Live from Morningstar: Best investment ideas heard at the conference

Live from Morningstar: Best investment ideas heard at the conference
JUN 13, 2013
> Russ Kinnel, director of mutual fund research at Morningstar Inc.'s, best idea for finding income: “If you want to find opportunities look for a fund, stock or bond yielding a little lower than its peers. We're so focused on higher yielding income we're creating opportunities outside of them.” > David Herro, portfolio manager of the $17 billion Oakmark International Fund (OAKIX), doesn't see value in the emerging markets yet. "Over the last five or six years there's been a wave of equity money moving into emerging markets indiscriminately. That's made stocks frothy. I still stand by the notion that emerging markets will be the engine of global growth over the next 20 years, but that's different than saying 'Brazil has a lot of good companies trading at good prices. Emerging market equities are starting to get beat up. if this keeps up, maybe they'll end up in our holdings in a year." > Patrick Galley, chief investment officer at RiverNorth Capital Management LLC, likes the opportunities in municipal bond closed-end funds. “Funds that were trading at a 5% premium as recently as two weeks ago are now trading at discounts because of interest rates rising. We think they'll revert back to premiums. Reaching for yield isn't going anywhere and you're getting 5 to 6% tax-free yields in closed-end municipal bond funds.” > James Montier, member of the asset allocation team at GMO LLC: "Right now you don’t want to be fully invested; you need to have some dry powder to take advantage of opportunities." > Richard Bernstein: "Treasuries have been a tremendous risk reduction tool in the last 5 to 7 years, and yet people hate Treasuries. If people are confused about the volatility in their portfolio it’s because they didn’t want to own treasuries." > Michael Mendelson, portfolio manager at AQR Funds: "There is risk in leverage. I don’t think you should use high amounts of leverage in anything. I would only use leverage if I was simultaneously helping myself somewhere else, such as concentration risk." > Gibson Smith, chief investment officer at Janus Capital Group Inc.: "When Wall Street gets creative you should be concerned." > Ryan Brist, portfolio manager at Western Asset Management: "One trade idea I’m a little concerned about, is banks are being encouraged to issue hybrid securities. I don’t think it’s a problem yet, but will we look back and say who bought perpetual preferred stock?"

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