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Investing Ideas
Whitepaper: The Case for CLOs
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Key Takeaways
- CLOs offer portfolios of floating-rate bank loans securitized across the rating spectrum. The availability of floating-rate bonds is limited in the U.S., and the choices for high quality floating-rate securities is even more limited, yet around 80% of CLOs carry a credit rating from A to AAA.
- Relative to the investment-grade corporate credit market, CLOs have offered a consistent yield premium across the rating spectrum, in some cases as much as two times the yield offered over U.S. Treasuries.
- In an environment where interest rates are low and the risk of higher Treasury yields has risen, allocations to AAA rated CLOs may help investors diversify a traditional fixed income portfolio, offering lower volatility, higher credit-quality and less sensitivity to any rise in interest rates.
Investing Ideas
A Potential Turning Point in the Battle Against COVID-19
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Delivering better-than-expected trial data, a vaccine candidate from Pfizer and BioNTech could mark the beginning of the end of the pandemic and boost confidence in an economic recovery, now underway.
Investing Ideas
Evaluating Stocks as Growth Continues to Grow
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Portfolio Manager Doug Rao discusses the phenomenon of concentrated market leadership and what that means for long-term investors.
Key Takeaways
- When market returns are driven by a handful of stocks, active investors face difficult decisions, especially when underweighting or not owning these stocks may significantly impact portfolio performance.
- The recent phenomenon of large-cap tech stocks driving a significant portion of stock market gains may be justified by the fact that these companies are strongly tied to themes related to digital disruption.
- Investors may benefit from focusing on competitively advantaged companies positioned to profit from these themes, which have only accelerated amid the COVID-19 pandemic and are likely to persist over the coming months and years.
Investing Ideas
Sustainable Design in Consumer Products
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An in-depth look at the role of sustainability in consumer products.
Key Takeaways:
- The apparel sector is well known for its detrimental effects on the environment. However, as consumers become more aware of their own environmental footprints, there has been a surge in demand for sustainable goods.
- A circular economy is based on the principles of designing out waste and pollution, keeping products and materials in use, and regenerating natural systems.
- Companies including Nike, Adidas and DS Smith have incorporated a circular approach to the design and production of their goods, creating durable and long-lasting products with a reduced environmental footprint.
Alternative Investments
All Options on the Table: Holistic Investment Strategies for a Volatile, Low-Yield World
In the 10-part module-based video education series, All Options on the Table: Holistic Investment Strategies for a Volatile, Low-Yield World, gain practical insights on the due diligence and portfolio implementation of options and option-based strategies. The modules allow professionals to dive into the subject matter they desire at their own pace. Member and non-member registration for the first-of-its-kind course can be found here.
Portfolio Construction Insights
Thinking Outside the Mailbox
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Redefining Income in a Low Yield World: Historically, investors in or near retirement have relied primarily on bonds for “mailbox money” necessary to fund their golden years. Going forward, investors and advisors will need to redefine their concept of “income” and reconsider how they fill their “mailbox”.
Investing Ideas
State of the RIA Market: Special Focus on the Investor/Advisor Relationship and Advisor Technology Stack
As a valued Envestnet Institute user, we are delighted to share with you our latest report on the State of the RIA Market.
Sustainable Investing
Jim Patrick on the Future of Impact
Jim Patrick provides his insights on the future of impact investing at the Envestnet Advisor Summit.
Sustainable Investing
Societal Impact vs. Financial Return: A Case of “Either/Or” No More
Many investors who find impact investing potentially appealing have at the same time struggled with a notion that investing for the “greater good” will always be “concessionary,” that is, accompanied by some loss of financial performance.