Independent Investment Ideas Don’t Come Easy

Posted by Dana Funds Investment Team on Apr 15, 2021 3:45:59 PM

Risk controls … sell discipline … trading practices … investment policies. They are all an important part of the investment process that can, hopefully, distinguish an investment strategy.

But there’s another factor we believe is just as important (probably more so) in differentiating an investment manager: Idea generation. It’s what starts an analyst or portfolio manager on a path that creates a strategy that doesn’t replicate everyone else, and provides the client something truly distinctive.

Despite its importance, we get less questions about how we come up with investment ideas. We believe it’s a unique funnel, that tunes out noise and takes us beyond the road shows most portfolio managers attend. In a Q&A, we explained how we believe our process is different:

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Is it Time to Pivot Portfolios to Value? It’s Tricky …

Posted by Dana Funds Investment Team on Apr 8, 2021 3:53:55 PM

Value has trounced growth in 2021, causing allocators to wonder whether it is time to rotate toward the investment style that was unloved for much of the past decade.

However, we believe market dynamics make it a particularly tough time to favor growth or value. In light of the debate, we wanted to reshare a blog we wrote in June 2020, that advised against making tilts toward growth or value as we come out of the pandemic.

At the time, growth was outperforming, but many of the issues we raised about both style boxes still apply. The original text from the June blog follows:

Style Boxes Pose Pitfalls in Post-Pandemic Investment Landscape

Growth or value? It’s a question advisors and allocators ponder at every potential turning point in the market cycle. But as the world emerges from a pandemic-induced lockdown, the new investment environment may favor neither.

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A Year from the Market Trough: 3 Trends and 3 Takeaways

Posted by Dana Funds Investment Team on Mar 31, 2021 4:20:53 PM

Last week marked a year since U.S. stock markets reached their trough, a period that saw the S&P 500 plunge 34% in just 23 trading days, as investors absorbed the implications of a global pandemic.

With distance between those volatile days, we wanted to reflect on three major investment themes that have taken shape since then. More importantly, we wanted to share three takeaways that we hope investors will remember in the future.

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Calling All Book Lovers – Spring Reading List

Posted by Dana Funds Investment Team on Mar 25, 2021 4:15:12 PM

Spring is in the air which means one thing, it’s time for the annual tradition of Spring Break! While fun is encouraged, we invite you to relax and dive into these 10 books recommended by the investment team at Dana.


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March Madness: Seeding the Forces Affecting Stocks, Economy

Posted by Dana Funds Investment Team on Mar 16, 2021 1:45:37 PM

After a pandemic-related hiatus last year, we are excited to see the return of March Madness. For millions of Americans, filling out a bracket and participating in an office or family tournament pool is another small step in a return to the normal traditions we are accustomed to.

Many of us at Dana Investments are college basketball fans, so in the spirit of the season we offer a more light-hearted market outlook, sharing how we would seed some of the forces potentially supporting – or disrupting – the economy and markets.

We hope basketball fans will enjoy.

The 1 Seeds

In a March Madness tournament, the one seeds are those tried-and-true teams you would expect to do well. They are the “base case” for market and economic outlooks. While these teams, or market forces, are supposed to carry on, there’s a hitch: If they fail to perform as expected, it could disrupt the market …or, in the case of March Madness, bust many fans’ brackets. Here are a few forces we deem as 1’s:

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One Year Lookback: Reflections on Operating Through the Pandemic

Posted by Dana Funds Investment Team on Mar 10, 2021 4:45:50 PM

It’s now been a year since COVID-19 shuttered many businesses, forced stay-at-home orders for Americans, and upended every sense of normalcy. As we cross that one-year anniversary, Dana Investment CEO Mark Mirsberger reflected on the year, what it meant for asset management businesses, and what it might mean going forward.

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These Stats Capture How Fast ESG Is Taking Hold

Posted by Dana Funds Investment Team on Mar 4, 2021 4:01:08 PM

While anyone with a passing investing interest would acknowledge ESG investing is growing in popularity, a few statistics on 2020 fund flows show how far — and how fast — the trend is moving.

Consider the following five stats, which come courtesy of Morningstar1:

  • S. flows into sustainable open-end funds and ETFs totaled $51.1 billion, more than double the flows of 2019 and almost 10 times as much as 2018.
  • Much of that growth came in the fourth quarter, when flows totaled $20.5 billion. That doubled the previous record for any given quarter.
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When it Comes to Analyzing Stocks, A Bond Background Doesn’t Hurt

Posted by Dana Funds Investment Team on Feb 25, 2021 3:39:30 PM

With equity markets at all-time highs and many businesses still struggling due to a pandemic, it seems reasonable to ask: What could possibly go wrong?

At Dana, that question is a fundamental aspect of our research process, and something we spend a lot of time thinking about before any stock makes it into our portfolios. That type of risk awareness stems largely from our roots as a fixed income manager.

In a recent Q&A, our CEO, Mark Mirsberger, explained how a fixed income background has informed our approach to equities, and led to a focus on higher-quality stocks for our strategies. A brief snippet of that interview is below:

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Looking to Invest Toward a Cyclical Rebound? It’s Nuanced

Posted by Dana Funds Investment Team on Feb 18, 2021 5:06:11 PM

With coronavirus vaccinations on the rise and cases trending down, it’s natural to think about what a cyclical rebound will look like, and which stocks will benefit. But investing in this cyclical bounce will be more complicated than previous recoveries, in large part because it will play out at different times and speeds across each industry and sector.

At Dana we take a long-term perspective with our holdings, and don’t position portfolios with a single overarching macro view. That said, we are nevertheless mindful of what a recovery will mean for different stocks and invest opportunistically when attractive valuation opportunities present themselves.

Below is an overview of how we are investing in companies we believe are well positioned as things turnaround:

Opportunities Began Last March

When stocks first sold off due to the pandemic, energy companies were hit with a double whammy, as an oil price war between Russia and Saudi Arabia erupted, just as global demand was poised to slow. With valuations depressed, we saw that as an opportunity, and selectively added a couple of exploration and production companies that we felt had stable balance sheets and could weather a downturn in prices. Those stocks have appreciated significantly with a bounce in oil prices.

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A Fair Question for ESG Managers

Posted by Dana Funds Investment Team on Feb 11, 2021 4:16:12 PM

With billions pouring into ESG strategies, asset managers are suddenly (and unsurprisingly) on board. Everyone has an ESG strategy, or purports to incorporate ESG factors into their analysis of a company.

This can make it tough for anyone conducting due diligence on ESG strategies to decipher which ones are truly rooted in ESG principles, and which asset managers truly believe it can affect a stock’s performance. Here’s a fair question to ask managers to see where their conviction lies: How did you decide that ESG is important to analyzing a company.

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The Dana Funds are distributed by Ultimus Fund Distributors, LLC. There is no affiliation between Ultimus Fund Distributors, LLC. and the firms referenced in this blog post.