New Putnam Investments Strategies Confront Uncertainty

Putnam Investments has released “Four Strategies for a World of Uncertainty,” described by the firm as “a thoughtful new strategic blueprint to help financial advisers and their clients navigate today’s dynamic markets.”

To help advisers implement the its latest thinking, Putnam is rolling out a series of written perspectives on modern investment approaches that should be considered in managing risk and “seeking to make the most of opportunities that current market turmoil may be masking.”

“Today’s financial adviser and investor face a complex web of market drivers and environmental factors that make the task of long-term investing seemingly more challenging and daunting than ever,” explains Robert Reynolds, president and CEO of Putnam Investments. “Our firm believes there is a new framework of thinking that can be helpful in maneuvering these markets and is designed to address the protection and growth of investment assets.”

First in the series, “Four Strategies for a World of Uncertainty” identifies key market challenges related to specific segments that have been transformed by interventionist central bank policy and macroeconomic uncertainties prevailing in recent years, along with corresponding strategies to allow a portfolio to “potentially weather adverse conditions and seize stealth opportunities.”

The strategy blueprint helps investors consider how bonds have “long been valued by investors who are seeking a reliable source of income and refuge from the volatility of stocks. However, as central banks consider scaling back ultra-low interest rates, pursuing income with benchmark-aligned strategies may be less safe than many people think … Currently, the benchmark Barclays U.S. Aggregate Bond Index, which repre­sents more than $18 trillion worth of bonds, is marked by long duration. If rates start to rise across the yield curve, longer-duration debt could incur real losses.”

As an alternative, Putnam urges advisers and their clients to “consider looking beyond traditional bond indexes at securities that are not overly subject to the risk of rising rates, such as high-yield debt, emerging market debt and non-agency residential mortgage-backed securities.”

Other aspects enumerated by Putnam Investments experts include “exploring new opportunities at the short end of the yield curve,” “managing market volatility with modern diversification strategies,” and how “active strategies can offer valuable sources of growth.”

NEXT: Wider Access to American Century Alternatives

Wider Access to American Century Alternatives

American Century Investments announced the public availability of the AC Alternatives Long Short Fund, the second multi-manager fund to be launched under the firm’s AC Alternatives brand. The new fund uses an open architecture subadviser approach to seek out “experienced, specialized managers who employ differentiated approaches to long/short equity investing.”

As the firm explains, long/short equity strategies seek to take long positions (buys) in undervalued equities and short overvalued positions in equities issued by companies across all market cap and geographies.

“The addition of AC Alternatives Long Short to our suite of liquid alternatives solutions reflects our commitment to meeting the evolving needs of our clients,” says Cleo Chang, senior vice president and head of alternative investments for American Century. “We believe long/short strategies can play an important role in a diversified portfolio by providing the potential for more consistent returns over a full market cycle, while striving to reduce volatility.”

American Century has engaged Perella Weinberg Partners Capital Management LP to provide investment management advisory services and to identify and recommend other underlying subadvisers with expertise in specific strategies. Those subadvisers so far include Passport Capital, Sirios Capital Management, Three Bridges Capital and CMIA Seligman. Perella Weinberg will supplement those strategies with its own tactical and opportunistic adjustments to the portfolio or “overlay” in an attempt to either reduce risk or increase exposure to certain asset classes expected to benefit from certain market conditions. Perella Weinberg also serves as subadviser on the AC Alternatives Income fund, which launched last July.

For more information about the AC Alternatives funds, visit www.ACAlternatives.com.  

NEXT: GSAM Moves Ahead on TDF Merger 

GSAM Moves Ahead on TDF Merger

Goldman Sachs Asset Management has filed a Proxy and Registration Statement on form N-14 with the U.S. Securities and Exchange Commission (SEC) in connection with the planned merger of the Madison Target Retirement Funds into a new series of GS Target-Date Portfolios. 

Moving forward, the four Madison Target Date Retirement Funds (2020, 2030, 2040 and 2050) will be reorganized into four new GS Target Date Portfolios, scheduled to launch on or around August 29, 2016, subject to shareholder approval. 

Additionally, GSAM will launch four new GS Target Date Portfolios in 5-year increments (2025, 2035, 2045 and 2055).  Goldman Sachs will act as an investment adviser to the funds and will retain Madison Asset Management as the sub-adviser to the funds.

Additional details here.