Fund Stories from Barron's (Paper & Online), 10/21/23

yogibearbull

BULLISH. Asset/money managers (AB, AMG, BEN, BLK, FHI, IVZ, TROW; dividend yield 0.0-8.9%; fwd P/E 7.2-17.3; market-cap 3.0-94.4 billion; should benefit from rising investor interest in bonds)

FUNDS – INCOME. GOLD is rising due to inflation and geopolitical tensions. Gold-bullion ETFs are GLD, IAU, etc. Gold-mining ETFs are GDX, GDXJ, etc. Some gold-miners pay variable dividends. Attractive are NEM, FNV, etc. (Ratio GDX:GLD or $XAU:$GOLD has lot of catching up to do – i.e., the gold-bullion has moved but the gold-miners not so much yet.)

FUNDS. Stock picks by AI have been disappointing as seen by lagging performance of AI-powered ETFs AIEQ, KOMP, WIZ. A problem is that the AI selections are based on lots of historical data and overweighted industrials and financial but underweights techs: Their proponents say that beating the market isn’t their objective, and that they should be used as supplements for other holdings (remember that when you see their ads next time).

FUNDS – Q&A. David SAMRA, international value ARTKX. He looks for undervalued stocks with strong balance sheets and good management; the expected return is 30%+ (time?). In some cases, his fund/firm becomes a minority shareholder – important in Europe to effect changes. Consumer-oriented companies are attractive now due to high inflation and rates. He also looks for indirect beneficiaries of AI.

EXTRA, FUNDS. With long-term rates rising (bond vigilantes are back), bonds and bond-proxies have slumped. Consider these DIVIDEND-ETFs: Dividend-growth VIG, current-dividend VYM, dividend-blend SCHD, international VIGI. M* recently upgraded some ratings on them and calls them “best in class”.

EXTRA, FUNDs (some duplication). After the SEC setbacks in the courts, and the SEC decision not to appeal the most recent adverse court ruling in SEC vs GBTC/Grayscale, there is hope in the market for the approval of physical/spot-crypto ETFs within months (pending are from BLK, Fidelity, IVZ, ARK, Grayscale, etc). The most immediate beneficiary may be Grayscale GBTC (at double-digit % discount now) if its conversion to ETF is also approved. But the court has only asked the SEC to reconsider and to come up with new reasons for rejection (as its old reasons weren’t valid) or approve it; GENSLER/SEC may continue to foot drag by claiming a new 240-day review period for GBTC to take into account the changed situation, but that is seen as unlikely.

https://ybbpersonalfinance.proboards.com/thread/516/barron-october-2023-market-week

hank

This week’s edition looks like a fascinating read that should interest those who visit this forum. Cover story is positive on Charles Schwab. Inside I found this one: ”How to Play Investors’ Growing Interest in Bonds”. Blackrock is singled out for its array of bond funds. TRP is also mentioned as a good investment (TROW) but has been losing assets. There’s an assumption by author Andrew Bary that rates are approaching the top (certainly debatable). Personal note: Yesterday I moved a tidy sum from a good international bond ETF at J.P. Morgan into a new diversified bond ETF from Blackrock. Very similar risk profiles. With a fee wavier thru June 2025 the ER at Blackrock is .40% compared to the other’s .50% The new Blackrock fund (May ‘23) is headed by veteran Rick Rieder who gets my vote of confidence.

From Yogi’s summation: ”Stock picks by AI have been disappointing”
Ah - Maybe AU (“artificial untelligence”) ?

Devo

Samra’s fund is closed unfortunately last I checked.