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Live chat with Lipper winner Alan Radlo
alan radlo fund manager won lipper awards for balanced funds
- Alan’s CI Cambridge Canadian Asset Allocation Corporate Class has just won Lipper Awards for one and three years in the tactical balanced category. For three years ending last Oct. 31, it posted an average annual return of 9.6 per cent.
- We’ll be starting in just a moment. While we wait, you might want to check out our full coverage of the Lipper awards from last week. It gives a good overview of strategies that have worked and funds that investors should consider. Find it here
- Also, we just published this helpful overview of some of the most recommended mutual funds - for both conservative and aggressive investors. Some great ideas for RRSP shopping season.
- Good morning Alan
- Hello
- Just to start things off Alan, I'd like to ask you this: Some of your success has been tied to your search for alternative high yielding investments, instead of the puny returns of bonds. Is this still your approach this year, and are you advising investors to continue to shun the bond market in the current environment?
- I do believe income securities belong in every one's portfolios....
- However I also believe some where sooner than later there will be a rise in rates and one must be careful going long term in bonds.....
- So I believe as stated that bond or income securities be in portfolios but the duration be watched
- How long should investors go out in terms of duration? And which is preferred right now: government or corporate bonds?
- Careful scrutiny of high yield securities on an individual basis can be placed in a portfolio for superior returns
- I am very nervous concerning long term bonds or government securities. However this has been wrong thus far. Thus I still believe to be short in duration.
- We've been hearing quite a bit lately about emerging markets debt. Is this something you've been looking at and would recommend for investors seeking extra yield?
- I prefer government over corporate.
- Emerging debt has all sorts of added risk from currency and sovereign risk. If you hedge then there are opportunities.....
- or if you buy emerging debt in your own currency then you have eliminated at least some of the risk.....
- I also believe you must use some risk adjustments when figuring out a required return on these instruments...
- Once again after the risks have been addressed one can still find with the help of advisers some opportunities to be placed
in a diversified portfolio - Thanks Alan. Our first question from our readers is from Eddy
- What's the current
breakdown of your asset allocation fund? - the fund is 55% equities and also 15% high yielding equities that are being used as quasi debt instruments as they have the ability to increase their dividends and are favored over straight bonds......
- the rest of the portfolio is corporate debt
- Once again there are income substitutes available for corporate or government securities
- Thanks Alan. In terms of equities, where are you hunting for yield these days? Any particular sectors, countries and stocks?
- It is ecclectic in nature. There can be good securities with underlying growth in all sectors.....
- Thus many sectors are represented . This would include transportation and energy and financials....etc
- I know a lot of our readers are wondering this: What are your top stock picks right now?
- This has to be a sensitive answer as fundamental information can change daily. Thus I will answer the question with this caveat. In terms of interesting names would be midstream pipeline assets such as Keyera...In energy would be truckers such as Mullen and transforce with nice yields.....
- I would include companies such as merk in the medical arena and also real estate and special infrastructure companies such as Brookfield and real estate companies such as Cominar and Dundee for some foreign real estate exposure with nice yield.
- The equities are not bought for their yield but for their underlying growth potential to grow dividends.
- Given what we are seeing in Europe and the U.S., do you think the equity indices have discounted enough of the downside already? Looking at the S&P and Nasdaq, that certainly can't be the case.
- Clearly there is going to be some austerity that is necessary that does keep growth tempered. However slow growth is still better than all the indecision concerning country bankruptcy that has been present. The Greek situation has been solved for the 3rd time and I am still uncertain as to it really being fixed........
- There is still more to come from Italy and Spain and Portugal etc... Thus it is not clear sailing......
- I will add though that within every country there exists domestic plays that are immune to some of these global issues. There are some technology plays immune from some of these issues.
- I do believe there is an upswing in place. Every talking head commentator and double dip recessions are now shut up like they should be.
- Can you mention which technology plays look interesting right now?
- A more normalized housing and auto cycle is in place and helping this upswing. Earnings are moving higher and companies are building value and there is liquidity in the financial markets. So i believe people should have a more bullish belief.
- A lot of the technology names have run up in price and are long term buys for patient investors......
- I do believe Apple still has a bright future but that is not news to many. However even when some technology companies grow earnings tremendously the analysts on the street who were wrong and too bearish have now extrapolated their earnings expectations ridiculously too high and good growth is not good enough.....
- For technology picks Apple is still included as well as Qualcom in the United States. there are too few large cap Canadian names to be played.
- David Berman had an interesting blog entry this morning on how fund managers are feeling particularly bullish right now. Read it here
- there are interesting foreign names. For Canadian names companies like Groupe CGI still performs well as does CAE......
- Again careful analysis of growth rates and earnings rates needs to be monitored.
- It seems Alan you are in the bull camp. Do you have any predictions on how high the major indexes may reach this year? Also, we have this related question from Gary
- so you are positioning your portfolio for a bull market
