The WisdomTree Blog
The transformation of Fed policy continues. What was viewed as a hawkish FOMC outcome at the December meeting has now morphed into a more dovish outlook. In fact, one could conclude the Fed is leaving March by “going out like a lamb.”
On last week’s “Behind the Markets” podcast, Jeremy Schwartz and Liqian Ren spoke with Wes Gray, CEO of Alpha Architect; Gaurav Sinha, Associate Director of Asset Allocation and Modern AlphaTM at WisdomTree; and Jay Hatfield, CEO of InfraCap. The conversation touched on topics ranging from the upcoming Democratize Quant Conference to India and asset allocation as well as the master limited partnership space.
When most people think about leverage, they think about it through the lens of added risk. While that’s one view, we think leverage can be a powerful tool for boosting the efficiency of portfolios, even during potentially volatile markets.
In his 2018 letter to Berkshire Hathaway shareholders, Buffett wrote that stock performance converges with business performance over time if the original purchase price is not excessive. Jeremy Schwartz and Kara Marciscano make the case for our quality dividend growth strategy, with aggregate profitability that is comparable to Berkshire’s equity portfolio and a valuation below the S&P 500.
Chinese equities have ripped higher this year, and we see catalysts to support further gains. But not all China exposures are created equal.
Jeremy J Siegel
Senior Investment Strategy Advisor
CEO of WisdomTree
Jeremy Schwartz, CFA
Executive Vice President, Global Head of Research
Christopher Gannatti, CFA
Head of Research, Europe
Christopher Gannatti began at WisdomTree as a Research Analyst in December 2010, working directly with Jeremy Schwartz, CFA®, Director of Research. In January of 2014, he was promoted to Associate Director of Research where he was responsible to lead different groups of analysts and strategists within the broader Research team at WisdomTree. In February of 2018, Christopher was promoted to Head of Research, Europe, where he will be based out of WisdomTree’s London office and will be responsible for the full WisdomTree research effort within the European market, as well as supporting the UCITs platform globally. Christopher came to WisdomTree from Lord Abbett, where he worked for four and a half years as a Regional Consultant. He received his MBA in Quantitative Finance, Accounting, and Economics from NYU’s Stern School of Business in 2010, and he received his bachelor’s degree from Colgate University in Economics in 2006. Christopher is a holder of the Chartered Financial Analyst designation.
Head of Fixed Income Strategy
Tripp Zimmerman, CFA
Head of Fixed Income & Currency
Associate Director, Asset Allocation and Modern Alpha
Head of Capital Markets
Associate Director of Capital Markets
Head of Europe
Joseph Tenaglia, CFA
Associate Director, Asset Allocation
Kara Marciscano, CFA
Jianing Wu joined WisdomTree as a Research Analyst in October 2018. She is responsible for analyzing market trends and helping support WisdomTree’s research efforts. Previously, Jianing completed internships and projects at Geode Capital, Starwint Capital, and Invesco Great Wall Fund Management with a focus in quantitative research. Jianing received her M.S in Finance from the Massachusetts Institute of Technology. She graduated with honors from Boston College with degrees in Mathematics and Philosophy.
Jeff Weniger, CFA
Director, Asset Allocation
Alejandro Saltiel, CFA
Associate Director of Modern Alpha
Alejandro Saltiel joined WisdomTree as a Quantitative Research Analyst in May 2017. He is responsible for quantitative research on WisdomTree’s products and global equity markets. Prior to joining WisdomTree, Alejandro worked at HSBC Asset Management’s Mexico City office as Portfolio Manager for multi-asset mutual funds. He started his career working at a boutique hedge fund that specialized on trading options on sector-levered ETFs. Alejandro received his Master’s in Financial Engineering degree from Columbia University in 2017 and a Bachelor’s in Engineering degree from the Instituto Tecnológico Autónomo de México (ITAM) in 2010. He is a holder of the Chartered Financial Analyst designation.
Matt Wagner, CFA
Modern Alpha Analyst
Matt Wagner joined WisdomTree in May 2017 as a member of the Research team. He is responsible for research on WisdomTree’s products and communicating the firm’s views on the markets. Matt started his career at Morgan Stanley, working as an analyst in Treasury Capital Markets from 2015 to 2017 where he focused on unsecured funding planning, execution and risk management. Matt graduated from Boston College in 2015 with a B.A. in International Studies with a concentration in Economics. Matt is a holder of the Chartered Financial Analyst designation.
With the U.S. equity markets enjoying a tremendous positive run over the last six to seven years, with few drawdowns passing the 10% threshold, some investors are looking for alternative investment solutions designed to hedge market risk.
For a long time, many investors allocated their portfolios to traditional asset classes only—namely equity and fixed income, often investing on a long-only basis. Over the years, investment researchers hypothesized that diversifying by incorporating international equities, small caps or even emerging market debt could help increase returns and lower risks for the entire portfolio.
Last Friday, the Bank of Japan decided to adjust monetary policy. The policy board voted to keep constant the quantity of balance sheet growth ay Y80 trillion per annum; but it voted to change the “quality” of its future asset purchases.
When the Federal Open Market Committee (FOMC) voted to increase the Federal Funds Rate by 25 basis points last week, in addition to the first rate hike in more than nine years, this also marked the first unanimous decision by the FOMC since the previous tightening cycle began in 2004.
On Wednesday afternoon the Federal Reserve raised rates by 25 basis points, effectively raising its target band for the Federal Funds Rate to 25−50 bps. A widely anticipated move, it is an important and positive development for risk markets such as equities in that it removes a level of uncertainty.