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Fourth Quarter 2016 Research Call Replay

Jan 19, 2017 / Portfolio Updates, Asset Class Research

This is a replay of our fourth quarter 2016 Litman Gregory research team webcast, held January 19, 2017. Topics covered (among others): recent portfolio underperformance, a Trump presidency, foreign stocks, and alternative strategies. The presentation slides are available at the bottom of the page under Resources.

 

Audio of the full call:
 
Introduction with Peter Souza, Senior Research Consultant:
 
Over the past several years your standard active model portfolios have had difficulty keeping up with their benchmarks. You have provided insight as to why this is and as advisors, we generally understand that, but this has been an extended period of underperformance for you. Are you contemplating changes? Can you please speak further about the discipline that you follow at Litman Gregory? Underperformance is often harder for end clients to rationally think through than it is for us investment professionals. Is there hope for a turnaround?
 
How are you factoring in a Trump presidency in your equity outlooks, if at all? Does the Trump administration lead you to adjust the model allocations? Do you think Trump will be successful in implementing his policies? How do you think Trump could affect earnings?
 
Many clients are asking about what sectors might be attractive during a Trump presidency. Can you share with us the thoughts of your managers on this question?
 
Touchstone Sands Capital Inst’l Growth and Artisan Value were two dramatic outliers within the portfolios for calendar-year 2016. Can you share some talking points on any changes to positioning and/or anything you've learned from your work with them?
 
The overweight to foreign stocks is becoming difficult to defend with clients. Do you have any additional talking points we can use to defend the allocation? What factors do you weigh in maintaining the European stock allocation?
 
Although the eurozone looks cheap, how does the health of the banking system factor into expected returns in their equity markets?
 
How do you evaluate an investment in commodities?
 
Have you thought about the equity-like risk in your bonds in a severe 12-month downside scenario? From the surface, the prospect of a downturn with a lot of credit exposure in the flexible and floating-rate loan funds is concerning. Will core fixed-income offset that much risk?
 
Can the research team comment on the performance of alternatives, particularly the managed futures funds? It seems these managers have not been very successful at spotting trends. 

 

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