Rethinking asset allocation
Stay invested, stay balanced
Rethinking the classic 60:40 portfolio
With market uncertainty, the classic 60:40 portfolio asset allocation is facing some tough challenges. Find out what the panel suggests and how to manage fixed income in a rising rate environment.
Where does 60/40 go from here?
The classic 60/40 portfolio asset allocation is facing some tough challenges as interest rates start to rise. Find out what the panel suggests about creating new strategies to help investors achieve their goals.
Panellists
Jacob M.Gerber
Equity and multi-asset investment director, Capital Group
Gerber is an equity and multi-asset investment director at Capital Group. He has 24 years of investment industry experience, all with Capital Group. Earlier in his career at Capital, Gerber was a manager in the results analysis department. He holds a bachelor’s degree in biology from the University of California, Los Angeles, where is now based for work.
CITYWIRE TERMS & CONDITIONS
From the Ukraine-Russia war to high inflation and rising interest rates, the market seems uncertain. And in these uncertain times, asset managers are trying to find a balance between risk, return and sustainability, ensuring their portfolios remain relevant and resilient. For investors with a long-term view in mind, Capital Group American Balanced Fund (LUX) seeks the balanced accomplishment of three objectives: conservation of capital, current income and long-term growth of capital and income.
The Capital Group American Balanced strategy is a time-tested approach to pursuing long-term growth and conserving capital. Launched in 1975, it is one of the world’s largest and oldest US multi-asset strategies, with assets under management of US$218 billion [1].
The strategy has only seen four calendar years with negative returns since its inception [2]. This diversified portfolio of quality US stocks and bonds has a focus on relative value and risk parameters at the security level to consider upside potential and downside risk.
In Miami in April, four fund selectors of the offshore industry came together for a roundtable discussion with Jacob Gerber, investment director from Capital Group, moderated by our own Atholl Simpson, to discuss asset allocation and the American Balanced strategy in detail.
What value can an adviser add for clients?
It’s a new world for investors with cash yielding nothing and safe bonds little more. Listen to our panel as they discuss their ideas on how advisers can justify their fees
Where should we be investing now?
Find out where the panel sees investment opportunities, even as some markets look expensive
Watch the panel highlights below:
Time horizon of long-term investment
The amount of time that you want to hold your stocks will completely depend on your investment style and strategy. Listen to our panel as they discuss the holding period.
Is there a recession coming?
Find out what our panel has to say about recession in this tricky environment.
Alberto Arrambide
Head of discretionary and portfolio manager, Banco Sabadell Miami
Arrambide is a senior vice-president at Banco Sabadell Miami. As head of discretionary, he is responsible for managing and supervising the different investment mandates in the Miami branch. He is also responsible for the relationship, evaluation and selection of mutual funds that are offered to non-discretionary and advisory clients. He was previously a portfolio manager at BBVA for 10 years. He started his career on the Mexican Stock Exchange floor in Mexico City. He has degrees from the Instituto Tecnológico Autónomo de México and Florida International University.
Kathryn Rooney Vera
Head of global macro research and chief investment strategist, Bulltick Capital Markets
Rooney Vera is the head of global macro research and chief investment strategist at Bulltick Capital Markets. She is responsible for the overall capital market investment strategy. Before joining Bulltick in 2008, she was a Latin America economist and strategist at Bear Stearns in emerging markets fixed income research. She also worked on the buy-side as sovereign analyst at MetLife Investments. Rooney Vera has a master’s in business, specializing in economics and finance, from New York University’s Stern School of Business. She has a bachelor’s degree in economics and Spanish literature from Rutgers University in New Jersey.
Eduardo Anton
Vice-president of product solutions, Itaú Private Bank
Anton is vice-president of product solutions at Itaú Private Bank. He joined in 2021 after working for Andbank as its head of portfolio management for the Americas. Anton has more than 15 years experience in wealth management, providing investment solutions to ultra-high net worth clients across Latin America and Europe. He has an MBA in finance from IEB in Spain and a degree in economics from Anáhuac University.
Watch a ‘playback’ of the full panel session here:
Watch here
Watch here
Mirko Joldzic
Head of international product strategy, Insigneo Financial Group
Mirko Joldzic has over 15 years of financial services experience, most recently at Insigneo Financial Group where he leads the Investment Product team. Mr. Joldzic also spent portions of his career at Raymond James, UBS Financial Services, JPMorgan, Barclays Wealth and Bank of America Merrill Lynch in various roles managing international and domestic products. While at UBS he served as the Head of Offshore Funds and Money Funds, as well as working closely across all product channels to expand their product offering. Throughout his time in the industry, Mr. Joldzic’s focus has been on product due diligence, supporting product distribution within brokerage and advisory platforms, enhancing the FA and client experience and managing business and regulatory risk.
Capgroup TERMS & CONDITIONS
For more information about Capital Group, visit capitalgroup.com/offshore
1. Data as of 31 March 2021. Source: Capital Group
2. In absolute terms and net of management fees for the Z share class, the Capital Group American Balanced strategy has experienced negative returns in only four years in its 45-year history: 1990, 2002, 2008 and 2018. Meanwhile, the S&P 500 Index, the 60%/40% blend of the S&P 500 and Bloomberg U.S. Aggregate Index, and the Morningstar peer category have each experienced eight down years during the same period. Returns are in US$ terms. Based on the Capital Group American Balanced Composite (defined as a single group of discretionary portfolios that collectively represent a particular investment strategy or objective). This is intended to illustrate our experience and capability in managing this strategy over the long term (composite inception: 31 July 1975). Our Luxembourg fund, which was launched on 27 July 2021, became a member of this composite at the beginning of August 2021. Sources: Capital Group, S&P, MSCI, Morningstar
Any information relating to the fund will not be distributed to persons in any country where such distribution would be contrary to law or regulation. Please contact Capital Group if you are unsure of the availability of the investment offering in your and/or your client’s jurisdiction.
FOR FINANCIAL PROFESSIONAL USE ONLY
The information in relation to the index is provided for context and illustration only. The fund is an actively managed UCITS. It is not managed in reference to a benchmark.
Past results are not a guarantee of future results. American Funds are not registered for sale outside of the United States.
Risk factors you should consider before investing:
• This material is not intended to provide investment advice or be considered a personal recommendation.
• The value of investments and income from them can go down as well as up and you may lose some or all of your initial investment.
• If the currency in which you invest strengthens against the currency in which the underlying investments of the fund are made, the value of your investment will decrease. Currency hedging seeks to limit this, but there is no guarantee that hedging will be totally successful.
• The Prospectus and Key Investor Information Document set out risks, which, depending on the fund, may include risks associated with investing in fixed income, derivatives, emerging markets and/or high-yield securities; emerging markets are volatile and may suffer from liquidity problems.
Evolving the 60/40 portfolio with low-cost multi-asset index funds
ARTICLE
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Watch the panel highlights below:
Rethinking the classic 60:40 portfolio
With market uncertainty, the classic 60:40 portfolio asset allocation is facing some tough challenges. Find out what the panel suggests and how to manage fixed income in a rising rate environment.
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