In November we met with a team from Alcentra, manager of BNY Mellon Floating Rate Income. Alcentra’s Leland Hart doesn’t think we are at the end of the cycle yet based on floating-rate loans market fundamentals and the macro backdrop. What is late-cycle is investor behavior. This year, the credit markets have been starkly bifurcated, with the highest-quality segments outperforming year to date. Still, the Alcentra team thinks BB-rated loans offer the best risk-adjusted return potential right now. Loans as a whole can still trade down, but the Alcentra team doesn’t see widescale defaults like 2009 given there are few parallels to borrower characteristics before the last financial crisis.AlcentrasLelandHartNoSignsOfTheApocalypse
We visited the offices of Jennison Associates, subadvisor to Harbor Capital Appreciation, and our discussions confirmed the many qualitative positives behind our use of the fund in many of our portfolios. We are confident it will continue to outperform the large-cap growth index and the broader S&P 500. Capacity constraints are not a concern given the strategy invests predominantly in large-cap U.S. stocks. And the fund’s five-year trailing returns have consistently ranked in the top third of its category in recent years.Harbor_Capital_Appreciation_Update_LGPS-1
Listen to a replay of our first quarter 2019 Litman Gregory research call. Topics covered (among others): the equity rebound, conditions in Europe, floating-rate loans, managed futures, and emerging-market bonds. The presentation slides are available below.
View and download the presentation slides here:Litman_Gregory_Q1-2019_Research-Call_Presentation_Slides
We recently had a conversation with Steve Liberatore, portfolio manager of TIAA-CREF Social Choice Bond, which allowed us to get an update on the fund. The fund is a core holding in the new ESG portfolios we recently launched on the CAAP platform.TIAA-CREF_Social_Choice_Bond_Update
In this report we check in with the team at Brandes to get their thoughts on how trade issues are impacting valuations for Chinese stocks, where the fund is finding investment opportunities, and the overall valuation for their portfolio.Brandes_Emerging_Markets_Value_Annual_Report