
PwC Luxembourg

This White Paper is the main public outcomes of a six-month initiative called Fundchain. This intiative managed to create a common understanding of the Distributed Ledger Technology between ten key players, as well as the developments of a proof of concept using Blockchain technology in the area of asset management, and in particular in the fund-distribution value chain.

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Sprott – Institutional May 2017 Strategy Report

May 2017
Sprott Asset Management USA, Inc.

In our mid-April report, we highlighted ten market variables we view as bullish for the gold price. During the intervening month, these factors have remained generally supportive, yet spot gold has traced out a 6.28% correction (from an intraday high of $1,295.61 on 4/17 to an intraday low of $1,214.26 on 5/9). More than anything else, we view gold’s pullback as a reflection of persistent strength in U.S. equity markets.

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The Incredible Shrinking Factor Return

April 2017
Research Affiliates

In 2016, Research Affiliates published a series of articles1 challenging the “smart beta” revolution. We pointed out that, while there is merit in many factor tilt and smart beta strategies, performance chasing in these strategies—buying the popular outperforming strategies whose relative valuations are at extremely high levels—can be just as dangerous as performance chasing in other realms of asset management.

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Strategy Report

April 2017
Sprott Asset Management USA, Inc.

At Sprott, our investment thesis for gold is significantly long-term in scope. We believe gold’s methodical advance since 2000 has had more to do with the growing disconnect between productive output (GDP) and ever-inflating claims on that output (debt and equity valuations), than with short-term fluctuations in variables such as CPI-type inflation or interest rates.

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SPROTT Gold Report

April 2017
Sprott Asset Management USA, Inc.

Precious metals resumed their upward climb during the first two months of 2017. During January and February, spot gold rose 8.34% (from $1,152.27 to $1,248.33) and spot silver increased 15.08% (from $15.92 to $18.32). During March, however, precious metals suddenly reversed course, with spot gold ending flat and spot silver declining 0.3%.

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MCCM 1Q 2017 Market Outlook

Q1 2017
Morgan Creek

The protagonist of our letter last quarter was Roger Babson, the acclaimed entrepreneur, investor and philanthropist, who was the first financial forecaster to call the 1929 stock market crash and subsequent economic Depression. Babson reluctantly attended MIT and studied Engineering.

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FEG Insight – A Veteran CIO: You Can’t Teach an Old Dog New Tricks

March 10, 2017
Fund Evaluation Group

I was not at FEG long before a colleague of mine said to me “Mike, we would like you to write something on he lessons you’ve learned throughout your career.” Now, I have been a lot of things to a lot of different people throughout my career, but I never thought the day would come where I felt like the old dog. But you know what?
I have more than 20 years of experience as the Chief Investment Officer at several large endowments, I have lived and worked at several great colleges, and I have been privileged enough to meet some of the most interesting people in the world. Maybe it is time for reflection and hopefully some will find my thoughts useful.

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Strategy Report

March 2017
Sprott Asset Management USA, Inc.

Precious metals resumed their upward climb during the first two months of 2016. During January and February, spot gold rose 8.34% (from $1,152.27 to $1,248.33) and spot silver increased 15.08% (from $15.92 to $18.32). During early March, however, precious metals suddenly reversed course, with spot gold declining 2.30% and spot silver declining 5.29% through respective March 15 closes of $1,219.68 and $17.35.

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Strategy Report

March 2017
Sprott Asset Management USA, Inc.

Precious metals resumed their upward climb during the first two months of 2016. During January and February, spot gold rose 8.34% (from $1,152.27 to $1,248.33) and spot silver increased 15.08% (from $15.92 to $18.32). During early March, however, precious metals suddenly reversed course, with spot gold declining 2.30% and spot silver declining 5.29% through respective March 15 closes of $1,219.68 and $17.35. Without question, the greatest variable affecting precious-metal performance during recent weeks has been market handicapping of the Fed’s March 15 FOMC meeting. On 2/22/17, Bloomberg consensus expectations for a rate hike at the March meeting measured 34%. Ten trading days later (3/8/17), this percentage had swelled to 100%.

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Peninsula House – Bloomberg Reports Family Office 2017 Outlook

March 2017
Bloomberg LP

LORENZO SERVITJE SENDRA was the oldest person on the Bloomberg Billionaires Index when he died in February with a $4.2 billion fortune. Thinking ahead, the Mexican billionaire had already transferred his stake in Grupo Bimbo, the world’s largest breadmaker, to his heirs, enabling them to sidestep what amounts to a $2.1 trillion headache for the wealthy.

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Key Themes in Emerging Market Corporate Credit

March 2017
BlueBay Asset Management LLP

An uncertain policy dynamic and a period of recovery in distressed EM credit are adding to an already ripe opportunity set for the EM long-short investor.

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Mission-Related Investing: Current Practices and Views of Non-Profit Investors

February 2017
Cambridge Associates LLC

Mission-related investing. Socially responsible investing. Impact investing. Sustainability investing. Environmental, Social, and Governance. Also known as: MRI, SRI, II, SI, ESG.

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US Public Policy

January 25, 2017
Morgan Stanley

Market optimism, meet policymaking reality. Republicans should deliver some major changes. Yet conflicting motives & unintended consequences mean less confidence that policy supports risk appetite over time. We examine tax reform options, border adjustment consequences, & how compromises may emerge.

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Do private equity managers have superior information on public markets?

January 20, 2017
Oleg R. Gredil

This paper investigates whether private equity (PE) fund managers have private information about the valuations of public equity. Using cash flows from 941 buyout and venture funds, I show that PE distribution patterns predict returns in the industries of funds’ specialization. Fund managers tend to sell at the industry peaks only when they have performance fees to harvest and foresee public firms’ future earnings rather than discount rates. My tests distinguish timing skill from reactions to arket conditions and spillover effects of PE activity on public firms. The results help better understand PE performance and have implications for manager selection.

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A Smoother Path to Outperformance with Multi-Factor Smart Beta Investing

January 2017
Research Affiliates

Factor investing, also called smart beta, is rapidly displacing traditional stock picking—and for good reason. Traditional active management of equity mutual funds has delivered returns persistently below passive benchmarks. In contrast, many factor-based smart beta strategies have persistently outperformed the same capitalization-weighted benchmarks.

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2017.01 Broyhill Book Club

January 2017
Broyhill Asset Management, LLC

“The more that you read, the more things you will know. The more that you learn, the more places you’ll go.” ― Dr. Seuss

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Active Investing: Shaping its future in a disruptive environment

2017
CREATE-Research

The current debate on actives vs passives has been binary, treating the two styles as if each leads a separate existence. All manner of predictions have been made, many far removed from the way the world of investing actually works.

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The Tale of Two Retails

2017
Western Asset Management Company

Summer is here—the make-or-break season for many retailers. For some it will be summer lovin’, but for others it will be the summer blues. Retailers need to adapt to the new landscape or they will not survive. We feel there is value in specific names, while others are to be avoided. Concerns over malls are specific in nature and we see pockets of value there, too.

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8 Factors Driving Gold & Gold Equities

2017
Sprott Asset Management

“The risks associated with investing in a Trust depend on the securities and assets in which the Trust invests, based upon the Trust’s particular objectives. There is no assurance that any Trust will achieve its investment objective, and its net asset value, yield and investment return will fluctuate from time to time with market conditions. There is no guarantee that the full amount of your original investment in a Trust will be returned to you. The Trusts are not insured by the Canada Deposit Insurance Corporation or any other government deposit insurer.

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The Case for Mid-Cap High Yield in a Rising Rate Environment

2017
Phoenix Investment Adviser LLC

The economic argument supporting high yield in a rising rate environment is straightforward: if Fed policy is guiding rates up because the economy is strong enough to justify it (as is the case today), that economic tailwind can support increasing profitability and more cash flow for high yield (i.e., leveraged) issuers. Improvements on these metrics can boost the issuer’s credit quality, which in turn leads to tighter spreads on their publicly traded debt.

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Incorporating Marketplace Lending Into An Institutional Portfolio

2017
RiverNorth Capital Management, LLC

Since 2004, RiverNorth has specialized in the development of opportunistic investment strategies. In 2013, the investment team started taking a closer look at what RiverNorth believes are the attractive characteristics of marketplace lending (“MPL”): high coupons, short duration and low correlation to traditional assets. There were, however, a series of challenges that, at the time, prevented the widespread inclusion of the asset class in client portfolios.

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Sprott Institutional Strategy Report 2017 Outlook

2017
Sprott Asset Management USA, Inc.

During 2016, gold markets shook off three consecutive years of price weakness. Spot gold posted an 8.56% annual increase, rising from $1,061.42 to $1,152.27. Gold equities were among the best performing global assets, with the Sprott Gold Miners ETF (SGDM) rising 48.15% and the Sprott Junior Gold Miners ETF (SGDJ) surging 64.99%.

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Member Educational Materials

 

2020  2019    2018   2017   2014-2016