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The Bloomberg Intelligence Fair Value Model is currently showing a 19.1x multiple on the S&P 500, which is lower than where we currently are, due to the Mag 7 driving a lot of the valuation premium in the index. In this episode of Inside Active, host David Cohne, mutual fund and active management analyst with Bloomberg Intelligence and co-host Michael Casper, US small cap and sector strategist at BI, spoke with Christopher Davis, chairman and portfolio manager at Davis Advisors about the significance of the earnings yield and the selective nature of the Davis investment discipline. They also discuss why management culture is crucial for long-term success and why understanding management’s capital allocation decisions is vital.

The Bloomberg Intelligence Fair Value Model is currently showing a 19.1x multiple on the S&amp;P 500, which is lower than where we currently are, due to the Mag 7 driving a lot of the valuation premium in the index. In this episode of Inside Active, host David Cohne, mutual fund and active management analyst with Bloomberg Intelligence and co-host Michael Casper, US small cap and sector strategist at BI, spoke with Christopher Davis, chairman and portfolio manager at Davis Advisors about the significance of the earnings yield and the selective nature of the Davis investment discipline. They also discuss why management culture is crucial for long-term success and why understanding management&rsquo;s capital allocation decisions is vital.

Davis Funds’ Chris Davis on the Earnings Yield

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Recent quarterly results from Japanese companies came out better than expected, with quarterly year-over-year growth of around 26%. In this episode of Inside Active, host David Cohne, mutual fund and active management analyst with Bloomberg Intelligence, along with co-host Laurent Douillet, senior equity strategist for Bloomberg Intelligence, spoke with Graeme Forster, an international equity strategy and global equity strategy portfolio manager at Orbis Investment Management, about the importance of intrinsic value and independent decision-making in stock evaluation. They also discuss how market inefficiencies can create significant investment opportunities, what industry he currently likes in Japan and the role of risk management in investment decisions.

Recent quarterly results from Japanese companies came out better than expected, with quarterly year-over-year growth of around 26%. In this episode of Inside Active, host David Cohne, mutual fund and active management analyst with Bloomberg Intelligence, along with co-host Laurent Douillet, senior equity strategist for Bloomberg Intelligence, spoke with Graeme Forster, an international equity strategy and global equity strategy portfolio manager at Orbis Investment Management, about the importance of intrinsic value and independent decision-making in stock evaluation. They also discuss how market inefficiencies can create significant investment opportunities, what industry he currently likes in Japan and the role of risk management in investment decisions.

Orbis’ Forster on Importance of Intrinsic Value

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Themes ranging from decentralized energy to nuclear to solar have found fresh footing this year due to secular growth trends such as the acceleration of electrification needs. In this episode of Inside Active, host David Cohne, mutual fund and active-management analyst with Bloomberg Intelligence, along with co-host Breanne Dougherty, head of thematic strategy at Bloomberg Intelligence, spoke with Jonathan Waghorn, a portfolio manager on the Guinness Global Energy and Guinness Sustainable Energy strategies, about the energy transition. They looked at why fossil fuels will continue to play a role in the shift and how technology companies are focusing on renewable sources. They also discuss the firm’s top-down and bottom-up approaches, including its global energy model and quantitative screening criteria, as well as why the portfolio is equal-weighted.

Themes ranging from decentralized energy to nuclear to solar have found fresh footing this year due to secular growth trends such as the acceleration of electrification needs. In this episode of Inside Active, host David Cohne, mutual fund and active-management analyst with Bloomberg Intelligence, along with co-host Breanne Dougherty, head of thematic strategy at Bloomberg Intelligence, spoke with Jonathan Waghorn, a portfolio manager on the Guinness Global Energy and Guinness Sustainable Energy strategies, about the energy transition. They looked at why fossil fuels will continue to play a role in the shift and how technology companies are focusing on renewable sources. They also discuss the firm’s top-down and bottom-up approaches, including its global energy model and quantitative screening criteria, as well as why the portfolio is equal-weighted.

Guinness’ Jonathan Waghorn on Sustainable Energy

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Out of the 31 global stocks found in four or more BI themes, the ones exposed to physical environment issues have outperformed tech stocks dramatically so far this year. In this episode of Inside Active, host David Cohne, mutual fund and active management analyst with Bloomberg Intelligence, along with co-host Breanne Dougherty, head of thematic strategy at BI, spoke with Albert Chu, a portfolio manager with the Man Group and manager for the American Beacon GLG Natural Resources ETF (MGNR). They discussed dispersion in commodities and why falling interest rates have historically been positive for commodity prices. They also spoke about the likelihood of a global restocking cycle amid rate cuts and a stimulus environment in China, and which subsectors Chu is bullish on.

Out of the 31 global stocks found in four or more BI themes, the ones exposed to physical environment issues have outperformed tech stocks dramatically so far this year. In this episode of Inside Active, host David Cohne, mutual fund and active management analyst with Bloomberg Intelligence, along with co-host Breanne Dougherty, head of thematic strategy at BI, spoke with Albert Chu, a portfolio manager with the Man Group and manager for the American Beacon GLG Natural Resources ETF (MGNR). They discussed dispersion in commodities and why falling interest rates have historically been positive for commodity prices. They also spoke about the likelihood of a global restocking cycle amid rate cuts and a stimulus environment in China, and which subsectors Chu is bullish on.

Man Group’s Chu On Dispersion in Commodities

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After the results of the US election were announced, the Russell 2000 index broke out of its 2024 range and approached all-time highs. On this episode of Inside Active, host David Cohne, mutual fund and active management analyst with Bloomberg Intelligence, along with co-host Michael Casper, BI’s sector and small-cap strategist, spoke with David Green, a principal of Hotchkis & Wiley and a portfolio manager on the Small Cap Value (HWSIX) and Value Opportunities (HWAIX) funds. They discussed the firm’s focus on high quality companies at low valuations and its fundamental risk-rating system. They also spoke on the challenges and opportunities for small caps and why mergers and acquisitions may increase under the new administration.

After the results of the US election were announced, the Russell 2000 index broke out of its 2024 range and approached all-time highs. On this episode of Inside Active, host David Cohne, mutual fund and active management analyst with Bloomberg Intelligence, along with co-host Michael Casper, BI’s sector and small-cap strategist, spoke with David Green, a principal of Hotchkis &amp; Wiley and a portfolio manager on the Small Cap Value (HWSIX) and Value Opportunities (HWAIX) funds. They discussed the firm’s focus on high quality companies at low valuations and its fundamental risk-rating system. They also spoke on the challenges and opportunities for small caps and why mergers and acquisitions may increase under the new administration.

Hotchkis’ Green on High Quality at Low Valuations

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Profitable companies tend to perform well among small caps, as evidenced by the Bloomberg MVP small-cap portfolio, which returned 11.9% annualized in a backtest run from 1999 to September 2024. On this episode of Inside Active, host David Cohne, mutual fund and active management analyst with Bloomberg Intelligence, along with co-host Michael Casper, sector and small-cap strategist, spoke with Mitch Zacks, CEO and principal portfolio manager of Zacks Investment Management about the significance of upwards earnings-estimate revisions and why they could be crucial for predicting stock performance. They also discussed the evolving landscape of small-cap stocks and why valuation metrics are more relevant for larger companies.

Profitable companies tend to perform well among small caps, as evidenced by the Bloomberg MVP small-cap portfolio, which returned 11.9% annualized in a backtest run from 1999 to September 2024. On this episode of Inside Active, host David Cohne, mutual fund and active management analyst with Bloomberg Intelligence, along with co-host Michael Casper, sector and small-cap strategist, spoke with Mitch Zacks, CEO and principal portfolio manager of Zacks Investment Management about the significance of upwards earnings-estimate revisions and why they could be crucial for predicting stock performance. They also discussed the evolving landscape of small-cap stocks and why valuation metrics are more relevant for larger companies.

Mitch Zacks on Upward Earnings-Estimate Revisions

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Buffer ETFs, which use options to limit losses and offer upside potential, have taken in around $10 billion in new flows this year as their popularity grows. On this episode of Inside Active, host David Cohne, mutual fund and active-management analyst with Bloomberg Intelligence, along with co-host James Seyffart, a BI ETF analyst, spoke with Burke Ashenden, director of capital markets at Innovator ETFs, about the rise of defined-outcome ETFs. They examine the unique features that set them apart from traditional investment funds, and how they provide risk-managed exposure. They also discussed how the underlying management of these products works.

Buffer ETFs, which use options to limit losses and offer upside potential, have taken in around $10 billion in new flows this year as their popularity grows. On this episode of Inside Active, host David Cohne, mutual fund and active-management analyst with Bloomberg Intelligence, along with co-host James Seyffart, a BI ETF analyst, spoke with Burke Ashenden, director of capital markets at Innovator ETFs, about the rise of defined-outcome ETFs. They examine the unique features that set them apart from traditional investment funds, and how they provide risk-managed exposure. They also discussed how the underlying management of these products works.

Innovator’s Ashenden on Risk-Managed Exposure

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Financial stocks could see better earnings growth this quarter than analysts’ consensus, according to Bloomberg Intelligence’s macro model. In this episode of the Inside Active podcast, host David Cohne, BI mutual fund and active management analyst, along with co-host Gina Martin Adams, BI’s chief equity strategist, speak with Bill Nygren, chief investment officer, US equity, at Harris Associates and portfolio manager at the firm’s Oakmark Funds. They discuss Nygren’s views on bringing a private equity perspective to public equity investing, the need for a long-term view, why financials make up a large allocation in the Oakmark Fund (OAKMX) and the significance of management quality in investment decisions.

Financial stocks could see better earnings growth this quarter than analysts’ consensus, according to Bloomberg Intelligence’s macro model. In this episode of the Inside Active podcast, host David Cohne, BI mutual fund and active management analyst, along with co-host Gina Martin Adams, BI’s chief equity strategist, speak with Bill Nygren, chief investment officer, US equity, at Harris Associates and portfolio manager at the firm’s Oakmark Funds. They discuss Nygren’s views on bringing a private equity perspective to public equity investing, the need for a long-term view, why financials make up a large allocation in the Oakmark Fund (OAKMX) and the significance of management quality in investment decisions.

Oakmark’s Nygren Takes Private Equity Perspective

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The quality factor is ranked second on the BI Factor Scorecard as higher-quality companies are beating lower-quality ones against a backdrop of a more defensive market. On this episode of Inside Active, host David Cohne, mutual fund and active-management analyst with Bloomberg Intelligence, along with co-host and BI US quantitative strategist Christopher Cain, spoke with Tom Hancock, head of Focused Equity at GMO and portfolio manager for the GMO US Quality ETF (QLTY), about how the fund combines GMO’s history of integrating the quality factor in its research with the firm’s roots in value investing. They also discussed why profitability is such an important element of their quality-factor research, and how QLTY differs from its mutual fund counterpart.

The quality factor is ranked second on the BI Factor Scorecard as higher-quality companies are beating lower-quality ones against a backdrop of a more defensive market. On this episode of Inside Active, host David Cohne, mutual fund and active-management analyst with Bloomberg Intelligence, along with co-host and BI US quantitative strategist Christopher Cain, spoke with Tom Hancock, head of Focused Equity at GMO and portfolio manager for the GMO US Quality ETF (QLTY), about how the fund combines GMO’s history of integrating the quality factor in its research with the firm’s roots in value investing. They also discussed why profitability is such an important element of their quality-factor research, and how QLTY differs from its mutual fund counterpart.

GMO’s Hancock on the Importance of Profitability

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Since the US market can be profitable for European companies, any slowdown in the US economy could harm earnings in Europe, but also alleviate high valuations. On this episode of Inside Active, host David Cohne, mutual fund and active management analyst with Bloomberg Intelligence, along with co-host Laurent Douillet, senior equity strategist for Bloomberg Intelligence, spoke with Sarah Ketterer, Chief Executive Officer and Fundamental Portfolio Manager at Causeway Capital Management, including the Causeway International Value Fund (CIVVX). They discussed Causeway’s value investment philosophy, including its risk-adjusted return ranking model, as well as the criteria she looks for in potential holdings. They also spoke about how AI tools are being integrated into the investment process and where she sees investment opportunities in artificial intelligence. 

Since the US market can be profitable for European companies, any slowdown in the US economy could harm earnings in Europe, but also alleviate high valuations. On this episode of Inside Active, host David Cohne, mutual fund and active management analyst with Bloomberg Intelligence, along with co-host Laurent Douillet, senior equity strategist for Bloomberg Intelligence, spoke with Sarah Ketterer, Chief Executive Officer and Fundamental Portfolio Manager at Causeway Capital Management, including the Causeway International Value Fund (CIVVX). They discussed Causeway’s value investment philosophy, including its risk-adjusted return ranking model, as well as the criteria she looks for in potential holdings. They also spoke about how AI tools are being integrated into the investment process and where she sees investment opportunities in artificial intelligence.

Causeway’s Ketterer on Estimating Intrinsic Value

https://api.omny.fm/orgs/e73c998e-6e60-432f-8610-ae210140c5b1/clips/33354210-910f-490b-9b0e-b20a00d2ef31/transcript

Reports of active management's demise have been greatly exaggerated. Active continues to grow and evolve in ETFs while mutual funds prosper and define benefit plans. Bloomberg Intelligence strategy team uncover active opportunities and gleam insights from active managers and those who cover the industry.

Reports of active management's demise have been greatly exaggerated. Active continues to grow and evolve in ETFs while mutual funds prosper and define benefit plans. Bloomberg Intelligence strategy team uncover active opportunities and gleam insights from active managers and those who cover the industry.

Inside Active by Bloomberg Intelligence

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