Rules-based investment strategies may cause the market to drive over the cliff Thelma & Louise style, said Brian Singer, head of William Blair’s Dynamic Allocation Strategies team, at the 2017 Conexus Financial Equities Summit held in Syndey, Australia.

Investment Magazine reports that during the summit, Singer told delegates he fears passive and smart beta products are generating fragility in the market and that the employment of dynamic risk capital allocation could create more resilient portfolios.

According to Investment Magazine, Singer told the summit attendees that it’s like locking a car’s steering wheel in Sydney, pointing it to Perth and expecting it to reach its destination.  “Investment strategies need to be active and dynamic,” said Singer.

Singer added that smart beta’s strict rules-based approach is like navigating the markets in a straightjacket.

“Dynamic asset allocation is the pendulum swinging right back to where it was in earlier periods,” he said. “[We focus on] riding the tides, navigating the waves and ignoring the ripples.”

Long-term investors need to be prepared to handle the ups and downs of the market. Singer explained that the William Blair Dynamic Allocation Strategies team is “anti-fragile,” highlighting that its investment process has evolved over time as the team researches, implements, and continuously reviews its inputs and frameworks.

At the summit, Singer said investors around the globe are considering risk premia and currency strategies when seeking diversification.

“Everyone wants diversification when the market’s going down,” he said. “We’ve gotten ourselves into a place where the market itself is very fragile.”

And nobody wants to drive over the cliff.

Read Investment Magazine article

 

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Please carefully consider the Funds’ investment objective, risks, charges, and expenses before investing. This and other information is contained in the Funds’ prospectus, which you may obtain by calling +1 800 742 7272. Read it carefully before you invest or send money. Investing includes the risk of loss.

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This content is for informational and educational purposes only and not intended as investment advice or a recommendation to buy or sell any security. Investment advice and recommendations can be provided only after careful consideration of an investor’s objectives, guidelines, and restrictions.

Factual information has been taken from sources we believe to be reliable, but its accuracy, completeness or interpretation cannot be guaranteed. Investments are subject to market risk. Forecasts, estimates, and certain information contained herein are based upon proprietary research and should not be interpreted as investment advice, as an offer or solicitation, nor as the purchase or sale of any financial instrument. Statements concerning financial market trends are based on current market conditions, which will fluctuate.

William Blair does not provide legal or tax advice. Please consult your tax and/or legal counsel for specific tax questions and concerns.

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Copyright © 2018 William Blair & Company, L.L.C. "William Blair” is a registered trademark of William Blair & Company, L.L.C. No part of this material may be reproduced in any form, or referred to in any other publication, without express written consent.

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Please carefully consider the Funds’ investment objective, risks, charges, and expenses before investing. This and other information is contained in the Funds’ prospectus, which you may obtain by calling +1 800 742 7272. Read it carefully before you invest or send money. Investing includes the risk of loss.

Any statements or opinions expressed are those of the author as of the date of publication, are subject to change without notice as economic and markets conditions dictate, and may not reflect the opinions of other investment teams within William Blair Investment Management, LLC or the Investment Management Division of William Blair & Company, L.L.C.

This content is for informational and educational purposes only and not intended as investment advice or a recommendation to buy or sell any security. Investment advice and recommendations can be provided only after careful consideration of an investor’s objectives, guidelines, and restrictions.

Factual information has been taken from sources we believe to be reliable, but its accuracy, completeness or interpretation cannot be guaranteed. Investments are subject to market risk. Forecasts, estimates, and certain information contained herein are based upon proprietary research and should not be interpreted as investment advice, as an offer or solicitation, nor as the purchase or sale of any financial instrument. Statements concerning financial market trends are based on current market conditions, which will fluctuate.

William Blair does not provide legal or tax advice. Please consult your tax and/or legal counsel for specific tax questions and concerns.

Distributed by William Blair & Company, L.L.C., member FINRA/SIPC.

Copyright © 2018 William Blair & Company, L.L.C. "William Blair” is a registered trademark of William Blair & Company, L.L.C. No part of this material may be reproduced in any form, or referred to in any other publication, without express written consent.

Statement of Financial Condition | NMS Rule 605 & 606 | Business Continuity Plan | UK Stewardship Code
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