With more than $50 billion flowing into ESG strategies in 2020, and more than 350 different sustainable funds available to investors, the space remains a hot conversation topic among advisors and their clients.
Not surprisingly, our own ESG strategy, the Epiphany Fund, is one of the funds we are asked about most. This blog takes a short look at a couple questions we are asked most frequently, and our explanation for each:
Disruption and innovation are the very fabric of the American economy. So it’s little wonder that investors get excited about disruptive trends.
But once in a while, it’s worth taking a pause to put current disruption and innovation in perspective. Not only because the statistics can be eye popping, but because they help investors see the bigger picture, and take a long term view with stocks.
With that in mind, we offer a few short, simple statistics that put a few recent innovative and disruptive trends in perspective. The innovations are well known, but the statistics offer perspective on how far the trends have come, and how far they can still push forward.
Investment managers are always looking for an information edge in the stocks and companies they follow. Dana is not alone in this regard. But when it comes to garnering unique insights, we believe the world has never been more awash with opportunity. The reason: Technology, data and information are more readily available.
At Dana, we’ve always utilized what we believe is a distinct blend of quantitative screening and qualitative analysis to isolate investment opportunities. But here’s a look inside at some – but not all – of the new ways we are gathering information.
Editor’s Note: Our technology sector outlook is part of a regular series sharing our views on various sectors. It’s part of our efforts to increase communication with investors at a time of economic and market uncertainty. While the sector outlooks provide a short overview of our thinking, we invite you to contact us if you are interested in a deeper discussion.
For much of 2020, gains in broad indices were largely concentrated, as a few mega-cap tech companies dominated performance. The FAANG stocks, or as they are grouped more recently, FAANMG (Facebook, Amazon, Apple, Netflix, Microsoft and Google) enjoyed heady returns while most other stocks trailed significantly.
True, some of these stocks fall in the consumer discretionary sector, but for all intents and purposes, they share a common thread: dominant technology platforms that individuals have relied upon heavily during the pandemic.
In 2021, opportunities in the technology sector could widen. This blog looks at a few of the additional bright spots, a few potential headwinds for pockets of the tech sector, and how we are navigating the current environment.
At Dana, we were pleased to end 2020 with some positive recognition, making Pensions & Investments’ list of best places to work for the ninth straight year. We celebrate that news, and are sharing it with our clients, for a simple reason: Culture matters.
In our view, a positive work culture doesn’t just benefit employees within a company. It also translates into a better client experience. This is likely true for any industry, but we believe it’s particularly important to asset management.
If there were ever a year to have a reflective conversation with clients, 2020 is it. From the virus, to market volatility to election uncertainty, the year has been filled with tensions. The end of the year provides a natural opportunity to reflect on those issues and make both a portfolio - and a client relationship - stronger.
If you’re an advisor going through year-end meetings with clients, we wanted to provide a few questions, suggestions and resources that may help your clients reflect on 2020 and stimulate deeper conversations. We know the vast majority of advisors will cover these issues in some shape or fashion, and have the pulse on their own clients more than anyone. But given how unusual 2020 has been, it never hurts to think of new ways to ask reflective questions.
In the spirit of sharing, here are a few items that may help you and your client reflect on a year of upheaval. We hope you find them useful heading into the new year:
In the past two weeks, investors got a lot more clarity on two of the largest clouds hanging over the market: the U.S. election and the coronavirus.
We now know who the next president is, and have a better idea (Georgia’s Senate election notwithstanding) of what the balance of power will look like in Washington D.C. And news that Pfizer’s coronavirus vaccine has shown a high success rate offers hope that we may be on the path toward addressing the coronavirus pandemic and normalizing the economy, even if current infection spread is alarming.
In this brief Q&A, Dana portfolio managers Joseph Veranth and David Weinstein reflect on what the election and vaccine could mean for markets going forward
Large cap stocks have outperformed small caps since the pandemic, but smaller stocks have begun to close that gap in recent weeks. It’s still early, but if investors stay patient, we believe small caps could be poised to continue to outperform in the coming quarters.
This blog post explores what was behind small cap underperformance in prior months, and why smaller stocks may outperform going forward, particularly when we receive clearer indicators of an economic rebound.
In Initial Months of Pandemic, Mega Caps Enjoyed Mega Dominance
Large caps’ outperformance over small caps in the spring and summer was due largely to the very largest stocks in the indices, a trend we noted in prior blogs. Many of the largest companies by market cap are tech stocks, and their revenue streams were naturally resistant to the pandemic and a stay-at-home lifestyle. Individuals still need Microsoft to work from home, for example, and relied on Amazon for delivery more than ever before.
Mergers and Acquisitions (M&A) activity among asset management firms is creating some investment behemoths. As these businesses scale up, we hope their clients are asking a critical question: What’s in it for me?
The consolidation wave running through the industry continued this month, with Morgan Stanley announcing it will acquire Eaton Vance, and Trian taking stakes in two large asset managers with the hopes they will merge. The announcements follow several other mega-deals in the past few years.
Too often, the touted benefits of these mergers seem focused on two factors: size and scale. But does bigger mean better for the client? As a small investment boutique, we admit we approach this argument with our own bias, but we see a few reasons clients may not benefit when their investment partners merge.
The presidential race may be polarizing, but both sides can agree on one thing: It at least has been compelling. The unexpected twists and turns over the past month have everyone anxiously awaiting November.
We’re anxious too. But as investors, we don’t just think about who we want to win. We try to think about what could happen in a range of different – and unexpected – outcomes. In this brief Q&A, we look at some of the factors investors should consider before November. The views are not a wish list of a particular election outcome or an endorsement of a party or candidate, just straight-forward things that advisors and other investors should think about:
What is the base case markets are pricing in about elections right now?
Markets, like polls, are predicting a win for Joe Biden. The general view is that he would be less business-friendly and that this could ultimately weigh on corporate profits. However, it’s likely that Republicans could still control the Senate.
It’s generally believed Republicans will pick up a Senate seat in Alabama. If that happens, Democrats would need to flip three seats to get to 50/50. The most likely are Maine, North Carolina, Iowa, Colorado and Arizona. We believe the market is currently hanging its hat on a Biden win, but that flipping three of those five would be a tall order.