Portfolio Manager Perspectives

Jeff Benjamin

Don't fight the Fed, says CLS's Guenther

Weak-dollar play boosted the year-to-date return on his AdvisorOne Amerigo Fund by 38 percent

Nov 19, 2009 @ 12:40 pm

By Jeff Benjamin

The top-down investment strategy continues to be “don't fight the Fed,” according to Dennis Guenther, who manages a total of $2 billion for CLS Investments LLC.

“The markets remain in somewhat of a sweet spot, benefiting from both monetary and fiscal stimulus, the current low level of interest rates and inflation, and improving corporate profitability,” he said.

Mr. Guenther added that “our Great Reflation theme for the third quarter played out well, as emerging markets, basic materials, investment-grade, and high-yield bonds all outperformed.”

He expects investors to start seeing a “tug-of-war” between the positive third-quarter earnings and reports of weaker economic data.

“What that spells is more headline trading and a higher level of volatility,” he said.

Mr. Guenther's strategy is employed in the $590 million AdvisorOne Amerigo Fund (CLSAX), which invests in exchange traded funds.

The fund gained 38.4% this year though Wednesday.

The S&P 500 is up 22.8% over the same period.

Mr. Guenther said he has been taking advantage of the weaker U.S. dollar and the Fed-induced liquidity by investing in international equities, commodities and muli-national domestic stocks.

If the stock market rally is to continue, he said, it will require solid evidence that the economy can stand on its own without the help of such extreme levels of government intervention.

“For the markets to maintain their vigor over the intermediate term between now and the middle of 2010, we will need to see a self-sustaining economic recovery take hold,” he said. “A recovery that is too fast will aggravate the bond vigilantes concerned about potential inflation, while a recovery that is too slow will not be well received by the equity markets.”

Portfolio Manager Perspectives are regular interviews with some of the most respected and influential fund managers in the investment industry. For more information, please visit InvestmentNews.com/pmperspectives .

0
Comments

What do you think?

View comments

Most watched

Events

Finding your edge from Tony Robbins

Guru Tony Robbins has helped a lot of people, but armed with his psychology Financial Advisor Josh Nelson has helped his practice soar.

Events

Finding innovation in your firm

Adam Holt of AssetMap explains how advisers understand they need to grow, but great innovation may be lurking right under your nose.

Latest news & opinion

The growth of factor-based investing

Advisers are making decisions about clients' portfolios by using the same characteristics that govern factor-based ETFs.

Finra makes its list to target hundreds of rogue individuals

The regulator sees patterns in the behavior and disclosures of high-risk brokers.

LTC insurer offering co-pays to blunt soaring premium increases

John Hancock policyholders would get a discount on their premium in return for agreeing to pay a bigger portion of their claims in the future.

Goldman Sachs acquires United Capital

After a payday of $75 million or more, CEO Joe Duran plans to join Goldman in a senior position.

Private equity loves IBDs, but will that last?

Three big acquisitions in less than a year signals renewed life in the formerly beleaguered industry.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print