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Clips From Abdulaziz Alnaim’s Interview With The Manual Of Ideas (Video)

Originally Published on March 21, 2016 I was recently interviewed by the wonderful publication, The Manual of Ideas , where we discussed various issues related to our strategy and to investing in general. I would like to share the following three clips from that interview with you. I hope you enjoy them. Abdulaziz Alnaim on Market Efficiency and Why Value Investing Works Abdulaziz Alnaim: We Begin by Looking for a Reason to Say ‘No’ Abdulaziz Alnaim on the Importance of Robustness

4 Strong Buy PIMCO Mutual Funds For Steady Return

With nearly $1.5 trillion assets under management, Pacific Investment Management Company, LLC (commonly known as PIMCO) is considered as one of the well-known investment management firms across the globe. The company provides a wide range of financial services in 12 countries with the help of more than 2,300 employees and over 720 professionals. PIMCO offers a broad lineup of investment solutions to its clients that encompass the entire gamut of equities, bonds, currencies, real estates, alternative investments and risk management. Though the firm manages a large number of mutual funds across a wide range, it is best known for its fixed-income mutual funds. Below, we share with you four top-rated PIMCO mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and we expect the fund to outperform its peers in the future. To view the Zacks Rank and past performance of all PIMCO funds, investors can click here to see the complete list of PIMCO funds . PIMCO Income A (MUTF: PONAX ) invests a minimum of 65% of its assets in fixed income securities from a wide range of sectors. These securities may include options, futures contracts, and swap agreements. PONAX may invest not more than half of its assets in securities that are rated below investment grade. The PIMCO Income A fund has a five-year annualized return of 7.5%. As of December 2015, PONAX held 4,022 issues, with 7.76% of its total assets invested in Irs Usd 2.75000 06/17/15-10y Cme. PIMCO New York Municipal A (MUTF: PNYAX ) seeks high tax-exempted income. PNYAX invests the lion’s share of its assets in debt securities whose interest is exempted from regular federal income tax and New York income tax. PNYAX may invest in “private activity” bonds having interest which is a tax-preference item for the purpose of the federal alternative minimum tax. The fund may also invest in other derivatives. The PIMCO New York Municipal A fund has a five-year annualized return of 5%. PNYAX has an expense ratio of 0.77% as compared to the category average of 0.93%. PIMCO StocksPLUS A (MUTF: PSPAX ) maintains a portfolio by investing in fixed income securities related to the S&P 500 including bonds and other derivatives in order to derive higher return compared to the index. PSPAX invest in securities from public as well as private sectors issued worldwide. While PSPAX will not invest more than 30% of its assets in foreign currencies denominated securities, it may invest more than 30% of its assets in foreign securities that are denominated in the U.S. dollar. The PIMCO StocksPLUS A fund has a five-year annualized return of 11.8%. Sudi N. Mariappa is the fund manager of PSPAX since 2014. PIMCO Low Duration Fund D (MUTF: PLDDX ) seeks to maximize return with capital preservation. PLDDX invests more than 65% of its assets in fixed income securities irrespective of their maturities. PLDDX invests in securities of both domestic and foreign issuers. PLDDX may also invest in forwards, options and futures contracts. The PIMCO Low Duration D fund has a five-year annualized return of 1.4%. PLDDX has an expense ratio of 0.75% as compared to the category average of 0.80%. To view the Zacks Rank and past performance of all PIMCO mutual funds, investors can click here to see the complete list of funds . About Zacks Mutual Fund Rank By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward. Learn more about the Zacks Mutual Fund Rank here . Original Post

Smart Beta ETFs Not So Smart?

Smart beta ETFs that were on fire for quite some time now appear to be losing some momentum. Smart beta strategy helps to exploit market anomalies by adding extra selection criteria to the market cap or rules-based indices. These include among other strategies value – stocks trading cheap but performing better than stocks trading at a higher value, momentum – based on ongoing trend, dividend – stocks paying high dividend perform better in the long run and volatility – stable stocks perform better any day (read: How to Play the Choppy Market with Cheap Smart Beta ETFs ). In fact, the popularity of smart beta has soared to such a point, where a Create-Research survey has found that smart beta ETFs make up for around 18% of the U.S. ETF market. The U.S. markets are experiencing extreme volatility and the factors responsible for it are global growth concerns, escalating geopolitical tensions, a surge in the U.S. dollar and uncertainty over the timing of the next interest rate hike. Against this backdrop, investors look for smart stock-selection strategies to alleviate market risks. But nothing works forever, not even smart strategies. This is as true for smart beta ETFs as for market anomalies. Per a report by Research Affiliates’ analysts, one of the primary reasons why smart beta strategies have been performing well is because of their growing popularity, which led to higher valuations rather than structural alpha. The latter is the quality of the strategy and its potential to beat the benchmark on a sustainable and repeatable basis. This does not mean that one should reject smart beta ETFs altogether. If any inefficiency is spotted in the market, smart beta ETFs enable investors to exploit it at a cheap cost. However, it should be noted that not all smart beta ETFs have fulfilled their promise of delivering market-beating returns (read: Smart Beta ETFs That Stood Out Amid Market Volatility ). Below we have highlighted a few ‘Smart Beta’ options that underperformed the broader U.S. market ETF SPDR S&P 500 ETF (NYSEARCA: SPY ), which has gained about 1.6% so far this year (as of March 30, 2016) First Trust Dorsey Wright Focus 5 ETF (NASDAQ: FV ) This ETF tracks the Dorsey Wright Focus Five Index, which provides targeted exposure to the five First Trust sector and industry-based ETFs that Dorsey, Wright & Associates (DWA) believes have the highest potential to outperform other ETFs in the selection universe. It is a popular ETF with AUM of $4.6 billion and trades in solid volumes of around 2.2 million shares a day on average. The fund charges a higher 89 bps in fees. The ETF has lost 8.2% in the year-to-date period (as of March 30). Guggenheim S&P SmallCap 600 Pure Growth ETF (NYSEARCA: RZG ) This fund tracks the S&P SmallCap 600 Pure Growth Index. The product has a wide exposure across 146 stocks with each holding less than 2% share while healthcare and financials are the top two sectors accounting for over 20% share each. The ETF has AUM of $192 million but trades in light volume of about 28,000 shares a day on average. It charges 35 bps in annual fees and fell 2.4% in the year-to-date period. SPDR Russell 1000 Momentum Focus ETF (NYSEARCA: ONEO ) The fund tracks the Russell 1000 Momentum Focused Factor Index and holds a broad basket of 903 securities that are widely diversified with none holding more than 0.82% of assets. ONEO has accumulated $340.2 million in its asset base. It charges a lower fee of 20 bps per year and trades in solid volume of around 137,000 shares. The ETF fell 0.5% in the year-to-date period (read: 5 Very Successful ETF Launches of 2015 ). Original Post