Portfolio Manager Perspectives

Jeff Benjamin

Marketfield's Michael Aronstein: More bounce for U.S. stocks

Jan 17, 2010 @ 12:01 am

By Jeff Benjamin

Strong domestic earnings over the next few quarters will add fuel to the charging U.S. equity market, said Michael Aronstein, manager of the Marketfield Fund (MFLDX). “I think the big surprise to people will be corporate earnings during the first half of 2010,” he said. Such robust corporate earnings, which began during the holiday shopping season, could attract more money from the sidelines and draw investors away from other hot sectors, Mr. Aronstein said. “If domestic stocks start to justify their performance with earnings, I would think the stock market will continue to rally,” he said. “And as that happens, some of the money in emerging markets and commodities is going to be at risk.” Mr. Aronstein, who manages $326 million for Marketfield Asset Management LLC, runs a “go-anywhere” strategy that is as close to a hedge fund as possible while still operating under the parameters of a registered mutual fund.

Such prospectus flexibility has allowed him to maneuver deftly through the extremes in the market since the fund's launch in November 2007, right around the time the S&P 500 hit a record high.

In November 2008, for example, the fund was loaded up with gold and gold company stocks to benefit from the sweeping “end-of-the-world panic.”

But by the end of last March, when the stock market was at its low point, Mr. Aronstein was positioned with the largest equity exposure in the fund's history at 70% net long, combined with a 22% net-long position in commodities.

His equity exposure is still more than 60% net long, but his allocation to commodities is now a slightly net-short exposure.

“There's too much affection for commodities right now, which is an aspect of the generally negative mindset toward the U.S. stock market,” Mr. Aronstein said.

He said that he will continue to focus on domestic sectors such as automobiles, regional banks, airlines and industrial conglomerates “until investors start to expect there is a reason for good stock market performance.”

In essence, Mr. Aronstein said, the sentiment is still way behind the stock market and the potential of a lot of U.S. stocks.

“Corporations are very liquid these days,” he said. “They don't need a [federal funds] funds rate at zero, but they'll take it.”

Since its launch, the Marketfield Fund has posted an annualized gain of 8.7%. That performance places it at No. 184 in the total universe of 17,484 mutual funds tracked by Morningstar Inc.

Among the 108 long-short funds, which combined for an average annualized decline of 3.1% over the period, the Marketfield Fund ranked fourth in the category.


What do you think?

View comments

Recommended for you

Featured video


Connecting with teachers key to adviser impact on literacy

Advisers can help with curriculum if they don't have the bandwidth to visit classrooms.

Latest news & opinion

InvestmentNews announces 2019 Innovation Awards winners

Sheryl Garrett is this year's InvestmentNews Icon.

Morgan Stanley rides wealth management train to solid first quarter

Chairman and CEO James Gorman expresses excitement about expanding into workplace plans with purchase of Solium.

Fate of New Jersey fiduciary standard could come down to politics, court

With strong support from N.J. Gov. Phil Murphy, the proposal has momentum out of the gate.

Growing wealth fuels demand for family offices

The market for serving wealthy families may be bigger than some data suggest.

FPA backs away from controversial plan to merge chapters

The group is no longer seeking to dissolve local chapters as separate legal entities.


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.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print