July 12, 2013

As 30-plus years of falling interest rates wind down, what are the new rules of investing? Loomis Sayles’ legendary bond fund manager Dan Fuss and top-ranked strategist, turned portfolio manager, Richard Bernstein provide their contrarian answers.

WEALTHTRACK Episode #1003; Originally Broadcast on July 12, 2013

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Dan Fuss & Richard Bernstein

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[wptabs mode=”horizontal”] [wptabtitle]Guest Info[/wptabtitle] [wptabcontent]

Vice Chairman, Portfolio Manager, Loomis Sayles & Company


[/wptabcontent] [wptabtitle] Newsletter[/wptabtitle] [wptabcontent]Consuelo MackThe investment climate has changed. After falling for decades, interest rates are rising. And as in everything else in this global, electronically-connected universe, the shift has been dramatic and rapid. Credit or blame Federal Reserve Chairman Ben Bernanke’s testimony to Congress weeks ago for really getting the ball rolling. Wall Street is still parsing those comments, the minutes from the last FOMC meeting released on Wednesday, and Chairman Bernanke’s comments that afternoon.

The reading right now, according to the very Fed connected Wall Street Journal’s Jon Hilsenrath is that while the Fed could “start winding down its $85 billion-a-month bond-buying program later this year, Fed officials aren’t abandoning their broader commitment to easy-money policies.”

So when will the Fed really start “tapering” its bond purchasing programs? Who knows! Even Bernanke says it’s “data dependent”.

The markets aren’t waiting to find out. The bond markets have seen a huge sell-off as holders of bond mutual funds and ETFs head for the exits. We will talk to legendary bond fund manager Dan Fuss about the “excitement” there on this week’s show. And the stock markets, which also sold off after Bernanke’s May 22nd testimony, have now more than recovered. The S&P 500 closed at a record high of 1,675.02 today, its sixth straight day of gains.

Our guests this week are two of the best in the business in understanding market dynamics and strategy. Dan Fuss is Vice Chairman of Loomis Sayles and has been portfolio manager of the firm’s flagship Loomis Sayles Bond Fund since its inception in 1991. The bond fund has an outstanding long term track record. Fuss has won just about every award given in the bond world including twice being named Morningstar’s Fixed Income Fund Manager of the Year. Loomis Sayles is a WEALTHTRACK sponsor, but Dan appears on the program solely on based on his reputation, expertise and track record.

Richard Bernstein is the CEO and Chief Investment Officer of Richard Bernstein Advisors, a money management firm he founded in 2009. It now manages assets of more than $1.3 billion. The firm sub-advises several mutual funds, unit investment trusts and separate accounts. Its flagship fund is the Eaton Vance Richard Bernstein Equity Strategy Fund. According to Barron’s, Equity Strategy has ranked in the top ten of its Lipper global flexible fund category since its October 2010 inception. Bernstein, formerly the Chief Investment Strategist at Merrill Lynch was named to Institutional Investor’s “All-America Research Team” 18 times and its  top “First Team” spot 10 times.

We also have two web-only EXTRA interview segments, with some personal insights from both guests, which will be available on our website tomorrow.

Have a great weekend and make the week ahead a profitable and a productive one.

Best regards,

Mathews Asia[/wptabcontent] [wptabtitle]Action Point[/wptabtitle] [wptabcontent]

Stay the course and if you must make portfolio changes take incremental steps… the markets might be choppy, others might be panicking, fleeing bonds for instance or piling into stocks, whatever they are doing en masse, don’t follow.

Pros like Dan Fuss and Rich Bernstein have learned over time that going against the herd and taking incremental steps is the best portfolio adjustment strategy.

[/wptabcontent] [wptabtitle]One Investment[/wptabtitle] [wptabcontent]


Own some small and mid-cap U.S. manufacturing and industrial companies

“Manufacturing is coming back here. And whereas if you think of the consensus, has been you have to have multinational companies growing through the emerging markets. We’ve taken 180 degrees, opposite stance, and said, we want domestically focused manufacturing companies.  And they’re working, and now, the difficult thing is I can’t give you one instrument to invest in here, because this is such a theme in its infancy, there are no ETFs…I can’t push my own fund, but within our own funds it’s roughly about ten percent of our equity exposure, a little more now. So we think it’s a great theme. We think it’s just in general a theme that people should be looking at.”

– Rich Bernstein


Consider small U.S. medical technology companies

“Rich is on to something here, and this is actually a credit event. And some of this, the manufacturers will be opening into an area that used to be dominated and is not now. So that’s more like a small tech stock in a sense. The area I really like as an area, on the fixed side it’s a little hard to play, but there are a couple things you can do, is the medical, medical tech area, really. Now, some of the big drug stocks you can argue either way on, but I’m talking about really on the newer technology in the area.”

– Dan Fuss


[/wptabcontent] [wptabtitle]Transcript[/wptabtitle] [wptabcontent]This transcript is available to WEALTHTRACK Premium subscribers here.   Alternately, you can purchase and download this transcript safely and securely with your credit card or PayPal account for $4.99. You will need the free Adobe Acrobat Reader (Mac/Win) or Preview (Mac) to view and print the transcript.

[/wptabcontent] [wptabtitle]Bookshelf[/wptabtitle] [wptabcontent]
[/wptabcontent] [/wptabs] WEB EXTRA: Favorite Emerging Market 

WEB EXTRAThe Biggest Difference  Richard Bernstein on making the switch from strategist to money manager.

WEB EXTRA: Top Of His Game  Dan Fuss talking about how he stays on top of his game after five decades in the business.

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Legendary “Great Investor”, Dan Fuss. The two time winner of Morningstar’s Fixed Income Fund Manager of the Year award has beaten the markets and its peers since the Loomis Sayles Bond Fund’s inception in 1991. We’ll ask Fuss why he believes interest rates will start rising in the next year and how investors can profit from it.

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January 13, 2012
Loomis Sayles’ Great Bond Investor Dan Fuss and a rare interview with BlackRock’s Financial Thought Leader Peter Fisher. Two influential financial powerhouses discuss the risks and opportunities in the economies and markets of the U.S, Europe, and Emerging Markets.

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June 12, 2012
Financial Thought Leader Richard Bernstein, one of Wall Street’s top ranked strategists for years, and Great Investor Bill Wilby, former portfolio manager of the number one ranked Oppenheimer Global Fund, discuss why they believe the U.S. is the best place in the world to invest right now and for years to come.

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