Is There a Changing of the Guard in Stock Leadership?

Posted by Dana Funds Investment Team on Jun 3, 2021 4:19:45 PM

Lower quality stocks have outperformed higher quality companies for much of the past year, helped by access to cheap debt and anticipation of an economic rebound. But that may be changing.

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ESG Strategies: You Asked, We Answered

Posted by Dana Funds Investment Team on May 21, 2021 9:34:53 AM

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:

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Consumer Discretionary Sector Outlook: Unleash the Spending

Posted by Dana Funds Investment Team on Apr 22, 2021 4:51:23 PM

Editor’s note: Our consumer discretionary 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.

The S&P 500 consumer discretionary sector hit several all-time highs in recent weeks, and higher valuations are likely warranted. Consider the backdrop: Consumers amassed $4 trillion in savings during the pandemic, household balance sheets are generally strong, the employment picture is starting to improve, stimulus checks are arriving in bank accounts, and credit is readily available. In short, spending should spring forward as COVID restrictions ease.

But valuations reflect many of these positives. This blog looks at some of the bright spots and remaining opportunities Dana sees within the sector, along with a few small pockets that warrant caution.

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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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Key Implications and Takeaways from the GameStop Phenomenon

Posted by Dana Funds Investment Team on Feb 2, 2021 10:49:57 AM

The retail trading phenomenon driving up shares of GameStop, AMC and a few other stocks has become one of the biggest investment stories in recent memory, in large part because a battle between Wall Street hedge funds and Main Street investors makes for a compelling story. But when the momentum fizzles out, we believe there are both ramifications and lessons to learn from the event.

In an interview Friday, Dana portfolio managers Michael Honkamp and David Weinstein shared their perspectives on some of the things the financial community should take away from what’s happened.

Q: Beyond the Reddit posts, what are the forces feeding this phenomenon?

Michael Honkamp: Current market conditions are ripe for all sorts of asset appreciation, and we’re seeing that in commodity prices and other pockets of the market. In short, we’re coming out of a sharp recession with many consumers in good shape, and with central banks and governments practically spraying money on the economy. If you look at the money supply growth, the slope is unlike anything we’ve ever seen. At the same time, consumers have limited spending options. The rise in retail trading of some of these stocks is just another sign of excess.

David Weinstein: I would just add that there were some industry forces that converged to help fuel the rise in these stocks. We’ve all been stuck at home, with little to do. Retail investors have become more sophisticated. You’re seeing them participate in options markets like never before. At the same time, Robinhood has been disruptive to the brokerage industry, making trading cheaper and taking it to the masses. Buying fractional shares has also allowed more people to participate in investing. These are long-term positives – we want everyone to have access to stock markets – but it can also lead to events like we saw last week.

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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.