On the Investment Process of a Global Generalist
At Thornburg, we tend to devote significant time to explaining the merits of our global generalist orientation. But what does it really mean? How is a global generalist orientation different from a traditional investment manager structure? Jason Brady, responsible for managing several Thornburg portfolios including Investment Income Builder Fund, Strategic Income Fund, and the taxable core bond funds, writes on the subject.
Japan is Going All In
The Bank of Japan has at last joined the Federal Reserve and the European Central Bank in an easing effort aimed at pushing up the country’s inflation rate, devaluing the yen, and sparking domestic growth. Equity Research Analyst Brian Burrell recently returned from Japan and writes about his experiences.
- On the Link between the
Growth of the Federal Reserve's
Balance Sheet and Inflation
Thornburg Associate PM Jeff Klingelhofer has written an informative piece on the link between the growth in the Federal Reserve's balance sheet and inflation. The topic has received attention lately as many investors have grown concerned that the tripling of the Fed's assets could lead to inflation. Jeff writes that over the last 25 years, money supply and inflation have actually exhibited an inverse relationship. And the recent expansion of the Fed's balance sheet has not resulted in a dramatic rise in money seeping into in the real economy, due in part to a precipitous decline in the velocity of money.
- The Value of Active Management in Equity Investing
At Thornburg Investment Management, we believe deeply in the potential of active investing to add shareholder value.
Eyes Wide Open: Responses to the Increased Complexity of Global Investing
This paper explores some of the reasons why investors are already allocating more money to international and global funds, despite the world economy’s recent travails. It also seeks to outline principles for investing that recognize changing trends in geographic risk profiles over time.
View from the Bond Desk August 2012 (pdf) This quarter featuring "Europe: Opportunity or Hazard?" and "Municipal Bankruptcies Point to the Importance of Rigorous Credit Work"
A Study of Real Real Returns Thornburg’s annual study examining the impact of inflation, taxes, and investment expenses on the returns of several asset classes. Despite a range of investment outcomes in 2011, the long-term results of our study remain relatively unchanged. Over the past 30 years, common stocks and municipal bonds posted the strongest results (when held in taxable accounts) after we adjust for inflation, taxes, and expenses. Taxable bonds have delivered positive results in shorter periods and strong returns in tax-advantaged accounts over longer time frames. August 2012 (pdf)
- Why we Ladder Short- and Intermediate-Term Bonds
One of the tools we use at Thornburg to manage fixed income is laddering. Laddering is not a passive investment strategy. Rather, it is simply one of many techniques managers have at their disposal to control duration. See how a hypothetical ladder structure outperforms barbell structure over a 16-year period. (pdf)
Why Do Dividend Strategies Tend to Outperform? - Conventional wisdom says that companies pay dividends only when prospects for future growth are limited. Recent research says otherwise. In this article, the portfolio managers review three studies demonstrating that there is a global tendency for high dividend paying companies to exhibit subsequent growth.
- Individual Bonds vs Bond Funds by Josh Gonze, Co- Portfolio Manager
- Laddering: An All-Weather Strategy - Portfolio manager Chris Ihlefeld revisits a core strategy integral to most of Thornburg's fixed income portfolios, the laddered strategy.
- Pre- or Post-Tax, Dividend Strategies Are Still About Total Return - This article discusses how, even after taxes, dividend strategies tend to outperform. In the appendix, portfolio managers look at what would have happened without the tax cuts provided by the Jobs and Growth Tax Relief Reconciliation Act.
- Investing in Retirement Using a Global Dividend Income Strategy
This article reviews how to structure, allocate and monitor the results of a tangible investment strategy for clients nearing or entering the distribution phase of retirement.
- The Case for a High and Growing Dividend Stock Strategy in Retirement Portfolios
This article compares the total returns of the high dividend paying stocks of the S&P 500 (The Top 100 Dividend Payers) to those of the S&P 500 itself — over various time periods that simulate actual retirement spans. The results are striking.
- Investment Solutions for Your Income Needs - June 2010
- Bond Investing as a Negative Art - portfolio manager Jason Brady CFA, discusses "negative skew" in bond investing as well as Thornburg's core bond funds goals and strategies for managing risk.
- A Tradition of Disciplined Bond Management - Overview of Thornburg Bond Funds and the role of bonds in a portfolio, types of bonds, the risks of investing in bonds and where Thornburg Bond Funds fit into your asset allocation strategy.
- The Road of Retirement educational modules outline the best practices for developing and following a retirement income plan that balances current lifestyle and long-term sustainability of the retirement portfolio. The series includes seven client-approved articles.
- Structuring Distribution Strategies for Retirees in a Bear Market
This article uses the past twelve years, which included two bear markets (2000–2002 and 2008), to test two retirement income planning strategies to see how they would impact a retirement portfolio’s withdrawal rates and sustainability.
- There is More to Dividends Than Just Yield
In this article, the portfolio managers discuss how there is more to dividend-oriented portfolios than buying high-yielding stocks. Rather, implementing a disciplined and comprehensive dividend strategy can provide significant benefits.
- Cultivating the Growth of the Dividend - includes discussion of the benefits of dividend paying stocks; dividends, valuation and corporate governance; dividend-paying equities as an all-weather strategy; and putting dividends to work for you. May 2009 (pdf)
- World-wide Investing - Thornburg study on international investing. (pdf)
- Alternative Minimum Tax (AMT) Josh Gonze, Co- Portfolio Manager -
Overview of AMT, who is affected and implications for Muni bond fund investors. updated February 2010
- Laddering A Bond Portfolio, Co-Portfolio Managers George Strickland, Josh Gonze, Chris Ihlefeld, Chris Ryon, Jason Brady, and Lon Erickson
- A Note on Liquidity - by Nicholos Venditti, Fixed Income Research Analyst
This article addresses the recent large outflows out of municipal bond funds and the potential ramifications for shareholders. (TH2350)
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