Deconstructing Alpha

For institutional investors, First Eagle has long been one of the most revered investment firms in the nation. Their mutual funds have been a pillar of strength in Frontier portfolios, providing consistent performance year after year, for decades, even during some of the most difficult of times. If you ask them how they have been able to achieve this track record, their response will likely be “scarcity” and “persistence”. What does that mean? Tune in for unprecedented access to the secrets of First Eagle’s success.

Welcome to 2023! Two big questions for the year; where will inflation likely end up, and what is the Fed’s plan? Let’s find out with Tony Crescenzi of PIMCO, after all PIMCO might know a thing or two about inflation and the Fed.

So here we are, 9 months into a market decline. What now? In this interview we discuss what is likely to happen to the economy and earnings, what is next for capital markets, and where is the opportunity. Who doesn’t want to know that? I don’t know anyone that can deconstruct it better than Brad Neuman.

Triumph! What an honor it was to host the famed international investor Rezo Kanovich from the Artisan International Small Mid Growth Strategy. Frontier has been a long-term investor with Rezo and Artisan, and I was shocked to have been able to interview such an icon of international investing. We deconstruct the importance of security selection, the opportunities before us, the inefficiencies, and risk aspects of small stock investing. After listening to this, you might be left pondering, who would index this space? Buckle up, ear bud up, or grab the dog and go for a walk. What a rare treat this interview is.

Stocks down, bonds down, managed futures up! What are managed futures, how do they work, and why are they performing so well in this “everything down” environment? To answer these questions, we go right to the source - Yung-Shin Kung, Head of Quantitative Strategies, & Portfolio Manager of the Credit Suisse Managed Futures fund. Tune in and listen up, this is something totally different!

In this podcast, we interview Max Belmont, Associate Portfolio Manager for the First Eagle Gold fund. What does First Eagle know about gold? Well, they just might own more gold than any other private entity in the country. How much gold can fit in a swimming pool, what is the difference between gold out of the ground and gold mining stocks, what is the role of gold in a portfolio, and how do crypto currencies factor into this environment? These are all questions that we will cover. This is a fascinating interview, chock full of facts and tidbits about gold. Grab your ear buds, get on your exercise device and buckle up. Here we go.

While this podcast does hover around the growth vs. value debate, we will hone in on the misunderstanding of innovation and how a simple financial reporting measure can cause trillions of investor dollars to be misallocated. This podcast is the most important podcast that I have produced!

To kick things off for 2022, we welcome back to the show Rob Almeida – Global Investment Strategist and Portfolio Manager for MFS Investment Management. This time around, we recap the highlights and oddities of last year, and address some of the major issues for the New Year. High asset prices, inflation, the Fed…we address it all in this sprawling synopsis of what the heck is going on in capital markets. So, go sit in traffic – if you can find any, go walk your dog, or relax in your office and plug into this one. Kick off the new year in style. Well, this might not be stylish, but you just might be more informed.

Can we deconstruct Advisors Alpha? This is a first. We interview an investment advisor – Brandon Jansma. We figured that since most of our listeners are investment advisors, maybe we should interview one. In this episode, we define Advisors Alpha with Brandon Jansma, whom we believe to be an all-around thought leader and contemplator of finer subjects. We ponder what it is to be an advisor today and venture into what the future of being an advisor looks like. We contemplate the value of time along the way. Grab your vacuum or your paintbrush and pop in your earbuds. Let’s go to Laguna Beach, CA with Brandon Jansma.

This year, we reported on the current themes of why interest rates are so low, what is going on in China, and whether inflation is transitory or persistent. However, we have saved one of the biggest issues for last to help prepare you for 2022 – Do Valuations Matter? With U.S. equity markets so overvalued currently – if you believe traditional valuation metrics – we thought it would be prudent to check in with Frontier’s very own Founder Gary Miller, CFA. Put in your earbuds. This might be our most important podcast episode of the year.

What better way to end 2021 than to talk about some heavy hitters? Spending. Taxes. China. Russia. Mid-Term Elections – we discussed it all in this interview with Libby Cantrill, Head of US Policy at PIMCO. Tune in to hear a thought-provoking discussion on some of today's hottest U.S. policy topics and the potential impact on the markets and taxes.

Regulation is a four-letter word in American politics, but in China, is it business as usual? This year, Xi Jinping – the leader of the Chinese Communist Party – passed down a laundry list of regulations that resulted in cascading unintended consequences for businesses and investors alike. These new regulations address real estate construction leverage, private education, environmental concerns, data privacy, and even screen time for minors. Needless to say, investors are not so happy about all of this, nor is the mainstream media. But, what is the real story? Is this a step backward towards Maoist communism, or is this par for the course for “common prosperity?” More importantly, for investors, the performance of Chinese equities has languished as of late. And, as China goes, emerging markets typically follow. The big question now: Is this a contrarian opportunity, or is this a value trap? Tune in to find out. Sit back in your Lazy Boy, lay down on your office couch, or walk your dog (or cat if you are into that), and enjoy the show.

Risk managed small-cap equity investing? How to manage a large small-cap portfolio? Can underperforming a bull market lead to multiple market environment outperformance? For how long can poor quality businesses outperform? Why is the beta ripping Russell 2000 Small Cap Index chock full of non-profitable companies? Do these questions sound like “Jumbo Shrimp”? We are fortunate enough to address these perplexing topics with Gregory Spiegel, Portfolio Manager of the $10 billion AUM – 30 plus year old – Neuberger Berman Genesis fund. Listen up and get wise folks. Time to go sit in traffic, take the dog for a walk, or just take a nap… Please click here for a summary of the Neuberger Berman Genesis Fund’s investment risks, current performance data, including current to the most recent month end, and other important disclosures.

Inflation at 5%, 10-year treasury yields at 1.5%, how is that sustainable? In the post-COVID investment environment of explosive growth coinciding with inflation concerns, it seems implausible that interest rates could remain this low. However, for my entire career, investors have decried, “Interest rates are just about to rise, so watch out!”. But they haven’t. Interest rates have been declining for 40 years. In this podcast, we interview Tony Crescenzi, Portfolio Manager and Investment Committee Member of PIMCO investments. What better person could we have found to ponder this perplexing conundrum? Buckle up or grab the dog and go for a walk; this is not to be missed.

The big macro-economic surprise in 2021 is INFLATION! The latest CPI-U year-over-year inflation print for the 12 months ending May 2021 is 5%. Regardless of whether the rise in general prices – influenced by the sectors of energy, lumber, or used cars – has been lumpy or not, it does appear that most of us are witnessing pockets of inflation in our lives. And, inflation is contagious, inflation in one area often spills over into others. This current inflation appears to be an about-face from the decade of deflationary forces that languished through the decade prior to COVID. The 2010s were characterized by slow growth, low inflation, and low-interest rates. To combat the persistent slow and low economy, central banks around the world were unrelenting in their efforts to stimulate the world’s economy, which largely just led to rising asset prices. Fast forward through one pandemic and one year later, and BOOM! An explosion in consumer demand and a disruption in supply. Have we entered a new paradigm of demand and exceeding supply, or will we return to the old, oversupplied economy that we are all so used to? In other words, is the inflation that we are witnessing transitory or persistent? In this episode, we break this down. What is happening with inflation, what does it mean to portfolios, how best to hedge against inflation, and is this inflation transient or persistent?

While you may have never heard of Frontier Asset Management, you likely have heard about MFS Funds. They manage about $500 billion in assets, and Rob Almeida is their Global Strategist! Given that the big story for strategists now is clearly “what the heck is going on with markets”, we quickly devolve from “deconstructing alpha” to all the weirdness that is occurring at the macro level. And, as you know, everyone wants to talk macro, we just don’t want to admit it. There is also some great insight at the end of this episode where we have an “aha!” moment about socially responsible investing.

In this episode, Geremy and Shannen interview Carl Kaufman, Co-President, Co-Chief Executive Officer, Chief Investment Officer of Osterweis funds, but more importantly, manager of the Osterweis Strategic Income Fund. With inflation fears on the horizon - leading to investors' big fear of rising interest rates - talking bonds, interest rates, and inflation couldn’t be more timely. And, who better to discuss this with than Carl Kaufman! While “deconstructing” the alpha that Osterweis seeks to provide, it becomes apparent that what this episode really uncovers: the value of active management for bond investors.

Geremy van Arkel of Frontier Asset Management, Nelson Louie and Chris Burton of Credit Suisse Asset Management discuss what strategies have worked for commodities.

Geremy van Arkel of Frontier Asset Management,John Walthausen, CFA, Chief Investment Officer, and Portfolio Manager and Gerard Heffernan, Jr., CFA, Portfolio Manager of Walthausen & Co. LLC discuss long term success in security selection.

Geremy van Arkel of Frontier Asset Management and George Shipp of Sterling Capital Management talk about the stock market and the U.S. economy.