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Buy These 3 Municipal Bond Funds for Steady Returns

Below, we share with you three top-ranked municipal bond funds. Each has a Zacks Mutual Fund Rank #1 (Strong Buy). Municipal bonds, or "muni bonds," comprises 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 the 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 top-ranked municipal bond funds, viz., Invesco Rochester Municipal Opportunities Fund ORNAX, Delaware National High Yield Municipal Bond Fund Class A CXHYX and AB Municipal Bond Inflation Strategy AUNAX. 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 municipal bond funds.Invesco Rochester Municipal Opportunities Fund invests the majority of its assets in municipal securities that its advisors believe are exempt from federal income tax and the fund's corresponding state income tax. ORNAX invests in securities issued by the governments of states, their political subdivisions, and the District of Columbia, U.S. territories, commonwealths, and possessions or by their agencies and other authorities.Invesco Rochester Municipal Opportunities Fund has three-year annualized returns of 2%. ORNAX has an expense ratio of 0.69% compared with the category average of 0.92%.Delaware National High Yield Municipal Bond Fund Class A seeks a high level of exempted current income by investing most of its assets in medium and lower-grade municipal securities exempted from federal income tax. CXHYX primarily invests in lower-rated municipal securities with higher income potential and greater risk.Delaware National High Yield Municipal Bond Fund Class A has three-year annualized returns of 1.9%. Stephen J. Czepiel has been the fund manager of CXHYX since 2007.AB Municipal Bond Inflation Strategy invests the majority of its net assets in high-quality investment-grade municipal fixed-income securities that pay interest exempt from federal tax, and are rated A or better by one or more recognized rating agencies. AUNAX also invests a small portion of its assets in below-investment-grade fixed-income securities or junk bonds.AB Municipal Bond Inflation Strategy has three-year annualized returns of 3.3%. As of April 2022, AUNAX had 63.6% of its net assets invested in Miscellaneous Bonds.To view the Zacks Rank and the past performance of all municipal bond funds, investors can click here to see the complete list of municipal 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: Top Stocks for the $30 Trillion Metaverse Boom The metaverse is a quantum leap for the internet as we currently know it - and it will make some investors rich. Just like the internet, the metaverse is expected to transform how we live, work and play. Zacks has put together a new special report to help readers like you target big profits. The Metaverse - What is it? And How to Profit with These 5 Pioneering Stocks reveals specific stocks set to skyrocket as this emerging technology develops and expands.Download Zacks’ Metaverse Report 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 (ORNAX): Fund Analysis Report Get Your Free (AUNAX): Fund Analysis Report Get Your Free (CXHYX): Fund Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksAug 18th, 2022

3 Municipal Bond Funds That Should Be on Your Radar

Below, we share with you three top-ranked municipal bond funds. Each has a Zacks Mutual Fund Rank #1 (Strong Buy). The debt securities category will always be the first choice for risk-averse investors because this class of instruments provides a regular income flow at low levels of risk. Income from regular dividends helps to ease the pain caused by plunging stock prices.When considering the safety of capital invested, municipal bond mutual funds are second only to those investing in government securities. In addition, interest income earned from these securities is exempt from federal taxes and, in many cases, from state taxes.Below, we share with you three top-ranked municipal bond funds, viz., Vanguard Short Term Tax Exempt Fund VWSTX, Colorado Bond Shares A Tax Exempt Fund HICOX and AB Municipal Bond Inflation Strategy AUNAX. 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 municipal bond funds.Vanguard Short Term Tax Exempt Fund usually maintains a dollar-weighted average maturity of 1 to 2 years. VWSTX invests the majority of its assets in municipal bonds that are in the top three credit-rating categories as determined by a nationally recognized statistical rating organization or, if unrated, determined to be of comparable quality by the advisor.Vanguard Short Term Tax Exempt Fund has three-year annualized returns of 0.4%. VWSTX has an expense ratio of 0.17% compared with the category average of 0.60%.Colorado Bond Shares A Tax Exempt Fund invests the majority of its net assets in tax-exempt bonds and other tax-exempt securities. HICOX declares dividends daily and distributes them monthly.Colorado Bond Shares A Tax Exempt Fund has three-year annualized returns of 1.7%. Fred R. Kelly Jr.has been one of the fund managers of HICOX since 1990.AB Municipal Bond Inflation Strategy invests the majority of its net assets in high-quality investment-grade municipal fixed-income securities that pay interest exempt from federal tax, and are rated A or better by one or more recognized rating agencies. AUNAX also invests a small portion of its assets in below-investment-grade fixed-income securities or junk bonds.AB Municipal Bond Inflation Strategy has three-year annualized returns of 2.8%. As of April 2022, AUNAX had 63.6% of its assets invested in Total Misc. Bonds.To view the Zacks Rank and the past performance of all municipal bondfunds, investors can click here to see the complete list of municipal 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 >> 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 UpView 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 (AUNAX): Fund Analysis Report Get Your Free (HICOX): Fund Analysis Report Get Your Free (VWSTX): Fund Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 23rd, 2022

Annuities: Types And Examples

Whether you know it or not, you’ve at least heard the word “annuity” thrown around. Unconvinced? You’ve probably encountered annuities in the following instances: Defined benefit pensions. Defined benefit pensions guarantee specific benefits upon retirement. Employers can administer pensions in the form of a lump sum or lifetime annuity. Due to the fact that these […] Whether you know it or not, you’ve at least heard the word “annuity” thrown around. Unconvinced? You’ve probably encountered annuities in the following instances: Defined benefit pensions. Defined benefit pensions guarantee specific benefits upon retirement. Employers can administer pensions in the form of a lump sum or lifetime annuity. Due to the fact that these are deposits to banks, the Federal Deposit Insurance Corporation (FDIC) supervises them instead of the Securities and Exchange Commission (SEC). Social security. Ultimately, Social Security is a government-backed annuity, much like an immediate annuity. Those over 65 will receive a guaranteed stream of income after paying into Social Security for at least ten years. 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. Mega Millions. Lottery winners can choose between a lump sum or a payout with Mega Millions. Mega Millions pays out an annuity on a one-time basis. Then, twenty-nine annual payments are made, each five percent greater than the previous one. Powerball. Lottery winners can choose between a lump sum cash payout and a payout option when winning the Powerball jackpot. One payment Is paid immediately and then twenty-nine payments are made annually — each five percent larger than the previous one. Court settlement. In civil law, structured settlements are settlements that result from winning a case. Typically, settlements involve a one-time lump sum, followed by regular payments. These payments are distributed through an annuity. But, I’m not referring to those examples. Instead, I’m referring to the insurance product. Why? Because Annuities are rising in popularity. LIMRA reports that total U.S. annuity sales increased 22% to $77.5 billion in the second quarter of 2022. Since LIMRA began tracking annuity sales in 2014, these figures represent the highest quarterly sales since the fourth quarter of 2008. So, if you want to jump onboard, here’s an introduction to annuity types and examples. What is an Annuity? Annuities are financial contracts between annuity companies, like life insurance companies, brokerages, or investment companies, and annuitants, the holders, and recipients. Typically, annuitants purchase annuities from issuers, either as lump sum payments or regularly over time. In the meantime, the annuitant’s money is invested by the annuitant. This is called a premium or purchase payment and eventually, payments are made according to the annuity type. In the United States, annuities are regulated by the Securities and Exchange Commission (SEC) and by the Financial Industry Regulatory Authority (FINRA), a private, self-regulatory agency. Annuities usually form part of a retirement program and provide a steady income stream for as long as the annuitant lives. The annuitant should, however, make it part of his or her long-term retirement planning if he or she plans to use it as retirement income. It is possible to lose the value of the additional benefits, called riders, if the annuity is withdrawn before a certain age, usually 59 ½. Riders may be purchased to enhance an annuity, such as death benefits, which allow beneficiaries to inherit assets. It is also common for annuities to have a surrender period, usually during the first five to ten years after purchase. During this time period, if the annuitant withdraws funds or cancels, surrender charges will apply. In addition to income tax, early withdrawals are subject to a 10 percent tax penalty from the Internal Revenue Service (IRS). Types of Annuities There are a lot of ways an annuity can be structured, like how long payments are guaranteed to continue. In addition to lifetime payments, annuities can be set up so that they keep paying as long as the annuitant or their spouse, if a survivorship benefit is selected, lives. As an alternative, annuities can be arranged to pay out funds for a predetermined amount of time, such as 20 years. Immediate and Deferred Annuities When you deposit a lump sum, annuities start right away. Or they can be structured as deferred benefits. In the case of an immediate payment annuity, you start getting paid right away after you make the deposit. For example, an immediate annuity is when an individual pays a single premium, say $200,000, to an insurance company and receives monthly payments, say $5,000, for a specified period of time. Depending on interest rates and market conditions, immediate annuities pay out varying amounts. On the other hand, deferred income annuities don’t start paying out until a future date. In fact, you often can choose when you want to start receiving payments. If you want, you can hold off annuitizing the $200,000 or take action on the annuity until you’re 85, for example. The type of annuity you choose will determine whether some of your principal investment can be recovered. With a straight lifetime payout, the beneficiary won’t receive a refund, the payments will simply continue until they die. Any remaining principal in an annuity that is set for a fixed period of time may be refunded to the recipient or to their heirs if the annuitant has passed away. Fixed and Variable Annuities In general, annuities can be fixed or variable: Fixed annuities. Based on the annuitant’s contributions over a certain period, a fixed annuity pays a fixed rate. Accounts are tax-deferred during the accumulation phase, and fees are largely limited to surrender charges. The main advantage of fixed annuities is that they offer a predictable and steady income. Variable annuities. There’s no guaranteed rate with a variable annuity. Rather, its value changes based on the stock market index performance of its sub-accounts, which are like mutual funds. Fees associated with this type of annuity often exceed 2 percent, including fund management costs, administrative costs, and surrender penalties. Unlike fixed annuities, you can make more money with variable annuities. However, there is more risk involved. It should be noted that there’s another option known as indexed annuities. Their value, like variable annuities, is determined by the stock market index. When the index gains value, the company credits a portion to the account, and if it loses value, the account remains unchanged. An account’s allocation can, however, be limited by rate and yield caps. Annuities that offer both a fixed rate of interest and a stock market component are referred to as fixed indexed annuities. How Do Annuities Work In general, annuities work in several steps: Purchase. Annuitants purchase annuities from annuity companies, either in a lump sum or in installments. Payments can be received for a specific number of years, known as a period certain, or for life. Accumulation. During the accumulation phase, the annuitant makes deposits or the annuity company makes investments to fund the annuity. Upon making the first payment to the annuity, the annuitant enters this phase. Annuitization. Annuitants will receive payments from the annuity issuer after the accumulation period ends. Depending on the type of annuity purchased, payments will vary in size, method, and duration. Accumulative Annuity Example Annuities can be used to accumulate funds for a goal such as living a comfortable lifestyle in retirement. The first example is our good friend the fixed annuity. Remember that when you purchase a fixed annuity, you will know the interest rate up front. You’ll also know how long you will have to hold your money before withdrawing it. For those who want to know what will happen in the future and have peace of mind, fixed annuities are clutch. Another type of annuity that accumulates value over time is the variable annuity. An variable annuity differs from its fixed cousin in that you can select subaccounts. There are usually a variety of choices in the subaccounts, including money-market funds, bond funds, and investments linked to the market. You can increase your wealth over time by investing in this type of annuity rather than a fixed one. However, it could also lose value, including its principal. If you plan on turning your accumulated funds into retirement income, using a variable annuity can be an efficient way to take advantage of market-based investment growth. In order to get certainty, you should ask about the cost of any guarantees offered by a variable annuity. Just be aware that the fees for certain variable annuities may be high, depending on whether you need guarantees. On the flip side, some offer lower fees that are comparable to those associated with managed investment accounts over time. When you have an accumulation annuity, you can eventually withdraw your money and use it for whatever you want. Alternatively, it could be adapted into an income plan that will provide guaranteed income for life, or a limited period of time. Income Annuity Example In exchange for an up-front payment to an insurance company, a lifetime annuity ensures you a paycheck for a set period of time. No matter how long you live, your payments will continue. As a result, income annuities are a reliable tool for reducing the risk of outliving your retirement savings. Additionally, many income annuities offer what is called a period certain guarantee. Even if you die within that timeframe, say 10 or 20 years, the beneficiary will receive payments for a minimum number of years. What’s the key difference between an accumulation annuity and an income annuity? You cannot withdraw the principal from an income annuity. At the same time, you get your money back through guaranteed payments. Let’s now take a closer look at a few examples of income annuities. After you pay the insurance company, an immediate income annuity begins paying income shortly afterward. In most cases, immediate income annuities are the best choice when you’re looking to convert a lump sum into income as soon as possible, usually after retirement. You can purchase a deferred income annuity today for income that will start arriving several years later. It is also possible to earn dividends from a few companies, which can increase your future income significantly. When you’re looking to lock in future income, perhaps from recent investment gains, deferred income annuities are usually the best choice. You may be interested in a deferred income annuity if you’re in your 50s and want to lock in a guaranteed income that will be available in your 60s when you retire. Whenever your income annuity pays dividends, your guaranteed income will grow each year leading up to retirement — without you having to make any additional investments. FAQs Who buys annuities? For individuals who want a stable, guaranteed retirement income, annuities are an appropriate financial product. But, this financial product is not recommended for younger people or for those with liquidity needs because the lump sum into the annuity is illiquid and subject to withdrawal penalties. What’s more, it’s impossible for annuity holders to outlive their income stream, which mitigates longevity risks. Are annuities safe? Annuities are generally considered safe investments. Annuities should, however, be purchased from reputable, highly rated companies with a good reputation in insurance and financial services. This is partly due to the fact that annuities are not insured by the Federal Deposit Insurance Corporation like certificates of deposit. Depending on the state, the amount of protection may vary. In addition to regulating insurance companies, states require them to comply with financial standards designed to ensure their viability. A company that sells annuities must belong to a guaranty association in the state where it operates. The National Organization of Life & Health Insurance Guaranty Associations provides links to all state guaranty associations on its website. How much do you need to start an annuity? There are different fees and restrictions associated with each annuity. Moreover, investing requirements are different for different companies. You may want to consider how your annuity purchase will perform before deciding whether you can invest enough in one. As an example, let’s look at a fixed, immediate annuity with a 3% payout rate. You will receive payments equal to 3% of your investment each year. That means if you contributed $1,000, you would make a $30 annual payment. With $100,000, that would jump to $3,000. What’s an annuity fund? An annuity fund is a portfolio of investments in which annuity funds are invested. Annuity funds earn returns, which are used to pay annuity holders. In order to purchase an annuity, an individual must pay a premium to the insurance company. The insurance company invests the premium in an annuity fund, which is an investment vehicle which consists of stocks, bonds, and other securities. What is the surrender period? Surrender periods refer to the amount of time before an investor can withdraw funds from annuities without penalty. Surrender charges are basically deferred sales fees that apply to withdrawals before the surrender period ends. The period typically lasts several years. Withdrawals before the surrender period can result in significant penalties. 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: valuewalkSep 20th, 2022

The Accurate Guide To Retirement Annuities

Is your retirement income sufficient? Can you count on it being enough for life so that you will not run out of money when you reach old age? If you haven’t answered these questions, it’s about time you do. As one example, a survey by Schroders indicates that people expect to need an average of […] Is your retirement income sufficient? Can you count on it being enough for life so that you will not run out of money when you reach old age? If you haven’t answered these questions, it’s about time you do. As one example, a survey by Schroders indicates that people expect to need an average of $1.1 million to retire comfortably, but only 24% expect to reach that threshold. In addition, 56% of respondents expect to save less than $500,000, including 36% who will save less than $250,000. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Henry Singleton Series in PDF Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {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   Considering that people are living longer worldwide, that should shake you to your core. In fact, between 2020 and 2050, the number of elderly people aged 80 or older is expected to triple, reaching 426 million. So, yeah. You’re going to need a solid nest egg. But, you also need a guaranteed income that you won’t outlive. That’s a tall glass to fill. However, a retirement annuity might just do the trick. Retirement Annuities: What Are They and How Do They Work? With a retirement annuity, you put money aside to receive an income in retirement. A schedule is outlined for the payment of this income. The payment is usually made monthly, quarterly, or annually. Overall, in your golden years, you will have peace of mind knowing that you have a reliable income stream. Buying a retirement annuity involves paying a premium. The premiums for retirement annuities are usually paid either in a lump sum or over time. But, this depends on the type of contract you sign. Retirement annuities can be divided into three categories: fixed, variable, and indexed: Fixed annuities. There is a minimum rate of return on the premium dollars invested with this type of annuity. There can be periodic or even annual adjustments to the rate. As an example with a Due Fixed Annuity, your get 3% a month on your money. With a monthly deposit, you’ll always know how much money you’ll have when you retire. Variable annuities. Payments into a variable annuity are invested in one or more of its subaccounts. The concept of sub-accounts is similar to that of mutual funds. Depending on the performance of the sub-accounts, the value of the annuity will vary. Indexed annuities. Indexed annuities are based on indices, like the S&P 500, and offer returns based on percentages of those indices. Additionally, index annuities generally guarantee a minimum return. Immediate vs. Deferred Retirement Annuities It is important to note that some annuities are immediate, meaning that payments can begin as soon as the annuity is purchased. With an immediate annuity, you pay the insurer a lump sum. These annuities are popular with older adults who want to ensure a regular income once they retire Deferred annuities, however, are used in the long run. You don’t get your money until a certain date after paying in. You have the option of earning interest or profiting from market gains before that date. Understanding Retirement Annuities The process of converting your annuity balance into income is known as annuitization. Your funds could remain invested indefinitely if your contract doesn’t require annuitization. In some cases, you may be able to take one-time withdrawals or designate a beneficiary to receive the money upon your death. In the event that you choose to annuitize, you will receive income based on: Your annuity’s accumulated funds. The investments that have been made with those funds. The duration of your income payments. Your income stream can last for a set period of time, like 20 years, or for the rest of your life. You might be able to adjust inflation as an optional feature. The Importance of Retirement Annuities In the face of retirement, an entire generation feels unprepared and unequipped due to the lack of pensions. In fact, the amount of Americans retiring with defined benefit pensions today is less than one-third (31%). No wonder a study by the Insured Retirement Institute shows that only 25 percent of baby boomers think they will have enough money when they retire. “Americans are living longer and face a variety of risks in retirement,” Michael Finke, a research fellow and dean, and chief academic officer of the American College of Financial Services, said in a 2018 news release introducing the Protected Lifetime Income Index research initiative. According to Finke, most retirees today use their retirement savings, such as IRAs or 401(k) plans, to pay for their retirement expenses. “If they had an annuity to accompany their savings and investments, [retirees] could always count on a source of guaranteed monthly income, which would reduce the risk of running out of money. And annuities are a solution that can provide that protected income for life,” added Finke. Additionally, a variety of studies have shown that retirees who receive guaranteed income in addition to Social Security are happier. Furthermore, a guaranteed lifetime income in retirement can provide a safety net during market downturns caused by unpredictable events like COVID-19. How Does a Retirement Annuity Pay Out? The way retirement annuities pay out determines the amount of income they generate. Depending on the type of retirement annuity, immediate or deferred payouts are available. Immediate Annuities An immediate annuity may be purchased as a lump-sum payment right before retirement by some buyers. As such, there is an upfront premium associated with immediate annuities. As soon as you pay the premium, you’ll receive monthly payments. Depending on the annuity terms, the payout usually begins under a year. In order to ensure steady payments throughout retirement, people close to retirement age should consider this option. Deferred Annuities On the other hand, deferred annuities can be built over several years. It is common for people to pay their premiums over time, but they don’t begin receiving their payout until after retirement. Depending on the type of annuity you have, your money will grow either through interest or through stock and bond market gains. Annuity Payout Options Again, depending on your needs, there are a number of different payout periods you can choose from. “Probably the most common is the life annuity with cash refund option,” explains State Farm agent Patrick Blevins. “With this option, if you’re still living once your initial investment has been paid out to you, you’ll keep receiving the same monthly payment for however long you live.” “If you don’t outlive your initial investment, your beneficiary will receive a lump sum payment based on whatever portion of the initial amount wasn’t paid out to you, so it guarantees the return of principal,” he adds. “Period certain options are popular too, where you or your beneficiary is guaranteed to receive payments for a specified number of years,” says Blevins. “If you live past that date, you’ll still continue to receive payments for the rest of your life.” How to Use Your Retirement Annuity Income There are several ways in which retirement annuity income can be used. Generally speaking, it should be used in a way that meets your retirement needs and goals. Some of the most common uses include: Covers your fixed expenses. As a supplement to Social Security, annuity income can be used to cover fixed expenses. These would be expenses like your mortgage, utilities, and groceries. Pays for your retirement lifestyle. Any retirement goals that you have planned can be funded from your retirement annuity income. For example, going on a vacation or picking up new hobbies. Keeps your spending in check. If you’re thinking about a retirement budget, it should include a stream of income, like an annuity and social security payments. By doing so, you avoid overspending. How? When you know what’s coming in, you can make more financially sound decisions. In these circumstances, retirement annuity income offers the advantage of protecting your retirement savings for other expenses that inevitably arise. The Advantages of Retirement Annuities There are two main reasons why people buy annuities: tax deferral and guaranteed income. Tax-deferred earnings. If you invest in an annuity, your funds will either earn a fixed rate of interest or grow with underlying investments. There are no immediate tax consequences associated with the resulting income. As with a 401(k), annuities do not need to be taxed until payments start coming in. Guaranteed income. As soon as you annuitize, the insurer is contractually obligated to pay you an income. In most cases, you’ll receive a monthly payment — often for life. Annuity benefits should be covered by your state’s guaranty association if your insurer goes bankrupt. You can find out the rules that apply to you by checking with your state. But, there are a couple of other benefits worth mentioning, such as: Guaranteed rates of return. There are some annuity contracts that offer guaranteed returns. Annuities, both fixed and indexed, can have this feature. Although your rate of return can certainly be higher, knowing there is a floor is nice. However, it is possible for this floor to result in a loss instead of a gain. No contribution limits. An annual contribution limit applies to 401(k) and IRA accounts and other tax-favored programs. However, retirement annuities do not have contribution limits. Survivor options. It is possible for survivors of a contract holder to choose from several options offered by annuities. Each insurer will have its own set of terms and conditions. A beneficiary option will typically be included in the contracts to designated beneficiaries upon the death of the account holder. In addition, there might be a joint and survivor option for a spouse, or a period certain option for someone not related to the spouse. The Disadvantages of Retirement Annuities Despite the advantages listed above, retirement annuities aren’t flawless. As such, you should also be aware of its disadvantages. Hefty fees. In comparison with mutual funds and CDs, annuities are expensive. In many cases, these are sold by agents, whose commissions are paid upfront. However, buying direct from the insurer can help you avoid those high upfront fees. Despite this, you may still be faced with significant annual expenses, often exceeding 2%. In addition, if you increase your coverage with special riders, you’ll pay even more. Early withdrawal penalties. Withdrawing funds from your retirement annuity before age 59 ½ will result in income tax and a 10% penalty. Illiquid asset. It is not possible to change the terms of the payments once you have annuitized. If you sell or surrender your annuity, you will lose some of your principal invested. Whenever you attempt to withdraw from your annuity within the first few years of your contract, you will incur a surrender fee. It usually takes 6-8 years for the surrender period to expire. Higher tax rates. One of the main selling points of these products is the tax-deferred status of interest and investment gains. You will, however, need to declare ordinary income when you withdraw your funds. In some cases, the capital gains tax rate is higher than the income tax rate. Complexity. There can be a lot of complexity involved with annuities. Sometimes, it can be difficult to understand what you’re paying for. Possibility of insurer default. It is the insurance company that issues the contract that guarantees annuities. Although there haven’t been many annuity defaults, it is possible. The guaranty association in your state provides backup for the insurance company. Before investing in an annuity contract, it’s a good idea to check the insurer’s financial stability. How Does a Retirement Annuity Fit into Your Retirement Portfolio Annuities can be a valuable part of your retirement plan. However, a well-rounded retirement plan should also include IRAs, 401(k) plans, life insurance, and other traditional financial tools. As a retirement income replacement, an annuity can also provide a source of income. Upon receiving the payout, you will continue to receive a steady, scheduled income for the rest of your life. In this way, retirement annuities protect you against outliving your retirement savings. In short, annuities give you financial flexibility in retirement by diversifying your retirement portfolio. To determine if an annuity is a good choice for retirement, it may be a good idea to speak with an advisor familiar with annuities. Ideally, you should avoid working with advisors who receive commissions when they sell annuities. And, as with any large purchase, always shop around. It would also be helpful to create a written financial plan to determine if an annuity is right for you. A financial plan can then include an annuity that fulfills a specific retirement goal. You may not be a good candidate for an annuity if it does not fulfill a specific financial goal. Frequently Asked Questions What is an annuity? In simple terms, an annuity involves a contract between you and an annuity provider. In many cases, through an insurance company. If you give the insurer money, they will guarantee that the money will be returned plus interest (deferred annuity) or that you will start receiving income fairly soon (immediate annuity). What is tax-deferred? While interest accrues on annuities, they aren’t taxed until they are withdrawn, which means they accumulate interest. As a result, annuity earnings increase. How can I protect myself when buying an annuity? It’s important to make sure that your insurer will be able to honor its commitment to you in the long run. It is easy to find financial strength ratings from agencies such as A.M. Best, Moody’s, Standard & Poor’s, and Fitch. The state insurance departments that regulate annuity insurers require them to file regular financial reports. Annuities are also protected from failure by state guaranty associations up to certain limits. Besides doing your research on the annuity company you’re considering, you can spread your annuity money across more than one insurer so you’re fully protected by the guaranty association if you’re investing a lot of money. What happens to my annuity when I die? There is one unique benefit to an annuity: the death benefit. Survivors of an annuity owner who die before all payments are disbursed can inherit the remaining assets. In the absence of a beneficiary, all remaining annuity assets are surrendered to the company that issued the annuity. Are there alternatives to annuities? Besides annuities, there are other options for long-lasting income without the fees and complexity of them. Two options that may be helpful to you are Social Security and dividend stocks. Social Security. Aside from annuities, Social Security is one of the few income streams that can last a lifetime. The amount of your Social Security benefit is determined by your earnings history. As you near retirement, you still have some influence over how much you receive. For example, raising your work income or delaying your benefits. A major advantage of Social Security over an annuity is that it does not require any upfront payments. Dividends. In addition to generating lifelong income, dividend stocks can also generate capital gains. This isn’t guaranteed, however. Dividends are always subject to reduction, suspension, or cancellation by a company. Some dividend stocks are more reliable than others, which is good news. Dividend Aristocrats, for example, are companies that have paid and increased dividends continuously for 25 or more years. In addition, Dividend Kings are a group of dividend increasers who have increased their dividends for more than 50 years. The dividend stock market offers more uncertainty than annuities, but it also offers a greater potential for income. With time, your stocks will appreciate, as well as you’ll earn dividend income. While it’s worth exploring retirement options that meet your needs, you shouldn’t put all of your eggs in one basket. In other words, to have a comfortable lifestyle in retirement, you should have a diversified portfolio. 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: valuewalkSep 14th, 2022

Top 3 Nuveen Mutual Funds to Add for Stable Returns

Below, we share with you three Nuveen mutual funds, viz., NPSAX, NHMRX and FTLRX. Each has a Zacks Mutual Fund Rank #1 (Strong Buy). Nuveen Investments, headquartered in Chicago, IL, was founded in 1898 by John Nuveen. The company aims to provide financial services to its clients using a multi-boutique structure. It provides these services through an independent team comprising Nuveen Asset Management, Winslow Capital and Symphony.Nuveen is the number one farmland assets manager in the world and a leader in alternative investments. In its Multi-Asset Solutions, the company had $1.1 trillion of assets under management as of Jun 30, 2021. Nuveen offers a wide range of asset classes and products, ranging from equity and alternative funds to municipal and taxable fixed-income bond funds.Below we share with you three top-ranked Nuveen mutual funds, viz.,Nuveen Preferred Securities & Income Fund NPSAX, Nuveen High Yield Municipal Bond Fund Class I NHMRX, Nuveen Louisiana Municipal Bond Fund Class I FTLRX. 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 Nuveen mutual funds.Nuveen Preferred Securities & Income Fund invests most of its assets along with borrowings, if any, in preferred and other income-producing securities. NPSAX also invests a small portion of its net assets in financial services companies along with securities that are rated investment-grade or below investment grade.Nuveen Preferred Securities & Income Fundhas three-year annualized returns of 2.3%. As of the end of March 2022, NPSAX had 65.03% of its assets invested in preferred stocks.Nuveen High Yield Municipal Bond Fund Class I seeks high current income, which is exempted from regular federal income taxes along with the appreciation of capital by investing most of its assets along with borrowings, if any, in municipal bonds that pay interest that is exempted from regular federal personal income tax. NHMRX advisors also invest in lower-quality long-term municipal bonds using effective leverage through investments in inverse floaters.Nuveen High Yield Municipal Bond Fund Class I has three-year annualized returns of 1.7%. NHMRX has an expense ratio of 0.52% compared with the category average of 0.92%.Nuveen Louisiana Municipal Bond Fund Class I seeks a high level of interest income exempt from regular federal and Louisiana state income taxes along with capital preservation by investing most of its assets in investment-grade municipal bonds rated BBB/Baa or higher by an independent rating agency at the time of purchase. FTLRX may also invest a small portion of its net assets in below investment grade municipal bonds known as "high yield" or "junk" bonds.Nuveen Louisiana Municipal Bond Fund Class I has three-year annualized returns of 1.0%. Steven M. Hlavin has been the fund manager of FTLRX since January 2011.To view the Zacks Rank and the past performance of all Nuveen mutual funds, investors can click here to see the complete list of Nuveen 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 >> 7 Best Stocks for the Next 30 Days Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops." Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.8% per year. So be sure to give these hand-picked 7 your immediate attention. See them 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 (NPSAX): Fund Analysis Report Get Your Free (NHMRX): Fund Analysis Report Get Your Free (FTLRX): Fund Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 6th, 2022

Futures Head For Another Monthly Drop, As Oil Slumps, Yields And Dollar Rise

Futures Head For Another Monthly Drop, As Oil Slumps, Yields And Dollar Rise After three days of steep declines, S&P futures traded between modest gains and losses as global markets headed for the third consecutive weekly decline and another monthly drop on concerns that aggressive central bank tightening will push the global economy into a hard recession. At 7:15am ET, futures were up 0.2% and Nasdaq futures rose 0.7%, after trading both higher and lower earlier in the session. The dollar rose, Treasury yields jumped after another record CPI print in Europe, while the bizarre oil slump extended. In premarket trading, Bed Bath& Beyond plunged after the home-goods retailer filed a form to sell an unspecified number of shares. HP also fell 6.8% after the company reported quarterly sales that missed estimates and cut its annual profit forecast as demand for personal computers and printers slowed. Analysts noted that the PC maker will need a couple of quarters to correct its inventory. Here are other notable premarket movers: Robinhood (HOOD US) falls 2.3% as Barclays cut its rating to underweight from equal weight ChargePoint (CHPT US) shares rose as much as 2.1% in US premarket trading, after the electric vehicle charging network operator’s second-quarter revenue came in ahead of estimates, with analysts positive on the company’s gross margin performance amid supply-chain woes HP Enterprise (HPE US) narrowed its full-year adjusted earnings per share forecast and reported in-line revenue for the third quarter. Analysts were bracing for the worst, after Dell’s disappointing outlook last week. Shares fall 1% in premarket trading PayPal shares rise 2.9% in premarket trading after Bank of America upgraded its rating on the payments stock to buy from neutral previously Morgan Stanley resumes coverage of Welltower (WELL US) at overweight and a $90 PT with the broker bullish on a recovery for the US senior housing market “What’s clear is that predicting this market is not clean cut,” Angeline Newman, a managing director at UBS Global Wealth Management, said on Bloomberg Television. “We are living in a world where conflicting economic signals are making the path of monetary policy very difficult to determine.” Market bets on a shallower trajectory for Federal Reserve tightening are receding, raising the prospect of more losses for stocks and bonds in an already difficult year. Investors are scouring incoming data for clues on the policy path, with August US jobs figures on Friday the next key report. European shares reversed earlier gains to trade at the lowest level in more than six weeks, after Euro-area inflation accelerated to another all-time high, strengthening the case for the European Central Bank to consider a jumbo interest-rate hike when it meets next week. ECB Governing Council member Joachim Nagel urged a “strong” reaction, hinting at a 75bps hike just as Europe braces for an energy disaster with winter coming. Paradoxically this pushed the EUR to session lows. In Europe, the Stoxx 50 fell 0.7%, with the FTSE 100 lagging, dropping 1%. Energy and autos slump while utilities is the worst-performing sub-index in the European gauge on Wednesday, extending their selloff to a fourth session as investors fret over Russian gas supplies at the start of a three-day halt of the key Nord Stream pipeline. Slump is lead by Drax (-4.3%), National Grid (-4%), Italy’s Terna (-2.3%), Germany’s Uniper (-4%) and Fortum (-3%). Some renewables also take a hit, including Orsted (-2.4%) and Verbund (-1.4%). Citi says utilities had to put up more than EUR100b of additional collateral versus 2020 levels because of record levels of future power and gas prices. Here are the biggest European movers: ASML rises as much as 3.4%. It is among the “most attractive names” in the current uncertain macro environment, UBS says in a note upgrading the semiconductor-equipment company to buy from neutral. Stadler Rail shares climb as much as 6% after reporting mixed results, with 1H sales beating estimates and a strong order intake, offset by more cautious comments on margins and a negative currency impact, according to analysts. CFE shares surge as much as 23% after the Belgian construction and development company’s 1H results, with Degroof raising its estimates. Ackermans & van Haaren rises as much as 7.5% after KBC upgrades its rating on the industrial holding company to buy from hold following first-half results, which the broker describes as “resilient” in tough times. Lundbergforetagen shares rise as much as 5.5%, the most since May, after DNB reiterated its buy recommendation for the Swedish real estate investment firm, while trimming its PT to SEK485 from SEK530. Utilities are among the worst-performing sub-index in the European gauge on Wednesday, extending their selloff to a fourth session as investors fret over Russian gas supplies at the start of a three-day halt of the key Nord Stream pipeline. European energy stocks underperform for a second day after oil erased initial gains on Wednesday to head for a third monthly decline as rate hikes by major central banks and China’s Covid Zero strategy increase the likelihood of a global economic slowdown. Brunello Cucinelli shares fall as much as 7.2% after the Italian luxury fashion company reported 1H results; Deutsche Bank says the update is “largely as expected” with guidance appearing “relatively conservative.” Europe's weakness was sparked by the ongoing rout in oil, which headed for a third monthly drop - the longest losing run in more than two years - hampered by the likelihood of slower global growth, yet which as Goldman says is now the best asset to own having priced in a recession more than any other asset class. European natural gas advanced after a two-day slump, with traders weighing risks to Russian supplies against the continent’s drastic efforts to curb the energy crisis. Earlier in the session, Asian equities climbed in a mixed day that saw tech shares advance but Japan’s bourses retreat as traders digested China’s weak economic data while technology stocks rebounded. BYD Co. plunged in Hong Kong after Warren Buffett’s Berkshire Hathaway Inc. trimmed its stake in the electric vehicle maker. The MSCI Asia Pacific Index erased an earlier loss to trade up as much as 0.6%. Chinese benchmarks underperformed the region after factory activity contracted on power shortages spurred by a historic drought. Stocks were also weak in Hong Kong as Warren Buffett’s sale of shares in BYD Co. fueled general risk-off sentiment, countered by advances in the city’s tech shares. Traders also weighed US job and consumer confidence numbers, which were seen backing the Federal Reserve’s rate-hike plans. “The dented risk sentiment from tighter-for-longer central bank policies is likely to weigh on sentiment in the region,” Jun Rong Yeap, a market strategist at IG Asia Pte, wrote in a note. He added that further headwinds including Covid lockdowns may weigh on Chinese equities. Taiwanese stocks rose, even amid a potential escalation of cross-strait tensions, while South Korean shares also advanced on gains in tech names. Indian and Malaysian markets were closed for holidays. Investors are also contending with mounting friction between Beijing and Taipei after Taiwanese soldiers fired shots to ward off civilian drones and evaluating the latest Chinese data, which indicated factory activity shrank for a second month. Power shortages, a property sector crisis and Covid outbreaks all took a toll. In Japan, stock dropped amid concerns over the potential for Federal Reserve tightening and data that showed weak factory activity in China.  The Topix fell 0.3% to 1,963.16 as of the market close Tokyo time, while the Nikkei 225 declined 0.4% to 28,091.53. Sony Group Corp. contributed the most to the Topix’s decline, decreasing 1.7%. Out of 2,169 stocks in the index, 683 rose and 1,381 fell, while 105 were unchanged. “US stocks, which plummeted on the Jackson Hole meeting last week, have fallen further and Japan stocks are matching that,” said Kiyoshi Ishigane, a chief fund manager at Mitsubishi UFJ Kokusai Asset Management. In Australia, the S&P/ASX 200 index fell 0.2% to close at at 6,986.80, weighed by losses in mining and energy shares.  Asia-Pacific energy-related stocks fell as oil headed for its third straight monthly decline, the longest losing run in more than two years, on prospects for slower global growth. In New Zealand, the S&P/NZX 50 index fell 0.4% to 11,601.10 In FX, the Bloomberg dollar spot index rose again, up 0.2%, as it reversed a loss as the greenback rebounded, with most Group-of-10 peers swinging to a loss in the European session. AUD and JPY are the strongest performers in G-10 FX, NOK and CHF underperform. The euro fell to a session low of $0.9974 as euro-area inflation accelerated to another all-time high of 9.1% from a year ago, exceeding the 9% median estimate in a Bloomberg survey. Norway’s krone plunged by 1% against the euro and even more versus the dollar after news that the nation’s central bank will ramp up its purchases of foreign currency to 3.5 billion kroner ($350 million) a day in September from 1.5 billion in August as it deposits energy revenue into the $1.2 trillion sovereign wealth fund. The pound neared the lowest since March 2020 against the greenback that was touched yesterday, yet options suggest a short-squeeze could be due. The Australian and New Zealand dollars held up well amid month-end demand after earlier gains in US stock futures following China PMI data. The yen was steady. Board member Junko Nakagawa said that the Bank of Japan’s forward guidance for interest rates isn’t necessarily directly linked with its Covid funding program. In rates, Treasuries are off session lows as US trading gets under way Wednesday, selloff paced by gilts with UK yields higher by 9bp-13bp. US 2Y barely exceeded Tuesday’s multiyear high. US yields are higher by 3bp-5bp, 2- year rose as much as 5.3bp to 3.275%, Treasury 10-year yield adds 4bps to around 3.14%.  Curve spreads are little changed, inverted 5s30s around -5.7bp, near lowest level since mid June; month-end index rebalancing at 4pm New York time will extend the duration of Bloomberg Treasury index by an estimated 0.12 year. European bonds slide across the curve, led by gilts, after hotter-than-expected euro-area inflation data. Gilts 10-year yield is up 11 bps to 2.82%, while German 10-year yield rises 3.6bps to 1.55%. Peripheral spreads widen to Germany with 10y BTP/Bund adding 2.2bps to 233.4bps. Bitcoin has managed to reclaim USD 20k after slipping to a USD 19.7k low, overall the crypto remains in fairly tight sub-1k parameters. In commodities, crude futures extend declines. WTI drifts 2.6% lower to trade near $89, while Brent falls 3% to the $96 level. Base metals are mixed; LME tin falls 2.5% while LME nickel gains 1.4%. Spot gold falls roughly $10 to trade near $1,714/oz. Spot silver loses 1.5% near $18. Looking to the day ahead now, data releases include the flash CPI reading for the Euro Area in August, as well as the country readings for France and Italy. On top of that, there’s the ADP’s new report of private payrolls for August and the MNI Chicago PMI for August. Finally, central bank speakers include the Fed’s Mester and Bostic. Market Snapshot S&P 500 futures little changed at 3,986.25 STOXX Europe 600 down 0.6% to 417.39 MXAP up 0.2% to 158.39 MXAPJ up 0.3% to 519.46 Nikkei down 0.4% to 28,091.53 Topix down 0.3% to 1,963.16 Hang Seng Index little changed at 19,954.39 Shanghai Composite down 0.8% to 3,202.14 Sensex up 2.7% to 59,537.07 Australia S&P/ASX 200 down 0.2% to 6,986.76 Kospi up 0.9% to 2,472.05 German 10Y yield little changed at 1.54% Euro down 0.1% to $1.0003 Gold spot down 0.5% to $1,715.78 U.S. Dollar Index up 0.14% to 108.92 Top Overnight News from Bloomberg Forget about a soft landing. Federal Reserve Chair Jerome Powell is now aiming for something much more painful for the economy to put an end to elevated inflation. The trouble is, even that may not be enough. It’s known to economists by the paradoxical name of a “growth recession.” France said the nation’s natural gas storage will be full in about two weeks, enabling the country to ride out the coming winter even as Russia turns the screw on deliveries of the fuel UK statisticians decided that a £400 ($466) government grant to help households with energy won’t lower headline inflation numbers, a move that will protect the returns of some bond holders but increase payments made by both the Treasury and consumers Sweden’s Riksbank hopes to be able to avoid a recession as it is prepared to do what is necessary to bring soaring inflation back to the central bank’s 2% target, deputy governor Anna Breman said The People’s Bank of China set stronger-than-expected yuan fixings for six sessions to Wednesday and people familiar with the matter said at least two local banks pushed back against the weakness when submitting data for the reference rate. Traders still expect it to weaken past the psychological 7 per dollar level, even if the moves slowed the decline China’s retail activity flatlined in August with e-commerce demand especially weak, according to satellite data, suggesting that consumer caution due to the ongoing Covid Zero policy and elevated unemployment remain major drags on the world’s second-largest economy Russia’s seaborne crude shipments to Asia have fallen by more than 500,000 barrels a day in the past three months, with flows to the region hitting their lowest levels since late March A more detailed look at global markets courtesy of Newsquawk Asia-Pacific stocks were mostly negative following the losses across global counterparts owing to recent hawkish central bank rhetoric and with geopolitical concerns stoked after Taiwan fired warning shots at a Chinese drone. ASX 200 was subdued by weakness in commodity-related stocks with the energy sector the worst hit after the recent slump in oil prices, while a surprise contraction in Construction Work added to the headwinds and feeds into next week’s GDP release. Nikkei 225 declined but held above 28k after encouraging Industrial Production and Retail Sales. Hang Seng and Shanghai Comp were pressured amid a heavy slate of earnings releases and with US regulators said to have selected a number of US-listed Chinese companies for audit inspections including Alibaba, while participants also reacted to the Chinese PMI data in which the headline Manufacturing PMI topped estimates but remained in contraction territory. Top Asian News Japanese PM Kishida said he has fully recovered from COVID-19 and returned to normal duty. Kishida added that they will begin administering Omicron variant targeted vaccines earlier than planned, while he announced to increase the daily upper limit of entrants to Japan to 50k on September 7th and will look into further loosening of border controls. South Korean vice-Finance Minister says they received "positive signs" during talks with FTSE Russell, FX environment has not emerged as a hurdle in discussions. Possibility is high for S. Korea's inclusion to the FTSE's WGBI watch-list in September Chinese NBS Manufacturing PMI (Aug) 49.4 vs. Exp. 49.2 (Prev. 49.0); Non-Manufacturing PMI (Aug) 52.6 vs Exp. 52.2 (Prev. 53.8) Chinese Composite PMI (Aug) 51.7 (Prev. 52.5) Japanese Industrial Production Prelim. (Jul P) 1.0% vs. Exp. -0.5% (Prev. 9.2%); Retail Sales YY (Jul) 2.4% vs. Exp. 1.9% (Prev. 1.5%) Australian Construction Work Done (Q2) -3.8% vs. Exp. 0.9% (Prev. -0.9%) Initial upside in Europe faded as broader price action took another hawkish turn amid inflation data, Euro Stoxx 50 -1.0%. Stateside, futures are mixed around the unchanged mark, ES -0.2%, though are similarly well off best levels with data and Fed speak due. Top European News UK's ONS rules that energy bill rebate does not directly affect inflation statistics directly; "concluded that payments under the scheme should be classified as a current transfer paid by central government to the households sector." i.e. the payment is being treated as a fiscal transfer as opposed to a price adjustment. UK government could reportedly fast-track nuclear power projects to help ease the energy crisis, according to The Telegraph. UK government is considering caps on rent to protect social housing tenants as part of a wider effort to ease the soaring costs of living, according to FT. Former UK Chancellor Sunak warned that Foreign Secretary Truss's campaign promises could increase inflation and borrowing costs, according to FT. German Economy Minister Habeck said they would reject the idea of 'capping' energy prices; Finance Minister Lindner says the hurdle to an excess profit tax is high (re. energy); Chancellor Scholz says the early steps on energy means we will get through the winter period, will take measures to ensure energy prices "do not go through the roof". FX A session of gains for the DXY with upside spurred by haven bids, as the broader market sentiment deteriorated shortly after the European cash open. EUR/USD sits as one of the laggards with minimal immediate reaction seen in wake of hotter-than-expected August flash CPI for the EZ, although the upside for the pair may be capped by Nord Stream 1 jitters. The antipodeans are mixed as AUD leads the gains as the outperforming G10 peer on the back of better-than-expected Chinese official PMI metrics; Petro-currencies are softer as the slide in crude oil resumes. The JPY remains somewhat resilient in the face of the USD strength, likely amid the risk aversion across the market. Fixed Income Core benchmarks experienced a fairly contained start to the session, though this proved to be shortlived and pronounced action occurred on inflation release. Bunds remain sub-147.50, though off worst, as initial French-CPI induced upside was reversed following hot Italian and subsequent EZ-wide Flash August HICP; market pricing for 75bp remains just above 50%. Gilts are the standout laggard as on the ONS treats the Energy Support as a fiscal transfer, thus Ofgem Energy adj. will be fully reflecting in CPI; Gilts sub-130 ticks in wake. USTs are directionally downbeat but comparably contained in terms of magnitudes, ADP and Fed's Bostic/Mester due. Commodities WTI and Brent futures resumed selling off in tandem with the broader risk-mood. Dutch TTF futures are on a firmer footing today following yesterday’s near-10% slump. Spot gold is pressured by the firmer Dollar and approaches USD 1,700/oz to the downside. 3M LME copper has been extending on gains with a boost from the above-forecast Chinese PMI metrics, but the contract remains under USD 8,000/t. OPEC+ JTC upgrades 2022 oil market surplus forecast by 100k BPD to 900k BPD, according to a report via Reuters; sees market surplus rising to 1.4mln BPD in November from 0.6mln BPD in October. OPEC+ JTC report says rising energy costs "may lead to a more significant reduction in consumptions towards year-end", via Reuters. US Private Inventory Data (bbls): Crude +0.6mln (exp. -1.5mln), Cushing -0.6mln, Gasoline -3.4mln (exp. -1.2mln), Distillates -1.7mln (exp. -1.0mln). Oman crude OSP calculated at USD 97.00bbl for October vs. USD 103.21bbl in September, according to DME data. Central Banks BoJ's Nakagawa says the central bank decided to maintain easy policy bias in July, and hopes to discuss at the September meeting whether it should continue doing so based on data. Must remain vigilant to downward economic pressure from pandemic. BoJ is to conduct fixed-rate purchase operations for the cheapest-to-deliver 357th JGB notes for an extended period of time as of September 1st. ECB's Rehn says the economic outlook has darkened, normalisation of monetary policy progressing consistently. Rates will increase in September, will be necessary to hike further at future gatherings. Riksbank's Bremen says it is of the utmost importance to defend the inflation target as anchor for price setting and wage formation; adds inflation is too high. Inflation outcomes have been higher than expected recently, inflation risks are on the upside. Does not rule out a 50bps or 75bps hike at the 20th September meeting. Norges Bank Currency Purchases (Sep) NOK 3.5bln (prev. NOK 1.5bln) US Event Calendar 07:00: Aug. MBA Mortgage Applications -3.7%, prior -1.2% 08:15: ADP resumes publication of jobs report with new methodology 08:15: Aug. ADP Employment Change, est. 300,000 09:45: Aug. MNI Chicago PMI, est. 52.1, prior 52.1 Central Banks 08:00: Fed’s Mester Discusses Economic Outlook 18:00: Dallas Fed Holds Event to Introduce New President Lorie Logan 18:30: Fed’s Bostic speaks on role of fintech in financial inclusion DB's Henry Allen concludes the overnight wrap Was back in the office yesterday after a two-week break but needed an extra day recovery before I started the EMR again as Monday was the twin's 5th birthday. To say they were excited would be an understatement. More is to come as they have their birthday party and 30-40 kids coming round our house on Sunday. After another dry spell Sunday brings rain again apparently! We're used to this adversity as the first day of our Cornwall holiday saw a dramatic storm and the first rain for 2-3 months. A few days of typically chilly, breezy, and slightly wet UK beach weather followed. In my second week off back home I played 5 rounds of golf so that was the proper holiday. My handicap is now the lowest it's ever been so there's life in the multiple operated on old dog yet! Back to the real world now though and not only has the world got darker since I've been off but so have work hours. I always take these two weeks off every year and it always marks a depressing reality that winter is coming. Before I go away it's just about light when I get up. However, by the time I get back from holiday it's firmly dark waking up for the EMR. It'll be a good 7-8 months before I see light again on the early EMR shift. The dark mirrors the mood in markets which has seen a rapid deterioration since Jackson Hole, with the S&P 500 shedding a further -1.10% yesterday to move back beneath the 4000 mark. The index is now -7.85% below its mid-August intra-day highs and -5.08% since last Thursday's pre Jackson Hole close. We're still +8.71% above the June lows though. Ironically, strong US data releases prompted the latest sell-off, as they showed that consumer confidence was more resilient and the labour market was tighter than expected. But in today’s high-inflation environment, good economic news is enabling the Fed to be even more aggressive on rate hikes, and the market developments yesterday were very much in keeping with that theme. We actually reached an important milestone yesterday too, as the futures-implied Fed funds rate for December ticked up +3.0bps to 3.73%, which surpasses the previous high of 3.72% seen back in June after the bumper CPI report for May came in. So for 2022 at least, markets are pricing in their most aggressive pace of hikes to date which makes a lot more sense than where we were a few weeks ago. In terms of the specifics of those data releases, an important one was the JOLTS data, which showed that job openings unexpectedly rose to 11.239m in July (vs. 10.375m expected). That marked a break in the trend of 3 consecutive declines, and shows that the Fed still have significant work to do if they want to bring labour demand and labour supply back into balance. Another indicator we’ve been tracking is the number of job openings per unemployed worker. That also bounced back up to 1.98 in July, which is just shy of its record high of 1.99 in March. So even with 225bps of Fed hikes by the July meeting, that measure of labour market tightness has barely budged. Then we got the Conference Board’s consumer confidence data for August, which came in at a 3-month high of 103.2 (vs. 98.0 expected), with rises for both the expectations and the present situation indicators. This positive news on the economy gave investors growing confidence that the Fed are set to keep hiking into 2023, and sent yields on 2yr Treasuries up +1.8bps to 3.44%. That’s their highest closing level since the GFC, and on an intraday basis they even hit 3.49% at one point. Longer-dated yields also increased, albeit to a lesser extent, with those on 10yr Treasuries flat. FOMC Vice Chair and New York Fed President Williams emphasised the point, saying that rates will need to stay in restrictive territory “for some time”, so the days of pricing rate cuts early next year are over for now. The fed funds futures curve currently has policy rates peaking around 3.90% in the second quarter of next year, with the first full -25bp cut from those highs not until November of next year, as of last night's close. The trend towards increasing hawkishness was echoed at the ECB as well yesterday, where the prospect of a 75bps move next week is being increasingly discussed by officials. In the last 24 hours alone, we heard from Estonia’s Muller, who said that “75 basis points should be among the options for September given that the inflation outlook has not improved”. Furthermore, Slovenia’s Vasle said that he favoured a hike “that could exceed 50 basis points”. Germany’s Nagel echoed the ECB chatter from last week, that they should not delay rate hikes just for fear of recession, instead arguing the call for earlier rate hikes to prevent later pain. Further, Pierre Wunsch of Belgium argued the current bout of inflation had structural roots, which called for a quick move to restrictive policy. While neither Nagel nor Wunsch explicitly endorsed a 75bp hike, their comments don't push back on it. So overall it’s clear that officials are contemplating a larger hike, and overnight index swaps continue to price a 75bps move as more likely than 50bps for the September decision, closing yesterday pricing +65.8bps worth of hiking for next week’s meeting. It's set to be a big one! We should get some additional clues on how fast the ECB might hike with the release of the flash CPI data for the Euro Area this morning. But there weren’t any big surprises in either direction from the country readings ahead of that yesterday. In Germany, the EU-harmonised reading rose to a fresh high of +8.8%, but that was as expected, and it was a similar story in Spain where the harmonised reading fell back to +10.3% as expected. A complicating factor for the ECB relative to the Fed is the stagflationary impulse coming from the ongoing energy shock, where prices have soared to new records in the last week. However, the last 24 hours brought some further declines that built on Monday’s moves lower, with natural gas futures coming down -7.21% to €253 per megawatt-hour. German power prices for next year came down by an even bigger -21.05%, on top of the -22.84% decline on Monday, although even that -39.09% total decline hasn’t erased the previous week’s gains. One other thing to keep an eye out for from today will be the start of maintenance on the Nord Stream pipeline, which is set to last for 3 days if you take the statement at face value. But as with the shutdown in July, there are concerns that gas flows won’t resume again afterwards, so that’s definitely one to watch. Oil futures took a big slide, with brent futures down -4.79% and WTI down -5.54%. The proximate cause appeared to be unsubstantiated rumours that the US and Iran had reached a deal to reinstate the nuclear deal. However, a US State Department spokesperson later denied the rumours, and we’ve already heard from OPEC+ that any supply increase from Iran would be offset by supply cuts among the cartel. So if oil prices stay around these levels, perhaps the market is pricing in more global demand slowdown than unmitigated supply expansion. For sovereign bond yields, the more hawkish noises from the ECB outweighed the effect of falling energy prices yesterday, with the 2yr German yield up +6.1bps. Similarly to the US, the increases in yields were concentrated at the more policy-sensitive front end of the curve, with longer-dated yields seeing smaller moves, including those on 10yr bunds (+0.8bps), OATs (+0.7bps) and BTPs (+1.7bps). On the equity side, the risk-off tone took the major indices lower on both sides of the Atlantic, with the S&P 500 (-1.10%) experiencing a 3rd consecutive decline. The more cyclical sectors led the moves lower, and the more interest-sensitive megacap tech stocks continued to struggle, with the FANG+ index down a further -2.04%. In Europe, the STOXX 600 was down -0.67% yesterday, although that decline was somewhat exaggerated by the fact that London equities were returning after Monday’s declines. Indeed, the DAX actually ended the day up +0.53%, although that was the exception as the CAC 40 (-0.19%) and the FTSE MIB (-0.08%) both posted modest declines. The more negative mood of the last few days has continued into today’s Asian session, with the Nikkei (-0.40%), Hang Seng (-0.39%) and the Shanghai composite (-1.18%) all losing ground this morning despite earlier better-than-expected economic data from China and Japan. Starting with the former, both manufacturing (49.4 vs 49.2 expected) and non-manufacturing PMI (52.6 vs 52.3 expected) were ahead of estimates but the manufacturing gauge stayed in contraction territory. In Japan, we got strong beats for industrial production (+1.0% vs -0.5% expected, MoM) and retail sales (+0.8% vs +0.3% expected, MoM). US Treasury yields are up across the curve, with the 2y yield (+2.1bps) gains ahead of 10y ones (+0.9bps). To the day ahead now, and data releases include the flash CPI reading for the Euro Area in August, as well as the country readings for France and Italy. On top of that, there’s German unemployment for August, Canada’s GDP for Q2, and in the US there’s the ADP’s report of private payrolls for August and the MNI Chicago PMI for August. Finally, central bank speakers include the Fed’s Mester and Bostic. Tyler Durden Wed, 08/31/2022 - 07:44.....»»

Category: blogSource: zerohedgeAug 31st, 2022

Buy These 3 Municipal Bond Funds for Steady Returns

Below, we share with you three top-ranked municipal bond funds. Each has a Zacks Mutual Fund Rank #1 (Strong Buy). Municipal bonds, or "muni bonds," comprises 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 the 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 top-ranked municipal bond funds, viz., Invesco Rochester Municipal Opportunities Fund ORNAX, Delaware National High Yield Municipal Bond Fund Class A CXHYX and AB Municipal Bond Inflation Strategy AUNAX. 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 municipal bond funds.Invesco Rochester Municipal Opportunities Fund invests the majority of its assets in municipal securities that its advisors believe are exempt from federal income tax and the fund's corresponding state income tax. ORNAX invests in securities issued by the governments of states, their political subdivisions, and the District of Columbia, U.S. territories, commonwealths, and possessions or by their agencies and other authorities.Invesco Rochester Municipal Opportunities Fund has three-year annualized returns of 2%. ORNAX has an expense ratio of 0.69% compared with the category average of 0.92%.Delaware National High Yield Municipal Bond Fund Class A seeks a high level of exempted current income by investing most of its assets in medium and lower-grade municipal securities exempted from federal income tax. CXHYX primarily invests in lower-rated municipal securities with higher income potential and greater risk.Delaware National High Yield Municipal Bond Fund Class A has three-year annualized returns of 1.9%. Stephen J. Czepiel has been the fund manager of CXHYX since 2007.AB Municipal Bond Inflation Strategy invests the majority of its net assets in high-quality investment-grade municipal fixed-income securities that pay interest exempt from federal tax, and are rated A or better by one or more recognized rating agencies. AUNAX also invests a small portion of its assets in below-investment-grade fixed-income securities or junk bonds.AB Municipal Bond Inflation Strategy has three-year annualized returns of 3.3%. As of April 2022, AUNAX had 63.6% of its net assets invested in Miscellaneous Bonds.To view the Zacks Rank and the past performance of all municipal bond funds, investors can click here to see the complete list of municipal 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: Top Stocks for the $30 Trillion Metaverse Boom The metaverse is a quantum leap for the internet as we currently know it - and it will make some investors rich. Just like the internet, the metaverse is expected to transform how we live, work and play. Zacks has put together a new special report to help readers like you target big profits. The Metaverse - What is it? And How to Profit with These 5 Pioneering Stocks reveals specific stocks set to skyrocket as this emerging technology develops and expands.Download Zacks’ Metaverse Report 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 (ORNAX): Fund Analysis Report Get Your Free (AUNAX): Fund Analysis Report Get Your Free (CXHYX): Fund Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksAug 18th, 2022

3 Diversified Bond Mutual Funds to Strengthen Your Portfolio

Below, we share with you three diversified bond mutual funds, namely FXIRX, AVEFX and BBBMX. Each has earned a Zacks Mutual Fund Rank #1. Investing in diversified bond funds is preferred more 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 PIMCO Fixed Income Shares: Series R FXIRX, Ave Maria Bond Fund AVEFX and BBH Limited Duration Fund Class N BBBMX. 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.PIMCO Fixed Income Shares: Series R seeks maximum real return along with preservation of real capital by investing most of its assets along with borrowings, if any, in fixed-income instruments, including inflation-indexed bonds issued by both governments and corporations, treasury inflation-protected securities (TIPS), corporate-debt securities, and convertible securities and corporate commercial paper. FXIRX invests in a portfolio of U.S. and foreign issuers.PIMCO Fixed Income Shares: Series R has three-year annualized returns of 3.6%. As of the end of March 2022, FXIRX had 23.82% of its assets invested in U.S. treasury inflation-protected securities.Ave Maria Bond Fund invests most of its assets along with borrowings, if any, in investment-grade debt securities issued by the U.S. government and its agencies, corporations, municipalities and money market instruments. AVEFX invests a small portion of its assets in equity securities, preferred stocks, convertible securities, and common stocks paying dividends of domestic or foreign issuers irrespective of its market capitalization.Ave Maria Bond Fundhas three-year annualized returns of 2.6%. AVEFX has an expense ratio of 0.43% compared with the category average of 0.64%.BBH Limited Duration Fund Class N seeks maximum total return along with preservation of capital by investing in a diversified portfolio of fixed-income instruments like asset-backed securities, notes and bonds issued by corporations and financial institutions and government agencies and government-guaranteed issuers. BBBMX invests in both U.S. and foreign issues.BBH Limited Duration Fund Class Nhas three-year annualized returns of 0.9%. Andrew P. Hofer has been one of the fund managers of BBBMX since February 2011.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 >> 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 (FXIRX): Fund Analysis Report Get Your Free (AVEFX): Fund Analysis Report Get Your Free (BBBMX): Fund Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksAug 3rd, 2022

Transcript: Graham Weaver

     The transcript from this week’s, MiB: Graham Weaver, Alpine Investors, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ ANNOUNCER: This is Masters in Business… Read More The post Transcript: Graham Weaver appeared first on The Big Picture.      The transcript from this week’s, MiB: Graham Weaver, Alpine Investors, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. 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, I have an extra special guest. Graham Weaver is the founder and partner at Alpine Investors, a private equity firm, focusing on software and services. Graham has a really interesting background, both engineering at Princeton and essentially launching a PE firm while he was a graduate student at Stanford. Everybody knows the story about Michael Dell launching a computer business out of his dorm room in Texas. This could be the first PE firm I’m familiar with, that got started in a dorm room. What makes Graham so interesting is while everybody else in the world of private equity is focused on the analytics and crunching numbers and creating econometric models that will tell you where to invest, I think they’ve found a very different model that has been extremely successful for them, where the key focus is on talent. How do we find the best talent, put them in place running our investment companies and allow them to generate the sort of returns that you don’t really generate by just looking at a model? I found our conversation absolutely fascinating and I think you will also. With no further ado, my discussion with Alpine Investors’ Graham Weaver. Let’s jump right into this, starting with your background. When I hear someone has an engineering degree, I tend to think of venture capital, not private equity. Tell us a little bit how you went the PE route instead of the VC route. GRAHAM WEAVER, FOUNDER AND CEO, ALPINE INVESTORS: Well, I actually started in private equity right out of undergrad. I really didn’t know the difference between private equity or consulting, or anything. I had zero knowledge of that. And I was fortunate to end up in Morgan Stanley’s private equity group, I loved it and I’ve kind of been at it ever since. RITHOLTZ: Really interesting. So is it from Princeton to Morgan Stanley, and then Stanford, or am I getting the order right? WEAVER: Yeah. When I was at Princeton then I went to Morgan Stanley in their private equity, then I worked at a firm called American Securities for a couple years, and then went to went to business school after that. RITHOLTZ: And somewhere in the middle of this, there’s a pig farm in Missouri that I am having a hard time figuring out what a pig farm has to do with private equity. WEAVER: So the very first deal I worked on, so I come out of school, I’m wearing my Cross pen and my lapel, and I’m like wearing a tie and — RITHOLTZ: All buttoned down. WEAVER: Exactly. And I think I’m a big shot being on Wall Street, and I get shipped out to this pig farm in Missouri which was a deal Morgan Stanley had invested in. They’ve invested a total of a billion, almost a billion dollars of debt and equity, and then suffice to say was not going well. So not that I was going to go save it as a 22-year-old analyst, but I’ve got shipped out. I lived in a CFO’s basement for about five months, and we did everything we could, but it turned out not to be a great investment. RITHOLTZ: So there’s not big money in pigs? WEAVER: Well, it turns out hog prices are wildly cyclical. And you know, there’s the expression, how does a six-foot man drowned in a river that averages five feet? You know, it’s because there’s parts of the river that are deeper. Well, you know, we build our whole model on hog prices being $47 and when we then — RITHOLTZ: And that’s what they average, right? WEAVER: That’s what they average. RITHOLTZ: But that doesn’t tell you how much they swing up and down. WEAVER: It turns out — yeah, they went to $18 and we had $700 million of debt, and that didn’t — RITHOLTZ: $18? WEAVER: That didn’t go well. So yeah. RITHOLTZ: That’s the old joke. It’s not the price, it’s the volatility. WEAVER: Yeah, it was rough. But it was a — that was my introduction to the glamorous business of private equity. RITHOLTZ: And you didn’t turn around and say, “I want nothing to do with this?” WEAVER: I had the time of my life. RITHOLTZ: Really? WEAVER: It was so fun. RITHOLTZ: How was — how was sleeping in the CFO’s basement — was his house on the pig farm? WEAVER: It was. Yeah, it was. The whole entire town smelled like a pig farm and everyone — RITHOLTZ: Which was not especially delightful? WEAVER: It’s not. No, it turns out. And pretty much everyone in the town worked and had some affiliation with the pig farm. The CFO was also a Morgan Stanley guy, and he was probably 27. So neither of us had any idea — RITHOLTZ: So many years, years of experience over you? WEAVER: Yeah, yeah. Exactly. Neither of us had any clue what we were doing. But it really wouldn’t have mattered when your revenue gets cut by like 80%, there’s just not a lot you’re going to do to turn that around. RITHOLTZ: So there’s a cliche about tech firms being started in dorm rooms. How does a private equity firm start in a dorm room? WEAVER: So I show up at Stanford, and I’m in my first week of class. And then similar as today, you have to take these core classes in your first year, which are just not that — you know, they’re just fundamental. They’re not that exciting. So the first class I sit down, and there’s this 25-year-old who’s never worked a day in his life. He’s a PhD student. He’s never taught before, and he’s kind of just reciting out of this strategy book. And I just thought to myself, oh, my God, what have I signed up for? So I had this idea that I was going to go try to buy a business. And I had — you know, in your first three years as an analyst, you basically build a financial model. But I had the confidence of someone I thought I was much more — much better than I was. So I convinced an owner — I started cold calling companies in a sector that I had looked at previously, and I convinced this owner to sell me his business, and then I had to go raise the money, most of which was debt and the little bit of equity that was needed. I financed with credit cards. So that was literally how I started, not your typical private equity founding story. RITHOLTZ: How did that initial PE transaction work out? WEAVER: I did a total of three labeled deals with some add-ons, lost money on one, made money on — or lost a little bit of money on — loss — made a little bit of money on the second one. And then the third one was a total homerun, which actually just sold this year, 20 years later. So that that one turned out well. RITHOLTZ: 20 years? That’s impressive. That’s not the typical private equity holding period. WEAVER: Yeah, well, it was just me. I was the — it was just my — RITHOLTZ: So you could afford to be patient. WEAVER: And it was awesome. It was great. That one — RITHOLTZ: What space was that at? WEAVER: It was the — we had these companies that made these little labels that went on products, like for example in Trader Joe’s private labels things, we made all those labels. It’s a totally unsexy business. RITHOLTZ: Right. WEAVER: But it was very consistent and — RITHOLTZ: And it’s profitable. WEAVER: It was really profitable. And no one wakes up and says, “You know, I’m going to be a hero because I’m going to save half a cent on my label.” So it tends to kind of like just clip along like a bond. RITHOLTZ: Right. WEAVER: So it turned out — it turned out well, but I mean, I had absolutely no idea what I was doing. And so I made every mistake you can imagine. RITHOLTZ: And it still worked out. When you launched in 2001, you started with $50 million, $55 million, something like that? WEAVER: Yeah. RITHOLTZ: And now it’s up to $8 billion close to eight funds. WEAVER: Yeah. RITHOLTZ: And your most recent fund just closed about $2 billion, more or less? WEAVER: Yeah, about 2.4. Yeah. RITHOLTZ: All right. So that’s real money, 2.4. Obviously, you’re doing something right. The track record has to be attractive. Is it the same investors rolling over, or new and different investors? Who is the clientele for this? WEAVER: In the very early days, it was a number of individuals because no institution was going to back — RITHOLTZ: Right. Well, you have to have a certain track record, be around for certain length of period, be able to check all of their due diligence boxes, and that takes time and money. WEAVER: Yeah. And I checked zero of those boxes. RITHOLTZ: Right. Dorm room, check. What else? What else we got? WEAVER: Yeah. Track record. RITHOLTZ: How old is he? 22? WEAVER: No. RITHOLTZ: Sure. Let’s write him a big check. WEAVER: Exactly. I checked no boxes. And that took me like almost a year to figure out. I went to all these institutions and I never got past the first meeting anywhere. And then I found a number — really two individuals who, thank God, I still owe everything to these two. One, I don’t know if I can — RITHOLTZ: Sure. You can say whatever you like. WEAVER: So, one was Tom Steyer, who ran for president. RITHOLTZ: Oh, sure. WEAVER: He was one of the early ones. And then Doug Martin from the Stephens family. And they were just the two best investors you could ever have. They were supportive. And most importantly, they were supportive after Fund I which was not a good fund. So that’s the reason we’re still in business today. RITHOLTZ: Why not good fund, just performance wise, or was it — because when you launch in ’01, we’re still in the early days of a massive downfall in technology, media, Internet straight across the board. Not — you know, it’s not — unless it’s a distressed fund, that’s not the ideal time to launch. WEAVER: Yeah. I would love to say that it was the market, but it wasn’t. It was self-inflicted. RITHOLTZ: Yeah. WEAVER: It was me making a lot of dumb mistakes, being overconfident, you know, and just investing in companies that looked great in the spreadsheet and didn’t — what looks great in the spreadsheet is low purchase price and a lot of leverage. That looks — always looks good in a spreadsheet, but the — RITHOLTZ: Leverage is the problem. WEAVER: The qualitative — yeah, the leverage is the problem and the qualitative things about is it a quality business? Those things you can’t model in a spreadsheet. And so, I just made a lot of dumb mistakes. And actually the whole fund, overall, lost money. I would highly, Barry, not recommend having your first fund when you launched and lose money. It was a — RITHOLTZ: Probably not the best long-term strategy? WEAVER: Yeah. It was anchored around our neck for pretty much a decade. RITHOLTZ: So that raises the question, if the first fund was a bit of a stiff, how did you raise money for the second fund? WEAVER: Well, thankfully, we were — I really communicated a lot with Doug and Tom, and they understood. They could see us getting better. You know, they could see us making a lot of improvements, fixing a lot of the things that we got wrong. And both of them were pretty seasoned investors, both of them had had mistakes they’ve made before. And so they, you know, thank God, were really supportive. And then it wasn’t like immediately we started knocking out of the park either, but we started getting better and better. And then really around the time of the recession was when we really completely transformed and became kind of the business that we are today. RITHOLTZ: And it’s a little bit of a cliche, they’re not so much investing in a fund as they’re investing in you as the manager. Obviously, they saw something that was, “Hey, needs a little seasoning, but there’s a lot of potential here.” WEAVER: Yeah. They saw someone who was willing to literally run through walls and run through a burning building to make it work, and I almost literally did. I mean, it was that — we were — and not just me, but our whole team was really committed to try and make it work, and I think they saw that. RITHOLTZ: Quite interesting. (COMMERCIAL BREAK) RITHOLTZ: I have to talk a little bit about your growth rate. You began with $54 million. All-in, you’re $8 billion in assets totally. Obviously, a lot of that is not just growth, but new investors coming along. But still that’s a — as a PE company, Alpine has really seen quite a corporate growth trajectory. Tell us what led to this success rate. WEAVER: Yeah. So when the recession hit, we were in — we were not well positioned. We didn’t — RITHOLTZ: Now, when you say recession — WEAVER: Yeah. RITHOLTZ: — because some of our audience is, you know, older than 25, I’m assuming you mean, ’08. ’09, the financial crisis? WEAVER: ’08. ‘0. RITHOLTZ: Okay. WEAVER: Yes. RITHOLTZ: Not the one in 2020. WEAVER: Right. RITHOLTZ: And not the one that maybe happened sometime in 2022 and certainly not 2000. WEAVER: That’s right. RITHOLTZ: So the great financial crisis — WEAVER: So great financial crisis happens. We were — we invested the last dollar from our third fund two weeks before — two weeks before Lehman Brothers blew up. RITHOLTZ: Wow. WEAVER: And so we were out of money and we had — it took us forever to raise the next fund. But that period, where we didn’t have any money, turned out to be the most important period for us. RITHOLTZ: Why? WEAVER: Because we started deciding we were going to look at our own business, you know, kind of like rather than working in the business, we’re going to start working on our business. So I hired an executive coach — RITHOLTZ: Really? WEAVER: — and he helped — he really helped me kind of redefine the business that I truly was in, which I’ll come back to. We hired a consulting and coaching firm for our whole organization. And so, we really started doing some soul-searching for lack of a better word. And then — and from that, we really, you know, changed our strategy and developed kind of a new playbook. RITHOLTZ: So let me interrupt you there because that you raise something that I’m fascinated by. So first, what leads you to say, “We need a pro to come in and show us how to do this?” And second, how do you even go about finding an executive coach? That sounds like, man, that’s a consulting field fraught with, you know, let’s be polite and just say high risks. WEAVER: Yeah. It’s a great question. And I am a huge fan of executive coaching. I’ve had a coach since 2009. RITHOLTZ: Wow. WEAVER: I talk to a coach every week or every other week since ’09. RITHOLTZ: No kidding? WEAVER: And we, at Alpine, have 23 coaches that are part of our — they’re 1099 folks, but they’re part of our ecosystem that’s available to our people at Alpine and our executive. So I’m just a huge fan of coaching. And basically what I love about coaching is you create space away from the busyness of the day to day. You ask yourself a bunch of really important questions. You know, what do I want? What success look like? What do I want in — what does a five-year plan look like? And you actually have to really burn some energy and some thinking time, thinking about those answers, which are really hard answers, which most of us never spend time thinking about. RITHOLTZ: Was it just in the midst of the crash and recession that you said, “Hey, maybe we just need a little help. We’re not — we don’t have the professional background to run the business. We know the investing side, but the business side is something very different.” How did you get to that — WEAVER: Yeah, 100%. I mean, I think one of the benefits of phase planning in your first fund is that you get some humility. RITHOLTZ: Right. WEAVER: And you — I’ve always just been open to learning from people that are smarter and better than I am. And so, coaching was an exercise — back then in 2009, it was not very well known and it was definitely an exercise in humility of saying, “I think I need some help.” RITHOLTZ: That’s the old joke. Experience is what you get when you don’t get what you want, right? WEAVER: Yeah. Exactly. Yeah. RITHOLTZ: So once you make the decision, “Hey, we want to bring in a professional to show us ways to improve our business methods,” how does one go about finding a business coach? WEAVER: So I had an introduction from a friend and then we had a number of lunches, and his business wasn’t going well in ’09 either, as you could imagine, so — RITHOLTZ: Well, who’s on — and other than people doing distressed debt investing, whose business was going great in ’08? WEAVER: Yeah. Exactly. Nobody. So — RITHOLTZ: Then in short sellers, everybody else was in trouble. WEAVER: So we had this awesome conversation. I can still — it’s one of these conversations you can still remember where you are and what you — you know, exactly the moment. So we had — this is actually after I brought him on. We have this awesome conversation where I said, “Hey, I have to” — his name is JP Flaum, and I said, “Hey, I have to cancel our coaching engagement. I’m just too busy,” which was like we’ve already decided ahead of time that that was no go. I had to stick with the — we made an agreement. RITHOLTZ: Right. WEAVER: So he texts back immediately says, “No, we’re having it.” So I get on the phone, he says, “Well, what’s — you know what’s so crazy that you’re so stressed?” I said, “Oh, my God, JP, you know, I got to fly to Dallas and fix this. And then I got to — you know, we got to deal we’re about to lose and then we lost a huge customer in Chicago. And then I got to go to D.C.” and then, you know I’m going on and on. And he said, “Okay, well, let’s kind of slow down and chill out. Let’s talk about Dallas. What’s going on there?” “Well, we — you know, we just missed our bank projections a second time,” and I’m going on and on. And he starts saying, “Well, tell me about the CEO in Dallas.” I’m like, “What does that have to do with anything? You know, we’re in the middle of the Great Recession,” like, blah, blah, blah. You know, it’s not — you know, it’s the markets or whatever. Anyway, it comes to points, he says — well, eventually, he says, “Well, how would you — how would you rate that CEO, you know, A, B, C?” I was like, “Oh, he’s probably a B.” He said, “Well, Graham, in one of our engagements, you said you wanted to build the greatest private equity firm of all time. Are you going to — are you going to do that with a B CEO?” And I just — it like hit me between the eyes. And then he asked me another question, he said, “And Graham, if you’re someone who keeps a B CEO” — RITHOLTZ: What does that make you? WEAVER: — “how would you rate yourself as a CEO?” RITHOLTZ: Right. WEAVER: and I just — like, it stopped me dead in my tracks. And that was really this light bulb that went off, that ended up having us — having me realize I’m actually in the talent business. That’s the fundamental business that I’m really in. And that was like ’09 that we came to that realization, and then started completely redesigning our firm to like build our companies around talent, build our firm around talent, build our investment strategy around talent. So that was just a huge turning point. RITHOLTZ: So let’s talk about that because all of your investments eventually get a CEO that’s been trained at Alpine and has the benefit of all of this coaching, all of this training, all of this expertise. It’s not that you’re just looking for attractive balance sheets, it’s where can we put someone in charge to move the needle by taking our expertise and applying it to this business model. Is that what you mean by when you say, you’re in the talent business? WEAVER: Yeah. I think that’s what I mean. There are two parts of it. One is our investment strategy, which is what you described the others, how we run our own firm. But sticking with what you were talking about, Barry, the investment strategy, we found that the single most important investment decision we make is the management team. And it’s more important than the price we pay. It’s more important than the leverage levels. It’s more important than the prior growth rate. And so, we just said, “Well, if that’s really the most correlated, most effective, or most important criteria, you know, let’s make sure we get that right. And so let’s actually kind of build our own CEOs and put our own CEOs in so that we can make sure that we’re getting a world-class person to run each one of our companies.” RITHOLTZ: So in some ways, this is almost parallel in the public markets to activist investing, where they identify a very attractive business that isn’t quite living up to potential, right? WEAVER: Yeah. RITHOLTZ: And they say, “Hey, with a few management changes, we can turn this into a really good business.” On the private equity side, I’m assuming the conversation is something like, “We want to either buy 30%, 40% of your business or your entire business. But regardless, we want one of our professionals to come in and manage it.” WEAVER: Yeah, that’s right. A lot of the companies we’re buying don’t have management. You know, it might be a corporate carve-out. It might be a management team that wants to retire, or exit. And that’s great. So there’s never any conflict. We’re totally transparent. We’re not doing hostile deals, nothing like that. It’s always the transaction that the seller wants to do is they want to retire. So it’s always very friendly. But we — there aren’t a lot of private equity firms that want to go through the process of changing management because it’s very, very hard to do. RITHOLTZ: And that’s the value add that you guys bring. WEAVER: That’s a big part of it. Yeah. RITHOLTZ: Yeah. That’s really quite fascinating. So there’s a quote of yours I have to lead with, which I find really intriguing quote, “People create returns, not deals, not price.” That’s a huge statement, considering most of the analyst community, especially private equity, is so analytical and modern driven. You’re saying this is a people business. WEAVER: Yeah, 100%, Barry. I think that if you want to do something different than people, you have to have some fundamental belief that’s different than what other people believe. And our belief is that returns come from people. They come from talent. And I think maybe one of the reasons why people shy away from that is it’s hard to analyze, it doesn’t fit in a spreadsheet, and it’s incredibly hard to manage. It’s a lot easier to manage the hard numbers, the financial statements and things than it is to, you know, really manage a team of people. RITHOLTZ: So we were talking earlier that you appoint the CEO at these purchased businesses that you’ve trained yourself. Tell us a little bit about what that in-house training looks like. WEAVER: So a lot of the CEOs we’re hiring, we’re bringing right out of MBA programs, and they have five years of experience typically before they go into business school. And that could be anything, that could be they’re in the military. They could have been in consulting firm. They could have been in investment banking. And we have success with any of those — any and all those backgrounds. So — and they’ve just been in two years of business school, so we don’t want to put them back in business school. But what we’re really teaching them, the fundamental thing we’re teaching them is how to hire, how to build their team, how to set a vision, how to create priorities, how to get everyone in their organization excited and aligned behind what they’re trying to do. Those are things that not a lot of business schools teach. It’s one of the things I try to teach in my class, but it’s something that we bring in — it’s the biggest thing we bring in that training program that we do. RITHOLTZ: Hiring has been described as the most difficult aspect of building a company versus everything else. WEAVER: 100%. RITHOLTZ: How do you teach good hiring? WEAVER: You can actually, to some extent, make hiring a science. And the simple — I could talk for you — I could talk for three hours about this, but I’ll try to do it in about two minutes, which is you build a scorecard for what you want that role — in that role, a specific list of outcomes you want that role to do. And then as you’re assessing a candidate, you’re looking for very specific evidence that they’re going to be able to perform against that scorecard. And you have two things, you’re looking for attributes and experience. Those are the two different parts of the interview process. RITHOLTZ: But we all know what experience is. Define what attributes mean. WEAVER: So attribute is about who somebody is versus what they’ve done. So an example for us, when we’re hiring young people to become CEOs, we’re looking at, you know, do they have a will to win? Do they have emotional intelligence and self-awareness that they can get along with people? And then did they have grit? Can they — are they going to be able to see things through after getting kicked in the teeth, because they’re going to get kicked in the teeth. So those are the three attributes that we’re looking for. Those are wildly more important than experience, because they’ll get experienced quickly. And you can teach experience, you can’t teach those three things. You can’t teach, you know, the will to win. They’re kind of coming to us with that or not. RITHOLTZ: That’s an — that’s an intrinsic aspect of the personality. You either have it or you don’t. There’s no way you’re going to learn that. WEAVER: Not in a period of time, or we don’t know how to teach it if it is writable. RITHOLTZ: Right. WEAVER: Yeah. RITHOLTZ: Really, really interesting. So you mentioned your class, let’s talk about the management course that seems to be related to that, CEOs-in-Training. Tell us about that. WEAVER: Yeah. So the CEO-in-Training is the — that’s the name for the people that we’re hiring. Did you want to talk about that, or the class itself? RITHOLTZ: Both, either/or. WEAVER: Okay. All right. So the CEO-in-Training is the name we give to those people we’re hiring right out of business school. We’re giving them that experience — training that I mentioned, and then we’re putting them right in. A lot of them are CEOs on day one of add-on acquisitions, and they get the reins and they’re — you know, they’re off to the races. And you know, there aren’t a lot of positions out of business school that you can become a CEO within — you know, right when you graduate. So we’re — we’ve designed that and it’s been — it’s been a homerun. We — I underestimated how amazing these students would do and the roles that they’ve done. And it’s been fantastic. RITHOLTZ: Do you end up hiring people right out of your classes or — WEAVER: Yeah. I mean, I don’t — RITHOLTZ: So this is really devious recruitment. WEAVER: I don’t interview anybody from Stanford, period. I don’t even know if they applied. I keep a wall between — RITHOLTZ: Right. WEAVER: — you know, my teaching and recruiting. But I will say probably teaching there has helped the Alpine brand. RITHOLTZ: Sure. WEAVER: And helped me — and more importantly, helped me understand what students are capable of, which is a lot, and what they want, which is they want to be the boss right away. And I think — so it’s helped — it helped me learn a little bit more about how to build a program that the students want to actually do. RITHOLTZ: So one of the things the CIT program does is to try and increase underrepresented individuals in PE. Tell us a little bit about what diversity does for your business. WEAVER: Yeah. Well, it’s awesome what we can do. If you — the great thing about hiring for attributes over experience is that we can actually have a huge impact on diversity. So for example, if I said we’re hiring a CEO to run a healthcare software business and our criteria is they have to have done it for 20 years. RITHOLTZ: Right. WEAVER: Then I’m — that battle has been won or lost 20 years ago. RITHOLTZ: Right. WEAVER: Yeah. I could hire someone who’s a diverse candidate from one of my competitors, but I haven’t really created any value. If I hire someone right out of business school, let’s just use women as an example and that woman wouldn’t have necessarily seen a path to become a CEO, and I can provide her a clear path, then I can actually increase the number of women that become CEOs, which is exactly what we’ve done. We have over 50% of our CEOs-in-Training that we’ve hired have been women. About 30% to 35% have been underrepresented minorities. And so we have — we can have a — we can really move the dial on creating more diversity in CEO ranks. RITHOLTZ: That’s really kind of interesting. Let’s talk a little bit about software and services, why focus on those areas in particular? WEAVER: So one of the things that we figured out, which probably took us way too long to figure out, is if you buy recurring revenue, there’s just a lot fewer things that go wrong. So we’re not unique in focusing on recurring revenue, but that we turn the dial in around that Great Recession time, and decided that was all we were going to do. RITHOLTZ: And so it’s less focused on winning that one big sale and it’s more about building a business that has a fairly steady revenue stream? WEAVER: That’s right. And then if you marry that with what I was saying before, about putting young people to run them, recurring revenue is really helpful because in the first year, they have a big learning curve. And you — RITHOLTZ: Right. WEAVER: You know, they — we need them to have a little bit of a cushion for them to get up to speed. So recurring revenue helps a ton because it does take a little while to learn how to be a CEO. RITHOLTZ: That’s really interesting. Software obviously has been really hot over the past couple of years. Any chance that that changes or slows down, or is software just the driver of the future? WEAVER: I mean, I think software is the driver of the future. And I think anything, even the driver of the future can get overpriced. RITHOLTZ: Sure. WEAVER: And you can overpay for any asset. And I think in the last few years, you know, people have gotten a little ahead of themselves with some of the multiples that were paid. But I don’t think that changes fundamentally that I think software — you know, software is here for a long time and it’s got a lot of really exciting trends. (COMMERCIAL BREAK) RITHOLTZ: I’m going to ask you a question. I’m going to have you put this back earlier in the hiring discussion because I missed something and I want to come back to it. You’ve discussed episodic versus programmatic hiring. Explain the difference between the two. WEAVER: Yeah, great question. So I might have made up those two terms, but — RITHOLTZ: Well, that’s why it jumped out at me. I don’t know what either those things are. I have to ask that question. WEAVER: I think I did make them up, but — so episodic hiring is what everyone does. Okay. We need a — RITHOLTZ: We have an opening. WEAVER: Yeah. RITHOLTZ: Fill this — go to LinkedIn — WEAVER: Exactly. RITHOLTZ: — put out an ad, get me somebody here. WEAVER: Exactly. Or yeah, we’ll hire Russell Reynolds to get us a CFO, whatever. That’s how everyone hires. That is two problems — well, a number of problems. One is it’s slow, and two is it’s expensive. And three is it actually doesn’t even work that well. Like, the hit rate is pretty low. The hit rate across the board in hiring statistically is about 50%, but that’s measured as are they still there in three years? Not this they — were they successful? So it’s even worse than that. So that’s the problem with episodic hiring. So programmatic hiring is you’re going to hire the same role a lot, and so how do you make that more of a program? So for example, you know, we’re hiring 17 people from business schools that start next month, or we’re hiring 27 undergrads to be interns who will matriculate into full time roles. And so, there’s a group of people that are graduating. You can kind of have a class of folks. You can give them way more training. You can build a whole program using the — to use the programmatic term around that, and it’s just a lot more effective. That’s two roles that we do at Alpine, the CEOs-in-Training and then the analysts. But then in our companies, you know, in some cases, that’s engineers, technicians, where that’s their recurring hire that they’re doing. And we’re helping them build programs to start with people who don’t know how to do those functions, and bring them up, you know, through training to learn those. RITHOLTZ: Really quite interesting. WEAVER: And you can scale — you can just scale a lot better, and you have a way higher hit rate doing that. RITHOLTZ: So you’re constantly maintaining a pool of either potential hires or actual employees that you’re waiting to promote? WEAVER: Absolutely. Yeah. RITHOLTZ: Before we get into the current market environment for private equity, I have to circle back to you teaching at Stanford, at the graduate school, tell us a little bit about the courses you teach and what students learn. WEAVER: So I teach two courses there. I teach — they’re both — they’re both basically similar. One is for first years, and one is for second years, but they’re both centered around entrepreneurship. And the idea of the courses is that there’s lots of classes on analysis and accounting and finance; and there aren’t a lot of classes around how to actually manage people, lead people. And I’m talking the nitty-gritty stuff of literally like what to say, if you have to fire someone. My students have to rule — my students will say, “Oh, I would just fire that person.” I said, “Okay, great. I’ll be them and you tell me.” RITHOLTZ: Right. Fire me. WEAVER: Fire me, and then they have to do it and they realize — RITHOLTZ: It’s harder than it looks. WEAVER: It’s a lot harder than it looks. So they’ll say — RITHOLTZ: That’s why people just cheat and send email. He’s so mortified. WEAVER: Yeah. That would not be something we teach. We do not — we not teach people to send an email. RITHOLTZ: So tell us about the role-playing. What does that — WEAVER: So we — so the student will actually play the protagonist in the case, and I’ll play the antagonist for lack of a better word of the other characters. And then they’ll fire me, or they’ll have to demote me, or they’ll have to tell me that they no longer want to be my partner, or whatever the situation is that they’re trying to get through. And then we’ll play around with it. And they’ll realize, you know, some things they do right, some things they do poorly. And then the entrepreneur about whom we’ve written the case is in the class, and so then they’ll chime in and say, “Well, wow, this is — you did this this way, this is why I didn’t do that,” or “I wish I would have done it that way. Instead, I did this.” So it’s a really — it’s a really, really fun class. It’s — and it’s something that they don’t get anywhere else where they actually have to kind of implement the stuff they’re talking about. RITHOLTZ: So aside from firing, what else do you teach them? WEAVER: So everything, we actually teach a lot on hiring. We have whole modules and playbooks and videos and things I’ve made and we do a class on that, which is really important. We talk about complex partnership issues, things with your board. They have to sell stuff. They have to fundraise, how to make an offense and defense deck to sell — to sell something, you know, a whole list of basically things that entrepreneurs are going to have to face in their life. RITHOLTZ: Really intriguing. I have to imagine having been a graduate student at Stanford, it’s deeply satisfying teaching there. WEAVER: It’s a blast. I started off as a case guest, where they wrote a case about me buying stuff in my dorm room, and I was a case guest and I kept — I would come home all energized. And it was my favorite day of the year. And then when the — Irv Grousbeck, who wrote the case about me, who’s a legend at Stanford, when he — he called me one day and said, “Hey, you know, I’m going to stop teaching this class, would you want to teach in?” And my first response was, “No, I have a job, you know, and I can’t,” but I didn’t say that. I said, “Hey, I’ll think about it.” And then, thankfully, everyone I was around was like, “Graham, you have to do this. And it’s your favorite thing you do.” And we figured out a way to make it work. So it’s a blast. RITHOLTZ: That sounds like — that sounds like it’s a lot of fun. WEAVER: One more thing I would just add is what I realized after a few years is I’ll teach students all about entrepreneurship, and we have this great class. And then they go take a job, you know, in consulting or investment banking; they never become entrepreneurs, even though that was what they wrote their essay about and that was what they’re excited about. So I added to the class a whole part on, okay, wait a second, what is it you really want to do with your life? You know, what’s holding you back? How’d you make a plan to go do that? What are your limiting beliefs? What are the things — what are your fears? So we have a whole thread, probably 25% of the class is on those things because I’m like what’s the point of teaching people to be entrepreneurs if they don’t become entrepreneurs? RITHOLTZ: Right. WEAVER: So I’ve invested a lot into, like, personal growth. And that’s a really, really fun part of us, too. RITHOLTZ: Are any of those skill sets transferable to consultants who arguably — WEAVER: Oh, 100%, a 100%. RITHOLTZ: — they’ll be working with other entrepreneurs and maybe haven’t been exposed? WEAVER: Yeah, a 100%. It wasn’t so much that I have anything against consulting, it was just that the student at the beginning of the class said, “My goal is to do X, and then they don’t do X.” That was all. RITHOLTZ: So tell us a little bit about your approach, what’s your process like to finding a potential acquisition target. And since we look at both private and public markets, what do you think of in terms of valuation? How do you come up with a number? WEAVER: Yeah. Yeah, great questions. We have a large team that looks for potential companies. We have actually 52 people at Alpine and in our portfolio companies that are looking for deals. RITHOLTZ: 52? WEAVER: 52. RITHOLTZ: So that’s a lot of people. WEAVER: Yeah. RITHOLTZ: How big is the firm overall? WEAVER: Overall, if you include the CEOs-in-Training and we have — RITHOLTZ: And your 1099 consultants. WEAVER: We probably have roughly 200. RITHOLTZ: All right, so that’s a — WEAVER: Yeah. RITHOLTZ: That’s a decent size. WEAVER: The 52 also includes a number of people that are working at the company who’s doing sourcing, but they’re doing the same thing. They’re calling companies, looking for investments. So we have 52 people looking for deals, and then a lot of those conversations are directly with founders. And what we’re trying to do is figure out — the way we think about it is we can pay a price, that we can hit our target returns, which I can’t talk about on, you know — RITHOLTZ: Right. WEAVER: But if we can hit our target — RITHOLTZ: We all have compliance departments. WEAVER: So we can pay a price so we could hit our target returns with like a 70% base case. And then we need there to be a lot more upside to that than downside. So we want there to be like a case where we could hit many multiples of our target returns. And so based on that, we kind of back into a price. And then where we get in trouble or where things get turned down at Investment Committee is when everything in the world has to go perfectly to hit that target. RITHOLTZ: Right. WEAVER: Because I’ve been in this business for 28 years, and when you start pricing in perfection, that’s a time when you realize you’re overpaying. RITHOLTZ: Right. WEAVER: So that’s — it’s that 70% probability and less a margin of safety thing that you really — as someone who’s like a little bit more senior at our firm, I have to bring that to the discussions. RITHOLTZ: Yeah. That perfect 10 stuck at landing, those are the outliers. You certainly can’t rely on that. WEAVER: Exactly. You can’t underwrite to that, for sure. RITHOLTZ: Yeah. So when you look at this macro environment, it seems to be pretty supportive of economic expansion generally. How closely do you pay attention to things like, hey, the Fed is raising rates pretty rapidly, maybe they’re going to cause a recession next year? WEAVER: We pay attention to it to some extent. If you go back to the ’08 crisis — RITHOLTZ: Now, that’s a recession. WEAVER: Yeah. And we’re just in a very different position. I think we’re way underbuilt on housing. So you know, I don’t see — RITHOLTZ: Wildly. WEAVER: Wildly underbuilt on housing, so I don’t see — you know, I don’t see things happen — you know, crashing there. I think we have — the consumer isn’t as leveraged as they were back in 2008. Businesses aren’t as leveraged as they were. I just think it’s a lot healthier. On the flip side, we also don’t have — the Fed can’t print money like they did in ’08 because of inflation. But I think, generally, it just feels like we’re a lot healthier than we were back then. RITHOLTZ: Right. You’re singing my song. I’m in the exact same place. I’m kind of perplexed by all the recession chatter. I mean, what are we? 27, 28 million new jobs in this year? That’s not what you usually see. Although, to be fair, some past recessions, we were creating jobs right until the moment it stopped and the bottom dropped out. But you know, it really depends on how aggressive the powers that you’re going to get about inflation. So here’s the question related to that in ’08, ’09, let’s say the naysayers are right and the end of this year or 2023, we see something more than just a mild shallow recession, we see a real recession. How does that affect the companies you look at? And do you start doing, for lack of a better phrase, distressed private equity investing? WEAVER: You know, I think that what we’ve been trying to do over the last 14 years is underwrite companies that would do well in a recession. So hopefully, we’re going to — our company is going to hold up well in that time. In terms of what we look for, it does open up the door when — you know, when there is a recession, there’s a lot more different things that are for sale at different prices. And I think one of the great assets is if you have a whole team of managers that you can put in to run distressed things, you have a lot of options open to what you can look at. So there — you know, there will be a lot more interesting things to do with, you know, if that happens. Certainly, we don’t wish that on the economy. RITHOLTZ: On anybody else. And then, finally, I have to ask about the way you score software companies and services companies, you use a metric. I really am not familiar with eNPS. Can you tell us a little bit about that? WEAVER: Yeah. So I think in general, that there are leading indicators and lagging indicators. Lagging indicator is revenue EBITDA. Those are lagging indicators. But yet, a lot of managers, they try to manage to lagging indicators. It’s like — and that’s just not very effective. So what we try to do is develop what are the leading indicators that are going to predict success. And the number one most important leading indicator, you’re not going to be surprised to hear me say, is talent. So if you tell me, “I’m on the board of your business, and we’re starting to build the world-class management team, I can tell you in two years, we’ll have a homerun investment.” So one of those leading — two of those leading indicators related to talent are employee net promoter score, which is the eNPS. RITHOLTZ: Meaning how employees rate their employee? WEAVER: Exactly. Yeah. Would they — would they recommend this company to a friend? And we measure that every quarter for every one of our companies. We measure it at Alpine. We measure it for a whole bunch of different groups within Alpine. And then retention is the other big one. So if we can be managing those and getting those right, those are leading indicators that are going to help us set up, you know, the revenue EBITDA that come later. And those are hard things to manage. Getting those metrics right takes a lot of work. That’s actually where I spend most of my time at Alpine, believe it or not, is making sure that we’re creating an environment where the best people want to be and stay. And most people again in the finance world, they don’t think about kind of squishy, soft metrics like that, but they should be. RITHOLTZ: Well, because they have a really outsized impact on the performance of a company. WEAVER: Absolutely. That’s my view is they have — they have the biggest impact. RITHOLTZ: And my last question before I get to our favorite questions we ask all our guests, so a little bit of a curveball, you are a captain on a national championship rowing team. WEAVER: I was. Yeah. RITHOLTZ: Tell us about that. WEAVER: So — RITHOLTZ: You look like you row. WEAVER: So I came to college not even knowing anything about rowing. I didn’t even know that the boats went backwards till I got in a boat. RITHOLTZ: Well, it’s not that they’re going backwards. It’s just that you’re facing backwards. WEAVER: Exactly. Yeah. I didn’t even know that. So I started as a novice, I walked on the team. And it seemed like everyone else on the team had rowed before, so I was horrible, absolutely horrible. I got cut, and then just kept kind of — and so there’s a funny story where the coach says, “Okay, these are the people who are going to boats. The rest of you are, quote, “land warriors.” And you’re a land warrior means you go on the rowing machines. And so that night when he kind of posted the boats and I wasn’t in the boat, he said, “All right.” So I did this calculus, and I’m like, okay, well, gosh, all the land warriors are going to show up before class. You know, classes — first class is at 9:00. So they’re going to show up at 8:00, but — so I got to show up at 7:00. No, no, no, everyone is going to think that, so I’ll show up at 6:00. So I show up the next morning, zero people. And one of the guys is like, “Hey, idiot, land warrior is another way to say you got cut.” But I still stayed as a land warrior, and kept getting better at — getting my Erg times better and better over time. And it was one of the greatest things I ever did. I had a great time and — RITHOLTZ: And when were they national champions? WEAVER: My senior year, I was — RITHOLTZ: So by then, you’re on the team? WEAVER: By my — yeah, by my senior year, I was pulling one of the best Erg times in the nation at the rowing machine — RITHOLTZ: Erg time? WEAVER: On the concept to rowing machine like you see in the gym, they actually have a standard test, which is 2000 meters which you submit, you know, nationally. And by my senior year, I had one of and maybe a few times the number one Erg time in the country, and I was elected captain by my teammates of our team. And then that year, we were supposed to have a rebuilding year because we lost all these seniors and we actually won the whole thing. RITHOLTZ: That’s amazing. WEAVER: So it was awesome. RITHOLTZ: Wow. That’s really amazing. (COMMERCIAL BREAK) RITHOLTZ: Let’s jump to our favorite questions that we ask all of our guests, starting with what kept you entertained during the pandemic lockdown? Tell us what you were streaming. WEAVER: I went on this whole Buddhist thing during the pandemic and I started reading a lot about Buddhism and streaming Buddhism, and it was — it was amazing. RITHOLTZ: Meditating or — WEAVER: Meditating and just kind of learning about Buddhism, and you know, why we all suffer and how to — you know, how all these thoughts we have in our head, our own imagination. And I went on this whole kick during the pandemic, which was phenomenal. I highly recommend it. And basically, the concept is that your reality is going through a filter. And everything that’s happened externally, you’re telling yourself a story about what that means, and whether that’s good, or whether that’s bad. And that that’s really — your reality isn’t what’s happening, it’s the story you’re telling yourself and that you have complete control over that story. RITHOLTZ: Right. That’s the classic narrative fallacy. WEAVER: Yeah, that’s the narrative fallacy. And that’s kind of the fundamental premise of Buddhism, which is your suffering is coming, not from what’s happening, but the story you’re telling yourself. So I went on this long, you know, meditating and reading, and kind of journaling about that. And that was — that was a lot of fun. RITHOLTZ: So the — we had this old joke about, we had a softball team here over in Central Park and we had the Buddhists playing the stoics and the game never finished. Everybody just sat down instead of having a long conversation. But I’m right there with you. You mentioned your — two of your mentors, who were some of your earliest investors. Are there anybody else you want to mention as mentors? The professor at Stanford you referred to also. WEAVER: Yeah. I’ll — both of those, Tom Steyer. Doug Martin and Irv Grousbeck were super important in my life. I’ll talk about Irv. He is probably if you had — there’s probably literally, Barry, a hundred people you could have on this podcast that would list Irv as one of their most important people. RITHOLTZ: Really? WEAVER: Yeah. RITHOLTZ: Wow. WEAVER: He a professor at Stanford and just, you know, makes time for folks. He built an incredible business. And he just has this, you know, unwavering moral code. He was an early investor. He’s the one who asked me to teach at Stanford. And I just — I just find the way he set up his life and his — just the way he treats other people, you’re always the most important person in the world when you’re with him. And so, I’ve definitely learned a lot from him. RITHOLTZ: Really interesting. Let’s talk about books. What are some of your favorites and what are you reading currently? WEAVER: I — it’s funny, I ended up rereading like the same 10 books. In terms of my favorites, I read — I have some I read currently too, but “Good to Great,” Warren Buffett’s Biography “Snowball,” Steve Jobs biography by Isaacson, Walt Disney’s biography by Neal Gabler, “Switch” by Dan and Chip Heath, “Made to Stick” by Dan and Chip Heath, Buffett’s annual letters. Like, those are like — I reread those and every time I reread them, I get kind of reenergized. And we’ve modeled a lot of our business and a lot of my life around some of the things I learned in some of those books. And a lot of those required reading and help. RITHOLTZ: I can imagine. What are you reading currently? WEAVER: And right now, I started getting on this Brene Brown kick. I don’t know if you’ve read some of her stuff, but “The Gifts of Imperfection” I’m reading right now, which is just phenomenal. She is — I actually downloaded it on Audible so I get to hear her talk about it. But she has just this incredible way of talking about things that other people don’t talk about, like shame and how to — how to deal with the things you’re not good at, and how to be intellectually honest and admit when you don’t know things. And she’s — I love her work. RITHOLTZ: What’s the title of the book you’re reading currently? WEAVER: “The Gift of Imperfection.” RITHOLTZ: It sounds really — WEAVER: Yeah, it’s phenomenal. It’s phenomenal. RITHOLTZ: Before I forget, just as an aside and you could edit this out. So I went to law school with a guy named Lawrence Cunningham, who was the first person who recognized, hey, all these letters from Warren Buffett, they’re really fascinating, deep stuff. He bound them. WEAVER: Yeah. I bought that book. I own that book. RITHOLTZ: That book has been like a perennial bestseller. WEAVER: Yeah. RITHOLTZ: And it’s — you know, the old joke about the two economists walking down the street. One says, “Is that a $100 bill on the floor?” And the other says, “No, if it was a $100 bill, someone would have picked it up.” It’s the same theme with that. WEAVER: He picked it up. Yeah. RITHOLTZ: These have been around for literally — WEAVER: Yeah. RITHOLTZ: I mean, I think he first started in like ‘90 or ‘92, something like that. And Buffett had been around for 30 years by then already, or 25 years, nobody had thought of doing that. WEAVER: And you know what, like, it doesn’t matter if it’s crypto or software valuations or the Internet. The stuff Buffett writes about is still the right stuff. RITHOLTZ: Fundamental common sense, block and tackling. WEAVER: You’re going to discount the cash flows back and decide what you can pay. You’re going to put a premium on the discount rate if the stuff is a lot more uncertain. It’s this — it is exactly the right formula today and it was 50 years ago, and it will be 50 years from now. And anytime that there’s something new, where people says this time, it’s different, you should be really skeptical. RITHOLTZ: Always. All right. Our final two questions, what sort of advice would you give to a recent college or business school graduate interested in a career in private equity? WEAVER: Well, I’ll start with the first part, just general advice, and then I’ll go the private equity. But, you know, as you can imagine, I actually give this advice all the time teaching. But the first thing that I think a lot of people graduating don’t ask is like, what they — what do I want? What is five years from now, 10 years from now, if I could — if I knew I wasn’t going to fail, what would I want to do with my life? And they can start with that question. And then start working backwards from that about what job you should take now and next year and five years from now. Instead, a lot of people just think, “Oh, these firms are interviewing on campus, and I’ll go here, I’ll go here.” And that’s okay. But if you know where you want to be 10 years from now, it will inform which firm you go to work and what skills you’re trying to acquire. So I think — I think that would be my advice is like, in 10 years, you will — you can do almost anything you set your mind to and so give yourself permission to really answer that question, what do I want to do in 10 years? RITHOLTZ: Why does it matter if you quote, “know you wouldn’t fail?” WEAVER: Yeah. RITHOLTZ: Just to open the set of possibilities or — WEAVER: Because — yeah, I always frame it as if you knew you wouldn’t fail, what would you do? Because without that, people already jumped to, “I can’t do this,” like subconsciously in the mind. RITHOLTZ: Fear of failure, is that big really? WEAVER: Fear of failure is so powerful. RITHOLTZ: Even amongst really high performing talent — WEAVER: I think it’s even — RITHOLTZ: I mean, Stanford graduate students, I have to think that’s the cream of the crop out there. WEAVER: In some ways, it’s almost more prevalent because they have had so much success, and they don’t — you know, they have this incredible track record. But I would say the number one thing that Stanford Business School students or really just about anyone in the world, it’s the same thing, which is their subconscious mind defaults to fear and fear of failure. RITHOLTZ: That’s fascinating because when I have discussions like this with colleagues or friends in Europe, the thing — or even Asia, the thing that makes United States so unique in the developed economy world is that failure isn’t a scarlet letter, especially in Silicon Valley. It’s almost a badge of honor. Look at all the VCs that list all, “Hey, we missed Apple and Cisco. We invested money in Pets.com. Look how terrible we are, except for our 40% compounded returns.” It’s a badge of honor to say, “We tried this face planted, brush yourself off and moved on.” WEAVER: But when you’re starting out your career and you don’t have anything to fall back on, and you haven’t yet had the success that you can look back, it’s really scary for people. And the thing that they miss is they underestimate what they could really do in 10 years and they underestimate themselves. They forgot what got them in that seat at Stanford Business School. RITHOLTZ: Sure. WEAVER: And they compare themselves to, you know, their roommate or their classmate or something. RITHOLTZ: So the other half of the question is advice about private equity. WEAVER: Yeah. I would say — I would say if someone is interested in a career in private equity, I would — I would say all private equity is not created equal. And there are — literally, like probably a thousand different models, and figure out, you know, go talk to a bunch of companies that are doing private equity in a whole bunch of different ways, and figure out what resonates with you and your interests and your superpowers, and where are you going to line up because it’s, it’s a very diverse industry. And you know, there are some firms that are making their money based on, you know, hardcore fundamental analysis. You know, we’re making our money on talent. There’s others that are, you know, doing cost cutting. There’s a whole bunch of different ways and one or more of those is going to line up a lot better with what you’re excited about. RITHOLTZ: And our final question, what do you know about the world of software services in private equity today that you wish you knew 28 years or so ago, when you were first getting started? WEAVER: Well, two things. The first thing is I wish I knew that it was going to work out fine. So I was so stressed and I put so much pressure on myself, that I wish — if I could go back and tell myself anything, it would be like, “Hey, Graham, you know, it’s going to be okay,” because I went through a lot. RITHOLTZ: That’s a really — that’s a really interesting answer because, you know, we just don’t realize how much we freak ourselves out and very often, unnecessarily. What’s the second thing? WEAVER: The second thing would be I would — if I could have realized earlier on just how important the world of talent is, and how that was really the thing that drove performance because that that would have saved me a decade. RITHOLTZ: It sounds really like you’ve honed in on exactly what makes your business work and really quite fascinating. Graham, thank you for being so generous with your time. We have been speaking with Graham Weaver, founder and partner at Alpine Investors. If you enjoyed this conversation, well, be sure to check out any of our previous 400 discussions that we’ve had over the past eight and a half years. You can find those at iTunes, Spotify, wherever you feed your podcast fix. We love your comments, feedback and suggestions. Write to us at mibpodcast@bloomberg.net. Sign up for my daily reading list @ritholtz.com You can follow me on Twitter @ritholtz. I would be remiss if I did not thank the crack team that helps put these conversations together each week. Robert Bragg is my audio engineer. Atika Valbrun is my project manager. Sean Russo runs all of our research. Paris Wald is my producer. I’m Barry Ritholtz. You’ve been listening to Masters in Business on Bloomberg Radio. END   ~~~   The post Transcript: Graham Weaver appeared first on The Big Picture......»»

Category: blogSource: TheBigPictureJul 26th, 2022

Goldman Sachs, Morgan Stanley stand to cash in on $3.9 billion Amazon-One Medical deal

Today's biggest story on Wall Street looks at the rainmakers at Goldman Sachs and Morgan Stanley who crafted Amazon's $3.9 billion buy of One Medical. It's a welcome injection for investment-banking teams, which were largely blamed for banks' recent earnings. Hi! Aaron Weinman reporting from New York. Amazon's $3.9 billion purchase of One Medical could net Goldman Sachs and Morgan Stanley millions-of-dollars in advisory fees apiece. It comes as investment banks fall under the microscope for a slow year in dealmaking.Let's unpack who at the two Wall Street giants put this deal together.If this was forwarded to you, sign up here. Download Insider's app here.Goldman Sachs and Morgan Stanley are in line for multimillion-dollar paydays following Amazon's announcement that it's purchasing One Medical.IronHeart/Getty Images1. Goldman Sachs and Morgan Stanley got the nod for Amazon's $3.9 billion purchase of One Medical. It's a welcome payday for the pair especially after investment-banking teams across Wall Street shouldered much of the pain in last quarter's earnings cycle.Goldman Sachs advised Amazon — rekindling a relationship that spans back to 2017,  when the company bought Whole Foods Market for $13.7 billion — and Morgan Stanley advised One Medical on the sale, Insider has learned.Morgan Stanley has advised One Medical at least three times now, following up its lead role on the clinic operator's $245 million initial public offering in January 2020, and its $2.1 billion acquisition of Iora Health in June last year.Amid a dearth of M&A activity, a deal of this size should net each bank millions of dollars in fees. Investment banks typically earn between 2% to 4% (of the enterprise value of a transaction) in revenues for their advisory services. A sought-after client like Amazon, however, might lead banks to lower their price in exchange for the tech giant's business.Amazon's interest in One Medical, meanwhile, started back in the spring of 2022, a person with knowledge of the process told Insider. But the company was not seeking a buyer at the time, this person said.News of Amazon's acquisition sent One Medical's share price to more than $17 per share from a little over $10 last week.For the full story on the genesis of this deal, and the bankers who helped piece the transaction together, check out this report from Insider's Reed Alexander, and myself.In other news:Robert A Tobiansky/Getty; Boris Zhitkov/Getty; Jake Wyman/Getty; José Miguel Hernández Hernández/Getty; Spencer Platt/Getty; Twitter; Anna Kim/Insider2. Legendary Silicon Valley investor Bill Gurley was fed up with how Wall Street handled IPOs. Here's how he took on the Street and revolutionized how companies go public.3. Hedge-fund assets dipped below $4 trillion in June due to poor performance and investor exits. But commodity-trading advisors and macro hedge funds soared. Here are the winners and losers for the first half of the year.4. Investors have piled about $41 billion into artificial-intelligence startups this year, according to Pitchbook. Meet eight lawyers helping these startups patent AI and comply with rules around privacy and safety.5. The crypto world is riled up about former Coinbase employee Ishan Wahi, who's accused of trading tokens before they were listed. The SEC asserted that some of the traded tokens were securities, a label that could create serious issues for entities enabling crypto trading.6. Blackstone's Chief Operating Officer Jon Gray is still all about rental housing and logistics. It's not surprising – short supply and steady demand mean that rents are through the roof right now.7. Staying on real estate, the commercial property market is getting iced by rising rates. One investor expects deals to emerge later this year as the market braces for fire sales.8. Index Ventures partners Nina Achadjian and Paris Heymann are betting on vertical software. They argue these tools — software tailored to specific industries — are "mission critical" to customers. Here's how founders of such companies can pitch VCs.9. Andreessen Horowitz is setting up shop in New York, Miami, and Los Angeles, and doing most of it virtually. Here's why the firm is spreading its influence beyond Silicon Valley.10. Citi has shuttered its municipal proprietary-trading effort, Bloomberg reported. The decision, alongside some high-profile departures from Citi's municipal-bond business, sparked concerns that the bank is stepping back from its storied public-finance business.Done deals:Smart Care, a Wind Point Partners' portfolio company that provides commercial cooking equipment, acquired Espresso Partners, a coffee equipment company.Fifth Wall, a proptech-focused venture-capital fund, closed a $500 million fund. It was the investor's first climate-focused fund that will be invested in renewable energy, and carbon sequestration to decarbonize the real-estate industry.Curated by Aaron Weinman in New York. Tips? Email aweinman@insider.com or tweet @aaronw11. Edited by Hallam Bullock (tweet @hallam_bullock) in London.Read the original article on Business Insider.....»»

Category: personnelSource: nytJul 25th, 2022

Market Snapshot: Investors are obsessed with size of Fed’s next rate hike. Here’s what they’re missing.

Win McNamee/Getty ImagesDebate has been simmering over whether Federal Reserve policy makers will raise the fed-funds rate by three-quarters of a percentage point later this month, as they did in June, or step up their inflation-fighting campaign with a full point hike —- something that hasn’t been seen in the past 40 years.Friday’s economic data, which included somewhat improving or steady inflation expectations from the University of Michigan’s consumer survey, prompted traders to lower their expectations for a 100 basis point hike in less than two weeks. The size of the Fed’s next rate hike might be splitting hairs at this point, however, given the bigger, overwhelming issue confronting officials and financial markets: A 9.1% inflation rate for June that has yet to peak.Generally speaking, investors have been envisioning a scenario in which inflation peaks and the central bank is eventually able to back off aggressive rate hikes and avoid sinking the U.S. economy into a deep recession. Financial markets are, by nature, optimistic and have struggled to price in a more pessimistic scenario in which inflation doesn’t ease and policy makers are forced to lift rates despite the ramifications for the world’s largest economy. It’s a big reason why financial markets turned fragile a month ago, ahead of a 75 basis point rate hike by the Fed that was the biggest increase since 1994 — with Treasurys, stocks, credit and currencies all exhibiting friction or tension ahead of the June 15 decision. Fast forward to present day: Inflation data has only come in hotter, with a greater-than-expected 9.1% annual headline CPI reading for June. As of Friday, traders were pricing in a 31% chance of a 100 basis points move on July 27 — down significantly from Wednesday — and a 69% likelihood of a 75 basis point hike, according to the CME FedWatch Tool.“The problem now does not have to do with 100 basis points or 75 basis points: It’s how long inflation stays at these levels before it turns lower,” said Jim Vogel, an interest-rate strategist at FHN Financial in Memphis. “The longer this goes on, the more difficult it is to realize any upside in risk assets. There’s simply less upside, which means any round of selling becomes harder to bounce back from.”An absence of buyers and abundance of sellers is leading to gaps in bid and ask prices, and “it will be difficult for liquidity to improve given some faulty ideas in the market, such as the notion that inflation can peak or follow economic cycles when there’s a land war going on in Europe,” Vogel said via phone, referring to Russia’s invasion of Ukraine. Financial markets are fast-moving, forward-looking, and ordinarily efficient at evaluating information. Interestingly, though, they’ve had a tough time letting go of the sanguine view that inflation should subside. June’s CPI data demonstrated that inflation was broad-based, with virtually every component coming in stronger than inflation traders expected. And while many investors are counting on falling gas prices since mid-June to bring down July’s inflation print, gasoline is just one part of the equation: Gains in other categories could be enough to offset that and produce another high print. Inflation-derivatives traders have been expecting to see three more 8%-plus CPI readings for July, August and September — even after accounting for declines in gas prices and Fed rate hikes.Ahead of the Fed’s decision, “there will be dislocations across assets, there’s no other way to put it,” said John Silvia, the former chief economist at Wells Fargo Securities. The equity market is the first place those dislocations have appeared because it has been more overpriced than other asset classes, and “there aren’t enough buyers at existing prices relative to sellers.” Credit markets are also seeing some pain, while Treasurys — the most liquid market on Earth — are likely to be the last place to get hit, he said via phone. “You have a lack of liquidity in the market and gaps in bid and ask prices, and it’s not surprising to see why,” said Silvia, now founder and chief executive of Dynamic Economic Strategy in Captiva Island, Florida. “We’re getting inflation that’s so different from what the market expected, that the positions of market players are significantly out of place. The market can’t adjust to this information this quickly.”If the Fed decides to hike by 100 basis points on July 27 — taking the fed-funds rate target to between 2.5% and 2.75% from a current level between 1.5% and 1.75% — “there will be a lot of losing positions and people on the wrong side of that trade,” he said. On the other hand, a 75 basis point hike “would disappoint” on the fear that the Fed is not serious about inflation.All three major U.S. stock indexes are nursing year-to-date, double-digit losses as inflation moves higher. On Friday, Dow industrials DJIA, S&P 500 SPX and Nasdaq Composite COMP posted weekly losses of 0.2%, 0.9% and 1.6%, respectively, though they each finished sharply higher for the day.For the past month, bond investors have swung back and forth between selling Treasurys in anticipation of higher rates and buying them on recession fears. Ten- and 30-year Treasury yields have each dropped three of the past four weeks amid renewed interest in the safety of government debt.Long-dated Treasurys are one part of the financial market where there’s been “arguably less financial dislocation,” said economist Chris Low, Vogel’s New-York based colleague at FHN Financial, even though a deeply inverted Treasury curve supports the notion of a worsening economic outlook and markets may be stuck in a turbulent environment that lasts as long as the 2007-2009 financial crisis and recession. Investors concerned about the direction of equity markets, while looking to avoid or trim back on cash and/or bond allocations, “can still participate in the upside potential of equity market returns and cut out a predefined amount of downside risk through options strategies,” said Johan Grahn, vice president and head of ETF strategy at Allianz Investment Management in Minneapolis, which oversees $19.5 billion. “They can do this on their own, or invest in ETFs that do it for them.”Meanwhile, one of the defensive plays that bond investors can make is what David Petrosinelli, a senior trader at InspereX in New York, describes as “barbelling,” or owning securitized and government debt in the shorter and longer parts of the Treasury curve — a “tried-and-true strategy in a rising rate environment,” he told MarketWatch. Next week’s economic calendar is relatively light as Fed policy makers head into a blackout period ahead of their next meeting.Monday brings the NAHB home builders’ index for July, followed by June data on building permits and housing starts on Tuesday.The next day, a report on June existing home sales is set to be released. Thursday’s data is made up of weekly jobless claims, the Philadelphia Fed’s July manufacturing index, and leading economic indicators for June. And on Friday, S&P Global’s U.S. manufacturing and services purchasing managers’ indexes are released. Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news......»»

Category: topSource: marketwatchJul 16th, 2022

Market Snapshot: 75 or 100 basis points? Lost in market debate over Fed’s next rate hike is ‘how long inflation stays at these levels’

Win McNamee/Getty ImagesDebate has been simmering over whether Federal Reserve policy makers will raise the fed-funds rate by three-quarters of a percentage point later this month, as they did in June, or step up their inflation-fighting campaign with a full point hike —- something that hasn’t been seen in the past 40 years.Friday’s economic data, which included somewhat improving or steady inflation expectations from the University of Michigan’s consumer survey, prompted traders to lower their expectations for a 100 basis point hike in less than two weeks. The size of the Fed’s next rate hike might be splitting hairs at this point, however, given the bigger, overwhelming issue confronting officials and financial markets: A 9.1% inflation rate for June that has yet to peak.Generally speaking, investors have been envisioning a scenario in which inflation peaks and the central bank is eventually able to back off aggressive rate hikes and avoid sinking the U.S. economy into a deep recession. Financial markets are, by nature, optimistic and have struggled to price in a more pessimistic scenario in which inflation doesn’t ease and policy makers are forced to lift rates despite the ramifications for the world’s largest economy. It’s a big reason why financial markets turned fragile a month ago, ahead of a 75 basis point rate hike by the Fed that was the biggest increase since 1994 — with Treasurys, stocks, credit and currencies all exhibiting friction or tension ahead of the June 15 decision. Fast forward to present day: Inflation data has only come in hotter, with a greater-than-expected 9.1% annual headline CPI reading for June. As of Friday, traders were pricing in a 31% chance of a 100 basis points move on July 27 — down significantly from Wednesday — and a 69% likelihood of a 75 basis point hike, according to the CME FedWatch Tool.“The problem now does not have to do with 100 basis points or 75 basis points: It’s how long inflation stays at these levels before it turns lower,” said Jim Vogel, an interest-rate strategist at FHN Financial in Memphis. “The longer this goes on, the more difficult it is to realize any upside in risk assets. There’s simply less upside, which means any round of selling becomes harder to bounce back from.”An absence of buyers and abundance of sellers is leading to gaps in bid and ask prices, and “it will be difficult for liquidity to improve given some faulty ideas in the market, such as the notion that inflation can peak or follow economic cycles when there’s a land war going on in Europe,” Vogel said via phone, referring to Russia’s invasion of Ukraine. Financial markets are fast-moving, forward-looking, and ordinarily efficient at evaluating information. Interestingly, though, they’ve had a tough time letting go of the sanguine view that inflation should subside. June’s CPI data demonstrated that inflation was broad-based, with virtually every component coming in stronger than inflation traders expected. And while many investors are counting on falling gas prices since mid-June to bring down July’s inflation print, gasoline is just one part of the equation: Gains in other categories could be enough to offset that and produce another high print. Inflation-derivatives traders have been expecting to see three more 8%-plus CPI readings for July, August and September — even after accounting for declines in gas prices and Fed rate hikes.Ahead of the Fed’s decision, “there will be dislocations across assets, there’s no other way to put it,” said John Silvia, the former chief economist at Wells Fargo Securities. The equity market is the first place those dislocations have appeared because it has been more overpriced than other asset classes, and “there aren’t enough buyers at existing prices relative to sellers.” Credit markets are also seeing some pain, while Treasurys — the most liquid market on Earth — are likely to be the last place to get hit, he said via phone. “You have a lack of liquidity in the market and gaps in bid and ask prices, and it’s not surprising to see why,” said Silvia, now founder and chief executive of Dynamic Economic Strategy in Captiva Island, Florida. “We’re getting inflation that’s so different from what the market expected, that the positions of market players are significantly out of place. The market can’t adjust to this information this quickly.”If the Fed decides to hike by 100 basis points on July 27 — taking the fed-funds rate target to between 2.5% and 2.75% from a current level between 1.5% and 1.75% — “there will be a lot of losing positions and people on the wrong side of that trade,” he said. On the other hand, a 75 basis point hike “would disappoint” on the fear that the Fed is not serious about inflation.All three major U.S. stock indexes are nursing year-to-date, double-digit losses as inflation moves higher. On Friday, Dow industrials DJIA, S&P 500 SPX and Nasdaq Composite COMP posted weekly losses of 0.2%, 0.9% and 1.6%, respectively, though they each finished sharply higher for the day.For the past month, bond investors have swung back and forth between selling Treasurys in anticipation of higher rates and buying them on recession fears. Ten- and 30-year Treasury yields have each dropped three of the past four weeks amid renewed interest in the safety of government debt.Long-dated Treasurys are one part of the financial market where there’s been “arguably less financial dislocation,” said economist Chris Low, Vogel’s New-York based colleague at FHN Financial, even though a deeply inverted Treasury curve supports the notion of a worsening economic outlook and markets may be stuck in a turbulent environment that lasts as long as the 2007-2009 financial crisis and recession. Investors concerned about the direction of equity markets, while looking to avoid or trim back on cash and/or bond allocations, “can still participate in the upside potential of equity market returns and cut out a predefined amount of downside risk through options strategies,” said Johan Grahn, vice president and head of ETF strategy at Allianz Investment Management in Minneapolis, which oversees $19.5 billion. “They can do this on their own, or invest in ETFs that do it for them.”Meanwhile, one of the defensive plays that bond investors can make is what David Petrosinelli, a senior trader at InspereX in New York, describes as “barbelling,” or owning securitized and government debt in the shorter and longer parts of the Treasury curve — a “tried-and-true strategy in a rising rate environment,” he told MarketWatch. Next week’s economic calendar is relatively light as Fed policy makers head into a blackout period ahead of their next meeting.Monday brings the NAHB home builders’ index for July, followed by June data on building permits and housing starts on Tuesday.The next day, a report on June existing home sales is set to be released. Thursday’s data is made up of weekly jobless claims, the Philadelphia Fed’s July manufacturing index, and leading economic indicators for June. And on Friday, S&P Global’s U.S. manufacturing and services purchasing managers’ indexes are released. Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news......»»

Category: topSource: marketwatchJul 16th, 2022

3 Municipal Bond Funds to Add for Stable Returns

Below, we share with you three municipal bond funds, namely, TXRAX, ORNAX and HICOX. Each has earned a Zacks Mutual Fund Rank #1. The debt securities category will always be the first choice for risk-averse investors because this class of instruments provides a regular income flow at low levels of risk. Income from regular dividends helps to ease the pain caused by plunging stock prices.When considering the safety of capital invested, municipal bond mutual funds are second only to those investing in government securities. In addition, interest income earned from these securities is exempt from federal taxes and, in many cases, from state taxes as well.­­Below, we share with you three top-ranked municipal bond funds, namely, JPMorgan Tax Aware Real Return Fund TXRAX, Invesco Rochester Municipal Opportunities Fund ORNAX, and Colorado Bond Shares A Tax Exempt Fund HICOX. 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.JPMorgan Tax Aware Real Return Fund seeks protection after-tax return 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 swaps.JPMorgan Tax Aware Real Return Fundhas three-year annualized returns of 1.7%. As of the end of April 2022, TXRAXhad 45.45% of its net assets invested in Miscellaneous Bonds.Invesco Rochester Municipal Opportunities Fund invests most of its assets along with borrowing if any in municipal securities that its advisors believe are exempted from federal income tax in the fund's respective state income tax. ORNAX invests in securities issued by the governments of states, their political subdivisions, and the District of Columbia, U.S. territories, commonwealths, and possessions or by their agencies, instrumentalities, and other authorities.Invesco Rochester Municipal Opportunities Fundhas three-year annualized returns of 0.8%. ORNAX has an expense ratio of 0.69% compared with the category average of 0.92%.Colorado Bond Shares A Tax Exempt Fund invests most of its assets along with borrowings if any in tax-exempt bonds, securities, notes, and municipal leases of political subdivisions, municipalities and public authorities in the State of Colorado. HICOX only invests in Tax-Exempted securities.Colorado Bond Shares A Tax Exempt Fund has three-year annualized returns of 1.2%. Fred R. Kelly has been the fund manager of HICOX since November 1990.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 >> 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 (ORNAX): Fund Analysis Report Get Your Free (HICOX): Fund Analysis Report Get Your Free (TXRAX): Fund Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJul 15th, 2022

How Public Pensions Turn Cities Into Unlivable Hellholes

How Public Pensions Turn Cities Into Unlivable Hellholes Authored by MN Gordon via EconomicPrism.com, “It’s like going to the ATM in Vegas and then going to the roulette wheel and it comes up red and you go back to the ATM.” The remark was recently made by Steve Mermell.  The man retired last year as city manager of Pasadena, California.  He knows a thing or two about how borrowing to enhance pension fund returns can result in spectacular losses. The Wall Street Journal article did not clarify whether red was a winning turn of the roulette wheel or not.  Within the article’s context it didn’t really matter. The main point was that public pension funds are grossly underfunded.  Consequently, more and more pension funds are borrowing money to play the markets.  The goal is to boost returns to cover their massive funding gaps. If you recall, public-sector retirement plans offer defined benefits, where retiree pension checks are calculated based on salaries and years of service.  Private employers, on the other hand, generally offer defined-contribution plans (like 401Ks), where payouts are based on market returns. If you live long enough, and are a recipient of a public pension fund you will get out far more than you put in.  If you work in the private sector, there’s a good chance you will outlive your retirement savings. Certainly, pension funds can attempt to fill their funding gaps by requesting increases in yearly contributions from governments and workers.  But the public-employee unions go full ape when such measures are proposed.  So the remaining option is to take on greater risk.  What could go wrong? The late Robert Citron could tell you.  As he discovered the hard way, even the most calculated bets will eventually go against you. Something Special Nearly 20-years ago, while providing consulting services to a county sanitation district, we crossed paths with a grumpy fellow who had only a secondary interest in providing industrious work.  His primary interest was deliberating on his upcoming retirement; he could bend your ear off. Between sips of coffee and bites of a glazed donut one Friday morning, he told us of an important milestone that would be reached within six months.  This would be achieved by the coalescing of two critical marks: (1) his 55th birthday, and (2) exactly 36 years of doing time at the district. As he explained it, after 55 years of age the retirement formula went from 2 to 2.5.  So after collecting a paycheck every two weeks for the past 36 years, something special was about to happen. He could take a factor of 2.5 and times it by 36 to equal 90.  Specifically, he would now receive 90 percent of his final year’s pay for the rest of his life.  He set his retirement date accordingly. Mr. Grumpy was an entitled member of the roughly $469 billion California Public Employees’ Retirement System (CalPERS).  The nation’s largest public pension fund.  It’s so large it takes 2,843 full time equivalent positions to administer it. At last count, there were over 2 million members in the CalPERS retirement system.  Some of these people may have done good work prior to retirement.  Others were likely career loafers.  All, without question, did their time with purpose and intent and eyes squarely on the prize. Are they feeling lucky? Starting this month, CalPERS will add leverage for the first time in its 90-year history.  Perhaps it will all work out just fine.  Regardless, the fund’s managers have their work cut out for them. Legacy Costs Officially, CalPERS has roughly two-thirds of the money it needs to pay benefits that state and local governments have promised their workers.  But this is based on an assumption of future investment returns averaging 7 percent a year.  Historically, CalPERS’ returns have fallen well short of this assumption. Over the last 20 years, the average annual return has been 5.5 percent.  Hence, the unofficial gap between what CalPERS has and the promises it owes is much larger than advertised. For instance, if CalPERS investment returns assumption was lowered to its historical average, unfunded liability would rise from $160 billion to over $200 billion.  For this reason, the mega pension fund will now attempt to lever its returns. In the case of Pasadena and Steve Mermell’s experience, funding the local pension plan it once offered to its police and firefighters has been a decades long struggle.  In 1999, in an effort to keep pace with its inflation-adjusted benefits, Pasadena borrowed $102 million through municipal bonds.  The borrowed money went towards its pension obligations. The idea was simple enough.  The pension fund could immediately begin earning on a larger amount of money, while the bonds would be paid back gradually. But then the stock market crashed during the dot com bust in 2001-03.  Yet the city still had to make bond payments at interest rates north of 6 percent. Pasadena then went back to the ATM in 2004 with another pension-obligation bond.  Several years later, in 2007-09, the stock market crashed again.  Still, the city’s pension legacy costs remain.  As noted by the Wall Street Journal: “The local police and fire pension plan has been closed for nearly 50 years.  Pension recipients have dwindled to fewer than 180.  But the city still owes about $135 million in bond debt on the plan.  Payments on it are expected to be about $6 million in 2022.” What a complete cluster. Following Pasadena’s closure of its local pension plan, public pensions are managed by CalPERS.  To add insult, the city’s annual contributions to CalPERS have doubled since 2015, to about $70 million last year.  That’s more than the city spends on transportation. What to make of it… How Public Pensions Turn Cities into Unlivable Hellholes Without question, gambling with public money is a foolish thing to do.  Nonetheless, many pension funds – like CalPERS – are now using leverage to juice returns. According to a Municipal Market Analytics analysis of Bloomberg data, more than 100 city, county, state, and other governments borrowed for their pension funds last year.  This is twice the highest number that did so in any prior year. Standing behind these pension funds are state and local taxpayers – that’s you, acting as the ATM.  Moreover, when the investment returns of public pension funds fall short, governments are primarily responsible for filling the void.  This means cutting other spending and services or increasing taxes. Covering pension fund obligations is a massive drag on state and local government finances.  The fact is, there’s a legion of public workers out there who’ve been promised a retirement that’s no longer affordable. These grand promises must be broken. You can witness the effects when traversing through just about every city in America that has been in existence for more than 60 years.  By repeatedly reallocating spending from much needed services, the present and future conditions of cities and municipalities are being transformed to unlivable hellholes. Your neighbor, who retired from the city over 25 years ago, may frequently lament the shoddy conditions of the streets and sidewalks.  He may bemoan the lack of resources to address burgeoning homeless encampments and the mobs of mentally ill zombies flailing about on the tired asphalt. Yet it has never occurred to him that he and his retired cohorts are receiving money that should be used to maintain basic municipal services.  The generous promises made many decades ago – the entitlements – are now destroying the world around them. *  *  * A massive wave of municipal and corporate bankruptcies is cresting.  The longer the bear market runs, the greater the collateral damage.  Don’t leave your retirement in the hands of others.  Instead, consider trying simple, practical steps everyday Americans can take to protect their wealth and financial privacy.  The steps are documented in the Financial First Aid Kit.  If you’d like to find out more about this important and unique publication, and how to acquire a copy, stop by here today! Tyler Durden Sat, 07/02/2022 - 17:30.....»»

Category: blogSource: zerohedgeJul 2nd, 2022

3 Diversified Bond Mutual Funds for Steady Returns

Below, we share with you three diversified bond mutual funds, namely PCRAX, PLSFX and NPSAX. Each has earned a Zacks Mutual Fund Rank #1. 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 PIMCO CommodityRealReturn Strategy Fund Class A PCRAX, Pacific Funds Strategic Income Fund Advisor Class PLSFX and Nuveen Preferred Securities & Income Fund NPSAX. 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.PIMCO CommodityRealReturn Strategy Fund Class A seeks maximum real return by investing most of its net assets in commodity-linked derivative instruments backed by a portfolio of inflation-indexed securities and other fixed-income instruments, which include bonds, debt securities and other similar instruments issued by domestic and foreign public- or private-sector issuers. PCRAX advisors may also invest in various leveraged or unleveraged commodity index-linked notes.PIMCO CommodityRealReturn Strategy Fund Class A has three-year annualized returns of 23.3%. As of the end of February 2022, PCRAX has 14.20% of its assets invested in U.S. treasury inflation-protected securities.Pacific Funds Strategic Income Fund Advisor Class invests most of its net assets in income-producing debt instruments — investment grade and below investment grade — in various proportions based on market conditions. PLSFX advisors may also invest in floating-rate loans, corporate-debt securities, asset-backed securities, mortgage-related securities, U.S. government and various agency securities.Pacific Funds Strategic Income Fund Advisor Classhas three-year annualized returns of 3.6%. PLSFX has an expense ratio of 0.71% compared with the category average of 0.97%.Nuveen Preferred Securities & Income Fund invests most of its assets along with borrowing, if any, in preferred and other income-producing investment grade securities of companies that are principally engaged in financial services. NPSAX can also invest a small portion of its assets in below-investment-grade securities.Nuveen Preferred Securities & Income Fundhas three-year annualized returns of 3.5%. Douglas M. Baker has been the fund manager of NPSAX since December 2006.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 >> 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 (NPSAX): Fund Analysis Report Get Your Free (PCRAX): Fund Analysis Report Get Your Free (PLSFX): Fund Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJun 29th, 2022

Top 3 Nuveen Mutual Funds to Buy Now for Stable Returns

Below, we share three Nuveen mutual funds, viz., NHMAX, FWIRX and NPSAX. Each has a Zacks Mutual Fund Rank #1 (Strong Buy). Nuveen Investments, headquartered in Chicago, IL, was founded in 1898 by John Nuveen. The company aims to provide financial services to its clients using a multi-boutique structure. It provides these services through an independent team comprising Nuveen Asset Management, Winslow Capital and Symphony.Nuveen is the number one farm land assets manager in the world and a leader in alternative investments. In its Multi-Asset Solutions, the company had $1.2 trillion of assets under management as of Mar 31, 2021. Nuveen offers a wide range of asset classes and products, ranging from equity and alternative funds to municipal and taxable fixed-income bond funds.Below we share with you three top-ranked Nuveen mutual funds, viz.,Nuveen High Yield Municipal Bond Fund Class A NHMAX, Nuveen Wisconsin Municipal Bond Fund Class I FWIRX,Nuveen Preferred Securities & Income Fund NPSAX. 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 Nuveen mutual funds.Nuveen High Yield Municipal Bond Fund Class A seeks high current income that is exempted from regular federal income taxes along with capital appreciation by investing most of its assets, along with borrowings, if any, in municipal bonds that pay personal income tax-free interest. NHMAX also invests a small portion of its investment in lower-quality long-term municipal bonds and inverse floaters.Nuveen High Yield Municipal Bond Fund Class A has three-year annualized returns of 2.0%. As of the end of December 2021, NHMAX has 89.84% of its assets invested in Miscellaneous Investment.Nuveen Wisconsin Municipal Bond Fund Class I seeks preservation of capital along with high current interest income, which is exempted from regular federal, Wisconsin State and, in some cases, Wisconsin local income taxes by investing most of its assets along with borrowings, if any, in investment-grade municipal bonds that have BBB/Baa or higher rating by at least one independent rating agency at the time of purchase. FWIRX also invests a small portion of its net assets in high-yield below-investment-grade municipal bonds or junk bonds.Nuveen Wisconsin Municipal Bond Fund Class I has three-year annualized returns of 1.3%. FWIRX has an expense ratio of 0.69% compared with the category average of 0.87%.Nuveen Preferred Securities & Income Fund invests most of its assets along with borrowings, if any, in preferred and other income-producing securities. NPSAX also invests a small portion of its net assets in financial services companies along with securities that are rated investment-grade or below investment grade.Nuveen Preferred Securities & Income Fund has three-year annualized returns of 3.5%. Douglas M. Baker has been the fund manager of NPSAX since December 2006.To view the Zacks Rank and the past performance of all Nuveen mutual funds, investors can click here to see the complete list of Nuveen 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 >> Just Released: Zacks Top 10 Stocks for 2022 In addition to the investment ideas discussed above, would you like to know about our 10 top picks for the entirety of 2022? From inception in 2012 through 2021, the Zacks Top 10 Stocks portfolios gained an impressive +1,001.2% versus the S&P 500’s +348.7%. Now our Director of Research has combed through 4,000 companies covered by the Zacks Rank and has handpicked the best 10 tickers to buy and hold. Don’t miss your chance to get in…because the sooner you do, the more upside you stand to grab.See Stocks 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 (NHMAX): Fund Analysis Report Get Your Free (NPSAX): Fund Analysis Report Get Your Free (FWIRX): Fund Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJun 27th, 2022

3 Municipal Bond Funds That You Should Consider Buying

Below, we share with you three municipal bond funds, namely, AUNAX, TAIAX, and CXHYX. Each has earned a Zacks Mutual Fund Rank #1. Municipal bonds, or "muni bonds," comprises debt securities that are issued by various states, cities, counties and other governmental entities to raise money to build roads, schools and a host of other projects for the 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 top-ranked municipal bond funds, namely, AB Municipal Bond Inflation Strategy AUNAX, American Funds Tax-Aware Conservative Growth and Income Portfolio Class A TAIAX, and Delaware National High Yield Municipal Bond Fund Class A CXHYX. 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.AB Municipal Bond Inflation Strategy invests most of its net assets in high-quality investment-grade municipal fixed-income securities that pay interest exempt from federal taxation, and are rated A or better or the equivalent by one or more recognized rating agencies, AUNAX also invests a small portion of its assets in below-investment-grade fixed-income securities or junk bonds.AB Municipal Bond Inflation Strategyhas three-year annualized returns of 3.4%. As of the end of January 2022, AUNAXhas 56.88% of its net assets invested in Miscellaneous Bonds.American Funds Tax-Aware Conservative Growth and Income Portfolio Class A seek current income, which is exempted from federal income tax, along with long-term capital growth by investing most of its net assets in American as well emerging market funds, including growth-and-income, equity-income, and balanced and fixed-income funds in various proportion and weight. TAIAX also invests significantly in dividend-paying stocks.American Funds Tax-Aware Conservative Growth and Income Portfolio Class Ahas three-year annualized returns of 5.5%. TAIAX has an expense ratio of 0.34% compared with the category average of 0.72%.Delaware National High Yield Municipal Bond Fund Class A seeks a high level of exempted current income byinvesting most of its in assets along with borrowings, if any, in medium- and lower-grade municipal securities, which are exempted from federal income tax, CXHYX also invests in lower-rated municipal securities with higher income potential and involve greater risk.Delaware National High Yield Municipal Bond Fund Class A has three-year annualized returns of 2.4%. Stephen J. Czepiel has been the fund manager of CXHYX since July 2007.To view the Zacks Rank and the past performance of all municipal bond funds, investors can click here to see the complete list of municipal 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 >> Profiting from the Metaverse, The 3rd Internet Boom (Free Report): Get Zacks' special report revealing top profit plays for the internet's next evolution. Early investors still have time to get in near the "ground floor" of this $30 trillion opportunity. You'll discover 5 surprising stocks to help you cash in.Download the report FREE today >>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 (TAIAX): Fund Analysis Report Get Your Free (AUNAX): Fund Analysis Report Get Your Free (CXHYX): Fund Analysis Report To read this article on Zacks.com click here......»»

Category: topSource: zacksJun 9th, 2022

3 Diversified Bond Mutual Funds for Spectacular Returns

Below, we share with you three top-ranked diversified bond mutual funds. Each has a Zacks Mutual Fund Rank #1 (Strong Buy). 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.Moreover, investing in diversified bond funds is 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.Below we share with you three top-ranked diversified bond mutual funds, namely BBH Limited Duration Fund Class Institutional BBBIX, MassMutual Core Bond Fund Class I MCZZX and Ave Maria Bond Fund AVEFX. 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 Class Institutional seeks maximum real return, consistent with the preservation of real capital and prudent investment management. BBBIX invests the majority of its net assets in a portfolio of fixed income instruments, including asset-backed securities, notes and bonds issued by both U.S. and foreign governments and corporations. The fund has returned 1.6% over the past three years.Andrew Hofer has been one of the fund managers of BBBIX since 2011.MassMutual Core Bond Fund Class I aims to achieve a high total rate of return alongside prudent investment and preservation of capital. MCZZX invests the majority of its net assets (plus the amount of any borrowings for investment purposes) in investment-grade fixed-income securities. The fund has returned 1.4% over the past three years.As of December 2021, MCZZX has 53.7% of its assets invested in Total Misc Bonds.Ave Maria Bond Fund invests primarily in investment-grade debt securities of domestic issuers, including the U.S. government and its agencies. AVEFX may invest a part of its net assets in preferred stocks, common stocks paying dividends and securities convertible into common stock. The fund has returned 3.3% over the past three years.AVEFX has an expense ratio of 0.43% compared with the category average of 0.64%.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 >> 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 (AVEFX): Fund Analysis Report Get Your Free (MCZZX): Fund Analysis Report Get Your Free (BBBIX): Fund Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksMay 24th, 2022

3 Market-Neutral Funds to Sail Through an Edgy Market

Invest in market-neutral funds like ARGAX, BALPX, and CBHAX to hedge your portfolio, amid market volatility. Continuous volatility on Wall Street drew the major indexes close to the bearish territory, with the Dow, and the S&P 500 closing at their lowest level since March 2021 on May 19.Monthly inflation rates denoted by the Consumer Price Index “CPI” came in at 0.3% for the month of April, the highest in 40 years. Rising interest rate to counter inflation remains the biggest concern for investors, especially since U.S GDP fell 1.4% annualized in the first quarter of 2022. Any further aggressive moves by the Federal Reserve could push the economy into a recession, threatening the stock market. In fact, the Fed has already started to increase interest rates in a steady manner.China’s first-quarter GDP, came in at 4.8%, with several cities in that county under strict lockdown due to fresh threats from Covid-19 mutation. Also, the unemployment rate rose to 6% in March from 5.4% in February. These bottlenecks along with other factors have compelled major investment banks like Goldman Sachs and Citi bank to downgrade China’s GDP forecast. The United States, being one of the biggest trade partners of China, should also face a repercussion effect.Russia’s war against Ukraine, too, has led to further weakening of the post-pandemic recovery and a global supply chain disruption. This has impacted corporate profits as companies will take time to overcome regulatory, financial, and technology hurdles.Thus, looking at the current volatility in the U.S. stock market, a market-neutral fund is particularly relevant for protecting one’s invested capital. This type of fund provides stable returns at relatively lower levels of risk regardless of market direction.Market-neutral funds are designed to adopt a more precise approach by shorting 50% of the assets and holding 50% long. This method seeks to identify pairs of assets which has related price movements. The fund goes long on the outperforming asset and shorts the underperformer.For example, take a $1 million long position in Eli Lilly and a $1 million short position in Bayer both of which are large pharmaceutical companies. If pharmaceutical stocks fall, you will lose because of your long position in Eli Lilly but gain from the short position in Bayer.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 three such market-neutral mutual funds that boast a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), have positive three-year and five-year annualized returns, minimum initial investments within $5000 and carry a low expense ratio.The Arbitrage Fund ARGAX invests most of its net assets in equity securities of companies that have publicly announced mergers, takeovers, spin-offs, and other corporate reorganizations.John S. Orrico has been the lead manager of ARGAX since Sep 18, 2000, Most of the fund’s exposure is in sectors such as Technology, Industrial cyclical, and Finance as of 4/30/2022.ARGAX’s three-year and five-year annualized returns are nearly 4.7% and 3.8%, respectively. ARGAX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 1.51%, which is less than the category average of 1.9%.To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.BlackRock Event Driven Equity Fund Investor A Shares BALPX is known for investing the majority of its assets in equity securities and related derivative instruments with similar economic characteristics which have announced or undergoing material changes. BALPX aims to achieve long-term capital appreciation.Mark McKenna has been the lead manager of BALPX since May 6, 2015, and most of the fund’s exposure is in sectors such as Industrial Cyclical, Health, and Non-Durable as of 4/30/2022.BALPX’s three-year and five-year annualized returns are 3.5% and 4.0%, respectively. BALPX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 1.41%, less than the category average of 1.9%.Victory Market Neutral Income Fund Class A CBHAX seeks to achieve its objective by investing in market-neutral, rules-based proprietary investment strategy in the domestic and foreign equity and bond market.Mannik S. Dhillon has been the lead manager of CBHAX since May 31, 2018, and most of the fund’s exposure is in sectors such as Finance, Utilities, and Industrial Cyclical as of 4/30/2022.CBHAX’s three-year and five-year annualized returns are 3.2% and 3.3%, respectively. CBHAX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.78%, compared to the category average of 2.3%.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 (BALPX): Fund Analysis Report Get Your Free (CBHAX): Fund Analysis Report Get Your Free (ARGAX): 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: zacksMay 20th, 2022

U.S. Dollar Index at Two-Decade High: ETFs to Benefit/Lose

The U.S. dollar is at a two-decade high. These ETF areas will gain/lose ahead. Thanks to a hawkish Fed, the greenback has been steady this year, with 9.4% year-to-date, 4.9% monthly and 15% yearly gains in Invesco DB US Dollar Index Bullish Fund UUP. The reason for this rally is red-hot inflation and the resultant hawkish stance taken by the Fed.April’s U.S. inflation print strengthened expectations that the Fed will continue its aggressive rate hike spree. The Fed hiked the rate in March by 25 bps and in May by 50- bps (which is a highest magnitude in two decades). Markets are pricing in another 190-basis-point rate hike in 2022.The U.S. dollar index rose to fresh two-decade highs as concerns that tighter monetary policies to tame surging inflation will slow global economic growth, which in turn has weighed on risk sentiment and driven investors toward the safe-haven currency greenback.It appears to be a win-win situation for the greenback as the global health crisis as well as the economic slowdown have not dissipated yet. This fact provides support to the safe-haven trades. On the other hand, continued vaccination might reverse the pandemic-induced economic slowdown in the United States and bring the economy back onto a faster growth path, which will boost the country’s currency.Given the above-mentioned facts, the bullish trend in the greenback is likely to continue, at least in the near term.ETFs to BuySo, investors looking to play the strengthening U.S. dollar could consider the below-mentioned ETFs:U.S. DollarThe dollar strength can sure be played with UUP and WisdomTree Bloomberg U.S. Dollar Bullish Fund USDU.Small CapsSince small caps are closely tied to the U.S. economy and do not get affected by a rising dollar due to their limited foreign exposure, iShares Russell 2000 ETF IWM could be a good pick. Most large-cap U.S. companies are flocking to protect their profits by currency hedging due to a relentless rally in the dollar.Hedging activity by Monex's clients rose 22% in March 2022 from March 2021, and was up 24% for the first quarter compared with last year, per vice president of dealing and trading at Monex USA, as quoted on a Reuters article. Thus, small-cap investing is more prudent at this time.Dollar-Denominated Bond ETFsInvestors seeking EM exposure amid a strong dollar can consider dollar-denominated EM bond ETFs. These funds invest in sovereign debt from a variety of emerging nations via U.S. dollar-denominated securities. Notably, the debt route is less risky than equities. Moreover, most emerging markets have low debt levels compared to the developed countries.Invesco BulletShares 2024 USD Emerging Markets Debt ETF BSDE is one such ETF. The fund yields 3% annually and is off only 3.8% this year. The decline in returns is pretty low compared to several other investment alternatives.ETFs to LoseInverse Dollar FundNeedless to say, if the dollar is rising, a short position on the currency would result in negative returns. Invesco DB US Dollar Index Bearish Fund UDN should thus be avoided.Commodities: GoldThe upsurge in the dollar is bad for raw materials and commodities as these are priced in the U.S. dollar. Furthermore, prolonged strength in the U.S. dollar might constrict the growth picture, which in turn would weigh on commodities’ prices. SPDR Gold Shares GLD lost 1.5% on May 12 due to a sudden dollar strength. Having said this, we would like to note that commodities have been strong this year thanks to the war in East Europe and high inflation.Large CapsSince large-cap stocks have greater foreign exposure, the strengthening dollar is negative for this capitalization. BofA Global Research once estimated that every 10% drop in the U.S. dollar translates into about a 3% boost to S&P earnings, as quoted on Reuters. It is expected that the opposite will happen if the greenback surges.Companies pointing to currency headwinds in their latest earnings reports include Coca-Cola Co, Procter & Gamble and Philip Morris International Inc. Analysts have cut their overall forecast for S&P 500 second-quarter profit growth to 5.6% from 6.8% at the start of April owing to the current headwinds, per a Reuters article. SPDR S&P 500 ETF Trust SPY should thus be closely watched. Want key ETF info delivered straight to your inbox? Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>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 SPDR Gold Shares (GLD): ETF Research Reports SPDR S&P 500 ETF (SPY): ETF Research Reports Invesco DB US Dollar Index Bullish ETF (UUP): ETF Research Reports iShares Russell 2000 ETF (IWM): ETF Research Reports WisdomTree Bloomberg U.S. Dollar Bullish ETF (USDU): ETF Research Reports Invesco DB US Dollar Index Bearish ETF (UDN): ETF Research Reports Invesco BulletShares 2024 USD Emerging Markets Debt ETF (BSDE): ETF Research Reports To read this article on Zacks.com click here......»»

Category: topSource: zacksMay 13th, 2022

Grab These 3 Municipal Bond Funds for Excellent Returns

Below we share with you three top-ranked municipal bond funds. Each has a Zacks Mutual Fund Rank #1 (Strong Buy). The debt securities category will always be the first choice for risk-averse investors because this class of instruments provides a regular income flow at low levels of risk. Income from regular dividends helps to ease the pain caused by plunging stock prices.When considering the safety of capital invested, municipal bond mutual funds are second only to those investing in government securities. In addition, interest income earned from these securities is exempt from federal taxes and, in many cases, from state taxes as well.Below we share with you three top-ranked municipal bond funds, viz., AB Municipal Income Fund II Arizona Portfolio Class A AAZAX, Colorado Bond Shares A Tax Exempt Fund HICOX and AB Municipal Income Fund II Ohio Portfolio Class A AOHAX. 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 municipal bond funds.AB Municipal Income Fund II Arizona Portfolio Class A seeks to earn maximum current income exempt from income tax. AAZAX invests the majority of its net assets in high-yielding, predominantly investment-grade municipal securities.AB Municipal Income Fund II Arizona Portfolio Class A has three-year annualized returns of 1.5%. AAZAX has an expense ratio of 0.78% compared with the category average of 0.83%.Colorado Bond Shares A Tax Exempt Fund invests the majority of its net assets in tax-exempt bonds and other tax-exempt securities. HICOX usually attempts to invest all of its net assets plus any borrowings for investment purposes.Colorado Bond Shares A Tax Exempt Fund has three-year annualized returns of 2.7%. Fred R. Kelly Jr. has been one of the fund managers of HICOX since 1990.AB Municipal Income Fund II Ohio Portfolio Class A invests the majority of its net assets in municipal securities that pay interest, which is exempt from federal income tax or state income tax in Ohio.AB Municipal Income Fund II Ohio Portfolio Class A has three-year annualized returns of 1.9%. As of November 2021, AOHAX had 6.5% of its assets invested in CNTY OF HAMILTON OH SWR S.To view the Zacks Rank and the past performance of all municipal bond funds, investors can click here to see the complete list of municipal 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 >> 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 (HICOX): Fund Analysis Report Get Your Free (AOHAX): Fund Analysis Report Get Your Free (AAZAX): Fund Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksMay 4th, 2022