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3 Utility Mutual Funds for Attractive Returns

Below, we share with you three top-ranked utility mutual funds. Each has a Zacks Mutual Fund Rank #1 (Strong Buy). Investors with a conservative mindset looking for stable current income can opt for utility mutual funds. These funds are used as defensive instruments, which protect investments during a market downturn. This is because the demand for essential services, such as those provided by utilities, is often shielded from market volatility.In recent years, many funds in this category have increased their exposure to emerging markets and unregulated companies. Though this strategy has increased the risk involved, it has also generated higher returns.Below, we share with you three top-ranked utility mutual funds, namely Cohen & Steers Global Infrastructure Fund CSUAX, Franklin Utilities Fund FKUTX and Fidelity Select Utilities Portfolio FSUTX. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of funds.Cohen & Steers Global Infrastructure Fund seeks total return. CSUAX invests the majority of its total assets in U.S. and non-U.S. common stocks and other equity securities issued by infrastructure companies, which consist of utilities, pipelines, toll roads, airports, railroads, marine ports, telecommunications companies and other infrastructure companies.Cohen & Steers Global Infrastructure Fund has three-year annualized returns of 5%. As of June 2022, CSUAX held 58 issues, with 6.1% of its assets invested in Nextera Energy Inc.Franklin Utilities Fund seeks capital growth along with current income by investing most of its net assets in public utility companies that provide electricity, natural gas, water, and communications services. FKUTX invests primarily in equity securities.Franklin Utilities Fund has three-year annualized returns of 8.2%. FKUTX has an expense ratio of 0.73% compared with the category average of 0.94%.Fidelity Select Utilities Portfolio seeks capital appreciation by investing most of its net assets in common stocks of companies engaged in the utility business. FSUTX uses a fundamental criterions like financial condition, industry position, as well as market and economic conditions to select investments.Fidelity Select Utilities Portfolio has returned 10.1% in the past three years. Douglas Simmons has been the fund manager of FSUTX since October 2006.To view the Zacks Rank and the past performance of all utility mutual funds, investors can click here to see the complete list of utility mutual funds.Want key mutual fund info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >> 5 Stocks Set to Double Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%. Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>View All Zacks #1 Ranked Mutual FundsWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Get Your Free (FSUTX): Fund Analysis Report Get Your Free (CSUAX): Fund Analysis Report Get Your Free (FKUTX): Fund Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 26th, 2022

Interview With Robinhood CEO Vlad Tenev From The CNBC Disruptor 50 Summit

Following is the unofficial transcript of a CNBC interview with Vlad Tenev, Robinhood Co-Founder & CEO, live during the CNBC Disruptor 50 Summit today. Q3 2021 hedge fund letters, conferences and more Interview With Robinhood Co-Founder & CEO Vlad Tenev JIM CRAMER: Thank you so much, Vlad. I am so glad you’re with us. How […] Following is the unofficial transcript of a CNBC interview with Vlad Tenev, Robinhood Co-Founder & CEO, live during the CNBC Disruptor 50 Summit today. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Walter Schloss Series in PDF Get the entire 10-part series on Walter Schloss in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues. (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2021 hedge fund letters, conferences and more Interview With Robinhood Co-Founder & CEO Vlad Tenev JIM CRAMER: Thank you so much, Vlad. I am so glad you're with us. How have you been? VLAD TENEV: I'm glad to be with you, Jim. Good to see you again. CRAMER: Alright, so let's get the zeitgeist of Robinhood. When I first met you, had a great app, you thought that people would be attracted to, it younger people. Younger people have been completely turned off from the market for years. Where are we now between when I saw you as a disruptor multiple years ago and your current status of business? TENEV: Well I think it's fair to say that investing has become culturally relevant. It's everywhere. People are talking about investing like they do their other financial needs – spending and saving. And Robinhood has grown tremendously. Over 22 million customers use the platform as of Q2 and, you know, despite the growth, we still feel like we're just at the beginning and there's so many people out there that are still not investing. Over half of Americans don't have any investments outside of their individual retirement accounts or 401ks. And nearly 70% of 18 to 29 year-olds have no investments whatsoever, not to mention a lot of people globally who lack access to a functional banking system. So I think the trends are going in the right direction and we see a huge opportunity to continue democratizing and democratizing safely. And we see a world where nearly everyone is investing in some form or fashion. CRAMER: You and I have both agreed that democratization is the greatest force in finance in this period, but I want to be sure it's democratizing correctly. You mentioned people are investing. If you looked at your book of business, we learned from Gary Gensler, the Chairman of the SEC, this week average customer 31 years old, median account balance $240. How much of that money, and it's all hard earned of course, is in option trading, in crypto trading, or investing in common stocks? TENEV: Yeah, so the bulk of the activity has been investing in common stocks in terms of assets on the platform. Relatively few customers are pattern day traders, I think the number is 2% or so. We have customers trading options, but that's a relatively small percentage as well. A little bit over 10% on a typical month. So, the bulk of the activity is equities. And, you know, we definitely see an increasing interest this year in cryptos as well as that asset has become a little bit more mainstream. And the philosophy is to allow access to these assets at the lowest possible cost, make it available to people on a level playing field, but also do that safely. You know, it's incredibly important to provide the customer support, the stability, the high quality infrastructure and the educational content to make sure that the people that are investing, a large portion of whom are first time investors, are in the best possible position to succeed. So we absolutely believe in democratization. And you've heard me say this a bunch of times, but it has to be done safely and we recognize that responsibility. We've actually spent a lot of effort this year, and all the way through the pandemic, in making sure that we make lots and lots of investments to put our customers in the best possible position to succeed. In fact, just a couple of weeks ago, we announced rolling out 24/7 customer support via voice for everyone using the app and doing that across every issue for logged in customers. And I think it's hard to overstate how challenging it is to do that at scale, and do it in a high quality way. And I believe we also became one of the first, if not the first, in the cryptocurrency market to offer 24/7 voice support to all customers. CRAMER: Well let’s talk about, before we talk about the single source of truth and safety, which I know you have adopted to because you had to after what happened in the events in January. We'll get to those in a moment. How do we, you and I, if we were brainstorming, keep people doing responsible things when it comes to crypto? We've got some cryptos that are named after dogs and then we have actually dog variations. There's mutts, I mean, there's some of this stuff you put to sleep? I’m against that, I own a lot of adopted dogs. But I am concerned that you and I both know that a market itself could be irresponsible and there's nothing you can do. You can't tell people, I don't want you to buy a slice of crypto. How are you engaged in trying to make people more wise and how much of what you see in crypto would you describe as speculation as opposed to investment? TENEV: Yeah, I think this is a tricky balance in the business, right. And, you know, a lot of things that end up being quite serious in a bigger and bigger part of the financial system started out being underestimated and, you know, made fun of and ridiculed in some sense. So I think it's important to have that perspective and be balanced. And the way that we approach it is of course by clearly articulating what our values are. And you've heard me mentioned, our value of safety first, our top value. And, you know, the way we operationalize that through the product is to make sure that of the assets we list, we make it clear to customers what the asset is, in certain cases, this year earlier, we launched information labels on certain assets like volatile, exchange traded products, or companies that have entered bankruptcy or companies or products that are undergoing volatility. So it's important to inform people of what's going on and give people that information and it's a delicate balance because some people, a lot of people, actually do understand what they're doing and they know exactly what these products are, and they'd like to have exposure to them, alongside their other investments. And we have to make sure we allow that and sort of make sure the happy path of people who are responsibly interested in diversifying and having exposure to cryptocurrencies and different assets have the ability to do that through our product and have an excellent experience doing it as well. CRAMER: Alright, I know that is definitely your duty and you're fulfilling it. Let's talk about the report that came out. This is the staff report on equity and options market structuring conditions early 2021. I’m calling it the report. You and I have both read it. I want to dive into my first takeaway is that a lot of people who felt that there was a vast conspiracy of people – Citadel, for instance. You, me. That we were all somehow in on it to hurt people. I think that this report represents a complete vindication of that and if you feel that way, tell me why you think so. TENEV: Well, of course. You and I probably already knew that. And there's a lot of people on the internet that are going to be difficult to convince one way or another. I think, misinformation on the internet has been a big issue of our time. Of course, as I said and a bunch of TV interviews around that time and I know you and I have made it into some memes together on the internet over the last couple of months as well. Which, you know, has it's good and it's bad, as I'm sure you know. But the sort of cause for these restrictions that we had to impose, along with other brokers, was crystal clear. It was an unprecedented time where you had lots and lots of people that wanted to invest in a small handful of stocks at around the same time. And you know, the market wasn't really built for that. If you look at the core infrastructure of the market and the clearing and settlement system, and the way that everything works, I'm sure that when everything was built over the course of the past few decades, they just didn't anticipate social media people getting together and funneling money into a small number of stocks. So, I actually, I'm not really making a value judgment on whether that's good or bad. I think people should be allowed to communicate with each other and buy the stocks that they're interested in buying. And moreover I think what's interesting is a lot of these companies a lot of these meme stocks are companies that have been hit hard by the pandemic. You have, you know, retailers, brick and mortar stores. You had the airlines getting the attention of retail customers in the early part of the pandemic. And you could argue, you know, the government hasn't stepped in to help them in this difficult time, and retail investors have come in and supplied them with capital and allowed them to grow their management teams. So it is a very interesting thing that I don't think we've entirely unpacked. But I did appreciate that the report mentioned my policy suggestion of shortening the settlement time. I think regardless, that's the right move for the industry, and the right way to move forward our financial system and reduce systemic risk. So, I was really happy to see that, alongside a number of other policy proposals that Robinhood and myself personally have made. CRAMER: Now they didn't really – when I spoke to Chairman Gensler it was clear that he is concerned about two issues we have to speak about. One is payment for order flow and whether people know about it and the other is the game like features. Now I was out last night with a big Robinhood fan. 19 year old gentleman. And I said what draws you to Robinhood? And he said, because the app is so much like Candy Crush. It was not the answer I expected. Is the app too much like Candy Crush, Vlad? TENEV: No, I think that's – as someone who played Candy Crush maybe 10 years ago or so, I can tell you that I don't see any similarities whatsoever. And I will say this – CRAMER: But the customer can’t always be right. Maybe something needs to be done to dissuade people from thinking this is as easy and as fun as Candy Crush because I've not seen people borrow money and lose money on Candy Crush. TENEV: I think it's important for it to be easy and accessible, and there's a big difference between that and so called gamification. And if you look at Robinhood right now, we do pride ourselves on having a simple onboarding, on having pioneered a cost structure and a business model with no account minimums and no commissions that has brought in a ton of new investors, a lot of whom are from diverse backgrounds that otherwise wouldn't have been even thinking about investing. And that's something we're incredibly proud of and we stand behind. I think it's a very, very powerful force. And there is this notion that you hear thrown around that, you know, when wealthy people or institutions are buying stocks, then that's investing. But when poor people do it, it's gambling. And I think we just have to move away from that. I think we reject that. We're proud of bringing all these new customers in. We're also proud of the educational content and a lot of the recent features. You know, not just the 24/7 support, but improvements we've made in app learning modules. CRAMER: I could not agree with you more. TENEV: Go ahead. CRAMER: I have spent an inordinate amount of time in my life trying to explain to people that just when someone – just because someone who doesn’t have any money is trying to make something of themselves in the stock market does not mean they are fools. That does not mean they don't know what they're doing. And until you came along, I felt no one in the industry believed in me. And that's one of the reasons why I've supported you from the day I met you. Because you do want to give people a chance. You do not discourage. Now shouldn't it be celebratory? I don't know. Should confetti go down? TENEV: Amen. CRAMER: What matters is that you have – you do not look down upon people who aren't that wealthy. Now sometimes I think, and my wife does too since she met you, think that perhaps it's because it’s your immigrant upbringing. Some of it is because I think you're just a good guy trying to get people involved. And some of it is because you realize technology can – a lot of barriers. At the same time, there are issues that the Commission brings up. Issues about like payment for order flow, where to me, it would seem like you're willing to tell anybody anything. I mean, you're willing to inform. You have become a person involved with safety and truth. Should you just give everybody a caveat that just says look, you know, there's other ways to trade, you can pay commission, some people think you get better. I don't know if you get better. We think you can get better. Something that indicates that the Commission's issues about this payment for order flow could go away and instead we focus on the fact that there are 22 million people who are trying to make something of themselves. TENEV: Well, I'll put it this way. I think that payment for order flow and digital engagement practices are what you call gamification in the report. It was a little bit confusing to me to see it in there because first of all, it had nothing to do with restricting the handful of stocks that were restricted in January. So it was sort of like a policy position that was kind of thrown in there a little bit as an aside with no connection to the restrictions or the underlying issues and I think the rest of the report supported that. I think some of the criticisms of payment for order flow, and the business model, frankly, don't make sense to me. I mean, you look at what the industry was like three years ago, pretty much all of the large brokerages were charging commissions and making revenue from payment for order flow as an addition, right. And Robinhood forced that to zero. Forced Commission's to zero and the payment for order flow model has become kind of the standard transaction base model for offering brokerage services in that space. And alongside that, you've had the best conditions for being a retail investor ever. By far the lowest cost of execution, across the board, whose spreads have been have been tighter. And I think it's a great time to be a retail investor in America and there's actually a lot of competition. Now I will say, I do support – I came out with a policy proposal a couple of months ago about the Sub-Penny Rule, and there has been some criticism about whether our exchanges can fairly compete with off exchange market makers like Citadel securities and Virtu. And I think there are opportunities to make the system better and to encourage more flow to go to the exchanges, and to strengthen the NBBO, and I think we should look at doing that. But I think the – CRAMER: Well, remember, we don't want people running ahead. We don't want rich people running ahead of the people who are trying to make something of themselves, correct? TENEV: We certainly don't want to do that, but I think by and large, this business model has helped pioneer commission free trading and make it possible. And certainly what we wouldn't want is the return to a commission structure in the industry that'll just keep people out especially those people of lower incomes and less means. CRAMER: Now how – if you were to look at the breakdown of what kind of common stocks people are buying, how much are these stocks that are say jumping 50% in one day – more than even GameStop – and how much are these days because we don't get to see them run like we used to. And I used to love that run. Where people are buying the great American industrials or they're buying the FAANGs, or buying fractions of the FAANGs because they cost too much. What is your –  just if you want to break up the mosaic of what you're seeing, how many people are really investing in America? TENEV: Well I think a lot of people are interested in buying the stock of companies that they believe in. You know, companies that make products that they use and understand. So you'll have, you know, the big technology companies, the consumer companies that are among the 100 most popular at Robinhood at any given time. And that's actually, you know, some information that we provide for customers within the app. There's also, you know, certain events that happen, so cryptocurrency entering the mainstream this year I think got a lot of people interested in cryptocurrencies and we offer seven different coins on our platform. And from time to time, you will see sort of shifts from one sector to another. When I was on your show last year – CRAMER: Is bitcoin the most popular? Or are they starting to buy like the dogecoin? The cocker spaniel coin, whatever it is. I mean, where are they – are they buying like the most steady of them? Or you're seeing people buying whatever is the least -- lowest value? Lowest dollar value. TENEV: You will have a range of activity. I think, generally speaking, people do buy larger companies, especially with fractional shares now making those companies more accessible, you'll see people investing smaller amounts into these companies, and with some of the tools that we've rolled out like recurring investments and drip, you'll see people automating a lot more of that activity, and actually dollar cost averaging into these names so that they don't have to watch day to day and keep track of the prices so closely. CRAMER: Okay, we like that. Are they dollar cost averaging into things like what people are chatting about Shiba. Now I feel somewhat embarrassed to say that they're talking about Shiba, but that's what they're doing. Are you seeing Shiba being traded? Is it on your platform? Or will you recognize it on your platform? TENEV: Well, I’ve heard a lot of people in that community – CRAMER: Are you thinking about adding it? TENEV: We actually don't offer. CRAMER: You don’t. TENEV: We only offer seven coins currently. And I think it goes back to safety first, right. So we're not generally going to be the first to add any new asset. We want to make sure that it goes through a stringent set of criteria. And, you know, we're very proud of our cryptocurrency platform, and giving people more utility with the coins they have. As a matter of fact, we rolled out our wallets waitlist. A lot of people have been asking us for the ability to send and receive cryptocurrencies, transfer them to hardware wallets, transfer them onto the platform to consolidate. And you know, the crypto wallets waitlist is well over a million people now, which is very exciting. We see an opportunity to continue growing that business. CRAMER: There was this bad old days period that fortunately did not last long, where there was kind of a, let’s call it a hate Vlad movement. And I'd like to think that the hate Vlad movement actually peaked on the night that you were willing to go on Twitter and debate Dave Portnoy. Where people thought you would be a no show. People thought that you didn't feel that safety had become paramount. That you were gamifying or whatever. And you showed. And it pretty much ended. Do you see that the way I did? TENEV: Well, it's been certainly an adventure over the past nine months, you know, to put it mildly – CRAMER: What do you mean? What are you, a diplomat? Give me some old Vlad, will you? Give me some old Vlad. Like the pre-Marc Benioff Vlad. I mean the guy who says yeah well I showed up I was willing to take the heat because I knew I did nothing wrong. What happened to that Vlad? TENEV: I'm surprised my hair is still dark and I don't have I don't have grays or it hasn't fallen out, put it that way. CRAMER: Watch yourself. You know, we don't like that our show. But no I mean, it did peak. And I think it peaked because you recognized that things – you didn't want things to get out of hand. I remember in the midst in the darkest moment, you were saying, look, no system was built for this. Which is true. That was one of the things that came out in the report. But I think that your democratization got challenged. And you never wavered, but you did have to change what was the most important value. And since you've done that Vlad – have you noticed that Vlad Tenev has become and Robinhood have become major I don't want to say you're, I hate to say this, but you're not a disruptor anymore. You're the norm. Do you mind being the norm? TENEV: I think there's always opportunities to continue along our mission, and, you know, I know that a lot of people talk about Robinhood as being a disruptor, and we certainly have been. We changed the industry and people used to be paying commissions and now we're not anymore, but I don't think that's done by any means. I think that, you look at cryptocurrencies, for instance, people are still paying 3%, 4% fees to access that market. You see a lot of opportunities to serve more customers that have even less money, who are even more underserved than the people we have now. So I think the mission has always been to democratize finance for all and to do that safely. And, you know, in some cases that might require disruption, in other cases is just going to be continual improvements to the product and just getting, you know, getting better and better each and every day with things like 24/7 support, improving our educational content, and really just helping customers be successful on the platform. I think that's a big part of it and we have really made incredible strides. I mean, the team has been working very, very hard to make the platform as reliable as possible for it to stand up to heavy volume and days where customers need us most. And to be there for customers if they need help, specifically for the first timers who can benefit the most. CRAMER: If you’ve got this set up – you’ve got the robust system, you've got 24/7 help, which most people don't. Is it time to start thinking bigger? For instance, right now we're hearing that perhaps PayPal is going to merge with Pinterest. But we see what some of the companies are doing – Square is doing. Not willing to be bound by the initial mission. I think that you have 22 million people who want more from Robinhood. Maybe they want to get some of the things that SoFi has, some of the things that Square has, is it time to be thinking about the next big leg up for Robinhood? TENEV: Well I think that there's always an opportunity to keep serving our customers and we have been expanding quite a bit over the past few years, especially getting into becoming one of the first to offer cryptocurrency trading, sort of, alongside traditional asset as a brokerage, our cash management product which allows customers to earn high yield and spend. And then, with cryptocurrencies, getting more into cryptocurrencies as a means of transacting with our new wallets waitlist that we announced and are rolling out shortly. So we're going to continue to do these things. I do think that investing and making people owners of our global economy is an incredibly powerful thing. And despite all the progress that we've made, there's still a lot of people that don't invest, and we see it as being very, very important to serve those people. I think it's not just good for them in their wealth building but also important for society. A society where more of us feel like owners in the common enterprise is one that's just going to be healthier. And I think, you know, we started this company in the wake of the financial crisis, there were a lot of protests, a lot of people were unhappy at the status quo, and just felt like the financial system wasn't working for them. And hopefully, bit by bit we can improve that and make it an inclusive system and one that really serve the needs of the people, as well as it possibly can. CRAMER: I know Chairman Gensler was very concerned about suitability. You have 1 million people who are 19. What do we tell the 19 year-olds to be sure that they understand that they're doing something that is in keeping with their suitability which by the way Vlad, they may not even know the word. How do we get 19 year-olds to be investing what you and I would say responsibly and not blow their heads off on shorting calls? TENEV: I think it's the things that we've been building and of course suitability is – there's very strict rules by FINRA and brokerages have to follow them, and Robinhood is always committed to following the rules of the road there. There's also educational content. You know, I think, investment products are not suitable for everyone. They involve risk, especially when you're talking about options, and having people understand the risks and understand all of the information of how they work, assuming they’re willing to take those risks and are suitable is something that's incredibly important as well. So we are continuing to do a lot more in product and through Robinhood Learn to educate people. CRAMER: Yeah, that's why we started our investing club here. Right because people don’t get enough. I think that, you know, we do investment club basically just to be able to teach. And I think that you're doing teaching now and I think it's absolutely terrific because we need to do that because we don't, as much as we're thrilled that you have – the average customers age 31, we've got to get this median account balance up to 240. Now how do we do that? And do these people own mutual funds away or index funds which I think is a very responsible way to start investing. And then they use their so called Mad Money $240 with you. Have you seen that grow? I mean, because you know that's not enough. And we all work hard. I started with $200. I know you started with nothing, which it is terrific to start with nothing. But I do believe that we need to get that balance up and I'm trying to figure out how to make people wealthier. How do we make people wealthy? TENEV: I think the best way to do it is to have a long term perspective and put aside a little bit at a time and really start young and you'll see kind of the magic of compounding and compound returns happen over a longer period of time. And I think there's ways we can continue to make that process easier with recurring, with drip, with fractional shares, we have a lot of the building blocks. And, you know, we're excited to see more and more people adopting those products and we believe that in the future, they'll be a larger and growing percentage of the activity on the platform. CRAMER: Now is the average investor, making I don't want to call it necessarily progress, but I would like to see the average investor not just suddenly go crypto. I mean are you saying people –people used to be say 90% stock, now 90% crypto? TENEV: It's certainly an interesting trend. I think there's certain advantages that crypto has for especially interoperability, and the ability to be global by default. So, you know, regardless of where you are in the world whether you're in the U.S. or overseas, you can have a wallet, you can send people cryptocurrencies from that wallet to their wallet. And so there there's certain advantages that are in the technology that make it kind of global and accessible by default and that makes it very interesting. Now of course, we also have, you know, the equities market in the US has really been where the best companies list over time. It's been a tremendous source of wealth creation, and there is an opportunity to kind of make that easier and make that more accessible as well. So I, generally agree with you, I think it's important for people to be diversified, for them to build up portfolios over time and invest for the long term. And you know what that specific mix is, I think, you know, we can probably debate, but crypto certainly is here to stay as an asset class, and the ease of use and the global nature of it, I think, has made it attractive to lots of people, not just in the U.S. but overseas in particular what you are seeing is very interesting. CRAMER: But Vlad, people are starting to come back to work. It's also football season, which is a DraftKings FanDuel situation. Are you seeing fewer people sign up? Is the app going down in popularity at all? As people then switch to football gambling, we know that – we're not saying that they're doing Robinhood  gambling with the football game, but these are various ways that people want to be able to make money. And the return to work means that most people can’t sit there and trade or invest during the day. Are you seeing those two trends which is gambling and back to work, cutting into the growth of Robinhood? TENEV: What I've always said and, you know, I think in our last conversation you've heard me say this as well. We're not paying too much attention to short term trends. The way that we're going to make progress and serve our customers and go after this opportunity of making as many people long term investors as possible is by focusing on the products. And so we're going to continue to roll out new products, improve the service, make sure that it's as easy as possible for first time investors to become long term investors and get all the support that they need. So, you know, whether short term fluctuations, Covid, reopening not something that we're going to spend too much time commenting on. CRAMER: By the way, did you see former President Trump’s SPAC today? Up 40 points. Do you follow any of these trends that some of the younger people really get a kick out of, too? TENEV: I heard about the product, the new social media platform. But I haven't been watching the stock too closely. CRAMER: No, no, it's a what I call a newer public offering, so to speak. Definitely newer. Well Vlad, look. I think you've come through Hades and back. I love the theme that I know you do care about passionately is safety. Any last words for people who are young who are watching who are thinking about taking the so called plunge into common stocks? TENEV: Yeah look I think that it's important to invest for the long term and to be educated. And we want to make sure to meet our customers where they are, and especially for young people, a lot of that educational content has to be contextual. It has to be in the form that customers expect. And we're going to continue to provide that through Snacks, on Snap and in in-product, which is our podcast and newsletter. We're going to continue to increase the tools and the functionality and the support that's available to customers. And we're going to continue to roll out products that democratize finance safely by giving you the lowest possible cost that we can offer, and the lowest barriers to entry with a great experience. So that's what Robinhood is all about and over the coming decades, I think we'd like to see more and more people globally become investors and we'd like to be a part of that and really driving that transition to where everyone becomes an owner of our economy and our society. CRAMER: Well I want to congratulate you for everything. For being 2021’s top disruptor, for the journey you have taken, for the maturity that we all had to have because so many new people have come in. And for your advice and counsel, particularly as far as I am concerned, in light of what happened at the end of January, shows that you never lost the flame. Some people thought you did. The report vindicates you. And I'm thrilled that you came to our Disruptor conference and to Mad Money. And it's always good to see you, Vlad. TENEV: It's always a pleasure. Thank you. Thank you for the time, Jim. Updated on Oct 22, 2021, 10:21 am (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkOct 22nd, 2021

3 Market Neutral Funds to Counter Market Volatility

Below, we share with you three top-ranked market-neutral funds. Each has a Zacks Mutual Fund Rank #1 (Strong Buy). In a volatile stock market, investors usually focus on a long-term strategy, which keeps them protected from concurrent ups and downs. But that is easier said than done, and adding market-neutral funds to their portfolio often bails them out in terms of hedging their risk in the prevailing market conditions.Market-neutral funds are designed to provide returns that are relatively unaffected by the state of the overall stock market. Adding these to the portfolio should boost returns and reduce risk. They typically deliver returns by combining long and short positions in various securities.Below, we share with you three top-ranked market-neutral funds, viz., Victory Market Neutral Income Fund CBHAX, Gabelli ABC Fund (The) GABCX and Hussman Strategic Growth Fd HSGFX. Each has a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of market neutral funds.Victory Market Neutral Income Fund seeks to achieve its investment objective of high current income by implementing a proprietary, rules-based market-neutral investment strategy. CBHAX aims to generate income from its investments while maintaining a low correlation to the foreign and domestic equity and bond markets.Victory Market Neutral Income Fund has three-year annualized returns of 1.5%. As of June 2022, CBHAX held 445 issues, with 10.3% of its assets invested in TOTAL OTHER.Gabelli ABC Fund (The) typically invests in securities that provide attractive opportunities for appreciation or investment income. GABCX seeks to limit the excessive risk of capital loss by employing a varied investment strategy, including investing in value-oriented common stocks.Gabelli ABC Fund (The) has three-year annualized returns of 2%. Mario J. Gabelli has been one of the fund managers of GABCX since 1993.Hussman Strategic Growth Fd typically invests most of its assets in common stocks picked by investment advisors. HSGFX may use options and index futures, and other hedging strategies, to balance the fund’s exposure during unfavorable market conditions.Hussman Strategic Growth Fd fund has three-year annualized returns of 7.9%. HSGFX has an expense ratio of 1.14% compared with the category average of 1.90%.To view the Zacks Rank and the past performance of all market-neutralfunds, investors can click here to see the complete list of market neutral funds.Want key mutual fund info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >> Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>View All Zacks #1 Ranked Mutual FundsWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Get Your Free (HSGFX): Fund Analysis Report Get Your Free (GABCX): Fund Analysis Report Get Your Free (CBHAX): Fund Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research.....»»

Category: topSource: zacks3 hr. 16 min. ago

5 Dividend-Paying Multiline Insurers for a Stable Portfolio

Multiline insurers like MetLife (MET), Prudential Financial (PRU), The Hartford Financial (HIG), MGIC Investment Corporation (MTG) and Radian Group (RDN), with an impressive dividend history, offer a breather amid volatility. Apart from price appreciation, investors look for returns on their investment in the form of dividends. Despite a choppy market, attributable to Fed’s hawkish move, concerns over the Russia-Ukraine conflict and a stronger dollar, the insurance industry has been gathering steam banking on solid fundamentals.The Zacks Multiline Insurance industry has gained 0.9% year to date. Players like MetLife Inc. MET, Prudential Financial Inc. PRU, The Hartford Financial Services Group, Inc. HIG, MGIC Investment Corporation MTG and Radian Group Inc. (RDN), who have an impressive dividend history, continue to offer a stable income.By virtue of the nature of their business, multiline insurers stand to benefit from a diversified portfolio, which, in turn, lowers concentration risk. Increased awareness, driving higher demand for protection products, should benefit sales and premiums of life insurance operations. Continued improvement in pricing should support the premium growth of non-life insurance operations. Also, an increase in the exposure of intangibles and an increase in cyber threats offers room for growth for non-life insurers. Per Deloitte Insights, gross premiums are estimated to increase about six-fold to $722 billion by 2030. China and North America should account for more than two-thirds of the global market, per the report.The Fed’s strategic move to hike interest rates to curb inflation has been benefiting the insurance industry as insurers are direct beneficiaries of an improving rate environment. The Fed has already raised rates six times this year. Insurers invest a portion of their premium income. Therefore, the higher the rates, the better the investment results. Also, investment income is an important component of insurers’ top line.Players are investing heavily in technology to improve scale and efficiencies. While a solid policyholders’ surplus helps the industry absorb losses, a sturdy capital level aids insurers in pursuing strategic mergers and acquisitions, investing in growth initiatives, engaging in share buybacks, and increasing dividends or paying out special dividends.Dividend Stocks for Your PortfolioIn this volatile market, stocks that give regular dividends offer an attractive investment opportunity. Regular dividend hikes reflect confidence in operational strength, which, in turn, fuel earnings power.With the help of the Zacks Stock Screener, we have selected five multiline insurers that have a Zacks Rank #1 (Strong Buy) or #2 (Buy) or #3 (Hold), a dividend yield of more than 2% as well as a five-year historical dividend growth rate of more than 2%. These stocks have a payout ratio of less than 60, reflecting enough room for future dividend increases. You can see the complete list of today’s Zacks #1 Rank stocks here.Radian Group, with a market capitalization of $3 billion, is a credit enhancement company, which supports homebuyers, mortgage lenders, loan servicers and investors with a suite of private mortgage insurance and related risk-management products and services.RDN witnessed five-year annualized dividend growth of 248.4%. Riding on continued financial strength and flexibility, Radian declared a 43% increase in quarterly dividends in the first quarter of 2022, which translated into the highest dividend yield in the private MI industry. Its current dividend yield of 4.1% betters the industry average of 2.5%. The insurer’s payout ratio is 16. (Check Radian Group’s dividend history here)Radian Group Inc. Dividend Yield (TTM) Radian Group Inc. dividend-yield-ttm | Radian Group Inc. QuoteRadian’s mortgage insurance portfolio is expected to create a strong foundation for future earnings. RDN remains focused on improving its mortgage insurance portfolio, the main catalyst of long-term earnings growth. For 2022, Radian estimates total mortgage originations to be nearly $3 trillion, reflecting an 8% increase in purchase originations and a 58% decrease in refinance activity. Also, given the strong credit characteristics of the new loans insured, we expect the company to see fewer claims than before. Radian Group maintains a solid balance sheet with sufficient liquidity and strong cash flows. A strong capital position helps this Zacks Rank #2 insurer deploy capital via share repurchases and dividend hikes that enhance shareholders’ value.MGIC Investment, with a market capitalization of $4.1 billion, engages in the insurance underwriting and related services business primarily in the United States and Canada.MTG has an impressive dividend history, banking on a solid capital position. The largest private mortgage insurer in the United States increased dividends three times in the last five years. Its dividend yield of 2.9% betters the industry average of 2.5%. The insurer’s payout ratio is 14, with a five-year dividend growth rate of 16.9%. (Check MGIC Investment’s dividend history here)MGIC Investment Corporation Dividend Yield (TTM) MGIC Investment Corporation dividend-yield-ttm | MGIC Investment Corporation QuoteMGIC Investment expects new business, combined with increasing annual persistency, to result in the continued growth of the insurance-in-force portfolio. The multi-line insurer expects to retain higher levels of liquidity at the holding company. MGIC Investment, carrying Zacks Rank #2, has constructed a solid capital base to increase the long-term value to shareholders while maintaining financial strength and flexibility.MetLife, with a market capitalization of $60.1 billion, is an insurance-based global financial services company providing protection and investment products to a range of individual and institutional customers.Since 2011, the company has been successfully raising its quarterly dividend at a CAGR of 9.5%.  Its current dividend of $2.00 yields 2.6%. The insurer’s payout ratio is 27, with a five-year dividend growth rate of 4.7%. (Check MetLife’s dividend history here).MetLife, Inc. Dividend Yield (TTM) MetLife, Inc. dividend-yield-ttm | MetLife, Inc. QuoteThis Zacks Rank #3 company’s focus on streamlining its business, numerous acquisitions and partnerships, and balance sheet will drive long-term growth.  MET has undertaken strategies to control cost and increase efficiency and remains optimistic about achieving a direct expense ratio below the target set for 2022.  A strong balance sheet, coupled with sound free cash flows, supports its shareholder value-boosting effort.Prudential, with a market capitalization of $39.6 billion, is a financial services leader that offers an array of financial products and services, including life insurance, annuities, retirement-related services, mutual funds, investment management and real estate services.PRU has been increasing its dividend for the past 14 years. Its dividend yield of 4.4% compares favorably with the industry’s figure of 2.5%. The insurer’s payout ratio is 47, with a five-year dividend growth rate of 8.5%. (Check Prudential’s dividend history here).Prudential Financial, Inc. Dividend Yield (TTM) Prudential Financial, Inc. dividend-yield-ttm | Prudential Financial, Inc. QuotePRU is on track to reprice as well as move toward lower-risk and less capital-intensive products. As this Zacks Rank #3 insurer transforms to become a higher growth, less market-sensitive business, it expects to double its growth businesses to more than 30% of earnings and the individual annuities business to 10% or less of earnings. PRU remains focused on investing in businesses to expand its addressable market and to continue to improve expense and capital efficiency. Prudential envisions about a 65% free cash flow ratio of earnings and about two times its dividend.The Hartford Financial, with a market capitalization of $24.1 billion, is one of the major multi-line insurance and investment companies in the country, providing investment products, group life and group disability insurance, property and casualty insurance and mutual funds in the United States.HIG increased its dividend at a five-year CAGR of 8.7%. Its dividend of $1.70 yields 2.2%. This Zacks Rank #3 insurer’s payout ratio is 21, with a five-year dividend growth rate of 9.5%. (Check Hartford Financial’s dividend history here).The Hartford Financial Services Group, Inc. Dividend Yield (TTM) The Hartford Financial Services Group, Inc. dividend-yield-ttm | The Hartford Financial Services Group, Inc. QuoteHartford Financial has been vending non-core businesses to concentrate on its U.S. operations and enhance its operating leverage. HIG expects its Hartford Next initiative to bring cumulative savings of $560 million in 2022 and $625 million in 2023.  Hartford Financial is gaining from lower COVID-related losses, an improved Commercial Lines loss ratio and a rise in earned premiums. Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Hartford Financial Services Group, Inc. (HIG): Free Stock Analysis Report MGIC Investment Corporation (MTG): Free Stock Analysis Report MetLife, Inc. (MET): Free Stock Analysis Report Prudential Financial, Inc. (PRU): Free Stock Analysis Report Radian Group Inc. (RDN): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research.....»»

Category: topSource: zacksDec 3rd, 2022

How To Invest In Land

If the financial meltdown of 2008 taught investors that land isn’t necessarily a surefire asset, the market’s subsequent rebound shows that land continues to be a lucrative investment. By understanding your options and doing your homework, you can find a land investment ideal for your portfolio. Whether it’s an apartment building or an exchange-traded fund […] If the financial meltdown of 2008 taught investors that land isn’t necessarily a surefire asset, the market’s subsequent rebound shows that land continues to be a lucrative investment. By understanding your options and doing your homework, you can find a land investment ideal for your portfolio. Whether it’s an apartment building or an exchange-traded fund for wheat, a land investment can bolster your financial returns. Here are your options and how they work. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get Our Activist Investing Case Study! Get the entire 10-part series on our in-depth study on activist investing in PDF. Save it to your desktop, read it on your tablet, or print it out to read anywhere! Sign up below! (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2022 hedge fund letters, conferences and more   Find A Qualified Financial Advisor Finding a qualified financial advisor doesn't have to be hard. SmartAsset's free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you're ready to be matched with local advisors that can help you achieve your financial goals, get started now. Types of Land Investments Investing in land isn’t a one-size-fits-all proposition. Investors with varying amounts of wealth and risk tolerance might gravitate toward a specific type of land investment. Use the following list to gauge which land investments appeal to you. Commercial and Residential Land Investments Commercial and residential properties have broad appeal because investors of all sizes can access them. For example, you might not be able to afford an apartment building, but you can purchase shares in a real estate investment trust (REIT) as you would purchase shares of a company’s stock. REITs allow you to focus on one type of real estate, such as residential properties, or combine any number of types from every sector of land investments. That said, REITs are generally diversified whether you choose one or multiple types of real estate investments. In addition, as with investing in company stock, your investments can typically be as small or large as you like. The downside of investing in REITs is that you won’t have any actual land to use or inhabit. Therefore, if owning your investment properties appeals to you, purchasing land may be a preferable route if you can afford it. Livestock and Crop Farmland Becoming a homesteader allows you to directly own your investment in a specific property. Living on and running your farm or ranch might be your dream come true – and the potential returns are icing on the cake. However, raising crops and livestock is expensive and risky. As a result, deep pockets and the ability to shoulder stress are all but necessary to manage this type of investment. Crops and livestock are just the beginning of investing in agricultural land. For instance, you could cultivate an orchard, vineyard, mineral development land, timber farm or recreational land. Generally, these investments require less up-front capital than crops and also allow you to live on the land. Specialized Agricultural Investments On the other hand, if farming interests you but owning land doesn’t, exchange-traded notes (ETNs) and exchange-traded funds (ETFs) are a less costly way to get exposure to agricultural land. For example, the Teucrium Corn Fund provided a 35.1% return over the past year through investments in corn futures. Like crops and livestock, you can purchase shares of ETFs and ETNs for specialized land if running your own timber operation seems overwhelming. Through these funds, you’ll have exposure to land rich in timber, oil and more and see healthy returns without owning an acre. Tips for Investing In Land If investing in land seems daunting, following these tips can help you make the most of your investments: Understand Your Investment Dotting each “i” and crossing each “t” can be irritating, but it’s usually worthwhile. Details like zoning laws, property lines, parking and whether an old apartment building has lead paint can make the difference between a profitable investment and a financial headache. Additionally, a title search can help ensure you would own the land outright with no disputes. Research the Region Every piece of land sits in a place where employment, household income and population interact and fluctuate. Ideally, the land you invest in will be located in a region on track to experience upticks in these crucial factors. Follow Your Risk Tolerance It’s recommended that investors don’t go against the grain of their preferences. If you’re risk averse, investing in areas with high population and income might be the solution. Buying land in a region with consistent demand and healthy economic activity can help offset the possibility of losing a fortune on a land investment. Check the Water Waitlist Some municipalities forbid new hookups to city water because of water shortages. For example, the city of Cambria in California hasn’t approved new water connections for two decades. As a result, reviewing your city’s water situation is critical before building new residential or commercial properties. Verify the Tax Situation Every municipality has different tax stipulations that can affect your investment’s profitability. For example, your city might charge income tax to residents and businesses. In addition, you might receive special tax breaks for using land in a specific way, such as farming. Review Your Mineral Rights As with taxes, mineral rights can vary based on region. For instance, your investment might grant ownership of the land you want but not what lies a few feet beneath the surface. This scenario could lead to legal mining or drilling by other parties with no financial benefits for you. Play It Cool During Negotiations When haggling over a desired piece of land, it’s recommended to leave your emotions at the door. Even if you’re excited about the deal, allowing emotions to lead the way can result in poor judgments and mistakes during negotiations. Key Considerations When Investing in Land Investing in land involves more than finding a plot and making an offer. Legal issues can render the most attractive land a lousy investment for reasons out of your control. For example, your municipality might tightly control how you can use the land in question, ruining plans for potential buildings or farms. Plus, part of the property might be legally accessible to your neighbors due to land easements. Furthermore, bordering a body of moving or standing water can affect land accessibility and create floodplain conditions. As a result, it’s essential to review the land’s deed to understand the legal ramifications of ownership. Once you’ve ruled out legal impingements, examine the land’s utility connections. Paying for new water or electrical lines can eat into investing profits significantly. In addition, proximity to towns and cities, the likelihood of attracting trespassers and how the land will impact your taxes are all vital to consider. Is Investing In Land Right For You? Several solid reasons might lead you to invest in land. First, you might aspire to own and operate a farm or vineyard and enjoy the financial returns as a side benefit. Or, as an investor looking to diversify their portfolio, you might invest in REITs with a proven track record. On the other hand, you might do your homework on a commercial or residential property and start collecting rent. Investing in land might not be suitable for you if you don’t want to do extra research on your investments or take on more risk. While real estate in its many forms can be a lucrative investment, uninformed decisions generally result in losing money. The Bottom Line You can invest in land through residential and commercial property, farmland and specialized agricultural investments. In addition, you can invest by directly purchasing land or buying shares of REITs, which give you a diversified slice of the real estate market, spreading risk across numerous assets. When investing in land, it’s recommended to research the relevant factors in your situation, such as tax obligations, title status and environmental implications. That said, the work is typically worth it and land can be a profitable asset for any investor. Investment Tips Land investments can be intimidating, especially if you’ve never purchased property other than your home. That’s where a financial advisor can help. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now. While it would be great to be a real estate mogul, the reality is that most investors don’t have millions to throw at land. Not to worry – here’s how you can invest in real estate with little money. The post How To Invest In Land appeared first on SmartAsset Blog......»»

Category: blogSource: valuewalkNov 29th, 2022

3 Diversified Bond Mutual Funds for Steady Growth

Below, we share with you three top-ranked diversified bond mutual funds. Each has a Zacks Mutual Fund Rank #1 (Strong Buy). Investing in diversified bond funds is more preferred to individual bond investing, as building a portfolio of the second type may prove relatively more expensive. A higher level of liquidity also makes diversified bond funds more attractive.Moreover, mutual funds having significant exposure to diversified bonds are excellent choices for investors seeking steady returns with a relatively low level of risk. Investing in funds that maintain a portfolio of bonds issued across a wide range of market sectors also reduces sector-specific risk.Below, we share with you three top-ranked diversified bond mutual funds, namely BBH Limited Duration Fund BBBMX, Virtus Newfleet Senior Floating Rate Fund PSFRX and BlackRock Floating Rate Income Portfolio BFRAX. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of funds.BBH Limited Duration Fund aims for maximum total return. BBBMX invests in a well-diversified portfolio of durable, performing fixed-income instruments, primarily focused on asset-backed securities, notes and bonds. The fund has returned 0.7% over the past three years.As of July 2022, BBBMX had 64.3% of its assets invested in Total Misc Bonds.Virtus Newfleet Senior Floating Rate Fund seeks high total return from both current income and capital appreciation by investing in non-investment grade bank loans, including senior floating rate loans, with a focus on higher quality companies within a rating tier. PSFRX may also invest in foreign securities. The fund has returned 1.4% over the past three years.Francesco A. Ossino has been one of the lead managers of PSFRX since 2012.BlackRock Floating Rate Income Portfolio invests primarily in floating rate investments and equivalents, which enables it to achieve a floating rate of income. BFRAX may also purchase, without limitation, participations or assignments in senior floating rate loans or second lien floating rate loans. The fund has returned 1.7% over the past three years.BFRAX has an expense ratio of 0.89% compared with the category average of 1.03%.To view the Zacks Rank and the past performance of all diversified bond mutual funds, investors can click here to see the complete list of diversified bond mutual funds.Want key mutual fund info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >> One Tiny Company Could Shake the EV Industry Zacks Aggressive Growth expert Brian Bolan has pinpointed a U.S. manufacturer with an under-$5 stock price that's gearing for a monster ride. It's ramping up production of an affordable, "working man's" rival to Tesla just as soaring gas prices and desire for energy independence are set to drive the EV market to $1 trillion in 5 years.See This Stock Now >>View All Zacks #1 Ranked Mutual FundsWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Get Your Free (PSFRX): Fund Analysis Report Get Your Free (BFRAX): Fund Analysis Report Get Your Free (BBBMX): Fund Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksNov 17th, 2022

3 Top-Ranked Market-Neutral Funds to Tide Over Volatility

Below, we share with you three market-neutral mutual funds, viz. HSGFX, GABCX, and CBHAX. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy). In a volatile stock market, investors usually focus on a long-term strategy, which keeps them protected from concurrent ups and downs. But that is easier said than done, and adding market-neutral funds to their portfolio often bails them out in terms of hedging risks in prevailing market conditions.Market-neutral funds are designed to provide returns that are relatively unaffected by the state of the overall stock market. Adding these to the portfolio should boost returns and reduce risk. They typically deliver returns by combining long and short positions in various securities.Say, for instance, you take a $1 million long position in Pfizer and a $1 million short position in Wyeth, both large pharmaceutical companies. If pharmaceutical stocks fall, you will lose because of your long position in Pfizer but gain from your short position in Wyeth.Below, we share with you three market-neutral mutual funds, viz. Hussman Strategic Growth Fund HSGFX, Gabelli ABC Fund GABCX, and Victory Market Neutral Income Fund CBHAX. Each has earned a Zacks Mutual Fund Rank #1(Strong Buy) and we expect the fund to outperform its peers in the future. To view the Zacks Rank and past performance of all market-neutral mutual funds, investors can click here to see the complete list of funds.Hussman Strategic Growth Fund invests most of its net assets in common stocks that its fund's investment adviser favors. HSGFX advisors also invest in options and index futures, and other instruments to hedge portfolio risks in unfavorable market conditions.Hussman Strategic Growth Fund has a three-year annualized return of 8.0%. As of the end of June 2022, HSGFX held 274 issues, with 1.83% of its assets invested in Alphabet Incorporated Class C.Gabelli ABC Fund invests most of its net assets in securities of domestic and foreign companies that its investment adviser believes provide attractive opportunities for appreciation or generate investment income. GABCX advisors adopt measures to limit capital loss by utilizing various investment strategies, including investing in value-oriented common stocks.Gabelli ABC Fund has three-year annualized returns of 1.5%. GABCX has an expense ratio of 0.81% compared with the category average of 1.90%.Victory Market Neutral Income Fund seeks income by investing its net assets using a proprietary market-neutral investment strategy. CBHAX maintains a low correlation to foreign and domestic equity and bond markets.Victory Market Neutral Income Fund has returned 1.4% in the past three years. Mannik S. Dhillon has been the fund manager of CBHAX since May 2018.To view the Zacks Rank and past performance of all market-neutral mutual funds, investors can click here to see the complete list of funds.Want key mutual fund info delivered straight to your inbox?Zacks' free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >> Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>View All Zacks #1 Ranked Mutual FundsWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Get Your Free (HSGFX): Fund Analysis Report Get Your Free (GABCX): Fund Analysis Report Get Your Free (CBHAX): Fund Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksNov 2nd, 2022

Transcript: Jeremy Siegel + Jeremy Schwartz

   The transcript from this week’s, MiB: The Jeremies! Schwartz and Siegel on SFTLR!, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, YouTube, and Bloomberg. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ ANNOUNCER: This is… Read More The post Transcript: Jeremy Siegel + Jeremy Schwartz appeared first on The Big Picture.    The transcript from this week’s, MiB: The Jeremies! Schwartz and Siegel on SFTLR!, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, YouTube, and Bloomberg. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ ANNOUNCER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio. BARRY RITHOLTZ, HOST, MASTERS IN BUSINESS: This week on the podcast, oh, how much fun was this? I can’t begin to tell you what it’s like to sit in a room with the Jeremy’s, Professor Jeremy Siegel and I keep calling him Professor Jeremy Schwartz, but he’s just Jeremy Schwartz, chief investment officer of the $75 billion ETF and mutual fund company, WisdomTree. I am just a fan of both of these guys. I have interviewed Professor Siegel several times. He’s always fascinating. You’ll hear him sort of zip in and out of focus like this, because he’s sitting on the chair spinning around, just having fun, telling stories. So if you hear his audio cut in and out, he’s all but spinning in circles. He’s just charming, as is Jeremy Schwartz is one of the smartest people you meet in finance, just a thoughtful, intelligent person who really understands what value is about, how to find investments that will outperform the broader markets with less risk, less volatility. He’s been a big advocate, along with Professor Siegel, of fundamental indexing, where you’re focusing on things like earnings and dividend and value. And they have some fascinating things to say. Latest version of “Stocks for the Long Run” has just come out. It’s sold ungodly numbers of copies, and is on everybody’s best finance books of all-time list. I found this conversation to be so much fun. We could have gone for another couple hours, but I had to stop and send them off to the New York Stock Exchange to do whatever they’re going to do there. I think you’ll enjoy this conversation; I know I did. With no further ado, my sit-down with the Jeremy’s, Professor Jeremy Siegel and Jeremy Schwartz. Professor Siegel, you began at Wharton back in ‘76. Did you ever imagine half a century later, you’re still teaching in the same place? JEREMY SIEGEL, PROFESSOR EMERITUS OF FINANCE, WHARTON: Well, I’m still associate. I’m emeritus professor, Barry. I actually left active professor in July of 2021, after 45 years of teaching at Wharton. I had taught four years in University of Chicago before that. So 49 years of university teaching. I’ve been as busy, because finishing, as we’re going to talk about, sixth edition of the book and conferences more than ever because now you can do them on Zoom. So I can do San Diego at 9:00 a.m. And at 10:30, I can do New York, which of course never used to be possible. RITHOLTZ: Modern technology. And Schwartz, you went to Wharton. You had Professor Siegel as an instructor. Tell us what that experience was like. How was he as a professor? JEREMY SCHWARTZ, GLOBAL CHIEF INVESTMENT OFFICER, WISDOMTREE: So I got to Wharton in 99, which was the peak of the tech bubble. I was coming into my own, seeing the tech bubble living through it, having some experience investing until those tech stocks, watched them crashed. And he was on — I got to meet him through, who’s now the Philly Fed President Patrick Harker, I was on a team called the Dean’s Advisory Board. We organized sessions with the Professor and I got to meet him through that. And then he got me into his class. I didn’t even know you have to apply to his class. He got me into his class. And the summer — RITHOLTZ: What do you think, he’s just walking in off the street and say, “Professor Siegel, I’m here?” It doesn’t work like that. SCHWARTZ: You have to apply. You have to apply. I didn’t know that. But I was lucky to meet him. And then — so ’01 was when I was sitting in his class. So this is after March of 2000, his famous op-ed “Big-Cap Tech Stocks are a Sucker’s Bet.” RITHOLTZ: I remember that vividly. SCHWARTZ: So he’s on CNBC all the time talking about this, and I needed something to do for the summer. And that was the third edition. Back in ’02, we helped — that was my first project with him was the third edition of “Stocks for the Long Run.” RITHOLTZ: Really? So you have a 20-year relationship with “Stocks for the Long Run,” as well as with Professor Siegel. SIEGEL: That’d be great. RITHOLTZ: So the question for you is, you come out of Wharton, how do you end up at WisdomTree? SCHWARTZ: Well, WisdomTree now — I’ve been there 17 years. The Professor — we knew the founder, Jonathan Steinberg. RITHOLTZ: Sure. SCHWARTZ: He had a magazine. The Professor was publishing for the magazine, and the Steinberg family is very involved in Wharton. So we were looking at their indexes. The second book, “The Future for Investors,” which we did, came out in ’05, had a lot of work on dividend investing, value investing. And we helped validate their initial research, which got the company funded in ’04. The Professor invested and joined as an advisor. And they saw — I did all his research. And I’m now the second longest employee and have been there from the very early days. RITHOLTZ: Wow. You’re right behind Jono, who remains elusive and is a phantom figure who I can’t get to the studio, but we’ll talk about that later. So WisdomTree goes public, the two of you are affiliated with it. But I recall vividly Professor Siegel as a traditional market cap-weighted index sort of guru. SIEGEL: Yeah. RITHOLTZ: How did you find dividend weighting or evaluating, or other ways of looking at what some people terribly call smart beta? SIEGEL: Yeah. RITHOLTZ: But how did you find your way to those sorts of indexing, which is what WisdomTree has become known for? SIEGEL: And as Jeremy mentioned, the tech bubble itself was quite instrumental in saying, just a minute, it’s cap weighting at the very best. And Jon Steinberg had called me up and said, “We were thinking of fundamentally weighting instead of buy just market cap, which is the assumption of an efficient market hypothesis by either earnings or dividends. Would you do historical research on stocks to see whether it gives you a better risk-return trade-off?” And that’s where Jeremy came in because he was my right hand man, to say the least, in doing all this. We did it not only for the U.S., we did it internationally. We wrote a white paper that was associated with it. And when we did it, I said, “You know what, it is significantly better risk-return trade-offs.” It makes sense for me. I was formulating a theory called the noisy market hypothesis instead of the efficient market hypothesis, where this sort of fundamental indexing would do better. And Jono asked me and I said, “You know, I’ve spoken for dozens of companies, I’ve never really taken any official position.” But I said I would be willing to certainly consider being an advisor on WisdomTree. And I am a senior investment strategy advisor to WisdomTree since that beginning. RITHOLZ: So let’s not bury the lead, if market cap isn’t the most efficient way to organize an index, what is? SIEGEL: What is? Well, fundamentals. RITHOLTZ: More specific — SIEGEL: And more — well, we like dividends and/or earnings as the weighting procedure. RITHOLTZ: So value with a dividend? SIEGEL: Yeah. So — and yes. And what it does give you is a value tilt. There’s no question about that. And I remember telling Jono, “I’ll go with you on this, but we have to be inexpensive. I don’t want to charge 100 basis points.” RITHOLTZ: Right. SIEGEL: And he said, “I want as many people to use it. I want it to be inexpensive.” We came out with the lowest cost. But for now, it became more competitive since then. But when we came out, we’re really lowest — definitely lowest cost of all, I think, the fundamental weighted indexes. RITHOLTZ: And you guys prefer the name fundamental as opposed to smart beta? I think kind of smart beta has fallen out of — SCHWARTZ: It’s semantics and branding. We actually use the term modern alpha now. RITHOLTZ: Modern alpha? Okay. SCHWARTZ: So it’s, you know, more in line with what you’re trying to achieve and not just trying to be beta. You can say you’re being dividend beta — RITHOLTZ: I like dumb beta, but that’s just me. That’s my preference. I don’t — it’s so weird how these names sort of catch fire for a while and they go viral. We’ll talk a little bit about your recent viral TV appearance a bit. But before I get to that, I have to ask, so how do you two guys meet? You’re an undergraduate or graduate student? SCHWARTZ: Undergraduate. RITHOLTZ: Undergrad. So you’re just a Pennsylvania kid walking around. SCHWARTZ: Lucky place, right time. SIEGEL: Well, you know, I have to tell you actually, he invited me to be a talk to an — some student group, and I was so busy, it slipped my mind. And I felt so embarrassed. And he came up with a smile and said, “Oh, Professor Siegel, we can reschedule.” And I said, “This is a truly wonderful” — SCHWARTZ: I was worried. I was like, “Is he okay?” SIEGEL: Yeah, he was worried if I was okay. But I would say and I repeat this in the preface of this new edition, when he offered to work for me, we were working through some risk-return type of analysis. And I said, “Listen, this is going to take a little bit of time, but I want to get too familiar with the data.” I know this was a Friday. “Come in Monday, you know, familiarize yourself with the data. Come in Monday and we’ll discuss how to do it to get the results.” RITHOLTZ: I know the answer to this. Keep going. I love this story. SCHWARTZ: Yeah. I mean — and so he came in on Monday, and I said — SCHWARTZ: Probably Saturday. SIEGEL: Yeah, Saturday probably. I — you know, who knows. I was in on Saturdays. SCHWARTZ: It’s definitely on Saturday. SIEGEL: It was a Saturday. All right. Jeremy remembered better than I. And you know, I said, “Okay, let’s talk about it.” And he said, “Well, Professor Siegel, I do have, I think, all the answers that you want.” RITHOLTZ: Yeah. I’ve done this already. SIEGEL: I said, “You do?” And we looked — I looked them over, I said, “This looks right.” And I said, “Okay, I’ve got someone special here.” And I did. RITHOLTZ: You know, I know I have a lot of business professors who listen to this podcast and assign specific ones to their students. But that should be a lesson to somebody who says, “Hey, how do I stand out from the crowd?” When a professor says, “Come in, we’ll talk about the assignment,” and you come in and say, “I’ve already crunched the number. Here’s the data. Most of what you’ve written previously is right. Here’s a couple of little mistakes I caught.” That has to impress you, right? SIEGEL: Oh, definitely. It definitely impressed me. I mean, all through our relationship, you know, I mean, it’s amazing because he travels back and forth, living in Philadelphia and working in New York, although he doesn’t necessarily have to do it as much now because of, you know — RITHOLTZ: How much you’re splitting your time? SCHWARTZ: So we recently went to be fully remote first organization. And you talked about Jono, he was the most New York in-person. I mean, I tried to move to Miami, call it, 12, 13 years ago, he said, “No, you can’t move to Miami.” RITHOLTZ: Right. SCHWARTZ: That’s where I grew up. And we’re now completely remote. First, we find it to be very productive. We are — you know, we have global team. We have a team in Europe. My research team is almost 30 people, and almost half — you know, half of them in Europe. And we can be more interconnected doing — talking to them weekly in a different format — RITHOLTZ: Right. SCHWARTZ: — through Zoom or Teams that were on. So I don’t come up as much. But you do find the benefits. I was — in the office yesterday, we had six of our team members in the office, and you do find little things. There is the benefit of the collaboration that you find things you wouldn’t have found on a Zoom call because you’re bantering. RITHOLTZ: That’s the key word, though, is collaboration, to have everybody schlep into the office to sit and stare at a computer, or worse, do Zoom calls from the office is kind of pointless. SCHWARTZ: Yes. RITHOLTZ: But when you could get together face to face and have conversations, that’s a very different experience. So let’s talk a little bit about this book, which has really become a classic. Really, the first question I got to ask is, how do you go about updating and editing a book that really has stood the test of time for, geez, it’s almost 30 years. It’s on everybody’s must-have list, top 10 finance book, best investment books of all time. Do you approach updating this with a little bit of trepidation? What’s the experience like? SIEGEL: Well, you’re right. The first edition came out in May of 1994, using data up through 1992. So we have 30 years more of data. RITHOLTZ: So now it’s really stocks for the long — SIEGEL: And now, of course — RITHOLTZ: –stocks for the longer run. SIEGEL: This is the sixth edition. But it’s also — the fifth edition was written just after the financial crisis — a couple of years after the financial crisis and a lot of things had gone. I mean, the huge bull market, the COVID which has a whole chapter on. It’s up-to-date. I mean, it even to some data on the recent bear market, which most general books can’t get as far as we got. RITHOLTZ: The 2022 bear market? SIEGEL: A little bit is in there. RITHOLTZ: Really? SIEGEL: Yeah. A little bit is in there. You know, we don’t know if it’s exactly over yet. We’ll certainly talk about that later. But — RITHOLTZ: Jeremy will let you know. SIEGEL: Yeah. RITHOLTZ: We’ll nail — we’ll try to nail that. SIEGEL: But there was so much more — I had to say this is the biggest revision and the most new material of any of — there’s been almost five new chapters that have been added. And there’s been parts that have been added. I mean, you know, obviously, I deal with cryptocurrencies and Bitcoin, which was not an issue 10 years ago. You can feel how heavy it is. RITHOLTZ: I know. This is vaccinated and boosted. SIEGEL: Yeah. RITHOLTZ: This is really — not that the other books were skimpy, but you could tell, this has a little bit of a heft to it. So — SIEGEL: Yeah. For instance, in the past, I had one chapter basically on value and growth. There’s four chapters that are directly related to value and growth. RITHOLTZ: Really? SIEGEL: And I mean — and other factor investing which became very popular in the last 10 years. One section I had to do, another one was on real estate. I’ve never had anything on real estate returns before. I mean — and these are just some of the changes that I wanted to put in to make it more complete. RITHOLTZ: So let’s talk about some of these additions that you added. We’ll start with real estate. SIEGEL: Yeah. RITHOLTZ: Your friend Professor Bob Shiller of Yale puts out the Case-Shiller Housing Index. And I believe if you look at housing for the long run, it doesn’t do much better than inflation, does it? SIEGEL: So this is the interesting thing. The price doesn’t do much better than inflation, but there’s a return. RITHOLTZ: Well, you got to live somewhere to start, right? SIEGEL: Yeah. First of all, there’s two types. First of all, your it’s your own house residential. And then we now have and this is sort of the research we have, we have 50 years of REIT data that we never had before. So I felt it was long enough. I mean, it’s not the 220 years of stock market data. RITHOLTZ: Right. SIEGEL: But 50 years is still a good time. RITHOLTZ: Respectable. Sure. SIEGEL: So I did a very complete analysis on that. And let me just summarize I think the most interesting part. The return on the REIT index is virtually exactly the same as the S&P 500. Most people say, “Oh, my God, it’s the same and it’s so much more stable.” No. This is the interesting thing. People think real estate is more stable than the stock market. In every recession, except one and that was the tech bust of 2000, the drawdown of REITs was greater than the S&P 500. RITHOLTZ: That’s really interesting. You know, people don’t get a print on their house second by second. SIEGEL: Every second. Yeah, exactly. RITHOLTZ: So it feels stable because you’re not seeing prices. SIEGEL: Exactly. RITHOLTZ: But in reality, any day you want to put your house up for sale, you might get a different price then — SIEGEL: If you — I mean, you know, if times are bad and then you say, “I got to sell it the next five minutes,” you don’t want to look at that price. RITHOLTZ: That’s right. So you mentioned you have a couple of new chapters on value and growth. Up until this year, value seem to have been struggling against growth. SIEGEL: Yeah. RITHOLTZ: Certainly in the 2010s, growth wildly outpaced value. SIEGEL: That’s a euphemism, Barry, struggling. RITHOLTZ: I’m being polite. Well, you know, okay, so value — SIEGEL: It’s hard. It’s been hard. RITHOLTZ: I could say that, right? SIEGEL: Yeah. RITHOLTZ: Value and growth struggled. SIEGEL: It has mightily struggled. RITHOLTZ: Why do you think that is, given the historical advantage of value over everything? SIEGEL: And you know, I mean, everyone has said this way before me, and it was the worst 10 years, actually the worst 15 years in history. And we have value and growth back to 1926. There’s never been anything that has approached the underperformance. And I would say the major reason for that was the boom of the giant tech firms. RITHOLTZ: So it’s Apple. It’s Amazon. It’s Google. SIEGEL: Yeah. I mean, it’s used to be called FANG. They had gone out of favor obviously with the bear market or have shifted. And arguably, they went from an underpriced position in 2004 I’d say — RITHOLTZ: Right. SIEGEL: — or 2006, ’07, ‘08. They were underpriced probably at that time, given their tremendous further growth. And as is usual, they got overpriced at the top. But that — I’m not going to say the word hijack the market because that sounds like they did something illegal. RITHOLTZ: They had a lot more mindshare relative to — SIEGEL: I mean, you know, the percent that was wrapped up in that. And then, of course, your cap-weighted index, you were there in that. And it’s been virtually impossible for any value strategy to have overcome the great bull market of the big tech companies of the last 15 years which probably ended in, you know, early ‘20 or late 2021 or ’20, early ’21. RITHOLTZ: So the obvious question for both of you is, what does this suggest about near term future performance? And by near term, I mean, the next decade, because I’m talking to you guys, it’s normally we’re talking about centuries. But for the rest of the 2020s, what does this say about value versus growth? SCHWARTZ: Interestingly, this year, you’ve had a big correction, and a lot of the mega growth stocks and profit tech stocks collapse the hardest. RITHOLTZ: Right. SCHWARTZ: It’s interesting with — RITHOLTZ: Unprofitable tech stocks. SCHWARTZ: Unprofitable tech. RITHOLTZ: Right. SCHWARTZ: What’s interesting is even within value, there has been a big dispersion. So value is being growth by — like in the Russell Value versus Growth, call it, almost 2,000 basis points. But — RITHOLTZ: Geez, that’s giant. SCHWARTZ: But there’s even still high dividend stocks versus the traditional price-to-book value. It got like another 1,000 basis points. RITHOLTZ: Wow. SCHWARTZ: And so high dividend stocks are definitely doing well relative — so some of that is — well, what is a high dividend stock that’s not in the price-to-book index? It’s overweight energy stocks which had been — RITHOLTZ: Killed over the past year. SCHWARTZ: And then S&P cut down to 3%. Right? It was double digits 50. This is the challenges of cap weighting; it writes things down, will never add to the weight. RITHOLTZ: Sure. SCHWARTZ: But high dividend stocks, you know, in one of our baskets of high dividend DHS is 18% to 20% energy. And then that rebalances every December, it’s going to stay that way. RITHOLTZ: So a high dividend index, how has something like that done in 2022? SCHWARTZ: It’s up about 2,000 basis points ahead of the S&P. I mean, it’s basically largely flat. RITHOLTZ: Meaning if — meaning it’s flat while the S&P is down 20%, 25% — SCHWARTZ: Yeah. Yes. RITHOLTZ: — depending on what we see in there? SCHWARTZ: And still, where you say, well, you had all your outperformance and so what? It’s an 11 times earnings and 9% earnings yield. RITHOLTZ: So it’s still cheap 9%. SCHWARTZ: 9% earnings yield before rebalancing, and if you, you know — RITHOLTZ: 9? That’s a pretty substantial earning yield, isn’t it? SCHWARTZ: Versus the 1.5% TIPS rate with a real yield, bond yield, almost an 8% equity — probably an 8% equity premium on this basket. And so for the volatility of the markets, I do think it is still — you know, you can say decade ahead. All right. But the next three to five years, I think it is a very attractive place to be. RITHOLTZ: So the product that focuses on high dividend yielding, value stocks at WisdomTree, which funds would be covered by that? SCHWARTZ: DHS is the U.S. version. There’s a whole family. DHS is the U.S. DTH is the International. DEM is the emerging. You know, you go to the emerging markets, which has been way out of favor — RITHOLTZ: For years and years and years, and it’s been given. SCHWARTZ: This is like five P/E-type stocks. Now, this is — now, you’re going to China, China banks. You’re going to energy materials, commodities, cyclical stocks, but you’re getting close to double digit yields. RITHOLTZ: And what is the dividend yield now on something like DEM? SCHWARTZ: The average yield of the stocks, I mean, I want a stock to look at Petrobras in Brazil, almost a 40% dividend. RITHOLTZ: The problem is it’s in Brazil and people are .....»»

Category: blogSource: TheBigPictureOct 31st, 2022

3 Municipal Bond Funds to Buy Amid High Inflation

Below, we share with you three municipal bond funds, namely, AITFX, VWSTX and TXRAX. Each has earned a Zacks Mutual Fund Rank #1. Municipal bonds, or "muni bonds," comprise debt securities issued by various states, cities, counties and other governmental entities to raise money to build roads, schools and a host of other projects for public good. These municipal securities regularly pay interest payments, usually semi-annually, and pay the original investment or principal amount at the time of maturity. Interest paid on such bonds is generally exempted from federal taxes making them especially attractive to people in higher income tax brackets.Thus, risk-averse investors looking to earn a regular tax-free income may consider municipal bonds mutual funds. These mutual funds are believed to provide regular income while protecting the capital invested. While mutual funds from this category seek to provide dividends more frequently than other bonds, they offer greater stability than those primarily focusing on equity and alternative securities.­­Below, we share with you three municipal bond funds, namely, Invesco Limited Term Municipal Income Fund Class A2 AITFX, Vanguard Short Term Tax Exempt Fund VWSTX, and JPMorgan Tax Aware Real Return Fund TXRAX. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of funds, their Zacks Rank and past performance.Invesco Limited Term Municipal Income Fund Class A2 seeks income exempted from federal tax by investing most of its assets along with borrowings, if any, in investment-grade municipal debt securities that either pay interest that are excluded from gross income for federal income tax purposes, or do not produce income that will be considered an item of preference for purposes of the alternative minimum tax. AITFX advisors try to maintain a dollar-weighted average with effective portfolio maturity of five years or less.Invesco Limited Term Municipal Income Fund Class A2 has five-year annualized returns of 0.8%. As of the end of May 2022, AITFX had 64.98% of its net assets invested in Miscellaneous Bonds.Vanguard Short Term Tax Exempt Fund invests most of its net assets in municipal bonds within the top three credit ranking categories determined by nationally recognized rating agencies or by the advisors for comparable quality if unrated. VWSTX advisors expect to maintain a dollar-weighted average maturity of 1 to 2 years.Vanguard Short Term Tax Exempt Fundhas three-year annualized returns of 0.2%. VWSTX has an expense ratio of 0.17% compared with the category average of 0.60%.JPMorgan Tax Aware Real Return Fund seeks after-tax returns by investing most of its net assets in a portfolio of municipal securities whose interest payments are excluded from federal income tax. TXRAX creates inflation-protected instruments by investing in a combination of municipal securities along with inflation-linked derivatives such as Non-Seasonally Adjusted Consumer Price Index for all Urban Consumers (CPI-U) swaps.JPMorgan Tax Aware Real Return Fund has three-year annualized returns of 0.7%.David P. Rooney has been the fund manager of TXRAX since March 2015.To view the Zacks Rank and the past performance of all municipal bond funds, investors can click here to see the complete list ofmunicipal bond funds.Want key mutual fund info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >> FREE Report: The Metaverse is Exploding! Don’t You Want to Cash In? Rising gas prices. The war in Ukraine. America's recession. Inflation. It's no wonder why the metaverse is so popular and growing every day. Becoming Spider Man and fighting Darth Vader is infinitely more appealing than spending over $5 per gallon at the pump. And that appeal is why the metaverse can provide such massive gains for investors. But do you know where to look? Do you know which metaverse stocks to buy and which to avoid? In a new FREE report from Zacks' leading stock specialist, we reveal how you could profit from the internet’s next evolution. Even though the popularity of the metaverse is spreading like wildfire, investors like you can still get in on the ground floor and cash in. Don't miss your chance to get your piece of this innovative $30 trillion opportunity - FREE.>>Yes, I want to know the top metaverse stocks for 2022>>View All Zacks #1 Ranked Mutual FundsWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Get Your Free (TXRAX): Fund Analysis Report Get Your Free (VWSTX): Fund Analysis Report Get Your Free (AITFX): Fund Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksOct 28th, 2022

How To Classify The Different Types Of Annuities

Future retirees have a lot to look forward to. Besides traveling, spending time with family, or picking up new hobbies, the number of U.S. centenarians increasing from 53,000 in 2010 to over 90,000 in 2020. In addition, we’re likely to see 130,000 Americans celebrate their 100th birthday by 2030, according to the U.S. Census Bureau. […] Future retirees have a lot to look forward to. Besides traveling, spending time with family, or picking up new hobbies, the number of U.S. centenarians increasing from 53,000 in 2010 to over 90,000 in 2020. In addition, we’re likely to see 130,000 Americans celebrate their 100th birthday by 2030, according to the U.S. Census Bureau. Considering that, what does it mean for how we fund retirement? It’s essential to invest in a nest egg that will last us a lifetime, as we have a lifetime ahead of us and more passions to pursue. With that said, the right retirement annuity can help you prepare for a long and fulfilling life in retirement. .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Ray Dalio Series in PDF Get the entire 10-part series on Ray Dalio in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q2 2022 hedge fund letters, conferences and more   Find A Qualified Financial Advisor Finding a qualified financial advisor doesn't have to be hard. SmartAsset's free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you're ready to be matched with local advisors that can help you achieve your financial goals, get started now. What Are Annuities? Annuities are contracts between you and an insurer guaranteeing lifetime income after retirement. You can pay the insurer a lump sum or a series of premium payments in exchange for retirement income payments. You will begin to receive those payments based on when you plan to retire and what type of annuity you purchase. Investing in annuities can help you ensure that you will not outlive your money when planning your retirement income. Regular payments are also convenient since once you choose your annuity, the payments will be made according to your contract terms. Annuity contracts have two stages. During the accumulation stage, you will save for retirement and potentially grow your funds as you build your annuity’s cash value. When you’re ready to begin spending the money in retirement, you’ll begin the distribution phase. In annuities, this is called annuitization. But, it’s simply converting the annuity into regular payments. Depending on the type of annuity you purchase, you will build retirement funds and cash value (accumulation) and convert those funds into guaranteed income (distribution). Payout Options for Annuities – When and How Long You Receive Payments Annuities can be defined as immediate or deferred payments, depending on their payout options. Basically, these describe how you’ll get your annuity income after you pay your premiums. Immediate Annuity For people who need a regular income stream in retirement right now, immediate annuities are the best option. After receipt of the investment, payments begin within one to twelve months. Owners pay the insurance company a lump-sum amount (premium) to guarantee monthly payments to the annuitant for the rest of their lives or for a specified period. Due to the inclusion of principal and interest, payments are typically higher than other annuities, offering a favorable tax treatment. Purchasing an immediate annuity can supplement Social Security and pension income, which are rarely sufficient to cover retirement expenses. It can also help to pay for healthcare premiums. Additionally, these are popular among retirees and pre-retirees who need a lifelong income stream that is higher than average but are willing to sacrifice the principal. Deferred Annuity Deferred annuities are short-term investment products offered by life insurance companies to help people prepare for retirement. These annuities offer tax-deferred growth over time, making them attractive to people who value the ability to grow their capital over time. Basically, these are for people who want to create a ladder of income over time rather than a guaranteed income now. As an example, they could desire to work in retirement. But know that eventually, they will stop working and will need annuity income at that point. Until retirement, they “defer” the steady flow of income. During times of low-interest rates, they are attractive alternatives to traditional bank savings products because they tend to offer higher interest rates. Rates on deferred annuities are usually locked in for a specified period, known as the guarantee period. These periods typically last one, three, five, or seven years. Therefore, deferred annuities can be a good choice in times of stock market volatility due to the rate guarantees. Also, they offer excellent protection. And, to sweeten the pot, the growth of assets is also earmarked for future healthcare expenses. How Long Annuities Are Paid by Type Lifetime Annuity In many ways, a lifetime annuity functions as a personal pension plan. The reason? They provide lifetime income and are sometimes referred to as “single life,” “straight life,” or “non-refund.” However, additional payments can be made for a spouse or dependent. In this case, the annuity is known as “Joint and Survivor.” This annuity generally provides income for life, although some may offer payments for a specified period of time. In retirement, a lifetime annuity can be used as a supplement to Social Security checks, 401(k) plans, or pension funds provided by companies. Even after the money you contributed to the annuity is exhausted, you can still receive income from it for the rest of your life. They may be useful for you if you wish to establish a regular and guaranteed income stream. Your beneficiaries will receive the payment option you chose when you purchased the annuity if you pass away before all the funds have been used up. In some cases, you may not be able to distribute anything to your dependents or other beneficiaries. As a result, you will receive an income you cannot outlive. A straight life annuity can make sense for you if you don’t intend to use the money invested for dependents or other beneficiaries. Fixed-Period Annuity Fixed-period annuities, or term-certain annuities, payout for a specific period of time. Payments from this type of annuity are spread out over a fixed period. In other words, you get payments for a specified period with this option. Regardless of whether you’re still alive, you won’t get payments after that. This contrasts with lifetime annuities, where payments are made throughout your lifetime. Time periods can range from five to twenty years or even longer. There are no health or age restrictions on annuities like these. However, fixed-period annuities earn little to no interest. In addition, you may outlive the fixed period, which is the biggest risk. Annuities by Growth – How Your Annuity Will Grow There are three main types of growth annuities: fixed, variable, and fixed indexed. Annuities of this type allow you to preserve your investment while gaining higher returns. Fixed Annuity The simplest type of annuity is the fixed one. If you agree to a specific length of the guarantee period, the insurance company will guarantee a fixed interest rate on your investment. For example, the interest rate could last for a year or the whole duration of your guarantee. If your contract is over, you can either annuitize it, renew it, or move your money into another retirement account or annuity. Your monthly payments will be exactly the same because fixed annuities are based on a guaranteed interest rate, which does not fluctuate based on market volatility. However, your payments will also not keep up with inflation if there is a potential upswing in the market. Therefore, annuities should not be used for retirement income generation but for growing income during the accumulation phase. A fixed annuity has the disadvantage that it is guaranteed to earn a lower minimum rate of return than its counterpart. However, it also has a maximum rate of return. Multi-Year Guaranteed Annuity (MYGA) MYGAs are types of fixed annuities that are guaranteed for a specified period. It offers a fixed interest rate for a specified period – usually three to 10 years. In general, MYGAs are most suitable for retirees looking to defer taxes while ensuring a return. Variable Annuity Variable annuities are tax-deferred annuities that combine the benefits of a 401(k) plan and an annuity contract that guarantees an income for a lifetime. In time, you may be able to keep up with inflation or even surpass it with your sub-accounts. The performance and risk of sub-accounts are similar to those of mutual funds. Therefore, you will receive a higher payment if your subaccounts do well or a smaller payment if they do not. In addition to a death benefit, variable annuities also offer an income rider that guarantees income to your beneficiaries as well. Suppose you’ve maxed out your Roth IRA or 401(k) contributions and would like the security and comfort that comes with guaranteed income. In that case, a variable annuity can be a great addition to your retirement income plan. Again, this type of annuity can be risky due to the performance of selected investments. And, it can have high fees compared to other types of annuities. Fixed-Index Annuity Essentially, these are fixed annuities with a variable interest rate added to your contract value if the underlying market index, such as the S&P 500, rises. As a result, they often provide a market-driven upside possibility and a guaranteed minimum income. The downside is the limitation of upside potential by participation rates, caps, or spreads – all ways to reduce your return on a rising market. Due to this, buyers of these annuities cannot keep up with market changes. In addition to providing principal downside protection, these products appeal to retirees and pre-retirees who want to participate in potential market gains conservatively. One more thing. Your annuity payments are calculated based on interest rate risk. A low level of risk yields predictable payments. On the flip side, expectations could be boosted by higher risk. Annuities by Premium – Which is Best for You? Deferred annuities can be purchased with a lump-sum premium or in installments. Flexible-Premium Annuity You can purchase a flexible premium annuity by paying premiums over time. These are only available as deferred annuities, in which you make payments over a long period and receive a payout later. Depending on the annuity company, you may be given the option to contribute without following a schedule or making minimum payments. Single premium immediate annuity (SPIA) In less than 12 months, you can begin collecting a steady income stream after making a single lump-sum payment. Alternatively, it is known as an income annuity or immediate annuity. People near retirement prefer them, accounting for only about 10% of annuities sold annually. Other Annuity Choices Besides the most common types, there is a wide variety of annuities. Again, you can customize these to suit your specific needs and long-term financial goals. In addition to traditional IRAs and 401(k) plans, qualified retirement accounts offer tax breaks. And the payment of an annuity can also be continued after your death if you choose to do so. Life-only annuities. Also known as single life annuities or straight life annuities, these pay a lifetime income to the owner alone. However, they do not pay income to a spouse or other beneficiary. Long-term care annuities. If you need long-term care in the future, these are tax-deferred annuities with a rider. Life annuities with period certain annuities. For a set period of years, these provide lifetime income. Any remaining payments will be made to your spouse or other beneficiaries upon your death. Joint and survivor annuities. So long as one spouse is alive, these make monthly payments. Group annuity contracts. Employees receive these benefits as part of their retirement benefits. Finding the Right Annuity Type for You Every annuity type has its own pros and cons. Depending on your current financial situation, different types of annuities may be better suited to helping you achieve your long-term financial goals. Additionally, factors like years until retirement, risk tolerance, and retirement goals must be taken into account. The number of years until retirement. Investing in a deferred annuity may be the best option for those who don’t require current income and wish to accumulate money tax-deferred. Annuities with deferred payments come in several varieties, including fixed, fixed-deferred, and variable. With deferred annuities, you can accumulate significant assets before retiring. The type of deferred annuity you choose will depend on how much risk you can tolerate. Tolerance for risk. To determine your annuity risk tolerance, you should consider two main factors: How close you are to retirement and how much money you currently have. A person near retirement has a lower risk tolerance than someone who isn’t planning to retire anytime soon. The best bet in this situation may be a fixed annuity. On the other hand, a variable annuity may be a better option for you if retirement is a distant dream, as you have more time to recoup losses. Furthermore, you may not want to risk your assets in a high-risk annuity if you have low-to-moderate assets. A variable or fixed indexed annuity might be the right option for adventurous investors with enough money. In either case, you should define your retirement goals and understand your risk tolerance before purchasing an annuity. Retirement goals. Your retirement goals might be the most important factor when choosing an annuity. For example, fixed immediate annuities are ideal for those who prefer to live at home and want to cover basic living costs with a guaranteed income stream in retirement. For world travelers with significant assets, you may want to defer payouts to let your money earn while you travel. You may benefit from a variable deferred annuity if that is the case. As you begin your retirement journey, there are annuities available that can meet your specific needs. However, it is possible to compare several different annuities with a financial professional’s help to determine which is best suited for your needs. FAQs Why buy an annuity? As an immediate payment (lifetime annuity), annuities can guarantee a lifetime income stream. There aren’t many financial instruments that can offer this kind of value. You can accumulate funds tax-deferred when you purchase a deferred annuity. Annuities can offer rates of return that far exceed those of savings accounts and CDs. Annuities are a smart investment choice for diversified portfolios due to their tax deferral benefits and guaranteed lifetime incomes. In what ways are annuities classified? In terms of annuity types, there are several ways to categorize them. An example is the types of annuities based on payout, growth, and premium options. When buying annuities, people tend to consider these factors the most important. What are the main types of annuities? Annuities can be paid out immediately or deferred, depending on how you want to receive the money. When you pay a lump sum premium for a single premium immediate annuity (SPIA), a steady income stream is immediately generated. With deferred annuities, you can pay premiums over time while receiving payments months or years in the future. Annuities that grow over time are called growth annuities. Your contributions are guaranteed a fixed interest rate over a certain period with fixed annuities. A variable annuity pays a return based on the performance of its subaccounts – the funds invested with your premium payments. Market indexes such as the S&P 500 and Dow Jones Industrial Average are used to calculate fixed-indexed annuity payments. The type of annuity you choose can also depend on how you want to pay your premiums. The amount and frequency of premium contributions can be adjusted with a flexible premium annuity. In a single premium immediate annuity (SPIA), a single premium is required, and payments begin immediately. What is the best type of annuity product? There is no one-size-fits-all annuity. Annuities should be chosen based on your current financial situation and long-term financial goals. In order to find the annuity that best fits your goals and needs, you must compare different annuities. When choosing an annuity, you should consider how you will pay, what kind of growth and payout you are looking for. How do you fund your annuity? Annuities can be purchased using qualified or non-qualified funds. A qualified annuity can be purchased with pre-tax dollars. In other words, this is income that hasn’t been taxed yet. An individual retirement account (IRA) or 401(k) is the most common source of these funds. Also, IRS-mandated required minimum distributions (RMDs) apply to qualified annuities. At 72, qualified annuity owners must begin receiving distributions from their accounts. Alternatively, you can use non-qualified dollars to fund your annuity. In the case of non-qualified annuities, they are post-tax. So your annuity will be funded with income you’ve already paid taxes on, perhaps from savings accounts or CDs. In relation to non-qualified dollars funded annuities, there are no restrictions regarding when you must take distributions. Article by John Rampton, Due About the Author John Rampton is an entrepreneur and connector. When he was 23 years old, while attending the University of Utah, he was hurt in a construction accident. His leg was snapped in half. He was told by 13 doctors he would never walk again. Over the next 12 months, he had several surgeries, stem cell injections and learned how to walk again. During this time, he studied and mastered how to make money work for you, not against you. He has since taught thousands through books, courses and written over 5000 articles online about finance, entrepreneurship and productivity. He has been recognized as the Top Online Influencers in the World by Entrepreneur Magazine and Finance Expert by Time. He is the Founder and CEO of Due......»»

Category: blogSource: valuewalkOct 6th, 2022

"The Crisis Is Upon Us" - Macleod Warns "We Have Never Seen Anything Like This"

'The Crisis Is Upon Us' - Macleod Warns 'We Have Never Seen Anything Like This' Authored by Aladair Macleod via GoldMoney.com, Gold has never been more attractive... In our lifetimes, we have not seen anything like the developing economic and financial crisis. Rising interest rates are way, way behind reflecting where they should be. Interest rates have yet to discount the continuing loss of purchasing power in all major currencies. The theory of time preference suggests that central bank interest rates should be multiples higher, to compensate for the current loss of currency purchasing power, enhanced counterparty risk, and a rapidly deteriorating economic and monetary outlook. There is no doubt that the majority of investors are not even aware of the true scale of danger that interest rates pose to their financial assets. Some wealthier, more prescient investors are only in the early stages of beginning to worry. But if you liquidate your portfolio, you end up with depreciating cash paying insufficient interest. What can you do to escape the fiat currency trap? This article argues that having everything in fiat currencies is the problem. The solution is a flight into real money, that is only physical gold — the rest is rapidly depreciating fiat credit. Owning real money is the only way to escape the calamity that is engulfing our current economic, financial, and fiat currency world.  Avoiding risk to one’s capital From conversations with family and friends, one detects an uneasy awareness of increasing risk to investments. There are two broad camps. The first and the majority are only aware that interest rates are rising, and their stocks and shares are falling in value but fail to make the connection fully. The second camp is beginning to worry that there’s something very seriously wrong. Investors in the first camp have usually delegated investment decisions to financial advisers, and through them to portfolio managers of mutual funds. They have taken comfort in leaving investment decisions to the experts, and besides the odd hiccup, have been rewarded with reasonably consistent gains, certainly since the early noughties, and in many cases before. They trust their advisers. Meanwhile, their advisers are rewarded by the volume of assets under their management or by fees. Both methods of reward ensure that the vast majority of professional managers and advisers are perennially bullish, further justified by that long-term bullish trend.  This leaves the majority of investors being led into believing that falling financial asset values represent a buying opportunity. After all, their experience for some time has been that it is wrong to sell when markets fall, because they have always recovered and gone higher. And this is the approach promoted by the majority of professional financial service providers because they are always bullish. The other far smaller camp is comprised of those who think more for themselves. They are beginning to make a connection between rising interest rates and falling markets but are badly underestimating the extent to which interest rates should rise.  This camp knows that the sensible thing to do when interest rates rise materially is to sell financial assets. They know that investing in physical property, tangible assets, is equally dangerous because at the margin prices are set by mortgage interest rates which are now rising. But they equally find that just sitting on cash is an unattractive proposition, with consumer prices rising and chipping away at its purchasing power. So, what is to be done? Just leaving it in the bank pays derisory interest. And besides, the proceeds of liquidated portfolios usually exceed government deposit guarantees, which means taking onboard the risk that banks might fail. There are things that can be done, such as investing in short term government bonds as a temporary solution, and perhaps buying some inflation-linked government bonds (TIPS). Other than investing in TIPS, the loss of purchasing power problem remains unresolved. And increasingly, these savvy investors are now waking up to currency risk, particularly if they are British, European, or Japanese. The cost of investment safety in nearly all currencies is rising relative to the dollar. I tell these people that the problem is simple: they have all their eggs in a fiat currency basket. The black and white solution is to get out of fiat by selling financial assets and the fiat cash raised by hoarding real money, that is physical gold in bar and coin form. The argument usually falls on deaf ears, because people only understood the monetary role of gold before the Second World War. That generation has mainly passed away. Why gold is so important has to be explained all over again to a sceptical audience. We then meet two further barriers raised by the sceptics: gold yields nothing, when investors have been used to receiving dividends and interest. And if gold is the answer, why is it performing so badly? These questions will be addressed. But all is at stake. Driven by interest rates rising even more and as the bear market continues, investors relying on investment managers and financial advisers will lose nearly everything.  A seventies redux Global economic conditions today are strikingly similar to UK financial markets in late-1972 and early 1973. Previously, in the autumn of 1970 the new Chancellor of the Exchequer, Tony Barber, had come under pressure from Prime Minister Edward Heath to stimulate Britain’s economy by running an inflationary budget deficit, combined with a deliberate suppression of interest rates from 7% to 5%. Heath was a Keynesian disciple. And in those days, the Bank of England was under the direct command of Heath’s government, its so-called independence only arriving far later.  The rate of price inflation rose slightly from 6.4% in 1970 to 7.1% in 1972. The inflationary consequences of the Barber boom and the reduction of interest rates to negative real values were beginning to bite. Meanwhile, investors had enjoyed an equity bull market. Consumer price inflation then began to rise in earnest. In 1973 it was 9.1%, in 1974 16%, and in 1975 a staggering 24.2%. All this is being replicated today — we are probably where Britain was in late-1972. While the dramatic increases in the rate of price inflation were unforeseen in 1972, being far greater today the stimulus of budget deficits and suppressed interest rates is having a more rapid effect. The gap between official interest rates and the rate of price inflation is magnitudes greater, with the Bank of England’s base rate at 1.75% and consumer prices rising at 8.6%. Even the Bank expects significantly higher CPI rates, with independent estimates forecasting yet higher CPI rates in the new year. Similar stories are to be found worldwide. The comparison with the UK in the early 1970s suggests the inflationary and interest rate consequences today are likely to be even more dramatic for financial assets and for the currencies themselves. In May 1972, the FT30 Index (the headline measure of share prices at that time) peaked at 534, and a year later had already declined significantly, as interest rates began to rise. In late-October 1973 the bubble in commercial office property began to implode. The proximate cause was the rise in short-term interest rates from 7.5% in June 1973 to 11.5% in July, and 13% in November. Consequently, banks which were lending to commercial property speculators collapsed in the notorious secondary banking crisis. And the FT30 Index continued to decline until early-January 1975, losing 74% from the May-1972 peak. Similarly, this is beginning to play out today. What’s happening now differs in some key respects from the UK in the early seventies. From negative and zero starting points, interest rates have much more substantial increases in prospect. The gap between bond yields and consumer price inflation is now far larger in the US, EU, and UK than anything seen in the early seventies. It suggests the consequences of rising interest rates today are likely to be far more financially violent than that experienced in the UK between May 1972 and January 1975. We will be lucky if equity markets lose only 74% this time. But overall, the lesson is clear: sharply rising interest rates are lethal for investors. We now turn to gold. Bretton Woods having been suspended in August 1971, the price of gold in sterling rose from £17.885 per ounce at that time when sterling interest rates were 6%, to over £40 when interest rates were raised to 13% in November 1974. The lesson learned is that the best hedge out of an inflation-driven collapse of conventional investments is gold. The common belief that rising interest rates are bad for gold because it has no yield is disproved. Furthermore, the evolution of investment services since the 1970s is worth noting. In those days, a good stockbroker was skilled at steering his clients through the dangers to their wealth from market uncertainties. Admittedly, his clients were never the pre-packaged masses, but were typically individuals with personal wealth whom he personally knew. Today, passive investors are little more than cannon fodder for a system that absolves itself of any responsibility for outcomes. They are a majority that always get wiped out by delegating all decision making to the so-called experts.  Only those who think for themselves have come to understand that there is something seriously wrong. Investment risks are escalating, and investors must take proactive steps to protect their capital. Unlike their contemporaries in the 1970s who were not so intellectually corrupted by Keynesianism, they have less knowledge of gold, and why it performed so well as an asset in that decade. They need to have a crash course in understanding money and credit, and the distinction between the two. Gold is money — everything else is credit So said John Pierpont Morgan in his testimony before Congress in 1912. He was not expressing an opinion, but stating a legal fact, a legal fact which is still true to this day. Despite all attempts by the authorities to persuade us otherwise, despite periods of bans on ownership and Roosevelt’s outrageous confiscations of gold bullion and coin from the people he was elected to represent, the legal position of gold being money and the rest only credit remains the case. It is why central banks accumulate and retain large reserve balances in gold, and why they refuse to part with them. It is why in official circles the topic is taboo. Ever since the end of barter many millennia ago, transacting people have used media whose primary function was to allow an exchange of goods. Over time, many forms of money were tried and discarded, leaving metals, particularly copper, silver, and gold universally regarded as most durable and capable of being rendered into recognisable coins of a standard weight. Our coins today reflect this heritage. While not containing the original metals, they often reflect the metals’ colours: the highest value looking like gold, intermediate silver, and the lowest copper.  A few thousand years passed before the Roman jurors ruled on monetary matters. Roman jurists were independent from the state. And despite many attempts by emperors and their henchmen to overturn their rulings, their rulings were robust and survived. Jurisprudence, or the science of law, became an independent profession in the third century B.C. Five centuries later, in the second century A.D., the classical era began. From then onward, the legal solutions offered by independent jurors received such great prestige that the force of law was attached to them.  Of particular interest to our subject were the rulings of Ulpian, who defined the status of moneyin the context of banking. On “depositing and withdrawing”, Ulpian starts with a definition: A deposit is something given another for safekeeping. It is so called because a good is posited [or placed]. The preposition de intensifies the meaning, which reflects that all obligations corresponding to the custody of the good belong to that person.[i] He then makes a distinction between a regular deposit; that is a specific item to be retained in custody, and an irregular deposit of a fungible good, stating that: …if a person deposits a certain amount of loose money, which he counts and does not hand over sealed or enclosed in something, then the only duty of the person receiving it is to return the same amount.[ii] Ulpian’s rulings in the early third century still define money and banking today. They were consolidated in The Digest, one of four books in the Corpus Codex Civilis established by order of the Emperor Justinian in about 530AD. Roman law became the basis of all significant European legal systems, and through Justinian, Ulpian’s rulings continue to apply.  In Britain’s case, Rome had left long before Justinian’s emperorship, so Roman rulings were not an explicit part of common law. However, when common law and the Court of Chancery merged in 1873 the distinction between custody deposits and mutuum contracts (when fungible goods such as money coins are transferred to another’s possession under a commitment to return a similar quantity) became unquestionably recognised, fully validating what had been common banking practice since the seventeenth century. Of the three forms of metallic money, gold became the standard in Britain in 1817, and all significant currencies which had not done so before became exchangeable for gold in preference to silver in the 1870s. It is therefore correct to say that today, gold is the only form of true money in our monetary system, while silver’s monetary role is merely dormant. The rest is credit. Bank notes issued by central banks, are the primary form of credit. No longer exchangeable for gold coin, they are simply issued out of thin air. In addition to the government’s general account with its central bank, in modern times they have started issuing other forms of credit, all of which are provided through commercial banks and reflected in commercial bank credit, such as payment for securities bought from investing institutions which do not have accounts at the central banks. This is the payment mechanism for quantitative easing. Commercial bank credit makes up all the circulating media which are not banknotes, typically representing over 95% of commercial transaction settlements. Bank credit can be expanded at will. The chart below shows how the sum of bank notes and commercial bank credit in US dollars measured by M3 has increased since 1970.  Colloquially, this is monetary inflation. More correctly, it is credit inflation because true money, that is gold, is almost never used in transactions. Since the suspension of Bretton Woods in 1971, the amount of M3 credit has increased by 33 times. At the same time, the price of gold has increased by 38 times from $42.22 per ounce, the rate at which it was fixed to the dollar before Bretton Woods was suspended. In other words, real money, which is gold in metal form, has fully compensated for the devaluation of the dollar due to the increase in dollar credit since 1971, though the credit expansion since Roosevelt devalued the dollar against gold is supplemental to these figures. There is more on this later in this article. If you bought gold when Nixon suspended the Bretton Woods agreement, you would have preserved the purchasing power of your money compared with owning bank notes or possessing instant withdrawal bank deposits. There were ups and downs in the relationship between gold and paper currency, but to make it clear, gold coin or bullion can only be compared with cash and non-yielding bank deposits. It cannot be compared with a yielding asset. Gold is not an investment. But owning bonds, equities, or residential property is most definitely investing for a return. Normally, it makes sense to spend and invest instead of holding onto cash, whether that cash be true money or bank credit. After all, the reason to maintain money and paper credit balances is to enable the buying and selling of goods and services, with any surplus being put to use by investing it. But it must be understood that in these times of rapidly depreciating currency, an investment must also overcome the hurdle of currency depreciation. When stocks are soaring and they pay dividends, the hurdle can be overcome. However, we must introduce a note of caution: when stocks are soaring, it is generally on the back of bank credit expansion which leads to a temporary fall in interest rates, a situation which is reversed in time. The next chart puts residential property prices in context. Priced in sterling, London property prices have soared 114 times since 1968. In true money, which is gold, they have only risen 29%. But the average property buyer buys a house with a mortgage, putting down a partial payment, while paying off the mortgage over time, typically twenty or thirty years. His capital value will have multiplied considerably more than the 114 times reflected in the index, against which mortgage payments including interest will have to be offset to properly evaluate the investment. Furthermore, the utility of the accommodation afforded is not allowed for but is an additional benefit of property ownership. Taking currency prices, mortgage finance, and yield benefits into account, investment in a home in London has proved to be a better use of capital than hoarding gold, but not by as much as you would think. As remarked earlier in this article, at the margin property values depend on the cost of mortgage finance, which is tied to interest rates. So, what is the outlook for interest rates? Understanding interest rates There is a widespread assumption that interest rates represent the cost of borrowing money. In the narrow sense that it is a cost paid by a borrower, this is true. Monetary policy planners enquire no further. Central bankers then posit that if you reduce the cost of borrowing, that is to say the interest rate, demand for credit increases, and the deployment of that credit in the economy naturally leads to an increase in GDP. Every central planner wishes for consistent growth in GDP, and they seek to achieve it by lowering the cost of borrowing money. The origin of this approach is strictly mathematical. First published in 1871, William Stanley Jevons in his The Theory of Political Economy was one of the three original proposers of the price theory of marginal utility and became convinced that mathematics was the key to linking the diverse elements of political science into a unified subject. It was therefore natural for him to treat interest rates as the symptom of supply and demand for money when it passes from one hand to another with the promise of future repayment. Another of the discoverers of the theory of marginal utility was the Austrian Carl Menger, who explained that prices of goods were subjective in the minds of those involved in an exchange. With respect to interest, Menger was the probably the first to argue that as a rule people place a higher value on the possession of goods, compared with possession of them at a later date. Being the medium of exchange, this becomes a feature of money itself, whose possession is also valued more than its possession at a future date. The discounted value of later ownership is reflected in interest rates and is referred to by Mengers’ followers as time preference. He argued that the level of time preference was fundamentally a human choice and therefore could not be predicted mathematically. This undermines the assumption that interest is simply the cost of money because human preferences drive its evaluation. Eugen von Böhm-Bawerk, who followed in Menger’s footsteps saw it from a more capitalistic point of view, that a saver’s money, which was otherwise lifeless, was able to earn the saver a supply of goods through interest earned from it.[iii] Böhm-Bawerk confirmed that interest produced an income for the capitalist and to an entrepreneur was a cost of borrowing. But he agreed with Menger that the discounted value of time preference was a matter for the saver. Therefore, savers are driven mainly by time-preference, while borrowers mainly by cost. In free markets, this was why borrowers had to bid up interest rates to attract savers into lending instead of consuming. In those days, it was unquestionably understood that money was only gold, and credible currencies and credit were gold substitutes. That is to say, they circulated backed by gold and were freely exchangeable for it. Gold and its credit substitutes were the agency by which producers turned the fruits of their labour into the goods and services they needed and desired. The role of money and credit was purely temporary. Temporal men valued gold as a good with the special function of being money. And as a good, its actual possession was worth more than just a claim on it in the future. But do they ascribe the same time preference to a fiat currency? To find out we must explore the nature of time preference further as a concept under a gold standard and also in an unanchored currency environment, in order to fully understand the future course of interest rates. Time-preference in classical economics Time-preference can be simply defined as the desire to own goods at an earlier date rather than later. Therefore, the future value of possessing a good must stand at a discount compared with actual possession, and the further into the future actual ownership is expected to materialise, the greater the discount. But instead of pricing time preference as if it were a zero-coupon bond, we turn it into an annualised interest equivalent.  Obviously, time preference applies primarily to lenders financing production, which requires the passage of time between commencement and output. Borrowed money must cover partly or in whole the acquisition of raw materials, and all the costs required to make a finished article, and the time taken to deliver it to an end-user for profit.  The easiest way to isolate time-preference is to assume an entrepreneur has to borrow some or all of the financial resources necessary. We now have to consider the position of the lender, who is asked to join in with the sacrifice of his current consumption in favour of its future return. The lender’s motivation is that he has a surplus of money to his immediate needs and instead of just sitting on it, is prepared to deploy it profitably. His reward for doing so is that by providing his savings to a businessman, his return must exceed his personal time-preference.  The medium for matching investment and savings is obviously credit. The financing of production above all else is what credit facilitates. We take this obvious function so much for granted and that interest is seen to be a cost of production that we forget that interest rates are actually set by time-preference.  Intermediation by banks and other financial institutions further conceal from us the link between interest and time-preference, often fuelled by the saver’s false assumption he is not parting with his money by depositing it in a bank.  When a saver saves and an entrepreneur invests, the transaction always involves a lender’s savings being turned into the production of goods and services with the element of time. For the lender, the time preference value for which interest compensates him must always exceed the loss of possession of his capital for a stated period. But with credit anchored to sound money, the level of interest compensation demanded by savers for time preference is strictly limited. The case for fiat currencies is radically different. Time preference and fiat money So far, we have considered time preference measured in a currency which is credibly tied to money, legally gold. Under a fiat currency regime, the situation is substantially different because of fiat currency’s instability. The ubiquity of unbacked state currencies certainly introduces uncertainty over future price stability and the value of credit. Not only is the saver isolated from borrowers through the banking system and often has the misconception that his deposits are still his property (in which case time preference does not apply), but his savings are debased through persistent inflation of the currency. The interest he expects is treated as an inconvenient cost of production, to be minimised. Interest earned is taxed as if it were the profit from a capitalist trade, and not compensation for a temporary loss of possession of his property. It is not surprising that with the saver regarded as a pariah by Keynesian economists, little attention is paid to time preference. But if savers were to collectively realise the consequences of this injustice, they would demand far higher interest rate compensation for losing possession of their capital. They would seek redress for loss of possession, monetary depreciation, and counterparty risk, all to be added and grossed up for taxes imposed by the state. That will not happen until markets take pricing of everything out of government control. There is an old adage, that in the struggle between markets and the desires of governments markets always win in the end. It is essential to understand that if the driving forces behind time preference for savers are not satisfied, eventually they will dump their credit liquidity in favour of real money, which is only gold and possibly silver, and for goods that they may need in future. The seventy or so recorded hyperinflations of fiat currencies have demonstrated that when currency and credit lose their credibility, they lose all their purchasing power. As these circumstances unfold, the market response is to drive interest rates and bond yields substantially higher, because time preference is failing to be satisfied. If the authorities resist by suppressing interest rates, the currency simply collapses. And then there is no medium to value financial assets, other than by gold itself. The consequences of contracting bank credit So far, this article has only touched on the important role of bank credit in the economy. Bank credit finances virtually all the transactions that in aggregate make up GDP. Banks are now contracting their credit, being dangerously leveraged in the relationship between total assets and balance sheet equity at a time of failing economies.  The consequences for GDP are widely misunderstood. It is commonly assumed that an economic downturn is driven by higher interest rates and their impact on consumer demand. That is putting the cart before the horse. If banks withdraw credit from the economy, it is a mathematical certainty that nominal GDP falls. It is the withdrawal of credit that is responsible for downturns in GDP. It is the rest that follows. There can be little doubt that with balance sheet leverage averaging over twenty times in the Eurozone and Japan, and with some British banks not far behind, that the global contraction of bank credit will be severe. The effect on less leveraged banking systems, such as that of the US, will be profound due to the international character of modern banking and finance. World-wide, businesses are set to become rapidly insolvent due to credit starvation and bankruptcies will become the order of the day.  Central banks are facing an increasing dilemma, of which the investing public are becoming increasingly aware. Do they intervene with unlimited expansion of their credit to replace contracting commercial bank credit, or do they just stand back and let these distortions wash out? Effectively, it is a choice between undermining their currencies even more or allowing them to stabilise. They will almost certainly attempt to mitigate the effects of commercial bank credit being withdrawn. Attempts by central banks to control the expansion of their own balance sheets through quantitative tightening will be abandoned, and quantitative easing reintroduced instead. And just as the expansion of commercial bank credit reduces interest rates below where they would normally be, the withdrawal of commercial bank credit tends to increase interest rates, as borrowers struggle to find any available credit. There’s no point in central bankers turning to central bank digital currencies for salvation because there is too little time to introduce them. Since the 1980s, having moved progressively towards expanding credit for purely financial activities and taking on financial collateral against loans, the contraction of bank credit is bound to have a profound effect on financial markets as well. Collateral will be sold, market-making curtailed, and derivative positions reduced. Driven partly by Basel 3 regulatory requirements, banks will amend their activities to prioritise balance sheet liquidity. Corporate bond holdings will be sold in favour of short-term government treasury bills. Long-term government debt will be sold for shorter maturities.  There can be little doubt that banks contracting credit exposed to financial markets is far easier and quicker than withdrawing credit for GDP-qualifying transactions. And just as the expansion of commercial bank credit for purely financial activities since the 1980s has been substantial, its contraction will not be trivial. The effect on valuations is set to repeat the consequences of bank failures in the Wall Street crash of 1929-32, when the Dow lost 89% of its value. There is also a symbiotic effect between the contraction of bank credit in the GDP economy and financial markets, with the losses and bankruptcies of the former further depressing confidence in the latter. Unless central banks intervene, it amounts to a perfect storm. But their intervention only serves to destroy the purchasing power of their unbacked currencies, in which case interest rates will rise stratospherically anyway. Comments on gold’s recent underperformance The chart above presents gold as it should be presented, with unstable fiat currencies being priced in real money, which is gold. For technical analysts, the current bear market for these major currencies relative to gold started in mid-December 2015, and the four currencies in the chart have been indexed to that point. Since then, they have all declined, with sterling down 51.6%, the yen down 45.9%, the euro down 41.6%, and the dollar down 37%. It should be noted that at this stage of the global bear market, sterling, the euro, and yen are seen to be most vulnerable to interest rate rises. Their government bond yields have become marooned at lower levels than equivalent US Treasuries, seen in the fiat world as the riskless investment. The euro and yen face the consequences of interest rates suppressed by the ECB and BOJ respectively into negative territory. Sterling has long suffered from a credibility problem relative to the dollar, and gilts still yield less than US Treasuries. While the dollar is the least bad currency, nevertheless inflation of the dollar’s total bank credit over time has been dramatic. It was noted above that since 1971, US M3 credit and currency has multiplied 33 times, while the price of gold in dollars has multiplied 38 times. But M3 had already increased from $44.18bn in 1934, when the dollar was devalued from $20.67 an ounce to $35, to $605bn in August 1971 when Bretton Woods was suspended. Including the expansion of M3 from 1934 makes the increase to date 490 times. In other words, gold has yet to discount much of the dollar’s post-depression credit and currency expansion. In approximate terms we can conclude that the gold-dollar relationship has yet to fully adjust to the dollar’s long-term inflation. In price terms, that gives some comfort to gold bulls, but not too much should be read into the relationship. More importantly, there is nothing discounted in the dollar gold price for the likely future deterioration of the fiat dollar’s purchasing power. Therefore, we can conclude that as well as being real money and all the rest being credit, gold prices at the current level offer an unrecognised safe haven opportunity for investors unhappy to leave the proceeds of their liquidated portfolios in fiat cash. Summary and conclusion It is with great regret that we must admit that the majority of investors who delegate the management of their capital into the hands of professional fund managers and investment advisers are likely to suffer a destruction of wealth that could become almost total. The reason is that these advisers and managers are comprised of a generation which has not experienced how destructive the link between persistent price inflation, rising interest rates, and collapsing financial asset values can be. Furthermore, to fully understand the link and current factors driving interest rates higher is not in their commercial interests. What happened in the 1970s has been described as stagflation — a portmanteau word suggesting something not understood by mainstream economists today. Looking at their economic models and the assumptions behind them, for them a combination of a stagnant economy and soaring inflation is unexplained. The effect they ignore is that inflation is a transfer of wealth from the private sector to the state, and from savers to the commercial banks and their favoured borrowers. The more the expansion of currency and credit, the greater the transfer of wealth becomes, and the impoverishment of ordinary citizen results. We are not arguing necessarily that inflation, measured by consumer price indices, will continue into the indefinite future, though a case for that outcome is easily justified. What is being pointed out is that current interest rates and bond yields should be far, far higher. With CPI already increasing in excess of 8% annualised in the US, EU, and UK factors of time preference indicate that interest rates and bond yields should be multiples higher than they are currently. This article has explained the role of bank credit in the economy. Bank credit finances virtually all the transactions that in aggregate make up GDP and non-qualifying financial activities. Banks are now contracting their credit, being highly leveraged in the relationship between total assets and balance sheet equity. They find themselves exposed to cascading losses in an economic downturn, which risks wiping out their balance sheet equity entirely. Surely, central banks and their governments will do what they have always done in the past in these circumstances: inflate their currencies, if necessary towards worthlessness. The argument in favour of getting out of financial and currency risks into real money — that is gold — has rarely been more conclusive. Tyler Durden Sat, 10/01/2022 - 12:30.....»»

Category: blogSource: zerohedgeOct 1st, 2022

5 Dividend-Paying Multiline Insurers That Ensure Stable Income

Multiline insurers like MetLife (MET), Prudential Financial (PRU), The Hartford Financial (HIG), Old Republic International (ORI) and Radian Group (RDN), which have an impressive dividend history, offer a breather amid volatility. With the major indices — S&P 500, the Dow Jones Industrial Average and the Nasdaq Composite — losing steam, investors are looking for returns on their investment in the form of dividends. The hawkish move of the Fed to cut down inflation (having increased interest rate fives time already in 2022), concerns over the Russia-Ukraine conflict and a strong dollar are causing the weakness in the stock market.The Zacks Multiline Insurance industry’s performance too has been affected. The industry has lost 13.7% year to date. Amid this, players like MetLife Inc. MET, Prudential Financial Inc. PRU, The Hartford Financial Services Group, Inc. HIG, Old Republic International Corporation ORI and Radian Group Inc. RDN, who have an impressive dividend history, offer a breather.By virtue of the nature of their business, multiline insurers stand to benefit from a diversified portfolio that in turn lowers concentration risk. Increased awareness driving higher demand for protection products should benefit sales and premiums of life insurance operations. Continued improvement in pricing should support the premium growth of non-life insurance operations. Also, an increase in the exposure of intangibles and increase in cyber threats offers room for growth for non-life insurers. Per Deloitte Insights, The Swiss Re Institute estimates an increase in demand for insurance coverage across the globe, that in turn will drive a 3.9% rise in premiums in 2022. Per Deloitte Insights, life insurance premium is estimated to increase 4% while non-life insurance premium is expected to increase 3.7% in 2022.The Fed’s hawkish move is a boon for the insurance industry as insurers are direct beneficiaries of an improving rate environment. Insurers invest a portion of their premium income. Therefore, higher the rates. better the investment results. Also, investment income is an important component of insurers’ top line.Players are investing heavily in technology to improve scale and efficiencies. While a solid policyholders’ surplus helps the industry absorb losses, a sturdy capital level aids insurers in pursuing strategic mergers and acquisitions, investing in growth initiatives, engaging in share buybacks, and increasing dividends or paying out special dividends.Dividend Stocks for Your PortfolioIn this volatile market, stocks that give regular dividends offer an attractive investment opportunity. Regular dividend hikes reflect confidence in operational strength, which, in turn, fuel earnings power.With the help of the Zacks Stock Screener, we have selected three multiline insurers that have a Zacks Rank #1 (Strong Buy) or #2 (Buy) or #3 (Hold), a dividend yield of more than 2% as well as a five-year historical dividend growth rate of more than 2%. These stocks have a payout ratio of less than 60, reflecting enough room for future dividend increases. You can see the complete list of today’s Zacks #1 Rank stocks here.Radian Group, with a market capitalization of $3.1 billion, is a credit enhancement company, which supports homebuyers, mortgage lenders, loan servicers and investors with a suite of private mortgage insurance and related risk-management products and services.RDN witnessed a four-year CAGR of 199.1%. Riding on continued financial strength and flexibility, Radian declared a 43% increase in quarterly dividend in the first quarter of 2022, which translated into the highest dividend yield in the private MI industry. Its current dividend yield of 3.7% betters the industry average of 2.5%. The insurer’s payout ratio is 19, with a five-year dividend growth rate of 245.8%. (Check Radian Group’s dividend history here)Radian Group Inc. Dividend Yield (TTM) Radian Group Inc. dividend-yield-ttm | Radian Group Inc. QuoteRadian’s mortgage insurance portfolio is expected to create a strong foundation for future earnings. RDN remains focused on improving its mortgage insurance portfolio, the main catalyst of long-term earnings growth. For 2022, Radian estimates total mortgage originations to be nearly $3 trillion, reflecting an 8% increase in purchase originations and a 58% decrease in refinance activity. Also, given the strong credit characteristics of the new loans insured, we expect the company to see fewer claims than before. Radian Group maintains a solid balance sheet with sufficient liquidity and strong cash flows. A strong capital position helps this Zacks Rank #1 insurer deploy capital via share repurchases and dividend hikes that enhance shareholders value.Old Republic International, with a market capitalization of $6.4 billion, engages in the insurance underwriting and related services business primarily in the United States and Canada.ORI has an impressive dividend history, banking on a solid capital position. The third-largest title insurer in the country increased dividends for 41 straight years and paid out dividends for the last 81 years, besides paying special dividends occasionally. Its dividend yield of 4.5% betters the industry average of 2.5%. Old Republic is one of the 111 companies with at least 25 consecutive years of annual dividend growth. The insurer’s payout ratio is 31, with a five-year dividend growth rate of 4.1%. (Check Old Republic International’s dividend history here)Old Republic International Corporation Dividend Yield (TTM) Old Republic International Corporation dividend-yield-ttm | Old Republic International Corporation QuoteORI’s solid market presence, niche focus, low property catastrophe exposure in its General Insurance segment and robust capital position auger well for growth. This Zacks Rank #2 insurer continues to strengthen its balance sheet by improving its cash balance while lowering its leverage ratio.MetLife, with a market capitalization of $48.5 billion, is an insurance-based global financial services company providing protection and investment products to a range of individual and institutional customers.Since 2011, the company has been successfully raising its quarterly dividend at a CAGR of 9.5%. Its current dividend of $2.00 yields 3.3%. The insurer’s payout ratio is 23, with a five-year dividend growth rate of 4.6%. (Check MetLife’s dividend history here).MetLife, Inc. Dividend Yield (TTM) MetLife, Inc. dividend-yield-ttm | MetLife, Inc. QuoteThis Zacks Rank #3 insurer’s focus on streamlining its business, numerous acquisitions and partnerships, and balance sheet will drive long-term growth.   MET has undertaken strategies to control cost and increase efficiency and remains optimistic about achieving a direct expense ratio below the target set for 2022.  A strong balance sheet, coupled with sound free cash flows, supports its shareholder value-boosting effort.Prudential, with a market capitalization of $32.4  billion, is a financial services leader that offers an array of financial products and services, including life insurance, annuities, retirement-related services, mutual funds, investment management and real estate services.PRU has been increasing its dividend for the past 14 years. Its dividend yield of 5% compares favorably with the industry’s figure of 2.5%. The insurer’s payout ratio is 40, with a five-year dividend growth rate of 9.5%. (Check Prudential’s dividend history here).Prudential Financial, Inc. Dividend Yield (TTM) Prudential Financial, Inc. dividend-yield-ttm | Prudential Financial, Inc. QuotePRU is on track to reprice as well as move toward lower risk and less capital-intensive products. As it transforms to become a higher growth, less market-sensitive business, it expects to double its growth businesses to more than 30% of earnings and the individual annuities business to 10% or less of earnings. PRU remains focused on investing in businesses to expand its addressable market and to continue to improve expense and capital efficiency. This Zacks Rank #3 insurer envisions about 65% free cash flow ratio of earnings and about two times its dividend.The Hartford Financial, with a market capitalization of $20 billion, is one of the major multi-line insurance and investment companies in the country, providing investment products, group life and group disability insurance, property and casualty insurance and mutual funds in the United States.HIG increased its dividend at a five-year CAGR of 8.7%. Its dividend of $1.54 yields 2.5%. The insurer’s payout ratio is 22, with a five-year dividend growth rate of 10.2%. (Check Hartford Financial’s dividend history here).The Hartford Financial Services Group, Inc. Dividend Yield (TTM) The Hartford Financial Services Group, Inc. dividend-yield-ttm | The Hartford Financial Services Group, Inc. QuoteHartford Financial has been vending non-core businesses to concentrate on its U.S. operations and enhance its operating leverage. HIG expects its Hartford Next initiative to bring cumulative savings of $540 million in 2022 and $625 million in 2023.  This Zacks Rank #3 insurer is gaining from lower COVID-related losses, an improved Commercial Lines loss ratio and a rise in earned premiums. Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Hartford Financial Services Group, Inc. (HIG): Free Stock Analysis Report MetLife, Inc. (MET): Free Stock Analysis Report Prudential Financial, Inc. (PRU): Free Stock Analysis Report Radian Group Inc. (RDN): Free Stock Analysis Report Old Republic International Corporation (ORI): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 28th, 2022

Is An Annuity A Good Investment?

Pop quiz. What springs to mind when you think of investing? You probably envision Wall Street and the frantic pace of the New York Stock Exchange floor. There are some of you who may visualize Fortune 500 ticker symbols. You could also think of the less exciting pie chart on your annual mutual fund report […] Pop quiz. What springs to mind when you think of investing? You probably envision Wall Street and the frantic pace of the New York Stock Exchange floor. There are some of you who may visualize Fortune 500 ticker symbols. You could also think of the less exciting pie chart on your annual mutual fund report if you’re not much of a risk taker. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Henry Singleton Series in PDF Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q2 2022 hedge fund letters, conferences and more   Find A Qualified Financial Advisor Finding a qualified financial advisor doesn't have to be hard. SmartAsset's free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you're ready to be matched with local advisors that can help you achieve your financial goals, get started now. But, have you ever thought about annuities? Probably not. Financially speaking, annuities are not considered investments. Instead, annuities are insurance products that guarantee income at retirement. However, this does not mean you should not invest in annuities. And, on the flip side, it doesn’t mean you should either. I know. That sounds contradictory. However, your personal investment objectives will determine whether or not an annuity is a good investment for you. It’s also important to consider your age, time horizon for investing, risk tolerance, and lifestyle when determining your investment objectives. However, if you’re unsure whether annuities make sense for you, the following guide may help. What is an Annuity? Annuities are confusing to a lot of people. In fact, only 25% of consumers passed an annuity knowledge test (70%) according to a study by Secure Retirement Institute (SRI). Due to this confusion surrounding annuities, it can be difficult to decide if they are a good investment and worth adding to your retirement portfolio. But let us simplify it for you. What exactly are annuities? Annuities are simply contracts between a person and an insurance company. Annuities are best known for protecting principals, providing lifetime income, and planning for long-term care needs. You might see annuities marketed as investments when you’re shopping for them. In retirement, this investment is aimed at generating income for you. It’s important to remember that this is a contract, not a retirement plan. In the event of a breach of a contract, expect hefty penalties. Consequently, annuities are not as accessible as savings accounts. How are annuities investments? During retirement, annuities can provide income and growth that are tax-deferred. Annuities can be categorized into two types: fixed annuities and variable annuities. Variable annuities are based on the performance of a market index, such as the S&P 500, whereas fixed annuities pay a guaranteed rate of return. The use of annuities as a retirement income supplement is becoming more and more popular. This is mainly due to the fact that pensions are becoming extinct like the Dodo. In fact, only 15% of workers in the private sector have access to one, according to the March 2021 National Compensation Survey from the Bureau of Labor Statistics (BLS). However, those who have invested heavily in stocks or bonds may find annuities particularly beneficial. Why? Annuities provide a source of income independent of market fluctuations. Annuities come in many forms, but a fixed index annuity is among the most popular. As well as providing tax-deferred growth, these annuities protect you from downside risk. In this regard, fixed index annuities can be an effective retirement planning tool. As an example, you’ll earn 3% interest on every dollar you put into your Due annuity plan. And, that’s guaranteed. How does an annuity work? An annuity is an arrangement in which the owner of the policy transfers the risk to an insurance/annuity company. Through the premiums it charges, the company offers the annuity assumes the risk for the owner. Annuities can have a single payment or several payments, depending on the type. Premiums are paid during the accumulation phase. As opposed to other types of insurance, annuities do not require continuous premium payments. As time goes on, you’ll no longer need to make annuity payments and will begin receiving payments instead. This is when the payout phase of your contract begins. There are a number of ways in which annuities can be paid. You can design an annuity to provide you with payments throughout your lifetime or the lifetimes of your heirs. You can also combine a lifetime income stream with a guaranteed payout over a specified period. How does a “life with a certain period” annuity work? It promises lifetime income. But, your beneficiary will receive the remaining value of the account if you die within a specific timeframe. It is common for annuities to be paid over an extended period of time. Like Social Security, they are also based on life expectancy. As a result, if you begin receiving income much earlier in life or if the term is longer, you should anticipate smaller payments. Annuities can be paid monthly, quarterly, annually, or even as a lump sum. Furthermore, they can be begun immediately or deferred for a long time. The different types of annuities. We briefly touched on fixed and variable annuities. But, there are actually five types of annuities that you can choose from. It’s like ordering a taco. Although pretty much the same, you have the choice between beef, chicken, pork, fish, shrimp, or beans. And, each protein slightly modifies your meal. Fixed annuities. Throughout the term of the contract, owners of annuities receive a fixed interest rate. With Due, for instance, you will receive 3% on all deposits. So, it is similar to a certificate of deposit. It is a safe and predictable option, even when market performance is good. Variable annuities. The returns on a variable annuity differ from those on a fixed annuity since they are linked with the stock market. In other words, its performance determines how much it will gain or lose, making it a less predictable and riskier option. Fixed indexed annuities. An annuity of this type combines the advantages of both a variable annuity and a fixed annuity. It provides investors with a minimum guaranteed rate of return, similarly to a fixed annuity. However, it also tracks an underlying index (e.g. the S&P 500). Therefore, rising stock markets can result in higher gains. You should always read the fine print, as there are caps, spreads, and participation rates that can impact the upside. Immediate annuities. Basically, you pay a lump sum to the insurance company and start receiving income payments right away. After the payment has been made, payments are usually made within 30 days. Lifetime payments are available in some immediate annuities, while fixed payments are available in others. In general, interest rates affect annuity income, which will impact payouts. Deferred annuities. In this case, there is also an upfront payment involved. Annuity payments will, however, be issued later. Since deferred annuities have more time to grow, they may offer higher payouts than immediate annuities. In exchange, early withdrawals are difficult. How Do Annuities Benefit Investors? A key benefit of investing in annuities is that they provide regular income before or during retirement. Moreover, your contributions are tax-deferred. Annuities are also exempt from a contribution limit or required minimum distribution (RMD). There are several additional benefits, including: Guaranteed income source. Having a guaranteed income source reduces the worry that retirees and pre-retirees will lose retirement savings in a downturn or outlive them. You fund the account with an annuity and typically earn a predetermined amount of interest, regardless of market conditions. With variable annuities, this can be different as they’re exposed to the market. Premium protection. In my opinion, this cannot be emphasized enough. An insurance company guarantees a minimum interest rate and principal in a fixed annuity. Therefore, the value of your fixed annuity will not decrease as long as the insurance company is financially sound. Tax advantages. Contributions to an annuity are tax deductible as well. It has no contribution limit, unlike IRAs and 401(k)s, which do have a limit on how much you can contribute annually. In the event that you have maxed out your other retirement accounts, annuities may be a good option for tax-deferred savings. The right annuity can help you hedge against inflation. Variable annuities are better suited to inflation hedges than fixed annuities. When used properly, variable annuities can guarantee you maintain your purchasing power throughout retirement if you boost your periodic payments by at least the cost of inflation based on your investment decisions. Long-term care. Many retirees overlook this costly expense. But, it is possible to insure against some of these costs with an annuity. No RMDs. Traditionally, withdrawals from retirement accounts must be made by the age of 7 ½. In contrast, retirement annuities do not carry that stipulation, so the funds may grow until needed. Flexibility. Through what’s known as a 1035 exchange, you can transfer money from one annuity to another, even if they’re with different companies. Taxes are not applied to your annuity earnings when using this method. It’s also possible to hold an annuity in a retirement plan, such as a 401(k) or IRA, or outside of one. Are There Any Risks Associated with Annuities? Yes. There are risks associated with annuities, just as with any investment. As such, despite the fact that annuities promise retirees a steady income, they also come with some sacrifices. Annuities are complex. The complexity of some annuities makes them difficult to understand without professional assistance. In fact, the structure of an annuity is the most complex of all retirement payment plans. Most insurance providers offer lifelong benefits as their most attractive selling point. However, retirees are grossly misled about the high taxes and the payment calculations. There is a missing income benefit. Annuities provide a lifetime income stream by saving money now. At the same time, you would lose that long-term benefit if you passed away suddenly. A beneficiary can be designated with some annuities, but there may be an additional charge. Locking up money you may need. If you suddenly need those funds, it can be difficult to access your annuity investment or cash it out. In some immediate annuities, after investing your principal, you lose access to it even though payments begin immediately. In some cases, you may be able to withdraw your principal or select time periods during which you can do so. But your monthly payment may be smaller. Also, you will usually have a 10% penalty if you withdraw from a deferred annuity before you turn 59 ½. Annuities can be pricey. Depending on the type of annuity, owners may have to pay high fees. Variable annuities, for instance, can charge fees between 2% and 3%, decreasing the value of your account and your investment return. You may also run into mortality and expense risk charges, administrative fees, and charges for add-ons like stepped-up death benefits. Conservative payouts. Even though annuities offer security and predictability, their returns aren’t as high as other investment options. Insolvent insurance companies. It is important to ensure the company you purchase an annuity from is around for the long haul since annuities are long-term investments. An investor should research annuity providers’ credibility, history, and credit standing. Annuities: When They’re a Good Investment Let’s be crystal clear. Annuities are insurance products. This means you buy it to mitigate some of the investment risks. At the same time, not all annuities are alike. With some annuities, such as variable annuities, you can choose from stocks and bonds as investment options. In other cases, they are true insurance rather than investments. There’s one thing an annuity does extremely well. It can protect you from longevity risk. For those unfamialir, this is the risk of living a lot longer than you expected. Basically, annuities are ideal if you’re healthy and look forward to living a long and meaningful life. If this is the case, annuities ensure you won’t outlive your money. So, an annuity can be a wise investment if you are buying it for this reason. The right annuity might be right for you if you know what you want out of retirement. Aside from that, you should find out how the annuity will help you achieve those goals, as well as what fees and restrictions the product has. Having an understanding of how annuity income is taxed, what investment options are available, and how annuities work with other investments is also important to know. A good rule of thumb for determining whether you are a good candidate for an annuity is: Your retirement savings goal is to grow steadily at a low level of risk. As a retiree, you want to earn interest on your nest egg in a safe manner. In addition to your other income sources, you would like to supplement your retirement income. Long-term investing is important. Finally, a white paper published by the National Bureau of Economic Research states that “standard economic models of life-cycle spending patterns imply that the portfolio of a risk-averse individual should include a substantial portfolio share in life annuities as a hedge against uncertainty about length of life.” When viewed along with the notion that annuities are investments rather than insurance, this statement supports the notion that annuities can be a valuable addition to a balanced and diversified investment portfolio. Annuities: When They’re a Bad Investment Do not purchase an annuity without checking your entire financial picture first. There are some people who sell them with good intentions, but they may not have a complete understanding of what they’re selling. For instance, their understanding of tax issues might be limited. In addition, they cannot see how the product fits into your retirement plan if they haven’t done any planning for you. It is also important to be aware of the fees associated with annuities. After all, your returns will be lower if you pay high fees. And, in most markets, you will not earn a lot of money from some annuities due to high fees. If you do not have a plan in place, never buy an annuity. So, until you have done your research on annuities, you shouldn’t feel pressured or obligated to buy one. You might hear from a sales agent that an annuity’s sale will be short-lived. There are times when insurers stop selling specific products, which could explain this. Even so, you should not rush into making a decision. And, always remember that a similar product will likely be available elsewhere. The Bottom Line There are a lot of controversy surrounding annuities. But, in the end, whether an investment is sound for a particular individual depends on various factors. At a minimum, your age, current retirement savings, and retirement goals. In addition to their fees, annuities have some disadvantages compared to other retirement accounts. Even so, you may decide that an annuity is a smart investment option. Primarily, it may make sense if you want a lump sum distributed over a longer period of time. Or, if you have already maxed out other retirement accounts like your 401(K) or IRA. If not, you might be better off investing elsewhere for your retirement. FAQS How can annuities be invested? Unlike variable annuities, fixed-rate annuities offer a predetermined return determined by the insurance company. With a variable annuity, though, you determine how to invest your money within the subaccounts. Do annuities have high fees? Despite the misconception, there are some annuities with low fees. There are some annuities sold by investment companies without sales commissions or surrender charges, known as direct-sold annuities. Also, annuities can be purchased from a variety of brokerage firms at a low price. For more information, you should contact a financial advisor. What are the drawbacks to annuities? The majority of people can benefit from annuities. But they also have some drawbacks to be aware of. The major concerns are long-term contracts, losing control over your investment, and low or no interest earned. Other possible disadvantages are the fees and complexity. In addition, annuities have fewer liquidity options, and you have to wait until age 59 ½ before withdrawing money from them. What happens to my annuity after I die? Your annuity account can be assigned a beneficiary, but doing so may come at a cost. In other annuities, the payout only lasts until you die, and payments stop after you do. Prior to investing, find out what payout options are available for beneficiaries. Who shouldn’t buy annuities? Generally, individuals seeking short-term investments to invest around frequently and those with little or no liquid assets should not purchase annuities. Article by Deanna Ritchie, Due About the Author Deanna Ritchie is a financial editor at Due. She has a degree in English Literature. She has written 1000+ articles on getting out of debt and mastering your finances. She has edited over 40,000 articles in her life. She has a passion for helping writers inspire others through their words. Deanna has also been an editor at Entrepreneur Magazine and ReadWrite......»»

Category: blogSource: valuewalkSep 27th, 2022

3 Utility Mutual Funds for Attractive Returns

Below, we share with you three top-ranked utility mutual funds. Each has a Zacks Mutual Fund Rank #1 (Strong Buy). Investors with a conservative mindset looking for stable current income can opt for utility mutual funds. These funds are used as defensive instruments, which protect investments during a market downturn. This is because the demand for essential services, such as those provided by utilities, is often shielded from market volatility.In recent years, many funds in this category have increased their exposure to emerging markets and unregulated companies. Though this strategy has increased the risk involved, it has also generated higher returns.Below, we share with you three top-ranked utility mutual funds, namely Cohen & Steers Global Infrastructure Fund CSUAX, Franklin Utilities Fund FKUTX and Fidelity Select Utilities Portfolio FSUTX. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of funds.Cohen & Steers Global Infrastructure Fund seeks total return. CSUAX invests the majority of its total assets in U.S. and non-U.S. common stocks and other equity securities issued by infrastructure companies, which consist of utilities, pipelines, toll roads, airports, railroads, marine ports, telecommunications companies and other infrastructure companies.Cohen & Steers Global Infrastructure Fund has three-year annualized returns of 5%. As of June 2022, CSUAX held 58 issues, with 6.1% of its assets invested in Nextera Energy Inc.Franklin Utilities Fund seeks capital growth along with current income by investing most of its net assets in public utility companies that provide electricity, natural gas, water, and communications services. FKUTX invests primarily in equity securities.Franklin Utilities Fund has three-year annualized returns of 8.2%. FKUTX has an expense ratio of 0.73% compared with the category average of 0.94%.Fidelity Select Utilities Portfolio seeks capital appreciation by investing most of its net assets in common stocks of companies engaged in the utility business. FSUTX uses a fundamental criterions like financial condition, industry position, as well as market and economic conditions to select investments.Fidelity Select Utilities Portfolio has returned 10.1% in the past three years. Douglas Simmons has been the fund manager of FSUTX since October 2006.To view the Zacks Rank and the past performance of all utility mutual funds, investors can click here to see the complete list of utility mutual funds.Want key mutual fund info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >> 5 Stocks Set to Double Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%. Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>View All Zacks #1 Ranked Mutual FundsWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Get Your Free (FSUTX): Fund Analysis Report Get Your Free (CSUAX): Fund Analysis Report Get Your Free (FKUTX): Fund Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 26th, 2022

10 Best ETFs to Diversify Your Portfolio and Avoid Risks

In this article, we discuss 10 best ETFs to diversify your portfolio and avoid risks. If you want to see more exchange traded funds in this list, click 5 Best ETFs to Diversify Your Portfolio and Avoid Risks.  The importance of ETFs has redoubled in 2022 as the stock market takes a beating amid volatility, […] In this article, we discuss 10 best ETFs to diversify your portfolio and avoid risks. If you want to see more exchange traded funds in this list, click 5 Best ETFs to Diversify Your Portfolio and Avoid Risks.  The importance of ETFs has redoubled in 2022 as the stock market takes a beating amid volatility, inflation and rate hikes. ETFs are managed by professionals who closely monitor changes at the stock market, and adjust the underlying portfolios and asset weights accordingly. Most ETFs also offer attractive distribution yields, as well as exposure to the biggest names in the market like Microsoft Corporation (NASDAQ:MSFT), Apple Inc. (NASDAQ:AAPL), and Johnson & Johnson (NASDAQ:JNJ), at relatively affordable prices. A Bloomberg report dated September 9 reveals that Neuberger Berman, a private investment management firm, is planning to convert its only US commodity mutual fund into an exchange traded fund. Neuberger is the latest asset manager to jump on this ETF trend, and will likely pour around $1 trillion into the ETF universe with this move. The Neuberger Berman Commodity Strategy Fund, with $233 million in net assets, will be converted to an actively managed ETF in the fourth quarter of 2022. One of the primary reasons for the conversion is the lower-cost and more tax-efficient nature of ETFs.  Money managers have been exiting emerging market ETFs rapidly, fearing a strong US dollar. Investors withdrew $1.21 billion from US-listed ETFs that invest in developing economies and emerging countries in the week ended September 2, and this was the highest pull back since May 2020, according to data presented by Bloomberg. This is why it is important to assess new market dynamics frequently and invest accordingly when one wants to diversify portfolios and avoid risks.  Photo by Adam Nowakowski on Unsplash Our Methodology  We explored ETFs that offer exposure to multiple sectors of the economy, both value and growth plays, large and small-cap equities, and dividend stocks for a well-rounded outlook of some of the top funds listed on US exchanges. We have also discussed the top holdings of the ETFs to offer better insight to potential investors.  Best ETFs to Diversify Your Portfolio and Avoid Risks  10. Vanguard Real Estate Index Fund (NYSE:VNQ) Vanguard Real Estate Index Fund (NYSE:VNQ) invests primarily in real estate investment trusts (REITs) that own and operate office buildings, hotels, residential properties, and other real estate. The ETF tracks the total returns of the MSCI US Investable Market Real Estate 25/50 Index. As of May 27, Vanguard Real Estate Index Fund (NYSE:VNQ) offers an expense ratio of 0.12%, while the average expense ratio of similar funds is 1.05%. The ETF holds 167 stocks in its portfolio, and as of August 31, the median market cap stands at $26.6 billion. Vanguard Real Estate Index Fund (NYSE:VNQ)’s total net assets were $72 billion as of late August.  A top holding of Vanguard Real Estate Index Fund (NYSE:VNQ) is American Tower Corporation (NYSE:AMT), one of the largest global REITs that operates multi-tenant communications real estate. JPMorgan analyst Philip Cusick on September 8 reiterated an Overweight rating on American Tower Corporation (NYSE:AMT) with a $305 price target after meeting with CFO Rod Smith. The analyst had “incrementally positive views” on the U.S., Europe, and Asia-Pacific businesses of American Tower Corporation (NYSE:AMT), and he was “encouraged” by trends in Latin America and Africa as well. The U.S. services business appears “poised to remain strong” in the next year with the carriers benefiting from American Tower Corporation (NYSE:AMT)’s “value-added offerings,” the analyst tells investors in a bullish thesis. According to Insider Monkey’s data, 52 hedge funds were long American Tower Corporation (NYSE:AMT) at the end of Q2 2022, compared to 50 funds in the last quarter. Charles Akre’s Akre Capital Management is the biggest stakeholder of the company, with approximately 7 million shares worth $1.78 billion.  Like Microsoft Corporation (NASDAQ:MSFT), Apple Inc. (NASDAQ:AAPL), and Johnson & Johnson (NASDAQ:JNJ), elite hedge funds are bullish on American Tower Corporation (NYSE:AMT).  Here is what Baron Real Estate Fund has to say about American Tower Corporation (NYSE:AMT) in its Q2 2022 investor letter: “American Tower is a leading global tower company with 220,000 communication sites globally and over 40,000 in the U.S. We added to our position during the market dislocation and as it became increasingly clear that the company would put permanent equity financing in place at better-than-expected terms for its previously announced acquisition of CoreSite (thereby removing the “equity overhang”). In addition, the company stepped back from a large potential deal in Europe, which would have required significant incremental funding, due to unfavorable contract terms and price. This decision further reinforced our confidence in management’s capital allocation discipline knowing that these were highly sought-after assets.” 9. Invesco S&P 500 High Dividend Low Volatility ETF (NYSE:SPHD) Invesco S&P 500 High Dividend Low Volatility ETF (NYSE:SPHD) tracks the performance of the S&P 500 Low Volatility High Dividend Index. The fund invests at least 90% of its total assets in the 50 securities in the benchmark index that have historically offered high dividend yields and low volatility. As of September 21, the SEC 30 day yield of Invesco S&P 500 High Dividend Low Volatility ETF (NYSE:SPHD) is 4.58%, and the fund offers a total expense ratio of 0.30%. The ETF has an average market cap of $75.5 billion. The portfolio comprises stocks from the utilities, real estate, consumer staples, financials, materials, energy, and communications services sectors, among others. It is one of the best ETFs to diversify a portfolio, as investors are seeking refuge in low volatility yet high income stocks.  Altria Group, Inc. (NYSE:MO) is the biggest holding of the Invesco S&P 500 High Dividend Low Volatility ETF (NYSE:SPHD), representing 3.14% of the total portfolio. Altria Group, Inc. (NYSE:MO) is an American company that manufactures and sells smokable and oral tobacco products in the United States. On August 25, Altria Group, Inc. (NYSE:MO) declared a $0.94 per share quarterly dividend, a 4.4% increase from its prior dividend of $0.90. The dividend is distributable on October 11, to shareholders of record on September 15. The company delivered a dividend yield of 8.69% on September 22.  According to the second quarter database of Insider Monkey, 48 hedge funds held stakes worth $1.8 billion in Altria Group, Inc. (NYSE:MO), up from 47 funds the prior quarter worth $1.95 billion. Arrowstreet Capital is the leading position holder in the company, with 8.86 million shares valued at $370.3 million.  Here is what Broyhill Asset Management has to say about Altria Group, Inc. (NYSE:MO) in its Q2 2021 investor letter: “Altria (MO) shook off the prospects of a ban on menthol and a potential cap on nicotine and gained 20%. We shared our thoughts on these regulations during the quarter, which are available here. MO Valuation. MO is up ~ 18% YTD (even accounting for the recent sell-off). We expect MO to generate close to $5 in annual FCF per share over the next few years, putting the stock at ~ 10x, which is less than half the market’s multiple today. Over the last decade, shares have traded at an average multiple of 15x and within a range of ~ 10x – 20x (+/-1 standard deviation). The stock yields 7.2% at the current price, close to a 6% premium to treasuries. Historically, shares have traded closer to a 3% premium to the 10Y, which would imply a ~ $75 share price.” 8. Vanguard 500 Index Fund (NYSE:VOO) Vanguard 500 Index Fund (NYSE:VOO) is one of the best ETFs to diversify a portfolio and avoid risks. The fund invests in stocks in the S&P 500 Index, which represents 500 of the largest American companies. Vanguard 500 Index Fund (NYSE:VOO) offers an expense ratio of 0.03% as of the end of April. The ETF is a feasible investment for long-term investors who want to grow their money. On August 31, the median market cap stood at $168.5 billion. Apple Inc. (NASDAQ:AAPL) is the biggest holding of Vanguard 500 Index Fund (NYSE:VOO), with the stock representing 7.16% of the total portfolio. On September 20, Evercore ISI analyst Amit Daryanani raised the price target on Apple Inc. (NASDAQ:AAPL) to $190 from $185 and reiterated an Outperform rating on the shares, noting that demand for high-end iPhone models is “notably higher” compared to prior years.  According to Insider Monkey’s Q2 data, Apple Inc. (NASDAQ:AAPL) was part of 128 hedge fund portfolios, compared to 131 in the prior quarter. Warren Buffett’s Berkshire Hathaway is the leading stakeholder of the company, with a position worth more than $122 billion.  In its Q2 2022 investor letter, Alger Capital, an asset management firm, highlighted a few stocks and Apple Inc. (NASDAQ:AAPL) was one of them. Here is what the fund said: “Apple Inc. (NASDAQ:AAPL) is a leading technology provider in telecommunications. computing and services. Apple’s iOS operating system is the company’s unique intellectual property and competitive strength. This software drives extremely tight engagement with consumers and enterprises. The engagement is fostering the growing purchase of high-margin services like music, apps, and apple pay. Apple’s shares detracted from performance as management lowered its guidance for the second quarter due to headwinds from the war in Ukraine, adverse foreign currency shifts, and dampened consumer demand associated with the coronavirus in China. Additionally, many investors were concerned that lockdowns implemented to curtail the spread of COVID-19 would impact production of apple products, however the manufacturing facilities have resumed activity.” 7. Invesco S&P 500 GARP ETF (NYSE:SPGP) Invesco S&P 500 GARP ETF (NYSE:SPGP) seeks to track the investment results of the S&P 500 Growth at a Reasonable Price Index. The underlying index comprises roughly 75 stocks from the S&P 500 that have been categorized as having the largest “growth scores” and “quality and value composite scores”. Invesco S&P 500 GARP ETF (NYSE:SPGP) has an average market cap of roughly $138 billion as of the end of June 2022, and the total expense ratio on September 21 came in at 0.33%. It is one of the best ETFs to diversify a portfolio and avoid risks in this market environment.  Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN), a New York-based manufacturer of medicines for multiple diseases, holds the leading position in Invesco S&P 500 GARP ETF (NYSE:SPGP)’s portfolio. On September 16, Canaccord analyst John Newman raised the price target on Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) to $750 from $700 and maintained a Buy rating on the shares, citing successful preliminary trial results from its collaboration with Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY).  Among the hedge funds tracked by Insider Monkey, Jim Simons’ Renaissance Technologies is the biggest stakeholder of the company, with 583,062 shares worth $344.6 million. Overall, 44 hedge funds were bullish on Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) at the end of June 2022, with collective stakes worth $1.60 billion.  In addition to Microsoft Corporation (NASDAQ:MSFT), Apple Inc. (NASDAQ:AAPL), and Johnson & Johnson (NASDAQ:JNJ), Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) is one of the stocks on the radar of smart investors.  Oakmark Funds shared its stance on Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) in its Q2 2021 investor letter. Here is what the investment management firm said: “We restored Regeneron Pharmaceuticals from a rather trivial to a more normal position size. You may recall Regeneron performed well for the Fund during the Covid-19 crisis, so we significantly reduced our position as its price-value gap narrowed. During the past several quarters, however, the market has experienced the now infamous “reopening trade,” in which companies that performed well during the pandemic trailed as the economy reopened. Regeneron suffered a similar fate and its shares have lagged the S&P 500 by roughly 4000 basis points, despite the company’s strong fundamentals and robust pipeline of new products. The underperformance widened Regeneron’s price-value gap, so we restored it to a more normal position size.” 6. Invesco QQQ Trust (NASDAQ:QQQ) Invesco QQQ Trust (NASDAQ:QQQ) tracks the NASDAQ-100 Index and ranks in the top 1% of large-cap growth ETFs. Invesco QQQ Trust (NASDAQ:QQQ)’s performance has historically outperformed the S&P 500 Index. The fund exposes investors to long-term investment themes like augmented reality, cloud computing, big data, online streaming, electric vehicles, and more. As of September 21, Invesco QQQ Trust (NASDAQ:QQQ) reported $157.21 billion in assets under management.  Microsoft Corporation (NASDAQ:MSFT) is one of the premier holdings of Invesco QQQ Trust (NASDAQ:QQQ). On September 20, Microsoft Corporation (NASDAQ:MSFT) declared a quarterly dividend of $0.68 per share, a 10% increase from its prior dividend of $0.62. The dividend is payable on December 8, to shareholders of record on November 17. In a recent interview with Bloomberg, Microsoft Corporation (NASDAQ:MSFT) CEO Satya Nadella reiterated his confidence that the $69 billion deal to acquire Activision Blizzard will get approved by regulators in the United Kingdom. It is Microsoft’s largest acquisition ever. Among the hedge funds tracked by Insider Monkey, Microsoft Corporation (NASDAQ:MSFT) was part of 258 public stock portfolios, with collective stakes worth $56 billion. Ken Fisher’s Fisher Asset Management is the leading position holder in the company, with a stake valued at $7.36 billion.  In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Microsoft Corporation (NASDAQ:MSFT) was one of them. Here is what the fund said: “Shares of Microsoft Corporation (NASDAQ:MSFT), a leading global provider of software solutions, declined 16.6% in the quarter along with the broader software group as well as due to growing concerns of a potential macro-driven slowdown. This is despite the company posting strong quarterly financial results and successfully absorbing headwinds from the war in Ukraine. The company had 21% revenue growth, 23% operating income growth, and 35% growth in Microsoft Cloud (all year-over-year in constant currency), which now represents 47% of total revenues. (read more…) Click to continue reading and see 5 Best ETFs to Diversify Your Portfolio and Avoid Risks.  Suggested articles: 10 Best ESG Stocks To Buy 10 Best Housing Stocks To Buy Now 10 Best Nuclear Energy Stocks To Buy Disclosure: None. 10 Best ETFs to Diversify Your Portfolio and Avoid Risks is originally published on Insider Monkey......»»

Category: topSource: insidermonkeySep 23rd, 2022

Is Atmos (ATO) a Solid Growth Stock? 3 Reasons to Think "Yes"

Atmos (ATO) is well positioned to outperform the market, as it exhibits above-average growth in financials. Growth stocks are attractive to many investors, as above-average financial growth helps these stocks easily grab the market's attention and produce exceptional returns. However, it isn't easy to find a great growth stock.In addition to volatility, these stocks carry above-average risk by their very nature. Also, one could end up losing from a stock whose growth story is actually over or nearing its end.However, the Zacks Growth Style Score (part of the Zacks Style Scores system), which looks beyond the traditional growth attributes to analyze a company's real growth prospects, makes it pretty easy to find cutting-edge growth stocks.Atmos Energy (ATO) is on the list of such stocks currently recommended by our proprietary system. In addition to a favorable Growth Score, it carries a top Zacks Rank.Studies have shown that stocks with the best growth features consistently outperform the market. And returns are even better for stocks that possess the combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 (Buy).While there are numerous reasons why the stock of this natural gas utility is a great growth pick right now, we have highlighted three of the most important factors below:Earnings GrowthArguably nothing is more important than earnings growth, as surging profit levels is what most investors are after. And for growth investors, double-digit earnings growth is definitely preferable, and often an indication of strong prospects (and stock price gains) for the company under consideration.While the historical EPS growth rate for Atmos is 9%, investors should actually focus on the projected growth. The company's EPS is expected to grow 8.9% this year, crushing the industry average, which calls for EPS growth of 5.7%.Cash Flow GrowthWhile cash is the lifeblood of any business, higher-than-average cash flow growth is more important and beneficial for growth-oriented companies than for mature companies. That's because, growth in cash flow enables these companies to expand their businesses without depending on expensive outside funds.Right now, year-over-year cash flow growth for Atmos is 13.3%, which is higher than many of its peers. In fact, the rate compares to the industry average of 9.5%.While investors should actually consider the current cash flow growth, it's worth taking a look at the historical rate too for putting the current reading into proper perspective. The company's annualized cash flow growth rate has been 12.5% over the past 3-5 years versus the industry average of 8.2%.Promising Earnings Estimate RevisionsSuperiority of a stock in terms of the metrics outlined above can be further validated by looking at the trend in earnings estimate revisions. A positive trend is of course favorable here. Empirical research shows that there is a strong correlation between trends in earnings estimate revisions and near-term stock price movements.There have been upward revisions in current-year earnings estimates for Atmos. The Zacks Consensus Estimate for the current year has surged 0.1% over the past month.Bottom LineWhile the overall earnings estimate revisions have made Atmos a Zacks Rank #2 stock, it has earned itself a Growth Score of B based on a number of factors, including the ones discussed above.You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.This combination indicates that Atmos is a potential outperformer and a solid choice for growth investors. Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Atmos Energy Corporation (ATO): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 23rd, 2022

Buy These 4 Defensive Funds to Beat Market Volatility

Invest in these recession-proof funds like FSHCX, FSUTX, FIUIX and FDIGX to earn positive returns during the volatile market conditions. Bloodshed on Wall Street, which began earlier this year, continues and has pushed investors toward a bearish mindset. The S&P 500, the DOW and the Nasdaq have given a negative return of 18.15%, 14.80%, and 23.91%, respectively, so far this year.All the major indexes are in negative territory mainly due to the Federal Reserve’s aggressive hawkish stances to counter inflation and other rising geopolitical tensions.The consumer price index (CPI) for the month of August rose 0.1%, with a 6.3% increase year on year after remaining unchanged for the month of July. Rents, food and health care mainly accounted for an increase in the CPI.With inflation numbers at multi decades high and the Fed’s target of 2% looking a distant reality, more interest rate hikes seem inevitable. Such moves will increase the cost of borrowing, impact consumer spending and slow down economic growth, thereby pushing the economy towards a recession.The Volatility Index measured by VIX closed in at 26.27 on Sep 15, with a 52.56% increase so far this year, reaffirming the panic situation in the market.  On the other side, Russia’s war against Ukraine and rising tension between China and Taiwan have led to a further global supply-chain disruption. This, along with fresh COVID-19 protocol implemented in China, has impacted corporate profits as companies will take time to overcome regulatory, financial and technology hurdles.Looking at the current situation, investing in mutual funds with significant exposure in defensive sectors like consumer staples, healthcare, telecommunication services and utilities seems prudent for investors who wish to diversify and earn a positive return. These funds invest in recession-proof companies that do not get affected by the economic cycle as they produce goods or offer services catering to the basic needs of consumers regardless of market or economic condition. Such funds provide stable returns at a relatively lower level of risk.Moreover, mutual funds, in general, reduce transaction costs and diversify portfolios without an array of commission charges that are mostly associated with stock purchases (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).Thus, we have selected four defensive mutual funds that boast a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), have positive three-year and five-year annualized returns, require minimum initial investments within $5000, and carry a low expense ratio.Fidelity Select Health Care Services Portfolio FSHCX invests most of its net assets in common stocks of foreign and domestic issues that are primarily engaged in the ownership or management of hospitals, nursing homes, health maintenance organizations. It also invests in other companies specializing in the delivery of health care services. FSHCX advisors choose to invest in stocks based on fundamental analysis factors like financial condition, industry position, as well as market and economic conditions.Justin Segalini has been the lead manager of FSHCX since Jan 28, 2016, and most of the fund’s exposure is in companies like Unitedhealth Group (24.11%), Cigna (8.27%) and Humana (8.06%) as of 5/31/2022.FSHCX’s three-year and five-year annualized returns are 20.2% and 15.1%, respectively. FSHCX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.71% compared with the category average of 1.03%.To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.Fidelity Select Utilities Portfolio FSUTX invests most of its net assets in common stocks of foreign and domestic issues that are primarily engaged in the utility industry or companies deriving a majority of their revenues from utility operations. FSUTX advisors choose to invest in stocks based on fundamental analysis factors like financial condition, industry position, as well as market and economic conditions.Douglas Simmons has been the lead manager of FSUTX since Oct 2, 2006, and most of the fund’s exposure is in companies like Nextera Energy (14.61%), Southern Co (7.99%) and Sempra (6.04%) as of 5/31/2022.FSUTX’s three-year and five-year annualized returns are 10.12% and 10.73%, respectively. FSUTX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.73% compared with the category average of 0.94%.Fidelity Telecom and Utilities Fund FIUIX invests most of its net assets in common stocks of foreign and domestic companies that are engaged in telecommunications services companies and utility companies. FIUIX advisors use fundamental analysis techniques like financial condition, industry position, as well as market and economic conditions to select investment.Douglas Simmons has been the lead manager of FIUIX since Sept 30, 2005, and most of the fund’s exposure is in companies like Nextera Energy (9.29%), AT&T (9.15%) and T-Mobile US (8.57%) as of 4/30/2022.FIUIX’s three-year and five-year annualized returns are 6.9% and 8.0%, respectively. FIUIX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.60% compared with the category average of 0.94%.Fidelity Select Consumer Staples Portfolio FDIGX invests most of its net assets in common stocks of foreign and domestic companies that are principally engaged in the business of manufacture, sale, or distribution of consumer staples. FDIGX advisors select investments based on fundamental analysis techniques like financial condition, industry position as well as market and economic conditions.Ben Shuleva has been the lead manager of FDIGX since Jan 1, 2020, and most of the fund’s exposure is in companies like Coca-cola (15.29%), Procter & Gamble (13.41%) and Walmart (7.10%) as of 5/31/2022.FDIGX’s three-year and five-year annualized returns are 9.3% and 6.7%, respectively. FDIGX has a Zacks Mutual Fund Rank #2 and an annual expense ratio of 0.74% compared with the category average of 0.76%.Want key mutual fund info delivered straight to your inbox?Zacks' free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >> Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Get Your Free (FIUIX): Fund Analysis Report Get Your Free (FSHCX): Fund Analysis Report Get Your Free (FSUTX): Fund Analysis Report Get Your Free (FDIGX): Fund Analysis Report To read this article on Zacks.com click here. Zacks Investment Research Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report.....»»

Category: topSource: zacksSep 16th, 2022

Stay Safe With 5 Defensive Stocks in an Extremely Volatile 2022

We have narrowed our search to five defensive stocks with growth potential for the rest of 2022. These are: NEE, SO, ADM, PEP, MCK. Wall Street has witnessed a tough 2022 after an astonishing rally in the last two pandemic-ridden years. The economic pain of coronavirus has been felt for the first time this year as the U.S. government has stopped its fiscal stimulus and the Fed has turned ultra-hawkish from ultra-dovish in its monetary policies.Inflation remains at a 40-year high despite an increase in the Fed Fund rate from almost zero to 2.5% from March to July. Additionally, the central bank has started to systematically reduce the size of its $9 trillion balance sheet since June.Moreover, September is historically known as the worst-performing month on Wall Street. At this juncture, it will be prudent to stay invested in defensive stocks as these are less volatile in a market’s downtrend. Five such stocks with a favorable Zacks Rank are — NextEra Energy Inc. NEE, The Southern Co. SO, McKesson Corp. MCK, PepsiCo Inc. PEP and Archer-Daniels-Midland Co. ADM.An Ultra-Hawkish Fed   The consumer price index (CPI) for August rose 0.1% month-over-month and 8.3% year over year. The core CPI (excluding volatile food and energy items) increased 0.6% month-over-month and 6.3% year over year. Both data stood at a 40-year high level and above the consensus estimates.A large section of economists and financial experts were expecting a decline in inflation in August due to a significant drop in energy prices and travel costs. However, food, shelter (housing and home building), vehicles and medical services drove costs higher in August.Following the report, the Dow, the S&P 500 and the Nasdaq Composite – plunged 3.9%, 4.3% and 5.2%, respectively. The major stock indexes posted their worst single-day performance since Jun 11, 2020. Year to date, the Dow, the S&P 500 and the Nasdaq Composite – are down 14.4%, 17.5% and 25.6%, respectively.Fed Chairman Jerome Powell and various other top Fed officials with voting rights have indicated that the rigorous rate hike will continue until inflation is at least down close to the Fed’s 2% target rate.After August’s CPI data, market participants are expecting another 75 basis point hike in the benchmark interest rate in the September FOMC of the Fed is a foregone conclusion. Some investment analysts are also expecting a 1% rate hike this month.As a result, market participants are highly concerned about a recession in the U.S. economy in the near future. Fed Chair Jerome Powell admitted that he cannot give any guarantee for a soft landing of the economy under a higher interest rate regime.Why Should You Choose Defensive Stocks?Markets are likely to remain volatile as investors are waiting for crucial FOMC meetings in September. Defensive sectors like consumer staples, utilities and health care should provide stability to one’s portfolio.Defensive sectors are mature and fundamentally strong as demand for such services is generally immune to the changes in the economic cycle. These sectors include companies that provide necessities and products for daily use. Therefore, these sectors have always been a go-to place for investors, who want to play it safe during extreme market fluctuations irrespective of internal or external disturbances.Year to date, out of the 11 broad sectors of the S&P 500 Index, the Utilities sector has gained 6.2%. The only sector, except Utilities,  that has rallied in 2022 is Energy. Consumer Staples and Health Care are down 6.9% and 9.8%, respectively. The remaining sectors of the benchmark have tumbled in double digits so far in 2022.Our Top PicksWe have narrowed our search to five defensive stocks with growth potential for the rest of 2022. These stocks have seen solid earnings estimate revisions in the last 30 days. Moreover, these companies are regular dividend payers. Each of our picks currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.The chart below shows the price performance of our five picks in the past three months.Image Source: Zacks Investment ResearchNextEra Energy is expanding domestic clean energy assets through acquisitions and organic initiatives. NEE has stakes in natural gas pipelines in Texas and gains from an increase in natural gas production.To enhance flexibility, NextEra Energy completed a few financing agreements to secure funds for acquisition. NEE benefits from declining installation costs and improving renewable technology. It has sufficient liquidity to meet obligations.NextEra Energy has an expected earnings growth rate of 13.3% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.7% over the last 30 days. NEE has a current dividend yield of 1.9%.The Southern Co. is one of the largest electric utility holding companies in the United States, and the premier energy firm serving the attractive Southeast market. Positioned in a niche industry with high barriers to entry, SO’s less volatile and recession-proof business model presents a unique opportunity to earn high returns.Southern Co. has gradually increased its customer base, ieveraging the demographics of its operating territories. With good rate-based growth and constructive regulation, SO is expected to generate steady earnings and dividend growth in the coming years.The Southern Co. has an expected earnings growth rate of 6.7% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.8% over the last 30 days. SO has a current dividend yield of 3.4%.McKesson provides pharmaceuticals and medical supplies in the United States and internationally. The strong fiscal first-quarter show by three of the four segments of MCK is encouraging. A strong earnings outlook for fiscal 2023 instills optimism.Strong adjusted operating profit growth across the key segments of MCK is encouraging. A strong position in the Distribution market continues to favor the stock. McKesson played a crucial role in the COVID-19 response efforts in the United States and abroad via the distribution of COVID-19 vaccines, ancillary supply kits, and COVID-19 tests.McKesson has an expected earnings growth rate of 2.4% for the current year (ending March 2023). The Zacks Consensus Estimate for current-year earnings has improved 0.8% over the last 30 days. MCK has a current dividend yield of 0.60%.PepsiCo benefits from the resilience and strength of global beverage and convenient food businesses. PEP expects to benefit by delivering convenience, variety and value proposition to customers through its brands. PepsiCo raised its revenue view for 2022.PepsiCo has been continuously focused on driving greater efficiency and effectiveness, by driving down costs and plowing back these savings to develop scale and core capabilities. In 2019, PEP delivered in excess of $1 billion in productivity savings, keeping it on track with its goal of generating productivity savings of at least $1 billion annually through 2023.PepsiCo has an expected earnings growth rate of 6.4% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the last 30 days. PEP has a current dividend yield of 2.7%.Archer-Daniels-Midland has been gaining from solid demand, improved productivity and product innovations. Persistent growth in the Nutrition segment of ADM, aided by significant gains in the Human and Animal Nutrition units, remains the key growth driver.Archer-Daniels-Midland expects the nutrition segment to record operating profit growth of 20% in 2022. The company has been significantly progressing on its three strategic pillars — optimize, drive and growth.Archer-Daniels-Midland has an expected earnings growth rate of 31.8% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the last 30 days. ADM has a current dividend yield of 1.8%. Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NextEra Energy, Inc. (NEE): Free Stock Analysis Report Southern Company The (SO): Free Stock Analysis Report Archer Daniels Midland Company (ADM): Free Stock Analysis Report McKesson Corporation (MCK): Free Stock Analysis Report PepsiCo, Inc. (PEP): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 14th, 2022

5 Defensive Picks to Stay Safe in Volatile September

We have narrowed our search to five utility stocks with growth potential for the rest of 2022. These are: NEE, SO, ATO, ETR and LNT. Wall Street has entered September with a series of serious near-term concerns. Inflation continues to be at a 40-year high despite an increase in the Fed Fund rate from almost zero to 2.5% during March to July. Moreover, the central bank has started to systematically reduce the size of its $9 trillion balance sheet since June.Fed Chairman Jerome Powell and various other top Fed officials with voting rights have indicated that the rigorous rate hike will continue until inflation is at least down to near the Fed’s 2% target rate. As a result, market participants are highly concerned about a recession in the U.S. economy in the near future.Moreover, September is historically known as the worst-performing month on Wall Street. At this juncture, it will be prudent to stay invested in defensive stocks from utilities as these are less volatile in a market’s downtrend. Five such stocks with a favorable Zacks Rank are — NextEra Energy Inc. NEE, Atmos Energy Corp. ATO, Entergy Corp. ETR, The Southern Co. SO and Alliant Energy Corp. LNT.Why Should You Choose Defensive Stocks?Markets are likely to remain volatile as investors are waiting for the crucial FOMC meeting in September. Defensive sectors like consumer staples, utilities and health care should provide stability to one’s portfolio.Defensive sectors are mature and fundamentally strong as demand for their services is generally immune to the changes in the economic cycle. These sectors include companies that provide necessities and products for daily use. Therefore, these sectors have always been a go-to place for investors who want to play it safe during extreme market fluctuations, irrespective of internal or external disturbances.Consequently, adding stocks from the utility basket usually lends more stability to a portfolio in an uncertain market condition. Moreover, the sector is known for the visibility of its earnings and cash flows. Stable earnings enable utilities to pay out consistent dividends that make them more attractive to income-oriented investors.Moreover, the regulated nature of their business, lends utility companies’ revenues a high level of certainty. These companies also benefit from the domestic orientation of their business, which shields them from foreign currency translation issues that are lately plaguing other industries.Our Top PicksWe have narrowed our search to five utility stocks with growth potential for the rest of 2022. These stocks have seen solid earnings estimate revisions in the past 30 days. Each of our picks carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.The chart below shows the price performance of our five picks in the past three months.Image Source: Zacks Investment ResearchNextEra Energy is expanding domestic clean energy assets through acquisitions and organic initiatives. NEE has stakes in natural gas pipelines in Texas and gains from an increase in natural gas production.To enhance flexibility, NextEra Energy completed a few financing agreements to secure funds for acquisition. NEE benefits from declining installation costs and improving renewable technology. It has sufficient liquidity to meet obligations.NextEra Energy has an expected earnings growth rate of 12.9% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the past 30 days.The Southern Co. is one of the largest electric utility holding companies in the United States, and the premier energy firm serving the attractive Southeast market. Positioned in a niche industry with high barriers to entry, SO’s less volatile and recession-proof business model presents a unique opportunity to earn high returns.Southern Co. has gradually increased its customer base, ieveraging the demographics of its operating territories. With good rate-based growth and constructive regulation, SO is expected to generate steady earnings and dividend growth in the coming years.The Southern Co. has an expected earnings growth rate of 6.7% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 11.1% over the past 30 days.Entergy has an investment plan in place to maintain utility support, and upgrade distribution and transmission. Such investment plans are expected to boost customer and industrial load growth, which should drive the earnings of Entergy.Over the next three years, ETR plans to invest $12 billion. Entergy is also making steady investments to boost its renewables portfolio. ETR plans to add more than 2,500 megawatts of capacity by the end of 2025 and more than 5,000 MW of renewables by 2030.Entergy has an expected earnings growth rate of 6% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the past 30 days.Atmos Energy continues to benefit from rising demand from its expanding customer base.  ATO is planning to invest in the range of $13-$14 billion from fiscal 2022-2026 to increase the reliability of its pipelines and serve customers efficiently.Returns within a year of capital investment continue to boost Atmos Energy’s performance and allow it to pay regular dividends. ATO has enough liquidity to meet near-term debt obligations.Atmos Energy has an expected earnings growth rate of 6.9% for the current year (ending September 2023). The Zacks Consensus Estimate for current-year earnings has improved 0.4% over the past 30 days.Alliant Energy has plans to strengthen and expand its infrastructure, retire coal-fired units, add clean assets to its generation and become carbon neutral by 2050. Electricity generated from clean assets will assist LNT to meet demand from customers. Alliant Energy plans to invest $6.1 billion between 2022 and 2025. The returns from regulated assets provide LNT with earnings visibility.Alliant Energy has an expected earnings growth rate of 6.5% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 18.2% over the past 30 days. Want to Know the #1 Semiconductor Stock for 2022? Few people know how promising the semiconductor market is. Over the last couple of years, disruptions to the supply chain have caused shortages in several industries. The absence of one single semiconductor can stop all operations in certain industries. This year, companies that create and produce this essential material will have incredible pricing power. For a limited time, Zacks is revealing the top semiconductor stock for 2022. You'll find it in our new Special Report, One Semiconductor Stock Stands to Gain the Most. Today, it's yours free with no obligation.>>Give me access to my free special report.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NextEra Energy, Inc. (NEE): Free Stock Analysis Report Southern Company The (SO): Free Stock Analysis Report Entergy Corporation (ETR): Free Stock Analysis Report Atmos Energy Corporation (ATO): Free Stock Analysis Report Alliant Energy Corporation (LNT): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 2nd, 2022

5 Low-Beta High-Yielding Stocks for a Likely Volatile September

We have narrowed our search to five large-cap low-beta stocks with a solid dividend yield. These are: ETR, IEP, SO, NI, NNN. U.S. stock markets are in the grip of volatility once again. Wall Street suffered a bloody blow in the first half of 2022 recording the worst first half in more than 50 years. The tremors of record-high inflation and its aftershock in the form of an extremely hawkish Fed have shaken investors’ confidence to its nadir.However, U.S. stock markets saw an impressive turnaround from mid-June to mid-August buoyed by an initial sign of a decline in the inflation rate, which prompted market participants to think that the Fed may reduce the magnitude of an interest rate hike from its September FOMC.The rally halted in the second half of August on investors’ concern about the continuation of hawkish monetary policies by the central bank. The meltdown deepened on Aug 26, following a stern message from Fed Chairman Jerome Powell at the annual Jackson Hole Symposium.Investors are highly worried about market’s behavior in September, which is historically the worst-performing month in Wall Street. The S&P 500 ended in the positive territory just 45% of the time in September since World War II.  At this stage, it will be prudent to invest in low-beta, high-dividend-paying stocks with a favorable Zacks Rank. Five such stocks are — Entergy Corp. ETR, Icahn Enterprises L.P. IEP, The Southern Co. SO, NiSource Inc. NI and National Retail Properties Inc. NNN.Near-Term ConcernsPowell reiterated that the central bank would pursue aggressive interest rate hikes and tighter momentary control policies until inflation comes down to at least near its 2% target level. A marginal decline in the inflation rate has no meaningful implication for the Fed.Market participants are expecting more softness in consumer spending and a decline in business spending due to a margin squeeze resulting in negative-to-moderate GDP growth. The Fed Chairman has also warned of some toughness going forward.On Aug 30, New York Federal Reserve President John Williams told The Wall Street Journal that he also favors Fed Chair’s view of rigorous rate hiking to bring down the inflation rate, which is currently at a 40-year high.The core PCE price index — Fed’s favorite gauge of inflation — came in at 4.6% year over year in July. Williams’ statement dashed market participants’ hope of a rate cut in 2023. CNBC said that Williams is a key member of the Fed’s current policy brain trust.Per CME FedWatch, at present, 70.5% of market respondents are expecting 75 basis-point rate hikes in the September FOMC.  Thereafter, there is a 64.4% probability of a rate hike of 50 basis points in the November FOMC and another 25 basis-point rise in the December FOMC.The second-quarter 2022 earnings results were better-than-expected despite the margin squeeze. However, we are seeing a significant drop in earnings projection for the third quarter. As of Aug 26, our estimate has projected 1.8% growth in earnings per share, well below the 7.6% projected on Jun 1.Why Choose Low-Beta High-Yielding Stocks?At this stage, investment in low-beta stocks with a high dividend yield and a favorable Zacks Rank may be the best option. If the markets regain momentum, the favorable Zacks Rank of these stocks will capture the upside potential. However, if the downtrend continues, low-beta stocks will minimize portfolio losses and dividend payment will act as a regular income stream.Our Top PicksWe have narrowed our search to five large-cap (market capital > $10 billion) low-beta stocks with a solid dividend yield. These companies have strong growth potential for the rest of 2022 and have seen positive earnings estimate revisions in the last 60 days. Each of our picks carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.The chart below shows the price performance of our five picks in the past three months.Image Source: Zacks Investment ResearchEntergy has an investment plan in place to maintain utility support, and upgrade distribution and transmission. Such investment plans are expected to boost customer and industrial load growth that should drive the earnings of Entergy.Over the next three years, ETR plans to invest $12 billion. Entergy is also making steady investments to boost its renewables portfolio. ETR plans to add more than 2,500 megawatts capacity by the end of 2025 and more than 5,000 MW of renewables by 2030.Entergy has an expected earnings growth rate of 6% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the last 30 days. ETR has a current dividend yield of 3.38% and a beta of 0.58.The Southern Co. is one of the largest electric utility holding companies in the United States, and the premier energy firm serving the attractive Southeast market. Positioned in a niche industry with high barriers to entry, SO’s less-volatile, recession-proof business model presents a unique opportunity to earn high returns.Southern Co. has gradually increased its customer base, ieveraging the demographics of its operating territories. With good rate-based growth and constructive regulation, SO is expected to generate steady earnings and dividend growth in the coming years.The Southern Co. has an expected earnings growth rate of 6.7% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.8% over the last 7 days. SO has a current dividend yield of 3.46% and a beta of 0.50.NiSource expects to invest $40 billion in the long-term utility infrastructure modernization program. The existing capex plans will further enhance the reliability of natural gas and electric operations, and help the company offer efficient services to NI’s expanding customer base.NiSource continues to increase its clean power assets. Moreover, nearly 75% of NI’s investment is recovered within 18 months through rate hikes, which provides necessary funds to carry on infrastructure upgrade projects.NiSource has an expected earnings growth rate of 5.8% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.1% over the last 60 days. NI has a current dividend yield of 3.10% and a beta of 0.38.Icahn Enterprises is a diversified holding company engaged in a variety of businesses. IEP operates in investment, energy, automotive, food packaging, real estate, home fashion, and pharma businesses in the United States and Internationally.Icahn Enterprises has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved more than 100% over the last 30 days. IEP has a current dividend yield of 15.48% and a beta of 0.80.National Retail Properties is a real estate investment trust, which invests in single tenant net-leased retail properties throughout the United States. NNN maintains a conservatively managed, diversified real estate portfolio with properties subject to long-term, net leases with established tenants.National Retail Properties has an expected earnings growth rate of 3.9% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1% over the last 30 days. NNN has a current dividend yield of 4.79% and a beta of 0.84. Special Report: The Top 5 IPOs for Your Portfolio Today, you have a chance to get in on the ground floor of one of the best investment opportunities of the year. As the world continues to benefit from an ever-evolving internet, a handful of innovative tech companies are on the brink of reaping immense rewards - and you can put yourself in a position to cash in. One is set to disrupt the online communication industry. Brilliantly designed for creating online communities, this stock is poised to explode when made public. With the strength of our economy and record amounts of cash flooding into IPOs, you don’t want to miss this opportunity.>>See Zacks’ Hottest IPOs NowWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Southern Company The (SO): Free Stock Analysis Report NiSource, Inc (NI): Free Stock Analysis Report Entergy Corporation (ETR): Free Stock Analysis Report Icahn Enterprises L.P. (IEP): Free Stock Analysis Report National Retail Properties (NNN): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksAug 31st, 2022

3 Magnificent Mutual Funds to Maximize Your Retirement Portfolio

Take advantage of these top-ranked, best-performing and well-managed mutual funds to maximize your retirement portfolio returns. It is never too late to invest in mutual funds for retirement. As such, if you plan to invest in some of the best funds, the Zacks Mutual Fund Rank can provide you with valuable guidance.The easiest way to judge a mutual fund's quality over time is by analyzing its performance, diversification, and fees. Using the Zacks Mutual Fund Rank of over 19,000 mutual funds, we've identified three outstanding mutual funds that are ideally suited to help long-term investors pursue and achieve their retirement investing goals.Let's take a look at some of our top-ranked mutual funds with the lowest fees.If you are looking to diversify your portfolio, consider Nationwide Growth Fund IS (NGISX). NGISX is a part of the Large Cap Growth mutual fund category, which invest in many large U.S. companies that are expected to grow much faster compared to other large-cap stocks. This fund is a winner, boasting an expense ratio of 0.64%, management fee of 0.45%, and a five-year annualized return track record of 14.31%.Wells Fargo Disciplined US Core Admiral (EVSYX) is a stand out amongst its peers. EVSYX is classified as a Large Cap Blend fund. More often than not, Large Cap Blend mutual funds invest in companies with a market cap of over $10 billion. Buying stakes in bigger companies offer these funds more stability, and are well-suited for investors with a "buy and hold" mindset. With five-year annualized performance of 11.5%, expense ratio of 0.78% and management fee of 0.35%, this diversified fund is an attractive buy with a strong history of performance.Calvert Global Energy Solutions I (CAEIX): 0.99% expense ratio and 0.87% management fee. CAEIX is classified as a Sector - Energy mutual fund. Throughout the massive global energy sector, these funds hold a wide range of quickly changing and vitally important industries. With a five-year annual return of 12.48%, this fund is a well-diversified fund with a long track record of success.We hope that your investment advisor (if you use one) has you invested in one or all of the top-ranked mutual funds we've reviewed. But if that isn't the case, it might be time to have a conversation or reconsider this vitally important relationship.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Get Your Free (CAEIX): Fund Analysis Report Get Your Free (NGISX): Fund Analysis Report Get Your Free (EVSYX): Fund Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksAug 29th, 2022